get that through. we can't get the guarantee. i wanted my two cents in there. i appreciate y'all service to the nation and keep doing what you are doing. i yield back. >> thank you. mr. barber. >> thank you, mr. chairman, i apologize for being late. i just got back from a hearing on fast and furious which is important to my region where agent terry was killed. first question for secretary hale, when we discussed sequesteration at the last committee meeting, i said at that time that the lack of action on this important issue is really a failure on our part and others on getting the fiscal house tomorrow.

we'll vote tomorrow, and if we're against it, we should stay here and not go home, worry less about our contracts and our constituents and saves our jobs if we can't save our constituents' jobs from the looms threat. as we see this over the horizon, how is that affecting the morale of the service members, how that affects them and their families? >> i am particularly worried about the civilian members. we'll exempt military personnel, so there's not a direct effect on military personnel, although it may affect their confidence, and i'm worried about the civilians who will be directly effected. we'll have a hiring freeze and suspect to consider unpaid furloughs. there is increasing unease in our work force about how this is going to affect individuals, and i don't blame them.

i'm worried for them, but i invite the fellow -- my colleagues here to comment if they'd like. >> thank you, sir. from an army perspective, you know, as i go around to different installations and talk to soldiers and families, we're beginning to hear more and more and amass the question of what does this mean for us in terms of support for family programs or what does it mean for strength? will my soldier be caused to leave prematurely? those types of things. they are beginning to focus on it more so than we would like to see them worry about it, and, again, our concern is that we don't want to break the faith with the soldiers and families that we've establishedded over the years. i think that's one of the things that enabled us to do what we've done in support two fights over a decade. i commend the families for what

they have done to date, and with your support, we've been able to take great care of them. we -- they will continue to be with us, but, again, they are focusing on it a bit more than we'd like to see. >> congressman, as i mentioned in the opening, i returned from a tour of the central command in the middle east speaking to 10,000 sailors on the aircraft carrier's mind force patrol craft. at every forum from the most senior commanders to the most junior sailor, they ask about sequesteration and what it means to them, their families, and i sensed a growing anxiety over the uncertainty of the fiscal future and what that means to them and their service to the nation, and i would just offer they look strongly to us to solve this and give them certainty to plan their lives and their aspirations and their future, and i think we owe them that great debt as we go forward. >> congressman, i have a similar

experience. there is, i think, some growing anxiety with the civilians and depos, and aircraft, engine repair, ect. because of the uncertainty. they don't know what's going to happen. as i have gone out and talk to military folks, it's pretty heart warming, i guess -- all they want is parts and to get airport -- airplanes over the ground, satellites launched, and the mission done. they want this behind them so they with move forward. >> very good. >> congressman, i re-emphasize the point that our folks over the past ten years done what they have done because of the trust and confidence they have in us. they trust the wherewithall to go in harm's way, trust we'll care for the families when they are deployed, and they still trust that's going to be the case. they trust us to resolve the issue and ensure we have the proper resources, but my point would be our inability to

resolve this, our inability to assure them they'll have the wherewithall when they go in harm's way the next time to have what they need to accomplish the mission, i think, is a significant risk, and the point about civilians is there's significant angst in the civilian community, civilian marines as we call them, about their future. that concerns us a great deal. just like with marines, our success and what they do is important. they participate in our training. they fix our equipment. they take care of our families, and our ability to recruit and retain high qualitity civilians is just as important and the way we treat them and provide with predictability in the future is also important. those are some of the concerns i have. >> thank you, mr. chairman. >> thank you, mr. barber. mr. coffman. >> thank you, mr. chairman. i first want to say oddly the congress of the united states should stay in sessioning sessie

resolve the issue of sequesteration and other issues like the debt limit and the fiscal cliff we face. i'll vote against adjournment tomorrow. i'll say first that i think i differ with a lot of the colleagues and think we are capable of more cuts in the department of defense. i disagree in the mapper they'll be done through sequester, that it's going to fall disproportionally on weapons and equipment that are so vital to our fighting forces, but let me say, first, that i think perspectively, i would like to see cuts. i think the department of defense is far too top heavy. more admirals and ships in the united states navy, and it's that top heavy across the board in the other services as well. i think we ought to look at some of the permanent overseas military bases we have. 79,000 troops still in europe where they are spending our nato

allies, spending less than 2% of the economy on defense. we're at 4.2%. south korea, 28,000 troops, we're at 4.7% of defense spending as a share of the economy. they are at 2.7%. we care more about defending south korea than the south koreans. this notion of nation building, so incredibly costly, that we could invade and administer countries based on the premise at the end of the day they just want to be like us, if only give them the opportunity, they won't be like us. i volunteered to go to iraq with the united states ma reap corp. out of retirement because i believed once we were in it we had to finish it. how costly that was, not just in terms of lives, but in terms of tax dollars spent. as long as i'm on this

committee, if i can do one thing, it's making sure this country never goes down the road of nation building and, again i'm glad to see we're phasing out of afghanistan. on the issue of libya today, stunning the lack of coordination between the intelligence community and the state department and now that we're reacting when we could have been proactive, didn't have a marine corp. attachment on the ground, in tripoli, the embassy, pretended it was a permissive environment, which was stunning to me costing the lives of the u.s. ambassador and two of his co-workers. with that said, let me put a question out to the united states marine corp.. with our ability to respond in the region with fast teams and

ops how to sequester and impact that capability? >> what we make every effort to do is ensure the current operations don't suffer so the expectation would be that the marines in information are support teams in the forces necessary to do the things you eluded to a minute ago, would be resourced. where you see the price being paid is units at home station, again, already in the greatest state of readiness. this further exacerbates that readiness, but does not affect the readiness of forces deployed. we would make every effort to ensure that was not the case. >> okay. i would never support a cut that compromised the gnarl security or the capability of this country to defend itself, and i think fundamentally, sequester in the manner these cuts will be done will, in fact, compromise national security, will, in fact, compromise the capability of the country to defend itself.

you know, i guess another question for the marine corp., the -- if sequester would occur, what would be the permanent damage to the united states marine corp. in terms of ability to respond to incidents across the board? >> congressman, the permanent damage would be hard to explain at this point. what we would experience, as i mentioned to congressman west is, we would pay for purnt operations, our account, infrastructure would suffer, and units home stationed would suffer, but the immediate impact is that's the bench you expect the marine corp. to be ready when the nation is least ready in the up expected crisis and continues supported by the home station. the degraded readiness seen in

the forces at home station impacts our immediate crisis and response capability. >> thank you, mr., i yield back. >> thank you, mr. coffman. gentlemen, thank you, again, for joining us today. we appreciate your service to our nation. i wanted to make a little statement before we got into my line of questioning, and that is there's an issue out there that i think has not got as much attention as i think it needs to. we talk about sequester, but we have not talked a lot about afghanistan and recent events in afghanistan with the attack there at camp bashtan and the taliban's effort there. that's something we ought to be looking at. we had two brave marines there defending the airfield perrishd. we had jets destroyed, a number of other ones damaged. we see that brazen attack there in afghanistan, and while at the

same time we're here talking about sequesteration, talking about cuts to the overseas operation funds while at the time they were under, i think, challenging times there in afghanistan. i think it's unconscionable that this body is preparing to go home while we look at these challenges. that's just not right. this body can do better than that. it must do belter than that. it must stay in town, make sure this sequester is set aside. as the debate took place earlier, i know folks talked about how do we make reductions to the budget? nobody had intention of getting to the point of making these types of cuts across the board in national defense. it is not where this nation needs to be. we have to stay in town and get this done. i, like other members who stated, will be voting against this body going home. we have to get the job done for

the men and women who serve this nation. with that said, admiral, i wanted to point to you and ask your estimate about what will happen in one area of the navy. >> we'll leave this hearing at this point. see it in the entirety at the video c-span library at c-span.org. there's a public hearing today on ethics violation allegations against california democrat maxine waters facing charges that our grandchildren, who serves as the chief of staff, pressured the treasury department to give bailout money to a minority owned bank in which ms. waters' husband held stock and served on the board of the director. all five leaders and linda sanchezed rescueded themselves from the case. congressman goodlatte is receiverring as the chair and

this should get underway any moment. [inaudible conversations] [inaudible conversations]

>> good morning. [no audio]

>> february of this year, after six members voluntarily rescued themselves in consideration of the matter of representative waters. the waters committee sole focus has been to resolve the waters matter. this effort has been assisted by billy marks, standing committee in july of 2011. [inaudible] they proceeded in two phase z, investigation of representative waters matter and in the 111th congress violated representative waters due process rights. the outside counsel concludedded, and we unanimously found that representative waters due process right had not been violated. the outside counsel then moved to the second phase of the review which is a substantive review of the conduct of representative waters and her

chief of staff. that review is now complete, and we are attempting to reach the final conclusion with regard to his recommendation and this matter in general. that's what brings us here today. so that everyone in the room understands where we are and why we are here, let me summarize the last several steps we have taken after months of intense and hard work by the outside counsel, his team, and our staff, the committee gave careful scrutiny to the evidence and recommendation from the outside counsel. mr. martin made recommendations based on the question whether we can pass a new investigative subcommittee in this matter. his recommendation is that we should not because there is not sufficient eve in the record to -- evidence in the record to prove violations by the clear standard which is necessary before formal sanctions are recommended to the house of representatives. we are prepared to accept the recommendation pending the

outcome of the hearing; however, the outside counsel also made perfectly clear to this committee that he believings that certain specific actions of mckale moore, the chief of staff who represented waters, the rules and conflicts of the interest. outside counsel does not believe the evidence on the road without making creditability determination would prove mr. moore's knowledge of the conflict at the time by clear and convincing standards. this is principally because mr. moore explicitly denied such knowledge; however, mr. martin has been clear about his concerns regarding mr. moore's credibility throughout the process and recommended the committee make its own credibility determination to decide if any other action is appropriate. to be further clear, nothing we are considering is in any way inconsistent with mr. martin's conclusions or recommendation which we value and agree with.

late last week, the committee who notified representative waters and mr. moore through the joint counsel we were close to issuing a report in this matter. we provided notice of the area well were still considering and informed them pursuant to house rules and in an abundance of fairness, they would have the unprecedented opportunity to have a hearing, public or private, to their discretion, prior to reaching a final conclusion about the report. we also informedded them we were considering whether a letter of approval is appropriate for mr. moore's conduct. the time frame for the process is more compressed than anyone wishes. it's the only time frame that meets the goal representative waters has of meeting the trial as quickly as possible. we scheduled the hearing as soon as the outside counsel's investigation of the substance of the matter was reasonably complete, and we, as a committee, had had the opportunity to thoroughly review

the recommendations and ask sufficient questions of mr. martin. because of the compressed noticing schedule, we offered representative waters and mr. moore the opportunity to request additional time before a hearing, but made clear this is the last opportunity to hold a hearing before the expected return of the members to washington, d.c. in november. on wednesday, we provided representative waters, mr. moore, and their counsel access to a draft of the reports we are currently considering as well as a draft of the letter of reprovable for mr. moore, in essence, a public letter from the committee stating we believe his conduct violated rules and standards, but did not warrant a former sanction or further action. mr. moore requested a public hearing. representative waters has not requested a hearing. to be clear, none of the documents are final and no final vote or conclusion has been made in the matter.

