differences, medicare cannot set its own course with respect to future growth independent of what is happening in the rest of the health care marketplace. ..

cautioned with respect to the long run sustainability required by the affordable care act. the productivity related reductions in the annual payment rate updates for medicare providers and the ipad. while the trustees believe the measures were alternative ones of similar impact can be sustained over long run, they will occur only if the overall health care sector transitions to significantly more efficient models of care delivery. such transition will not happen if private payers and medicare continues to pursue cost saving innovations aggressively to moderate growth. in short, medicare's ability to moderate growth over the long run who depends critically on the private sector's success and

vice versa. >> you and the other trustees predicted in 13 years medicare will only be able to pay 87% of its benefits going forward. how the cuts that severe what impact does it have on medicare and its ability to provide medical assistance to seniors? >> that shortfall is in the hospital insurance trust fund and if it were allowed to simply play out without action, the amount of benefits will get pay would be 87% of what is currently scheduled under wall. that side of medicare cannot make payments in excess of balance of its trust funds so basically the interpretations of all medicare would have to wait until the incoming revenues before it can send out payments.

this would mean in many instances a delay of care but reduction in the aggregate amount received of roughly 13% in that year. >> you project likely high-cost growth rates going forward. so in effect we ought not, on the low growth rates of the last two years and you make the point that our finances are on the knife's edge. >> the seven trustees have said congress needs to take prompt time in legislative action. does that mean some time in the next ten years, sometime in the next five years? do we need to act sooner than that to address these issues? >> certainly the sooner there is action, the more prudent it would be for a number of reasons. one is the sooner you back to the more people can involved in the solution in the d'marko

hordes of tax payers. if there is going to be an impact on beneficiaries you can spread it out over a long period of time. the other point is you have to remember the main factors driving the cost growth. one is demographics. if we are going to change anything about eligibility criteria, then we want to phase that in. >> a lot more people coming into the program, higher costs over the long term continuing to drive the financial problems. >> how soon should we address? you've benner. you know the issues and the challenges. how much longer do we delayed taking some meaningful steps. >> what is the best time i can tell you from a numerical perspective the earlier you act, the better. >> now the session preferably from a purely technical

substantive perspective. >> your testimony sounds like everything is just fine in medicare. are you thinking don't worry be happy it will all work out? >> i think i said early on that although i'm optimistic about the spending slowdown, we still face a very significant problem, and like my colleague, i think the sooner we adopt measures to address the long term situation, the better. i am not one that spends sleepless nights worrying about 2087. but, you know, looking out at the next two decades, there is a

cause for concern. and i believe the sooner the decisions are made, the more gradual they can be implemented and the more political viability they will have. >> is your thinking rather than waiting five or ten years are the recommendations taking meaningful steps to the congress to do this this session, to start of those solutions or at least the steps of them now rather than continue to delay? >> we have adopted a lot of changes. we are going to lot a lot from the demonstration and the pilot programs and from the implementation of various cost reducing measures in the affordable care act. the and i think that in a few years we will be in a much

better position to adopt the next generation of changes informed by what we learn about how well the demonstrations are doing. >> i didn't -- you spend a lot of time in your testimony talking about the benefits of the affordable care act. i didn't see that. >> on the trustees' report -- >> what is your personal view just looking ahead on these issues? >> it comes from the belief that the success of the efforts to head down the medicare cost depends critically on what happens in the rest of our economy that medicare can't go

off. >> final point, is it accurate the trust fund party this year started out only have enough to cover 81% of liabilities, is that accurate clocks in the trustees' report? >> the trust fund assets amounted to 81% of 2013's expected expenditures, so if there were no money coming into the trust funds. >> it's expected the next 13 years. >> these hearings are basically educational for the public. let me try to get it in people's mind when you're talking about a

deficit, you are talking about a deficit in part a and part b is doctors and other incidental laboratories and so forth that will be paid in full and part d will be paid in full so those programs are not what we are worried about here. we are worried about the hospital is at 87%. there's going the 87% of the value. you are saying if we do nothing. but in fact, what we have done is put in place aca. so we are putting in a cost control mechanisms in the aca in a way that seem to be affecting these. i look at the medical advantage program and see that it's dropping and that there is encouraging news the bids are

coming lo wer on medicare advantage, which suggests to me the aca is already having an effect. is that a fair estimate? >> the trustees report says that the initial estimates of the impact of the affordable care act on medicare advantage plans were probably a bit high -- a bit low in terms of reductions and that the behavior of the plans and the changes in the benchmarks that have occurred over the last three years have led the actuaries to believe that the savings will be larger in the medicare advantage than they thought in 2010. and we've also seen an increase