the committee takes the hearing very seriously open to having mr. moore persuade us the drafts and potential cop collusions we consider are wrong. we hope that this will be a productive hearing. this will not be a debate, but an opportunity for mr. moore to present new information and arguments to the committee to address the concerns we have about his conduct and to answer any questions the members of the committee have. with that, i'll now recognize my colleague, the gentleman from kentucky, and the acting ranking member in this matter. >> thank you, mr. chairman. as the chairman stated, this committee has taken seriously its charge to resolve the matter of representative waters fairly and expeditiously. it's been a long process, but i believe it's been a fair process as demonstrated by the lengths to which the committee has gone to ensure every relevant fact and consideration is accounted for. in the 11th congress, the standing committee on ethics

paneled a subcommittee, adopted a statement of alleged violation, and a panel of the a subcommittee, and ultimately, the committee elected to re-commit the matter and consider evidence discovered late in the process. none of the members here today was on the committee in this period or had any role with respect to representative waters' matter in the 111th congress. after the matter was returnedded to the isc for further investigation, serious charges raised about the committee's investigative and decision making processes. even before the charges were made publicly, the standing committee recognized the need to retain an outside counsel to review them; however, due to changes in the committee's membership and staffing, including the resignation of the committee's former staff director and chief counsel, the committee was not able to select and retain mr. martin to be outside counsel until july 2011. mr. martin conducted a careful and comprehensive review of the

due process allegations raised by both representative waters and the committee itself. this review, which was unprecedented in the committee's history concluded with mr. martin's recommendation that none of the conduct alleged by representative waters or others rose to the level of a violation of representative waters' due process rights. this committee's members had no role in any of the conduct at issue in the due process review, and we have no interest in protecting our providing cover for the standing committees' action in the 111th congress. we thus considered conclusions and recommendations regarding the due process issues with an independent eye and found the prior committee's conduct did not violate representative waters' due process rights. after reaching that decisionings did we authorize outside counsel to start the second phase of the work. that phase involved reviewing all of the evidence gathered in the matter in the 111th congress as well as conducting additional

interviews and reviewing auditional documents in order to recommend a resolution of the matter. this effort was also unprecedented. the committee never before retained outside counsel to review a prior committee's own investigative work and procedures. all of the steps, recusal of members and staff involved in representative waters matter in the prioring progress, the hiring of a new committee foe c'sed on this matter demonstrate the lengths to which the standing committee and waters' committee went to ensure the process would be fair and any decision would be credible. in reviewing the substance of the standing committee's prior investigation with the outside counsel's assistance, we, again, exercised our independent judgment with no allegiance to that committee's process or findings. consistent with the findings, we addressed mr. moore's question

and the waters' concerns regarding his conduct. it's a complicated matter. in a remarkable time in the nation's financial history, representative waters faced a difficult balances act between representing minority banks and avoiding a conflict due to her own financial interests. the committee is faced with a difficult question of whether mr. moore's actions blurred that line and placed the reputations of his employing member and the house of representatives at risk. if lines were crossed and violences occurred, we are also always concerned with the proper response in any individual case. one of the most important considerations is how seriously the member, officer, or employee at issue takes the allegations, the applicable rules, and the house process. in addition, we have to consider what level of response is necessary to detour similar conduct in the future. our commitment to fairness and integrity in this matter including providing mr. moore this opportunity to comment on all of those concerns.

i, too, hope this will be a productive hearing. thank you, mr. chairman. >> thank you mr. yarmuth. i'll ask if any other members of the opening committee have an opening statement they'd like to make. there being none, i'll now recognize the outside counsel, mr. martin, for his remarks. >> mr. chairman, mr. ranking member, members of this committee, we thank you for the opportunity to provide an opening statement in the matter of representative maxine waters. brief background, twine, the ose submitted a report to the ethics committee in the 111th congress concluding that representative waters may have violated house conflict of interest rules when she called the former treasury

secretary to set up a meeting with one united bank. in light of the fact that representative waters' husband was a former board member and current stockholder in that bank, the oce recommended that the committee further investigate those allegations. an investigative subcommittee was empanelled, and on june 15th, 2010, that isc adopted a statement of alleged violations. that allege the misconduct based on representative waters' chief of staffs continued assistance to one united bank after representative waters, herself, determined she should no longer work to assist that bank. before the committee held an adjudicatory hearing, the matter was remitted to the isc on basis of newly discovered evidence in the 111th congress ended without the committee taking further action on the matter.

on july 20th, 2011, my partner and i retained outside counsel to assist the committee in the 112th congress in the review of the allegations. in conducting our review, we were tasked with reviewing the record and providing a recommendation to the committee as to whether there is sufficient evidence 20 show by clear and convincing legal standard that representative waters knowingly violated any house rule or other standard of conduct. in reaching our cop -- conclusion, we reviewed over 150,000 pages of documents, the transcripts of 41 witnesses, transcripts and documents from ten prior investigative subcommittee hearings, and we reinterviewed several key witnesses. our ultimate recommendations involved whether this committee should impanel an investigative subcommittee. in order to make this recommendation, we had to determine if the evidence in the

record was sufficient to show that a violation occurred in this matter by a clear and convincing standard. upon completion of our review, we recommended to this committee in a written report that covers almost 150 pages that the evidence in the record does not support a knowing violation of the ethics rules or any other standard of conduct with respect to representative maxine waters by clear and convincing standard. rather, with respect to representative waters, we concluded and recommended that the committee determine that when representative waters called the treasury department and the secretary in 2008 to request a meeting, she believed she was acting on behalf of all minority banks when what she believed had been seriously affected by the conservativeship of fannie mae and freddie mack. because the evidence supports she was acting on behalf of a large group of banks, we found

no evidence in the record to support that her phone call to arrange the meeting violated any house rule or any other standard of conduct. our report recommended to the committee that some time after the treasury meeting, which occurred on september 9th, 2008, representative waters became aware -- excuse me -- representative waters became aware that during that meeting with treasury, one united bank had specifically requested $50 million from the treasury department as a buyback of its preferred shares and fannie mai and freddie mack. when representative waters learned of the request, she approached the former chairman of the financial services committee to discuss that her husband had been a member of the board of one united bank, and he told her that he, being representative barney frank,

that he would handle the one united matter, and she should stay out of it. the exact timing of the conversation is not clear from the record, but we believe that conversation occurred at some point following september 9, 2000 treasury meet r or prior to the circulation of the first draft of the emergency economics stable aization act known as esa on september 20th, 2008. the record reveals that despite representative waters' correct determination that she should not be involved in any direct help for one united because of the conflict of interest that existed, her chief of staff continued to engage in specific actions taken solely on behalf of one united bank, and not the greater acts afghanistaned by the conservativeship. the first official agent was an e-mail dated november 19, 2008.

mr. moore sent that to a staffer stating, and i quote, "ou is in trouble." based on the record in the case, outside counsel believes it is a reasonable interpretation that this e-mail is a specific reference to one united capital report due at the end of september. at that time, moore was aware that if one united believed that if it did not meet the call report, that bank might fail. the second official act was an e-mail mr. moore sent to a financial service staffer on september 23rd, 2008 in which mr. moore forwarded an e-mail. he received that from one united special counsel who also served as the chair elect on the national bankers' association. the e-mail contained an attachment, a chart breaking

down the investment in fannie mae and fredly mack. mr. moore followed up on the e-mail with the staffer by e-mailing and asking, quote, "how did that meeting go?" the staffer responded, "they will continue to pursue treasury acting without legislation." another staffer and i are working on drafting cdfi related language to help them that we could -- to help them that we could try to possibly add to the bailout. it is our recommendation to the committee the e-mails sent by mr. moore were an effort to assist one united and not the greater class of affected banks. while we determined these two e-mails were official acts taken by mr. moore to specifically assist one united, we were not able to determine by a clear and

convincing standard from the record if these e-mails were sent before or after representative waters relayed her conversation with the chairman of the financial services committee to mr. moore. it is abundantly clear that representative waters told mr. moore he should not specifically assist one united. representative waters publicly stated, and i quote, "i told my chief of staff that i informed the chairman of the financial services committee about one united bank's interest that we were only concerned about small and minority banks broadly that the chairman of the financial services committee would evaluate one united's issue and make a decision about how to proceed." as her chief of staff, mr. moore's representative waters' most trusted and senior staff member. as such, she should be able to rely on him to follow her

instructions. because of the record supports representative waters took the important step to instruct mr. moore not to specifically assist one united, we recommended in the report, mr. chairman, to this committee, that the evidence does not support a finding by clear and convincing evidence that representative waters failed to supervise her staff. mr. chairman, i will now introdust evidence with respect to representative waters' chief of staff. we could not conclusively determine from the record by clear and convincing standard when representative waters told mr. moore he should not agent on behalf of one united. mr. moore has testified that he was unaware of representative waters' husband's financial interests in one united bank at the time that he sent the e-mails. for these reasons, we recommend that the record does not support a finding with clear and convincing evidence that a

knowing violation of the house rules or other standards of conduct can be prove against m moore. it is troubled that mr. moore's testimony raises substantial questions of credibility. first, while mr. moore testified that he was unaware of representative waters' husband's financial interests in one united, at a subcommittee hearing on october 30 #, 2007, representative waters entered into the record a statement which indicated that her husband was both a board member of a minority bank and a stockholder in one united. she did this because she noted on the record that she believes disclosure is important. mr. moore denied knowledge of the portion of -- of this portion of the statement where it addressed representative waters' husband's stock

holdings. second, representative waters disclosed her husband's stock holding in her public financial statements. third, and probably most importantly, representative waters, herself, stated that mr. moore would have known of her husband's stock holdings in one united. finally, mr. chairman, mr. moore testified that he permly interpreted the instructions from representative waters when she told him no specific assistance to one unitedded. he took that to mean he was only, only to refrain from working on one united matters that day and that day only. the record is clear that representative waters met and instructed otherwise. further, the chief counsel of the financial service committee testified that mr. moore told her that his office had a conflict of interest, and they were stepping back from the one united issue. it is our conclusion and recommendation that moore

understood the instructions and directions from representative waters. given that representative waters believes disclosure is important and that she, herself, believes that mr. moore would have nope of her husband's investments in one united bank, we found mr. moore's denial incredible, in doubt of the testimony's credibility generally. indeed, we found other inconsistencies between mr. moore's testimony on other disujts and the evidence -- subjects and the evidence we reviewed which are included outside counsel's report to the committee. thus, even though we do not believe the evidence is sufficient to prove by clear and convincing standard that mr. moore knowingly violated the ethics rules, we raise the issue of mr. moore's credibility in the report to allow the committee to consider whether it was appropriate for this committee to consider taking action against mr. moore short of a formal sanction.

as noted in the report of your outside counsel, all final determinations, including celt determinations are properly left to this committee since it's the responsibility of this committee and not your outside counsel to make the ultimate findings and conclusions regarding this matter. we state for the record, mr. chairman, should the committee decide to issue something short of a formal sanction such as a letter of approval, reprove for mr. moore's actions in the matter, we agree with that decision regarding any new evidence, facts presented by mr. moore at today's hearing. mr. chairman, we believe that such action would be consistent with the findings of the report, and i thank you for allowing me the time to present this. >> thank you, mr. martin. mr. moore, at this time, i would ask that you please stand and

raise your right hand so that i may swear you in. do you solemnly swear and affirm the testimony you are about to give would be the truth, the whole truth, and nothing but the truth so help you god? thank you, and please be seated. for the record, would you please state your full name? >> [inaudible] >> the procedure for your testimony today will be as follows: you may make an opening statement if you wish, outside counsel may question you, members also may ask you questions if they wish, and you may make a closing statement. outside counsel and then members will make closing statements if they wish. would you like to make an opening statement? >> yes. >> you may have 10 minutes for an opening statement, and you are recognized. >> members of the committee, before you, you have two reports. the first is a report authored by the outside counsel, billy martin, whom the committee hired

on july 20th, 2011, and since that time, the committee committed approximately 1.3 million dollars to the work. when the committee hired mr. martin, did it so suggesting to the public and the house that the outside counsel would allow for an independent review. among the key findings of the reviews it is outside counsel's opinion that representative waters did not violate house rules or other standard of conduct, as such, outside counsel recommends that the waters' committee find representative waters committed no violations in this matter, and after the review of my conduct, outside counsel recommends that the waters committee find no formal sanction or referral to the many floor of the house is warranted in this matter. the second report before you written by the committee agrees with the special counsel's determination that rep waters committed no violation, but diverges on my actions applying unprecedented standards to the same testimony which, in part, led mr. martin's independent

determination that neither the congresswoman nor i violated ethics rules. both the committee and independent review agreed with our long held contention both the meeting rep waters set up in the treasury department an all legislative action on behalf of small, minority, and community banks were, indeed, proper; however, there's two e-mails and the timing of the e-mails sent by me to a staffer on the financial services committee. neither of which ask for or is the catalyst to any action on behalf of one united. as is the basis for three substantive violations of house rules. the claim is that i worked on behalf of one united solely and did so after the point i should have recognized that ambassador williams' investment was in the committee's eyes, a disqualifying interest. key to the committee's theory is determines at what point i learned of the interest, and more specifically when they

spoke about the matter, and finally, relaying the conversation to me. i repeatedly and consistently testified i was not conscious of the ambassador's investments in 2008, and that played no role in the decision making process, which that would make a knowing violation impossible. mr. martin's independent review agrees stating outside counsel determined and recommends to the waters' committee that it is not possible to determine by clear and convincing standard when the conversation between rep waters and her cos regarding the conflict occurred. despite the seemingly clear finding, the committee disagrees and applies the standard of not what i knew or what the evidence displays, but rather what the committee believes i should have known. this, i believe, is app impossible standard to meet or defend and diverges from the committees' recent treatment of other matters before it, specifically in the matters of gene scmidt who are free legal

services and the chief of staff who violated the outside compensation rule, and although they violated those rules and possibly federal law, they did not do so knowingly. the committee did not venture to assume what they should have known instead properly relying on what evidence that provided and what they do know. however, the committee has outlined in the draft report three substantive and knowing alleged violations based on what they believe i should have known, two of which claimed my office for personal benefit despite mr. martin's finding to the contrary. speaking specifically about actions relating to personal benefit, mr. martin says outside counsel recommends the two actions taken by her cos solely on behalf of one united cannot be proved by clear and convincing standard to rise to the level of a knowing violation of house rules or other standards of conduct relevant to using our members' office for personal benefit. the first two charges in the

committee draft report allowing compensation to accrue to my personal benefit and dispensing of special favors build directly for using office for personal benefit, although, on its face, because i had no financial interest, i'm not sure what personal benefit i received and how that ben my accrued to me, i would like to address the charges. according to the independent review as well as precedent regarding personal benefit, the committee asked when considering whether or not the concept is breached among other things, what is the members' or staff's motive in taking the action? when determines motive and taking action, the committee asked whether there is direct evidence of the congressman or staffers has any such improper motive. this concept is derived from the st. germain case in which the ethics committee sharply stated that they believe speculation about motive is not evidence,

and there's no direct evidence that the congressman had any such improper motive. in light of the above, the committee believes it would be inappropriate to attribute improper action to an individual based solely on inference and speculation, thus, does not reach this conclusion. the committee has shown no direct evidence of improper motive on my part, and therefore, seemingly, according to precedent, cannot find i used my office for personal gain, and in addition, the committee previously suggested that influence exerted in order to establish personal gain must cross the threshold of improper influence. at this point, mr. martin suggestses a finding of influence should not be based on pure inference or circumstance or, for that matter, on the technique or personality of the legislator. instead, a finding of undue influence must be based on evidence that a reprisal or threat was made. there's no such evidence in this case. the committee also found that i

brought discredit on the house, a charge which is extremely troubling given the sacrifices that i, like thousands of staffers and members, made to serve the institution that we care so much about. in recent years, the committee used this as a dangerous catch all to amplify member punishments, and in doing this, the committee ignored one of the key dripters in the ethics manual describing this provision. the manual states "in interpreting clause one of the code in adopting the committee of the standards of the 90 congress noted this standard was included within the code to deal with, quote, "flagrant violations of the law that reflect on congress as a whole that might otherwise go unpunnished." there was no flagrant violation of the law in this case. to date, the committee or the house has invoked rule 23, clause one, investigating or disciplining members for or among other things, engaging in sexual relationships. i do not belong in this cat gyre.

the committee's draft report has taken care to question the credibility of my testimony and, in turn, my integrity. the committee's questions on cent, forth rightness, and honesty compelled my presence here today. oddly, i've never been interviewed by a single member throughout the process, and my interactions are limited to staff of the committee and outside counsel. in the interviews and various interactions, i admit, i have been a zealous defender of my member, her work, and the legislative philosophy which we work by. in that defense, i have been aggressive and sometimes con contentious. this was not in any way meant to show disrespect to the institution, nor the committee, but rather to show the ultimate respect to the people who i come to work for every day to serve. it is my hope that today we can have an open dialogue so that you may ask all of your questions and make an independent judgment as so my credibility and integrity. that's the end of the prepared statement, but i have two minutes left, so i want to address three pieces raised by

mr. martin. is that allowable? >> you have ten minutes, proceed. >> great. the first thing to address is on the question of when i knew and what i knew about mr.-- the ambassador's' investment. the first thing raised was about the hearing in 2007, where congresswoman waters publicly disclosed on the dais that her husband was a director at a minority bank. i submitted a video of that hearing to the committee that showed that i was not present at that hearing and testified that my knowledge of what the congresswoman was going to insert into the record was a typed statement referring only to the ambassador's position as a directer at the bank. the congresswoman at the time unbeknownst to me, inserted a handwritten statement into the typewritten statement referring to her husband's investment, which was i was not aware of.

i testified several times to the fact that i did not know about the investment at the time. one of the reasons is that i did not have never been a part up until recently, until after this, frankly, the congresswoman's preparation of the financial disclosures, and they have been prepared for 20 # years by an outside accountability, and that was not one of the functions of my job in 2007 or twaights. -- 2008. i'll end with that. >> thank you mr. moore. we'll now begin the questioning, and i'll turn to the outside counsel to ask if he has questions. >> mr. chairman, i have no specific questions based on mr. moore's statement, and, thus, i return it to chair president >> thank you very much. the chair ask if members of the committee have questions of mr. moore. >> mr. chairman? >> the gentleman from ohio is recognized. >> mr. chairman, this is more of a, i think, a parliamentary

inquiry than a series of questions. there may be questions, but i have been troubled, not by the process because this has been, i mean, always impressedded, and mr. moore, unlike appropriations, unlike ways and means, nobody asks to be on this committee. it's not a sought after committee assignment, but because this is a hybrid, this particular committee, i have been troubled by the notion, seems to me and reenforced in the earlier meeting today, that props mr. moore on procedural grounds, would be more comfortable if there was an invest gaitive subcommittee to move forward and look at this rather than disposing this matter, and so i guess that's the question to you, mr. moore, do you feel based upon the -- where we are today, your review of the documents, and your

observations, that this process is appropriately concluded by the committee when we are done receiving your information together with the reports that mr. martin and his staff prepared, or are you of the opinion that you would be better served and it would be fairer to you if an investigative subcommittee looked at the case? >> one proceed churl question on that specifically. >> you can't ask me, but you can goodlatte. >> the first question would be would the matter between myself and the congresswoman be by fer kateed? >> i tell you this committee, unlike other cases, there was a guy in pennsylvania, where members have been found liable for the actions of their staff, even when they didn't know what the staff was up to. it's my opinion, based upon the

evidence, we have not reached a final cop collusion, that representative waters went above and beyond what was required of her in that she issued the statement into the record which you say you were not present at in 2007, when she received the telephone call from treasury secretary paulson asking why only one united representatives were present at the september 9th meeting, took immediate action, and talked to representative frank, and that she instructed you to stay out of the one united matter, and so from my stand point, there's nothing left with representative waters, and the only issue is, but i'm not the legal beagle up here, but the only issue in my mind would be whether or not you think based upon that disposition you think your rights would be better protected if you had the opportunity to have an investigative subcommittee review this matter? >> i'll answer that in a couple ways. the first answer is that i, too,

have been troubled by this process, especially towards the end. as the committee acknowledged, we were notified friday of the areas of issue, at issue, and allowed to see the transcript -- i mean the report on wednesday, and that was the first time i was made aware of the quote-on-quote charges against me. in conversations with the staff director, i raised this as a question. >> that's right. >> i guess the interesting thing about it is, that, yes, i wanted full opportunity to be responded in the back and forth that that provides, but i don't know how that would happen begin the outside counsel already determined there's no clear and convincing evidence to prove any of the charges. i feel we're in a gray zone. one of the things raised with the chief counsel was that the charges, the charges that are laid against me, 233, clause 5,

and bringing discredit are very serious charges. without having the opportunity to push back on those charges, that leaves me in an uncomfortable space, and so that's the way i answer. i would -- that's the way i answer the question. >> i appreciate that. i would say that outside counsel's is a report is a report, he makes recommendations, it's not his job to make final decisions, but that's the job of the committee. his recommendations are observation that it can't be proven by clear and convincing evidence would yield to your benefit, but that's not why we have adjudicatory subcommittees because with if we reach the conclusion there's clear an convincing evidence, there's no point in the committee. that's like a jury trial when the jury already decided what they wanted to do. >> sure. >> i'm interested in your response, andic that -- and i think that what troubles

me and why it might benefit you to request that path is that i do have serious questions based upon the testimony, the documents that have been received, and i'll give you some examples. at first, when the nba asked your employing member to set up the meeting with treasury, they had not conducted a survey of the members to determine how many banks were affected. after the meeting, secretary paulson called representative waters expressing concern that, hay, only one united people were at the meeting? two days after that, on september 11th, one united -- excuse me, the nba communicated with the treasury department on a document you were copied that it's not a range of banks, but two with the fannie and freddie problem. one united and i think a bank in

tech. in addition, aside from your grandfather, who was a member of the board of the gentleman by a name of leeander folley iii, and that part of the report is troubling to me, and i think, you know, that you might be better served by letting all of that stuff be flushed out. >> may i respond? >> yeah, sure. >> so let me respond directly to the two points that you raised. [inaudible] the first point is one of the things talked about consistently and i provided information to the committee was that is that beginning on september 7th, not only the nba, but the icba and the american banker's association were talking about the specific issue. this was an ongoing issue where the american bankers'

association, in addition to what the nba survey said, that 27% of all banks in the country were -- had fannie and freddie stock and would be negatively impacted by what happened on september 7. 85% of the 27% were community banks were the area where one united bank fell in so all -- in my view, all of the actions that are taken post the conservatorship are with all of that context in mind. >> okay. i've read your transcripts r and i understand that's your position. i woulding -- i would suggest to you that my understanding of the rules of the committee and the house are that a member may act on behalf of an entity in which they -- i was surprised with this to be honest with you -- a financial

interest, a broad class. what's troubling to me and why i think an isc wants your opinion on this is that there is evidence that i think supports the conclusion that while that may have been the case that the letter from the nba on the 11th says we're only dealing with two, and in my mind, every bank in the country was affected # by the hobble things going on, and your grandmother is nope as a champion and fighter, and i serve on the committee for 14 years, and minority banks don't have a batter champion, and perhaps the country, but it appears in my mind only, and i don't know what my colleagues colleague, there were two paths going op, and that's helping everybody, but then on september 11th relative to the preferred stock buy back, there's two.

there's grappling with that. i've been handed a note from the staff so i don't give you bum advice. >> okay. >> but the staff has indicated to me that if there is an isc for you, it could reveal evidence relative to representative waters. i don't know what that means. >> i understand. ..

what is the caddies definition of a class? and i think that there is no definition of a class specifically what i would raise is the grace case and all we have different opinions about what the case says it does say very specifically that mr. glaze and his wife's investment was part of a class even if it wasn't determined visible companies they have an investment. what they said is of the action party can only benefit if those companies, then the still -- because the minimal stock ownership they would be the part of a class, so my question to the committee would be how does the committee define class. if it's not grayes how do you define it and did congresswoman waters investment compare favorably or how did it compare to the case? >> i reviewed the graves case

and i am aware of the argument and i personally find the graves case distinguishable and you should know i've had a discussion with the committee and the staff about what is a class, and there have been cases where again some things tt are shocking to me and we need to change the rules around here where a member has a change for a project on which they own property and they found that it's not a problem because there are other priorities on the road. that is nuts to tell you the truth but i am willing to accept that the class is 30, 40, if it's bigger than that. i have to tell you when it gets down to two that's really at the center of what is problematic relative to your conduct in this matter. those are my questions but it's the last question, and your

desire -- would you think that you are better served by this committee considering the retirement to an investigative subcommittee? would you like us to deliberate based upon the review and the statement which you've shared with us and get it over with today? >> my heavy heart really is around the idea that whether it's a letter of approval or someone just saying that the idea that of a knowingly and intentionally used the congresswoman's office for personal gain that i disrespected the house is a very difficult to swallow and as you can tell the way that i have

been trained and the philosophy would tell me in the normal circumstance to fight tooth and nail to the end of that in this circumstance, i would say no. >> i appreciate that. this is a big deal. we are talking about your reputation and a bunch of members reputation and this letter of approval business is something that god invented the last time that i was on the committee and the delay matter on the medicare part b boat and it's the reason i got thrown off a number of years ago. but i appreciate your answers. thank you. >> i thank the gentleman. are there other members -- the gentleman from kentucky is recognized. >> thank you mr. chairman. the issue of knowledge of a conflict or financial interest is critical in this entire case.

there was evidence presented in the outside counsel report to the committee bill would indicate one that representative waters said you would have been aware of the investment. second, there was a staff member on the financial services committee who said you told her that there was a conflict here, and then a question which i would oppose kind of independently when representative waters told you to stay out of that, did she at that point say why you were to stay out of it or what was your understanding of why she would tell you to stay out of it? >> let me address the first quote that's been used in the outside counsel report. my honest assessment is with the

quote actually says when she was asked says yes she knew about it, the newspapers know about it, everybody knew about it. i was fully disclosed. my reading is in a statement about withdrawing new but whether she had disclosed and always disclosed so in the same way i don't think that it's reasonable to expect all the newspapers and everyone to know, and barney frank for that matter who testified he didn't know that isn't a determine the statement that she made, that ye believe. the chief counsel on the financial services committee about the conflict of the why don't remember that conversation. one of the things that troubled me in that statement in the record is theris no date associated with it. it doesn't say when that conversation allegedly happened, so it raises the same issue that is raised with the other evidence and around the timing

and that is the critical moment. if there's a date associated that's one thing. if there's not a date associated when that happened it raises the same issue the rest of the evidence raises on that point around timing and whether or not i was aware. what did you -- win representative waters told you to stay out of it, did you ask why, did she say why? what did you infer from that as to the reason why she would have asked you to stay out of it? >> i actually do not recall the substance of the conversation at this point. >> i thank the gentleman. other members have questions? mr. moore, i will recognize myself. one of the issues that the committee that is troubled by

the end deliberating about is finding that representative waters on at least three occasions made it clear that she had a conflict and that she intended to stay out of the matter of one united assistance from the department of treasury and the legislation that might come about. we know and you have to address your knowledge of the public speech that she made. we also know that she had a conversation with chairman barney frank about this legislation about this matter and that he had advised her and she had agreed that she should stay out of this matter because of the connection of her husband to one united. and then the third was her statement that she told you that

she had a conflict and then you should stay out of that. i think the part that troubles us is that in the questioning by the committee staff coming you explain that her order to you to stay out of it you interpreted to mean only one day. we are troubled by that coming and we would welcome your explanation for how you would come to that conclusion that if she had a conflict why it would only apply for one day and that your subsequent actions in canada indicating with the financial services committee staff regarding the matters related wouldn't violate that order that she gave you. this is more of a comment and i don't know if they have changed their standards to this point. during the oce interview it wasn't a transcribed interview but what the record says in the

oce interview is specifically that all i took it to mean i will stay out of the nba issues. it wasn't connect jul -- >> let me ask you why she would instruct you to stay out of the broad issues at all. it wouldn't seem there's any conflict there. why would it apply to just that one day? >> frankly i do not know why i made that statement. i can't -- it was several of years ago, and i guess the broad question for me as the act as the committee suggested that i took were two e-mails, of one that says you were in trouble and an e-mail that was forwarded to the services committee. one of the questions i have is even under the committee. i guess the question i would ask is in that circumstance the standard that has been used before specifically in the cases

like site has been a member or the staff communicating with federal agencies or communicating with folks who have the actual power to do something on behalf of the entity they were communicating on. i don't see those e-mails as causing anything other than precipitating anything as being the catalyst to anything, and i do not communicate anything to an outside entity who would have had the power to grant the request. so that is my challenge. i still go back to the point that there has been no date and no time line established about when the conversation happened with the congress when defeat to woman. >> when you were interviewed by outside counsel now in 2012 as opposed to your referenced in your earlier testimony coming you confirmed that earlier testimony, did you not? you confirmed the earlier testimony that you had said you

thought the instructions unit received from congress wollman waters to stay all of the matter was for one day only and not to stay out of it. >> i'm not denying that i said that. i want to be clear. what i said is i'm not clear what my thinking was behind making that statement. >> we are troubled by the contract that you have been ordered by the congresswoman waters to stay out of the matter entirely for one day being all things meaning that wouldn't apply to the communications on things beyond one united after that without having any question or concern for why would be. number two, obviously we are reviewing the testimony and the evidence before the committee regarding the nature of those

actions and the connection and the subsequent e-mail communications and their connection to one united, but is still troubles us that you would say i felt i was only required to stay out of the matter for one day that i could proceed to communicate with them whether it is the broad matter for the narrow matter with relation to one united. we will be the judge of what we think the total to tell what the show's. but i still personally am not able to understand how you would reach those conclusions and one you wouldn't ask for further clarification and why you would feel that there would be the need on monday to stay out of the matter but not the needed to stay know that entirely. >> i think that is a valid and fair point and as i said i don't know why i made that statement in that way but i would still go back to the actions that were taken and the timeline of those

actions. again, i will let knowledge demand concede that is a fair point that if that was my interpretation as the record states that that may not have been the best judgment call on my part. i do not think that the vendor for leads to three violations and suggesting that used the office knowingly for my personal use, and my personal benefit etc.. i acknowledge that statement and that it may have been poor judgment but i still think that the time line issue and not being able to establish the time line is the more important issue. >> the chair recognizes the outside counsel mr. martin. >> we ask mr. moore in a follow-up interview in july of 2012 his testimony f. oce, and he didn't at any time tell us in our interview coming and we have the portions of the transcript available that he was referring to the nba, the national bankers

association. he come from the testimony that he thought it was one day and one day only. was critical in our review command mr. chairman, it isn't accurate that he indicated it was the nba in 2012 that would have made a difference in the review and in our interpretation. that is not an accurate statement. >> i would request that you pulled the testimony. if you pull the oce testimony and refers to the nba. i think again my and credibility and honesty is being impeached when the testimony from the oce specifically says the nba. >> we will take your comment under advisement. could i recognize the counsel for mr. moore? >> as a matter of a rule they do not transcribed their interviews

with witnesses. those are recorded as handwritten notes on a legal pad by staffers. subsequent to the waters case and other matters we've worked on we have actually provided our own stenographer so they could have an actual transcript of the testimony but that didn't occur in the case and there was potentially the first case the we worked on so it's important to emphasize those are not verbatim notes on what mr. moore said and they are not accurate to the context but it's not a word for word transcription of the testimony. >> the gentleman from maryland is seeking recognition and from ohio has a question on this. i will recognize the gentleman from ohio first. >> mr. moore, giving to the

july 12 interview, and i don't know if you have it laying around, but -- i will read the answer that i read like to focus on on page 54 of your july 12 testimony. relative this is what the congresswoman was telling you to do or not to do based on the conflict that existed. ury answers on page 54 where i think the matter as high understood, the congresswoman is working now on this idea that they've been asked for $50 million as a repayment by backend so for me the conversation was that issue if there is a response to that that's not something that you are to work on. that goes back to the september meeting represented to the treasury as the minority banks, the nba want to express their concern about issues.

at that meeting the document was presented to the treasury officials where one asked for $50 million as a buyback for the preferred stock they own the on fannie and freddie. later i would say that same document without the header says something to the effect the was given to treasury. i request protection from you to revoke the failure of one united bank due to its investment in the preferred stock. that same document -- >> i don't believe that document was provided at a meeting. >> but it went to somebody to read the treasury was asked for 50 million. >> if i can be clear about that, the letter that was sent, the

solution that was outlined in the letter that preceded the meetings said that minority banks that were impacted should be giving that money that so it was the solution that was suggested before the meeting happened which the treasury department had come with the way in which it was articulated and how and who it was articulated by, that isn't something that wasn't in conjunction and the letter the ascent previously. >> i guess this goes to my concern how big is the class because treasury, the reason that i believed they called congresswoman waters is because he thought the sisyphus to be a minority bank meeting would ask for $50 million, so that cut preferred stock. it then gets down to the fact there is only to members in this

particular problem about the one united stuff is also forwarded to the financial services committee and i have a copy of that if you are interested as well. again, my concern is that there were the legislative tracks to be in the crossway of the skills and the rules of the road you don't have to be successful. you try to do something and it doesn't work it doesn't make it okay. likewise but me finish and then you can respond. likewise -- or not likewise. anyway, there were two tracks of legislation. one, that your employer was working very diligently and did make it into t.a.r.p. section section 103 sub six that provided relief for the smaller

banks 1 billion carless in assets and certainly one united would benefit from that that is a big class. when it can to the 50 million there were drafts of legislation passed back-and-forth but in the treasury and the financial services and mr. foley dealt with the buyback. that didn't make it into t.a.r.p. but it's the class. >> i would ask -- i'm a little bit obsessed with the class question which is again, whether or not it deals with the number of institutions were shareholders for the percentage of ownership is a question that the committee has to grapple with. the second thing i would say is that, again, the e-mails and the issues are looked at in a very

narrow viewpoint i would asked to broaden it and the buyback question that you're talking about is something that wasn't exclusive for individual to one united as early as the day of the conservatorship expressed their want, need and aspirations for the buyback of the preferred stock's for all banks that have been impacted so the concept isn't something that individual and there is one other thing that i should say about my legislative process as a staffer which is ultimately i evaluate the problem that is articulated, the solution that's articulated and with a broad impact is going to be on that solution. i think one of the challenges in dealing with people you work with on a free basis whether or not you are going to act on

their behalf or not is figuring out when to say don't call me. i don't know how the conversation happens with ongoing issues. second, also note that gleefully in his testimony said he wasn't hired by the nba or one united and contacted buy any of them to do work on their behalf. lee foley is a well-known minority banking expert. i acknowledge that there are multiple rules that exist in this instance and i welcome guidance from the committee on how the stuff is to deal when those multiple roles or in place. as members know whether it is the nba with the aba, the way the leadership is made up and the committee gets the data are made up of their members they are not separate, so the ceo of the bank and head of the legislative committees at the same time, so i would welcome that point. >> with the gentleman from ohio

yield? >> yes, sir. >> mr. moore, mr. lee foley testified before the outside counsel that he was a board member of one united bank, and that he believed you knew he was a member of one united bank. at the time of these discussions and communications going on related to one united bank's difficulties. >> i guess i would say, again, i am not denying that point, but the point is what was asked and what was done and who did he say that he was working on behalf? he was a board member without question according to the e-mail and testimony that he also testified he wasn't working on behalf on either of the entities when he was communicating in that way according to what i write. >> and i am advised by the committee outside counsel that

mr. foley put that in writing you to july, 2008. at the time you had been advised by congresswoman waters to stay out of this matter subsequently you were advised to stay out of the matter because she had a conflict in her mind and in her testimony before the committee staff. that conflict was her husband's ownership of stock yet the subsequent communications with mr. foley would seem to indicate not standing in your comment i thought would only do this for one day you then subsequently had communications with committee staff that could clearly -- you could say that it's for a broader purpose but it could clearly also be seen to be communication related to one united bank and the reason congresswoman waters asked you

to stay out of the matter. >> the first point, the e-mail you are referring to about mr. foley that he was a board member was in july of 2008 and was a part of a reference of at least seven or eight legislative conferences around the coming downfall of fannie and freddie. i don't want the committee to suggest that i denied a long-term working relationship with mr. foley. that isn't the question. the question is even to mr. latourette's printable the by the provision and other provisions of the language the question that i would ask the committee is that is there any contention that any one of those come any legislative language cent would apply only to one united coming and the answer to that is absolutely not. there was no piece of language that would apply to the only one united so my point in the same way if we could see section 1 of

36 which allowed a broad class was okay in the buyback provision if it applied to a broad class if it wasn't unique to a specific bank it also passed the same. >> mr. moore, let me say and then i will yield back to the gentleman from ohio, and the gentleman from maryland does, but let me say that troubling matter here and the distinction with the case you cited is that in your case, does woman water's coming your employer instructed you to stay out of this matter and to take your own interpretation of what the matter was and how narrow or broadly applied the skills appear to us to have violated the obstruction you receive from the congressman. >> my working -- the work that i did in september 2008 was sent

on behalf of any one bank. if it was instructed not to do anything on behalf of one united i believe that what followed that destruction. also believe that again, continuing to have a conversation about when i was instructed is very important because it's difficult to say that i violated that instruction >> the gentleman from ohio. just two points because i know the gentleman has been waiting patiently. one of the terrifying things that happens, to me any way -- but me interrupt for a second and advise members we have votes that have been called and it is our intention to return until all of the members have asked questions the need to ask of you and we will give you a full opportunity to respond. the gentleman from ohio. >> one of the things that can happen is when someone says it's nice to meet you and i. googled

you before the meeting. i didn't know who mr. foley was and you were right mr. foley based upon his career and training and expertise, he is a fellow that is sought after in terms of giving advice, but i think you hit the nail on the head. it's how many different hats can a person where. look ayman expert in banking. i want to help icba devine a board member of one united. that's the center of the case. there are times, again, in my opinion when you as a lobbyist and a staffer and a member have to say we can't go with that. >> i guess i would appreciate

clarification and the house would appreciate that as well because i think one of the ways the house conflict is interpreted as by the actions they are taking. dalia acknowledge all of the house that these people were wearing and mine litmus test for me as a legislator is what is being asked and what am i doing? if i would have been asked to write a piece of legislation that applies to one united or another company that would be something that made me highly uncomfortable. i do not believe the other language applied to only one company. >> i appreciate the clarification and i'm glad you asked for the hearing today because you come across much better in person than you do in writing. [laughter] the gentlewoman from maryland is recognized. as the next before mr. chairman. i will be brief.

mr. moore, you've argued there is insufficient evidence to prove that you knew your employer ms. waters had a personal financial interest, but i believe that the actions that you took subsequent or in the context of these meetings and e-mail the exchange's streams the notion of credibility that you didn't know about her interest. in particular, ms. waters direction to you to stay out of any suggestion which you a firm on the record before the outside counsel you thought that only meant one day strains credibility. and it's clear to me that ms. waters knew she had a conflict of interest and she made it clear that she

understood that and that she spoke to the chairman of the committee to separate herself from the matter and she directed you to stay out of that and you ignored your member. i levesque as i am listening to you i wonder if we were to accept your conclusion that to stay out of it only meant when they we would have to go back and reconsider whether ms. waters did provide the supervision that she is obligated to provide. i don't find that because i find her direction to you and the reiteration of that by several sources very credible which is why your statement both here and

in the record streams so much credibility that i believe you either knew or should have known by september 19th that there was a conflict of interest by your employee in member. >> let me address that in a couple of ways. one coming you said that i ignored my members direction. the outside counsel has established we can establish when that conversation happened. that is a fact of the record. i think it is difficult for me to accept the idea that i ignored a direction where we haven't established a time line. second, i would again suggest that in my view -- and i could be wrong -- in my view that e-mails referred to even after that direction do not violate that direction if the happened after that to send an e-mail to say you are in trouble and especially to mr. frank's office who was a person who according

to everyone is designated to work on behalf of this entity if i were to communicate with an outside treasury or fdic or someone and ask them to do something on behalf of one united, i think would be a different conversation but i have to continue to go back to the timeline issue because it is important in establishing that time line to establish whether or not a directive was ignored and then what actions were taken after. >> like mr. latourette, it is important to me as a consideration whether you were successful or approached the right and he to evaluate whether you knew or should have known about a conflict, and again perhaps we will have the celebration if we were able to accept your conclusion, i think that we would have to revisit the conclusion that we have

already made that is in the report as to ms. waters supervision of you, and mr. chairman, i will leave it at that. >> if i may respond to that the first thing i would say is i'm already on the record today acknowledging it may be important to take that as an interpretation. i am in no way trying to say that they didn't give clear direction when it was given so i want to be clear to the committee that i have acknowledged on the record i may have exhibited poor judgment if my interpretation was that i should do it for that day so there isn't a question about that a defective but the remaining question still remains, and i would ask any member or staffer or outside counsel to affirmatively established when the conversation happened and that i ignored and their record is replete and says does not happen so my concern is that the

committee has laid out three substantive violation saw used the office for my own personal gain and that i brought discredit on the house without establishing the facts and i think that is problematic. >> of the vote on the floor has about five minutes remaining, so the committee will stand in recess and we will reconvene immediately following the votes. [inaudible conversations]

>> as you heard some votes right now on the floor of the house and after that's wrapped up, this hearing will get back under way, the ethics violation charges. as we wait for that we will bring you up to speed for what else is going on today on capitol hill. the senate meeting today to continue debate on a six month federal spending plan. the new budget year starts october 1st in the house already passed the measure that would continue current spending for half a year. most of the agencies would get an increase of slightly over

half a percent. we have live coverage of the senate on noon eastern.

this morning washington journal talked with house ways and means committee jim mcdermott and talked about -- now we will take you live to the steps of the u.s. capitol. it turns out minority leader nancy pelosi making her way to the microphone she will speak with reporters will bring live coverage of the remarks by the house minority leader.

>> good morning. as you can see, democrats are proudly stand on the steps of the capitol saying we must stay here until we take action to help the american people. we are prepared to stay in session to pass president obama is job bill that can create more than 1 million new jobs immediately. has a five-year farm bill, 16 million agricultural jobs depend on it. extend middle-income tax cuts to provide certainty for millions of americans come and help our economy. and to pass a comprehensive

balance and balanced bill to address our fiscal concerns. to say to the world that we can get the job done, that we can work in a cooperative manner to reduce the deficit to create growth, to create jobs. we are here standing together to recognize that since august 3rd when the congress adjourned, and november 14th, but what is being called back into session we will have been in session only eight days. that's not right. democrats are prepared to stay until we get the job done. that is what we are elected to do is get the job done. [applause] in closing i will say that one of the most important issues that we face in our country that is fine to be decided in the election is the issue of

medicare. the republicans in the house of representatives have voted six times to in the the medicare guarantee to bid that will cost seniors $6,400 more as they get tax breaks to people making over a million dollars a year of $160,000. that is just not right. the democrats are committed to the american dream to build ladders of opportunity to play by the rules and we will remove obstacles to that so that they will have success. that's how we must stay here to do it and now i am pleased to yield to the distinguished mr. hoyer. [applause] >> what we are seeing this week is a convincing end to abysmal converse to the distinguished political scientists in the

country they become an insurgent out liar in american politics that is ideologically extreme. it's dismissive of the legitimacy of the political opposition. republicans are leaving town with a stack of unfinished business to the public expects us to get done. chief among them are to create jobs and at first the fiscal cliff if congress fails to act. the democrats have been willing to work to replace the question the imposed last year by reaching a big and balanced solution to deficits. however they have walked away from compromise every time as the political science says insisting on putting tax breaks for millionaires ahead of a balanced solution. they also held tax cuts from the middle class hostage to the same cause.

they've used this time to consider the senate bipartisan farm bill. farmers across the country are facing the worst drought in decades and republicans refused to act. this is a responsible and republicans ought to come back and finish their work, not cut and run and walk away from the american people. [applause] shame on them for abandoning the farmers, they call me and families that need us to act. let me turn over to the assistant leader. but let me say this about the caucus we are fired up and ready to stay. we are five-year note and we are going to stay here and do the work for the american people. jim clyburn of south carolina. >> thank you so much. it's weird to be introduced by a refrain in the great state of

south carolina. the republican and the majority of the house have taken their own political interests of the american people and they see a continuation of that this week. the senate passed the middle class tax cut and the president has said that he will sign it as soon as it hits his desk and the leadership to allow it to be voted off. the only thing standing between the american middle class and working people and their tax cuts is the republican leadership in the house and the tea party adherence converse shouldn't leave town without passing the middle class tax cut. [applause]

as one of those people, the 47% come the middle class the democrats are ready to work on behalf of the american people and to deliver the tax cuts that they so genuinely deserve and with that i am proud to yield to my friend of connecticut. [applause] islamic members are prepared to stay in the work of the job they were sent here to do on behalf of the people that were sworn to serve. this is personal, people back home cannot understand the work ethic of this congress they don't understand why we aren't staying here to get the job

done. they've seen them over the last several weeks perpetuate the mess that clinton be found at the convention and about work requirements. the only requirement for work is that republicans stay here and work instead of cutting and running. we are ready to do the job we are sent here to do. we want to work and get the job done and that's why we rely on the great strength of our leader, the vice chairman of his caucus and xavier becerra. [applause] our chairman is fired up i believe. every single member standing here is saying something to the american people. we are here to represent our constituents. we are here to represent america and represent every single one

of those americans. we are ready to work for every american who wants to go to work. [applause] we are here to say to our colleagues don't cut and run. it's time for us to what our sleeves and showed the american people that we can do this bipartisan leavitt it's not just american tax payers, it's not just american workers, it's not just american farmers being left behind today. back in april the u.s. senate passed by an overwhelming majority the will to help women who suffer from domestic violence. the violence against women act passed by 68 votes in the senate and it's been languishing since april when the house of representatives. every day in america a woman dies of domestic violence and behind her is another woman and behind her is another.

three women in america die every day as a result of domestic violence and since april the house of representatives under the republican majority leadership has been unwilling to put the violence against women act against a vote so it's not just american workers, it's not just about american farmers and it's not just american taxpayers left behind by those that wish to cut and run in the house of representatives. it is women who are fighting for their very lives. each and every member standing behind me today is saying we are ready to work for farmers, ready to work for american taxpayers and folks that want to get ready for work and to work for every single american woman saying we want to have the respect that we deserve and not be the victims of violence. don't go home until you do. we will do that. [applause] if the republicans will stay. let me introduce the ranking but committee chris van hollen.

>> thank you. i'm proud to stand with my colleagues to say we want to say congressional publicans want to run away but you know what, you can run, the but you cannot hide from your record and from when you want to do. i can understand what they plan to do and why they want to hide from the american people. but president obama and congressional democrats are going to make sure that people hold our colleagues accountable. the president has said to congress stay, stay in the past the middle class tax cut. we need to make sure that we extend the tax relief in 98% of the american people. in fact, 100% of the american people would get tax relief on the first $250,000. 98% of the american people would get full tax relief. 97% of all pass through businesses would get tax relief. the republican position has then

know, unless people like mitt romney and less the company's domestic and a tax break nobody else in america can get tax relief, so it's no wonder they want to cut and run especially when you look at the next plan they look up the rhine and the romney budget would do they want to do. another round of big tax breaks from wealthy people like mitt romney at the expense of everybody else because if you're stealing about dealing with the long term deficit as we should be and we all are the question is how do you choose to do that. and if you provide another round of tax breaks for people like mitt romney it means you're going to cut seniors on medicare, give them a voucher that the plans the value comfort to the rising health care costs and leave them taking the bill

seeks to give another round of tax breaks to folks at the very top. i understand in some ways why they are cut and run we won't let them hide from the record or for what they plan to do to this country because we are not going to take a u-turn back to the same failed trickle-down policies that got our country into such a mess to begin with. we need to move forward and that is what my colleagues want to stay here to do. thank you all very much.

>> [chanting "work"] [inaudible conversations] [inaudible conversations]

>> house democrats on the east steps of the u.s. capitol on a nice september morning here in washington, d.c.. we will show a picture now from inside the radio and television gallery at the house in the capitol. we are expecting about 20 minutes or so with the speaker of the house, john boehner, to come out and make remarks as we can see people just starting to arrive and we will have that hope life and about 20 minutes or so. earlier this morning on washington journal we spoke with house ways and means committee jim mcdermott talked about the spending issues on capitol hill and his bill to create a scholarship program for medical students. let's take a look. we want to check in with congressman jim mcdermott, democrats in washington and member of the house ways and means committee thanks for being with us on c-span. >> it's my pleasure. >> host: first and foremost, one of the stories that got our attention from "the new york times" this past week is a story

from the association of mental, which is estimating that by 2015, the country will have 62,900 fewer doctors than are needed. that's just a couple years away. >> guest: yes, it is. a couple things. you've got retirement. obviously people get older and say i'm not going to practice medicine anymore. it's harder and harder for kids to go to medical school, and we simply have not expanded our class's and medical school to deal with the expanding population in the united states. so a number of factors to explain what's happening, but the reason we are moving in the problem we take 30 million people who haven't had health care before and bring them and give them access to the system and its estimated by 2020 that we would be short 45,000 primary-care doctors so we have a number of problems we have to

deal with. >> primary-care physicians over the next ten to 15 years and over all about 100,000 fewer doctors than are needed. some people are looking at the health care law as one of the reasons we've taken into account fully you and other democrats in the law. >> guest: when we went back to the white house before this started, i told you of the program that i am proposing because i said you are going to need a lot of primary-care doctors and the problem massachusetts was the to get rid of dna and then people said where de wi-fi doctor they are not taking any more because they are full said it was clear from the massachusetts experience. we put some provisions in to expend the national health service corps and some programs before, but in my view they were just too small, too little and

too late because we are going to have a major problem here in ten years. >> if you take a college student thinking about medical school, it is going to take him or her eight to ten years to go through the internship and program training so you are talking about an eight to ten year proposition to make them a full-fledged physician. >> guest: when i started medical school and spent four years of medical school and did an internship and then i took my residency. so i was there for nine years after college, and if somebody's been going to primary care, you probably could do it medical school and then one or two at most three years after, at least seven years to go from saying we are going to fix the problem today. it's going to be seven years before you get to it so this requires planning for the future. >> host: phone lines are open for the doctor and congressman to the democrats' first, the numbers are on the bottom to be to send an e-mail or join on

facebook work better. atwitter dhaka,/c-spanwj. many people don't want to become primary care physicians. they would rather go into other areas because it may be a little easier or it may be profitable, or a lot less headaches in terms of the paper work and all that is involved for the surgeons and physicians. >> guest: the reason i put forward the program which i did which is called rdocs, took the model of the military, which is rotc. when we need medical officers we give a kid a college scholarship and a stipend, and then when he or she finishes they serve in the military for four or five years. i said why don't we do the same with medical school, give kids the chance to understand that if they going to medical school they would have their tuition paid and get a stipend and then both the state five years of practice in an underserved area.

that could be a rural area or a densely part of the urban area where there isn't enough physicians. it's very clear what is troubling medical students today as they come out 175,000, 200,000 cut rendered $50,000. when i finished medical school than 63i was spending $800,000 a semester, 1600 the year. i could pay that -- i could work and pay that but many kids can't because tuition is killing them so that's why the program of tuition forgiveness in exchange for service to your country is what we are proposing. >> host: 20 plus years in congress and the position you served and it has among the lowest approval rating of eight to 10% of the american people, and we were talking about this in the first 45 minutes the least productive congress and a generation. as you look back and the fingers on both sides.

democrats fighting republicans, republicans fighting democrats. what is the core reason there is little agreement on the key issues including simple things like the spending bill? >> guest: without being partisan i think mitch mcconnell made it clear in 2009 when he said my number one job is to prevent barack obama from getting a second term. ..

i will come back next year and, but you always compromise. the idea that you can't compromise is, it doesn't work in our democracy. >> host: lets let's forsake a bargain and say the congressman remains divided and regardless of who is in the white house there needs to be a compromise in dealing with a 16 trillion-dollar debt. will the politics be different after the election? >> guest: absolutely. you see in the paper the republicans are talking about it and "the washington post" today the fact is they are going to have to deal with this whole issue. they cannot be absolutely no compromise my way or the highway. we are hitting the cliff. all the tax cuts are noel. and we are also hitting a wall that says we have to cut big amounts of money out of defense and nondiscretionary -- though

both sides of the budget will have to be cut deeply. assad there are are going to be faced with some awfully awfully difficult questions and they are already saying well if obama is reelected we are clearly going to have to deal with taxes. we are going to have to raise taxes. taxes are going to go up. we have said that all along. we have said you can't solve problems in the country without increased revenue. you can make cuts in all of us know about cuts and we have done them but there has to be some additional revenue. we gave away too much revenue in 2000 that the bush tax cuts and we are paying the piper in 2012. >> host: let's get your phonecalls. seras on the phone from rudy in mississippi for representative jim mcdermott of washington state. hello sarah. >> caller: good morning and thank you for c-span. i wanted to state that i love the health care bill that has come out.

my husband developed cancer during the health care debates. he was fired after seven weeks of the company finding out that he had cancer, and i i i know a lot of this has happened to people all over the country besides ourselves. but in regards to congress, the republican congress they have stagnated this country from going forward and senator mcconnell to me he should have been fired way back when. this job bill was put on the table out there in congress. there may have been one long lame-duck session forever knight is kind of wanted to state that for everything from all of the things that they work to pass on all the things they wouldn't address, and i just find it absolutely appalling. >> host: sarah, thanks for the call.

your husband battling cancer, what was the outcome and was he able to get medical treatment? >> caller: i ended up in front of the judge to get, to continue on with his health care. he had a major surgery and a large tumor on his liver and still today -- this has been the three years ago. >> host: how is he doing? >> caller: he still has some health problems but he doesn't have this tumor on him any more. >> host: sarah, thanks for the call. we will get a response and good luck with your husband. >> guest: she is emblematic of what the problem this country is. we do not have health care security. we have social security and a lot of other things but most families are always living with the fear that they will lose their health insurance or their health insurance will not cover what they have. i have been very doing that all the time and i'm watching the flight attendants get older. they are still flying at age 60

and i think a number of them, why are you still flying? because i have health care coverage and my husband has a job where he doesn't. everybody in this country is worried about it. that is why 2013 is the year that we are going to implement the bill to start in 2014 and it's going to change this country dramatically in terms of people's convert about situations like this that we just describe. when you think you have a health insurance policy and then something happens, suddenly it turns out it's not worth anything, it's a terrifying experience. >> host: one of our viewers saying sequestration is forcing the issue we need to listen to our needs. why are the cuts such a bad thing? >> guest: well, one of the problems of sequestration is it's an across-the-board cut, bang. >> host: and the etymology of that word. where do we get sequestration? >> guest: it means slipping back inside.

it comes from the latin and it's a medical term. sequester, you are holding something in and so you have got to open it up and this issue of holding back, now here is the issue i can give you one example. we spend money at the the national institutes of health, every day, every month. people are on panels choosing which research we should do over the next three years and giving out money and grants. we used to fund 17% of the grandson that means one out of five we would fund. well, then came the cuts and we are now funding one out of nine. what that means is the research and ultimately our research in this country is going to go down. you have to keep putting money into that so when people say let's just cut the national institutes of health, they are

not thinking what that means 10 years out. that is the real problem. >> host: scott is on the phone from thomasville georgia, republican line. >> caller: good morning gentlemen. first of all i am in the business, 15 years my dad was in it 20 years before that so i have got a lot of experience and in southeastern insurance and i wanted to ask the congressman, does he think that the way the health care law was put into place where it addresses insurance, the providers themselves because i know when this is the way it is right now in this business and getting this way increasingly each year, that the availability of providers and the primary care and in the specialties, you have to really work hard to be able to get an. if you have any problem it could be three weeks and you have to have a friend of a friend to be able to get u.n..

>> guest: you are putting your finger on the problem. they found this in massachusetts and we are going to find it nationally in the same way. the president had two problems to deal with in health care. one is access, that is getting people access to care and the second one is how to control costs. most of what we did was access. we made it possible for people not to be able to go to an insurance exchange in a state and choose a policy that they could afford and if they don't have enough money we will subsidize them and we are helping employers so employers can also offer to their people a health care plan. we have tried to figure out all the places where we have to make it affordable but you can't just say well it's out there. lamborghinis are out there but you and i are not buying lamborghinis because we don't have the money. we are buying prius or a honda or we are buying something. what we want to do is buy a plan for everyone but covers the

basic things we need and in a way that doesn't break is financially. if you are out there alone trying to buy, and if you have any preexisting condition or you are above a certain age or whatever, it's very very expensive to buy health insurance on your own. when using the market and using the group to buy the insurance and we are subsidizing people. i think the american people are going to be amazed. they are er because i remember when my kids got out of college and they couldn't get insurance or they weren't going to get it and i was worried they would get hurt or get sick or something. now you can keep her kids on your policy until age 26 when they get a job that has benefits. well that is already in place and we have a whole. if things better already going in but the changes are going to come in 2015. >> host: to our radio audience we are talking to congressman jim mcdermott, democrat from washington state. one of our viewers says, sequestration comes from latin

meaning to afraid of losing your job to actually do your job. [laughter] >> guest: that may be it. it does cover the issue. >> host: we will go to mike in laguna woods california. good morning to you. thanks for waiting. >> caller: good morning gentlemen. congressman i'm a libertarian so i believe the federal government already has a dangerous bubble of power. my view especially the democratic politicians are blind to this concentration of power. and they think that you have submitted exhibit a a, the controversy over death panels and that issue i think democratic politicians have a blind spot. >> host: your response? >> guest: actually that was manufactured by people who were trying to destroy the president's plan. what we put into the accountable care act was a provision that

said a doctor could sit and be paid for, talking to you about what your final directives want to be. every american has a civic duty to sit down with your family and your doctor and decide what you want to do when you are close to death. 20% of the money we spend in this country is spent on the last six months of life. the person is now so sick they can't make decisions for themselves. the doctor can't say well i'm not going to treat him any anymore because he's not going to get any better. we can't do that. the responsibility of the position is you must take care of the patience of those final directives, and they are tough. i remember having this discussion with my own father and they said you have had a stroke dad and there is at possibility your heart may stop. what you want us to do if that happens? he said i don't like those paddles. i don't want that to happen, so

i said to him, you want pressing on your chest to make your heart start again and he said yeah that's what i want. i went and talked his doctor and he said your father made exactly the wrong mistake is the paddles are much less invasive. they don't hurt you. if you have a big intern pressing on your father's chest following pain, so when i went back to my dad and told him with a doctor said he said if that is what the doctor says that is what we should do, that's what we should do. doctors don't get paid for that. it takes time. you can't go through this kind of discussion in an instant and it's not like taking a sample or something. this is something that takes time. if you try to pay for that, people called that death panels because it's like we are setting up something outside. no, we were paying physicians to spend time to talk to you about

how you want your life to it and. woody allen said nobody gets out of your life. >> host: yesterday you and your colleagues were debating the whole issue of welfare to welfare to work it became an issue with mitt romney stating the president was trying to get that part of the program the key provision in the law signed by the president clinton back in 1996. you are calling the chair of the house ways & means committee who have this to say on the floor. >> the obama administration issued an information memorandum to waive the welfare to work requirement in a blatant and unlawful and run around the current congress. be it menstruations action is unlawful and two friends. first, the welfare worker crimes are contained in a section of the social security act section 407. they not be waived according to that law. second, the nonpartisan government accountability office determined the administration's information memorandum followed by the rule and therefore should

have been officially submitted to the congress for review before in being issue. it was not. your reaction? >> well, first of all the president did not cut the welfare act. i was here in 96 when it was put in place and it's still in place and has more requirements in it but the president was dealing with the fact that we have paralysis. you can get anything done and the governors are coming to him saying we have some ideas about how we can make our welfare program work a little bit better. and send out a letter that said i will entertain your proposal but it has to increase employment by 20%. he was demanding more work that he was going to make any kind of waiver. they simply an misrepresented the facts in that issue. if they want to make it a political issue and say this president doesn't want to send people to work and he just wants to send -- that idea is

political but the facts are wrong in this particular case. i read the bill and that is not true what was said. >> host: the payroll tax cut from 6.2% to 4.2% which is used to fund social security and katy o'donnell from the "national journal" pointing out there is no sentiment keep this tax cut in place and it will likely revert back to 6.2% in january. are you hearing the same thing? >> guest: i'm worried about social security. if you reduce the amount of money that we are getting and, when you get your check and i get my check and he sent another 6% for social security i'm worried that we reduce the tax too far and there won't be any money out there. we have got it so right now everybody is taking care of until 2075 or someplace out there. it is done but if we reduce the tax, it weakens our own social security and a lot of people in this country is our living in

that. i think the -- [inaudible] >> host: one of our viewers on the twitter page has this to say. dare republicans to block a tax cut to the bottom 97%. no pledges period and cut the defense. >> guest: well i think that is what the papers were indicating this morning, that the president has said he would extend all the tax cuts for everybody under $250,000. now that is most americans, and 97%, i'm not sure but it's close to that. most of us understand that we live in a country that is the most wonderful country in the world. and we can do the things we can't because of this wonderful country but it doesn't come free. you have to pay for it and we believe that people ought to pay on their ability to pay and i think there will be a tax

increase for everybody over 250,000. >> host: when it comes to that benchmark, the first $250,000, is it then kick in above 250? >> guest: it's at 250 you start paying a higher rate after you get to 250. >> host: delano is on the line from his bring field missouri on our democrat line. >> caller: thanks for c-span. doctor i just read a book by a doctor from oklahoma and he says the problem is the bring of power, the people at the top and the senate democrats. you can't get anything past them because the lobbyist etc.. now i don't know how most of his. >> we will break away from this portion of "washington journal" to take you live back to capitol hill and house speaker

john boehner just stepping to the podium in front of reporters. live coverage on c-span2. >> the bill will cut red teeth tape and remove government barriers that make it harder for small businesses to hire new workers. there are bills over there that expand american energy production and approve projects like the keystone pipeline. there are bills over there to stop the president's tax hikes and affect the tax code to bring more jobs home from overseas. these are good ideas, all passed with bipartisan support here in the house. the president obama won't work with us to find common ground or urge senate democrats to take action. why? because democrats have failed to lead. they have failed to lead on jobs and the unemployment rate has been over 8% for 43 consecutive months and they have failed to lead on energy so everything from gasoline prices to groceries all cost more today.

the presidents defense sequester threatens our national security and the tax hikes threaten some 700,000 jobs. while democrats have failed to lead republicans have focused on jobs and keeping our pledge to america so we made nearly two years ago. in my opinion p and people want government out of the way. they want spending reduced and less regulation on small businesses. they want a strong national defense. they want more in american energy production. that is the people's agenda. it's a pro-growth, pro-jobs agenda and it has been our governing agenda. we promised to focus on solutions for jobs and the economy, to reform congress and to cut spending and we have kept our pledge. but this is in the time for self congratulations. it's not just our jobs bill that the democrats are ignoring.

their failure to lead is a lot worse than that. they have not passed a budget in more than three years. they have no plan to save medicare and no plan to stop all the tax hikes and no plans to replace the sequester. they have actually threaten threatened to do nothing and drive us off the fiscal cliff which the congressional budget office has said will lead to a very deep recession. this isn't leadership. president obama's excuses you can change washington from the inside. well, you actually can change washington from the inside. it takes courage and it takes determination and it takes sincerity and it is called leadership. i have been here for 22 years. i've been involved in changing a lot of things in this town from my days as a member of the gang of seven, trying to get congress to run more efficiently and more professionally. and how about the issue of --

i spent five years working to eliminate earmarks and over the last couple of years we have had no earmarks. so you can't tell me that you can't fix washington from the inside. i have this belief and i'm frankly believe it is verbal and that the president doesn't share my optimism about fixing this. >> some republicans -- [inaudible] [laughter] >> he has been a longtime friend of mine. >> he is somebody who said publicly he is very worried. [inaudible] >> there have been discussions about it. it's not about anything else.

obama in the last few weeks, campaigns up and into all kinds of other areas that the american people want to know, what is the plan to get our economy going again integrate jobs collects the president's economic policies have failed. he has to try to make this election about everything other than his record but the romney campaign needs to stay focused on jobs. their plan to create jobs and convince the american people that he in fact is that the plan that will put americans back to work. they have done a pretty good job of the. >> mr. speaker when he came into your current role, he said -- whether or not it might bring up some bills on the floor that could fail. and there is a bipartisan group of farm heavy district lawmakers who really are pushing. my question is, what farm bill

will we see on the floor? >> we don't typically put bills on the floor where we are expecting certain failure. it has been my opinion, having been a member of the ag committee for 16 years, it's my opinion that the opposition to the left and the right here in congress has prevented us from putting a billboard because i don't believe there are 218 votes to pass the bill. i made it clear yesterday that we will have the house take up the issue of the farm bill. now i know the next question is. what's it going to look like? [laughter] >> what the going to look like? >> when we get back after the election we will consult with their members and develop a pathway forward. it is too early to determine right now what kind of mood members are going to be and what kinds of opinions they're going to have. >> it the president wins does

not mean we are eventually going to have to raise taxes? >> no. raising taxes would threaten our economy with the loss of 700,000 jobs. why would i ever be for something like that? i am not. our goal is to have tax reform and entitlement reform so we all know that these are probably having to travel on parallel paths but it's important for our country to fix our debt problems and to have a tax code that is competitive in the worldwide economy and fairer for the american people. speier expressed concern about the sequester with members of both parties -- i keep hearing republicans saying we need to fix the sequester and republicans the saying government should be out people's lives. aren't you are you basically saying we need to fix the

sequester and -- [inaudible] this committee put out a report said the sequester -- there are people tied to the government even in your own party. >> because the president didn't help and didn't lead when he came to fixing are working with a supercommittee senate democrats didn't cooperate in helping make the supercommittee function we ended up with a sequester. the sequester is like taking a meat axe to federal spending. it is not, no one on either side of the aisle believes this is an appropriate way to reduce the role of government. so that is why the house acted to pass a bill to replace the sequester, continues to sit in the united states senate.

[inaudible] >> my friends across the aisle. [inaudible] >> you know instead of having this demonstration on the house floor maybe they should've had it on the senate steps. it was standing hoyer a couple of years ago he said the most important part of governing is to have a budget. senate democrats have not done a budget for three and a half years. if you think about the letter that they sent to me about us doing our work. how about the 40 jobs bill sitting in the united states senate? the house is the only body to

have passed a bill to stop all the coming tax hikes. the house is the only body that is passed a bill to stop the sequester. we have done our work. but here senate democrats and the president, where is their responsibility? wears their leadership? it just doesn't exist. >> the sequester may put in place because the expectation was for some grand bargain. there are members of your caucus that will recognize -- or democrats who liked the idea of cutting defense spending. why not just that let the sequester take effect and see how it all sheiks out? >> i'm not going to speculate on what may or may not happen in the lame-duck but i have not

heard one member, not one member suggested the sequester was a good idea. not one. and i have talked to a lot of members from both parties almost every day. >> why is mitt romney continuing to trail in the polls? >> it has been a close race in ohio and it's going to be at close race in ohio. i was expecting it to be a close race in ohio probably like all of you have expected it to be a close race in ohio and one of the things that works against romney in ohio is the fact that evan or kasich has done such a good job of fixing government regulations in the state and attracting new businesses to the state. our unemployment rate in ohio is lower than the national average and in fact i think it's a lot lower than the national average. as a result people are still concerned about the economy and jobs in ohio but it certainly isn't like you see in some other

states. speak you have spoken of the need to address the sequester in the lame-duck. do you think congress will expand -- [inaudible] >> i see don't know. i have not heard any conversations about it. we had a plan that we passed last december to deal with this. i'm sure we will look for a common way forward. >> you think congress should investigate -- libya? >> i suspect, i suspect part of the investigation underway. we will take a look at that. while we typically have marine detachment at our embassies, it isn't always the case when it comes to other countries so i'm sure there will be a review of

and discussion about whether that is why is going forward. alright, one more. [laughter] >> back in april you said there was a one in three chance that house republicans -- and as we look at the polls, all polls are trending more democratic. what is your assessment now? ..

here in the coming weeks. >> what's the prediction? romney versus obama? [laughter] speaking with reporters on capitol hill. show you in the house ethics committee room the hearing getting started this morning in a break a number of votes on the floor of the house there is legislation on the floor on the environment and energy regulation and a number of amendments. as those are taking place this hearing in a recess. we are going to try to get it when it resumes, the hearing to the matter of the representative maxine waters, a california democrat dealing with allegations. the senate coming in and about half an hour meeting today to

continue debate on a six month federal spending plan. the new budget year starts in just a couple of weeks on october 1st, and that the house already passed a measure that would continue current spending for half a year. most agencies would get an increase of slightly over a half percent. we have live coverage on the c-span2 coming up at noon eastern or when the senate comes in. in the meantime a portion of this morning's washington journal with joe barton, the texas republican talking about energy and commerce and come from the energy and commerce committee. he will talk about some of the matter is in front of that committee. we want to welcome congressman joe barton, r-texas, member of the house energy and commerce committee. thanks for being with us. let me ask about some of the things congress will not accomplish. one is the farm bill. why such an inability to get a major piece of legislation through a republican controlled house? >> guest: it's republican house that a democratic senate.

you've got to keep that in mind. i think the primary reason is that some of the more conservative republicans coming and certainly i consider myself to be a conservative republican want to take a look at the cost and not just a farm program that all of the programs, and so you have a disagreement if that is the right term about the spending levels. having said that, i think the majority of the house republicans would vote for the farm bill if it is put up on the floor and some amendments are made some of these issues could be worked out the regular order on the floor votes and after the election we will get the worked out. >> host: let me put this into perspective and "the new york times" writing about this calling it the least productive in a generation. it does, discuss 173 public walls as of last month as a

comparison the so-called do nothing congress, the president harry truman ran against in 1948 in the same two-year time period passing 906 laws. that is a huge difference. some say that is a good thing because fewer regulations. do you think this is a metric on with the congress is or isn't doing? >> guest: i wouldn't rate the congress on how many laws its past. we could pass a resolution proclaiming national donut day and that would be a law but it doesn't mean it's substantive. the issue is you have a republican controlled house and democratic controlled set. i would say fairly left-of-center president. so there are real disagreements between what we think the solutions are coming and we have passed a number of bills in the house that i thought were good pieces of legislation that didn't get a hearing in the

senate. it's not all bad that we haven't gotten some of these -- a bunch of bill's done but i think on the big issues, you know, we do need to address the deficit. we do need to address spending. i think we need to pass a constitutional amendment requiring a balanced budget to the states. and the house has passed some of those bills. the senate didn't even take up the budget. i think a majority of the senate voted against the budget to the constitution. so, we have divided government and when you have divided government, you don't have consensus and when you don't have consensus coming to don't a lot done three >> host: the inspector general for the justice department with his 471 page report looking at the fast and furious operation. according to "the new york times" republicans focused on the findings that included the

deputy assistant attorney general who is supposed to be aware of what was happening in approving this operation was not fully informed of everything that was going on. and the representative elijah cummings had this to say as part of the question before the house oversight committee. >> i want to commend the attorney general. i lost track of how many times that he is remanded even-handed, respectful and always true to the daunting and critical mission of the department that he leads. he requested this investigation coming and he's already put numerous reforms in place. to that and i know that the administration did not exert executive privilege over any part of the inspector general's report. over any of the documents relied on by the inspector general. in fact, the department went a step further. yesterday it said the county more than 300 pages of additional documents that were withheld previously.

>> democrat elijah cummings and also the report by michael horowitz. are you satisfied? >> guest: christa why have great respect for congressman cummings. i think that he's an outstanding congressman and a man of integrity. but i would say that what he said was truthful but perhaps he didn't tell the entire story. he was held in contempt of congress that some president i think. the attorney general did withhold documents to the committee is investigating and my recollection is they did at some point in documenting the request from the house claimed executive privilege. congressman cummings just said and they've been in the investigation by the inspector general whenever the inspector

general requested with the attorney general provided. so it is possible that he was more forthcoming with of the inspector general than he was in the house of representatives. so far as the congressman cummings said, i think he's telling the truth as he knows it and giving his opinion which that is what congressman are supposed to do that there is a broad picture, and again, it is extremely unusual if not unprecedented for a maturing general of the united states and trusted as the chief law enforcement officer of the executive branch to be held in contempt of congress. >> host: this is on the printer page. who was the last republican president to submit a balanced budget to congress? >> guest: ronald reagan for one because i voted for it.

in 1985. it didn't get many votes but i was one of them. president bush submitted budgets the balanced. the second president bush weekend for balanced budgets under president clinton in the first year president bush was president. was dhaka with the busheir tax cuts and a stake as we look now at the dead of $16 trillion? >> guest: our problem isn't tax revenue, its spending. i think the bush tax cuts were a positive affect. >> host: with the tax cuts in addition to the war in iraq and afghanistan, the development of the department homeland security the congress and the president but democrats and republicans didn't do enough to pay for those. >> guest: my democratic friends enjoy spending money. they don't enjoy paying for what they spend. there is a little thing called the laugher curve and it may be

out of date to talk about it but it's just kind of a bell shaped curve and as you take that tax rates down, you get more revenue because people work harder and more wealth is created. we have shown that time and again. the bush tax cuts i think created a lot more wealth than the lost tax revenue and while the revenue did go down slightly for period what time our problem is that the spending has been building up in some years almost double digit rates coming and we have no plan. the democrats certainly have no plan to bring them under control. the president's budget he has to submit to congress each year doesn't show a deficit under half a trillion to a trillion dollars at any time. >> host: michele did morning. greenville carolina republican line go ahead, please.

>> caller: i'm very excited to speak to the congressman. i just want to let you in african-american and i plan to vote for mitt romney and i changed my registration to republican because of what is going on in the country helping. i am very worried about my children and it's not as much for me that it's not fair for my kids to have to deal with what the problems are going on now. they should have a clean slate just like when i was born to it i want to say thank you so much. i know that republicans only have the house and thank you for trying to do all that you can. i know it's hard because there are a lot of things the media will not let the people know and try to withhold especially with what is going on in libya.

>> host: thank you, michele. we will get a response. >> guest: i want to thank her for switching her reza to do that could registration and voting for governor romney. we are in the same boat. i'm going to vote for him also. i do think that the republican party has a great message for african-americans. we are the party atoka and opportunity and inclusion, and in my congressional district in texas i have got a large number of african-american supporters and i value their input and support embrey placer we are glad to have her as a part of the republican party. >> host: one of the viewers saying we do not need to amend the constitution to balance the budget we need the representative to do his job >> guest: if everyone voted the way that i did the last eight years we would have had a lot more balanced budgets.

the twitterer if that is the correct term is correct you don't have to have a balanced budget amendment but there would be helpful. the states that haven't, they have a lot more balanced budget and if we have at the federal level we wouldn't have a balanced budget every year because there are exceptions for the time of war and economic depression and things like at bat but we would have them more often than not and in my lifetime, i was born in 1949, we've had five balanced budgets and one of them was accounting president nixon used when he got five quarters of revenue and four quarters of spending and the other four were in the speakership era and a hastert speakership. we had four balanced budgets in a row. >> host: dead on the democratic line from virginia. good morning.

>> caller: good morning. how are you doing this morning? the biggest problem you have is the oval analysis that's flawed. it doesn't trickle down. it goes up. wheat, the consumers. that is where the biggest flaw is at. the money comes from last. >> guest: i don't know that i give an economic analysis about where the money comes from, but i do agree with the caller that what else is created and in the private sector when you put capital and labor with materials

together you create products or services that the consumers purchase. there are a lot of people that work for themselves, their self-employed. most people work for corporations or companies together to create products and services that consumers buy, and we have shown that time after time wealth is created in the private sector and the free markets and transparency, not by the public works programs that provide short-term spending but no long-term economic impact. i wouldn't give an economic model but i don't have a problem with her pointing out that it's, you know, it's the private sector that creates the wealth in order to have money to spend most people have to have a job and most jobs are created in the private sector.

>> host: we normally don't ask about the entire of the guests because we take the graphic down and look at your tie i have to ask what you are wearing. [laughter] >> guest: well, i am wearing my disney mickey mouse tie, the last day of congress. i'm going home to texas, and usually when i go to texas i will wear a texas high but today since the last day of congress before the election i wore my disney tie to show how happy i am to be going home. >> host: this is the earliest date for congress to recess since 1960. six to seven weeks for your colleagues to campaign. >> guest: that is good news for the american people. senators will be out in their states and districts and certain congressmen then have the

elections and races and i have a very good democrat opponent that gives voters a chance to see us up close and personal, and i think that is good and not bad. if there will to be some emergency with speaker boehner and the majority leader reid would call this stuff but absent something catastrophic i think it is very good that we get to go home and not get there at the last minute. what hasn't been set is that in all probability after the election there will be several more weeks of congress as we do things like you've already talked about doing the reform bill and maybe some other issues we haven't got wrapped up yet. >> host: representative barton of texas. good morning, thank you for waiting. >> caller: good morning. my question is this. all monetary bills originate the

house of representatives. the spending that has been going on, the fact that we are over budget and we have had two wars and haven't spent for them, haven't paid for them, the fact that congress is leaving shows that there is no concern for the american people. there's only concern for themselves and their own reelection so i question is why should we hire them back. >> host: how do you respond to that? >> guest: i point out the obvious in the house every congressman is up for election. the term is for two years and most congressmen have competition so the gentleman

doesn't pay for the current congress he has an alternative and he has the right to vote for the alternative to the beach in his or her district should be evaluated every two years on their merit. i have run 14 times and i've won in the morning the 15th time and i hope i get to represent six the district of texas again but it's up to the people in the district. the senate is a different. they have six year terms and only one-third of the senate is that every two years and the president as you know is a four year term and so president obama is asking to be reelected for his second term but the power is in the hands of the people, and it's up to them to decide who they want to represent them. i would take exception with one thing you said in that the congress is only concerned about

its re-election. that is not true. on both sides of the nile the overwhelming majority are very concerned about the country, and we want to do the right tampa. the thing most people do not understand is that in the country this large and this diverse what my constituents think is the right thing to do is sometimes of the same as the minority leader nancy pelosi's constituency in san francisco or the gentleman from washington was under the program might be for me. he has a much more liberal voting record than i do and he represents a more liberal part of the country in washington state. i represent a more conservative part of the country in central texas. so the duty of democracy is over time we start here and in that here and hopefully here is for the good of the country.

but the reason congress starts out here is because many issues that we're different groups in the country are. instead of yelling and screaming coming to the capitol and talk and debate and offer amendments and the differences and ultimately get stuff done the country once done. >> host:, did you sign the northwest no tax pledge? >> guest: i have. >> host: tom cole in the king of the president is reelected, he could see taxes would go up next year. do you agree? >> guest: i want to vote to raise taxes. i am one vote out of the 45 and the house and in the senate. i think with the congressman and saying is that he expects the president to push and mandate the tax increase in exchange for spending reductions and that is a part of the space process that we will deal with it president

obama is reelected, which i hope it's not, and as i've already pointed out i'm going to vote for governor romney and hopefully if i am the elected with president romney we will be talking about reducing spending and cutting taxes and creating opportunities in the private sector to find employment to be opposed to the vote against the tax increase that they could go of it the president is reelected? >> guest: i could see the president obama would attempt to raise taxes. he is campaigning on that and his tax on millionaires. but, you know, that's his prerogative. if he is reelected i don't personally think a lot of people in america want to see their income tax raised but that is what elections are all about. >> host: republican line. >> caller: yes. well, for one, i, just became a

republican after 40 years of being a democrat. >> guest: thank you. welcome. >> caller: one thing obama said in the health care law if you like your instruments you would be able to keep it. one week after he signed the law -- i am disabled, and i healthcare through my employer -- one week after he signed the law i was dumped onto medicare coming and i don't like the fact that the health care law was rammed down our throats and having nancy pelosi stand there and say we've got to pass it so we will know what is in it. that is no way to pass of law. >> guest: i agree. i voted against the health care law every chance i could win it was going through the house and

committee and on the floor, and i voted to repeal it, parts of it the number of times in this congress, and what the caller said is absolutely right. president obama did say that when he was pushing the bill that's now law that if you like your insurance coming you can keep it. well, if it is fully implemented, in my opinion, most employer sponsored health care plans are going to go away because the difference in the mandated cost of the coverage they have to provide and what is the penalty in the bill but which the supreme court said is a tax, that differential, the cost is on average probably $10,000 per person, per year, and the penalty or the tax if you eliminate the health coverage and put them into these

exchanges and public plans i think is no more than $2,000. so you take the differential, which is going to be five, six, up to $10,000 per employee if you don't provide health insurance and you just pay the penalty of the tax and put them into the exchanges, most corporations and companies are going to do that because it is such a huge cash flow advantage to not provide health insurance. so, you know, the president's promise if you like your health insurance, you can keep that and it is simply not going to be sustainable, and i think the president knew that when he made the statement. >> host: on c-span radio heard coast to coast on cfpm we welcome your calls as well. kerry is gone from illinois. good morning. >> caller: yes, good morning,

congressman to the line calling from the home of ronald reagan just write down the street. my question to the congressman, i remember in 2000 when george w. bush became president he had a 59 billion-dollar budget surplus and the republicans took control of the house and the senate and they were talking about we're going to get $2 trillion in tax cuts and then in 2003i believe it was $1.3 trillion of tax cuts in devotee said no, no, no. don't do it because you are going to blow $5.6 trillion hole in the budget and lo and behold within that time look where we are. that's one of my questions. my question is also here you settle these bills come after the i suppose to believe were

job-related come in and everybody can see that these bills that you sent over coming you knew coming you knew in your heart these bills would not be taken up by the democrats because that's the way you wanted it because you are falling right with mitch mcconnell that you want to make this a one-term president. so,, this man, you need to answer to the american people why, number one committed to distribute the wealth from the middle class to the upper class and cut 1 million jobs during the whole bush administration. >> host: we will stop right there and get a response. >> guest: there was a lot there. first of all, there were budget surpluses when president bush came into office. as i said, we have through the balanced budget under president clinton with of the republican house leadership new gingrich and denney hastert, then we had one with bush as president. and we did pass some tax cuts coming and i think those on a

net basis were positive, but the caller did not add net something called the 911 where we have a terrorist attack on the united states have been on september 11, 2001 and that changed the economics not just in the united states but around the world that caused a severe recession. people pulled back and as that happened we had the situation with the banks. they have all their problems, and we all know about that. the economic problems that we've had in the last ten years are not because of the bush tax cuts. i would say they are in spite of them. if you look at the charts, they're has been a slight decline in revenue and it is beginning to come back to the

problem isn't the revenue, the problem is the spending line. my first year in congress back in 1985 the entire federal budget, the entire federal budget was less than a trillion dollars. this year the total spending in the federal budget i think is 3.6 trillion, and the deficit was projected to be 1.5 trillion i think it is grand to come in about 1.5, 1.2 but this would be the third year in a row that we cut the deficit we have to borrow over a trillion dollars and that is more than the entire federal budget was my first year in congress 1985. >> host: if you've retial -- >> we are going to break away from the last few minutes of this record portion of this morning's washington journal program just about ready