in the number of folks signing up for medicare advantage higher than was predicted at the time the affordable care act was enacted. >> the initial medicare advantage introduction was a little bit rocky as i remember it. >> let's start with recalling that medicare advantage costs the government more money than the fee-for-service. in 5,010 because we were overpaying the plans relative to the cost that the individuals who participated in the plans would have cost had they been in fee-for-service medicine. so the affordable care act took a number of steps to try to reduce debt situation. and those have been quite successful. >> so what you have said is that congress took actions that have

reduced costs already and it looks like there is no reason to believe that won't continue out into the future as more people get into managed care and medicare advantage. the bids keep coming down and we will save money in the future. >> to take this to the next step they have to come down well below what the cost would be on fee-for-service which means these plans have to become ever more efficient, which i think they are on the way to doing. but to go back to mind the original testimony these are buying and -- buy and care services one big ball of wax and we want to keep pushing on all

aspects. >> this seems to me that what you are really saying is that some of the things being put in place and have been put in place in medicare advantage in the past you can't expect them to go in and have a major change that is like trying to take a super tanker and turn it on the line. it takes 20 miles to bend for degrees in each direction and that is what we are doing in the big program. is that your view that we are getting the benefits? >> we are, i think, and i think -- i hope that we will get more. it needs time to the vault to move in the right direction. they make the decision sooner rather than later someone direction to grow.

>> i would be glad to help with the cost control to the system we have a vote at 15 and i know members want to take a look at those and before we began we are going to recess until five minutes after the vote series concludes. we will reconvene. mr. johnson. >> medicare to spend more money and pay claims this year than it will protect from the federal tax, is that correct? when the expenditures began to exceed the tax and come -- tax income. >> are you aware of any program that is financially sustainable if it spends more money than it

has. >> we can't continue on the path and the current projections over the next decade projecting an exact symmetry of income there is a brief blip later in the decade to exceed expenditures but after that of the lines come apart and expenditures exceed the income on a permanent basis and that is the depletion of the trust fund. >> i don't know how you come up with that decision pity estimate the cost projections show there will be increased pressure on the general federal budget highlighting the increase in the general revenue and will be needed to prop up the trust fund. what does this mean for federal finances as a whole.

>> the answer is yes much increased pressure on the budget and there's only three outcomes, you have to have higher taxes and higher indebtedness. >> which of those do you favor? >> this is my personal viewpoint i'm not excited about the idea of the steadily rising taxes or debt. we have to do something to get the rising cost of medicare under control. >> maybe you can pay for the whole cost what do you think? >> i wouldn't want to do that. >> in your testimony using policies included in the affordable care act obamacare will reduce costs and create more deficiencies in the system. we specifically mention the cost conscience's insurance products that will be offered within the exchange's but many states

release numbers showing premiums will be increasing 10%, some 20 to 50% from as much as 150%. your assumption doesn't sound right to me. how does this help us control costs in medicare which is facing the problems right now. >> first of all, those numbers that you suggested i don't think account for the differences in the generosity between the plans but are being offered now and those will be offered in exchange because there are minimum benefit requirements for plans offered in exchange. but what i am really referring to is the situation that we will have once the exchange starts which is the individual consumer having a choice of which plan he or she does to sign up more there will be plans at different levels of generosity and we

might find very significant fractions of the american public are quite comfortable with plans that are not as generous that we see offered the 3-cd employer would and we the situation and that will change and start a competition and heretofore hasn't existed because employers offered a range of plans and those that do usually make their contributions to those different flavors of plans such that true market responses by the employees are not exhibited to respond people to spend more on health care than they are and i'm afraid that is what is going

to happen. >> each of them are two minutes long. so the subcommittee will reconvene promptly five minutes after the last vote so grab a cup of coffee and be back here and ready to work.

the senate foreign relations committee yesterday held a confirmation hearing for president obama's nominee to the assistant secretary of state for east asia. north korea's's nuclear program, relations with china and cybersecurity or among topics at the hourlong hearing. >> we will come to order. we want to thank tremendous for allowing me to chair today's hearing in which we will consider mr. daniel russell of new york to be assistant secretary of state with east asia and pacific affairs. the nominee for the assistant secretary of state for east

asia. i had a chance to be with mr. russell for my recent chance the qtr to asia and i want to thank him personally for the briefing and he's well qualified i want to thank you for your continuing to serve the public and i know that your family is there and we want to think your family as well. we think the members of your family for being willing to put up with your desire to serve the country. mr. russell is a career diplomat since 1985 was a major architect of the administration's rebalanced asia policy as white house national security staff since 2009. as the turn of the subcommittee rebalancing the asia policy so i welcome the opportunity to discuss mr. russell's plans for the rebalanced bigot asia is tremendously important for

america's economic growth and faces serious challenges of nuclear proliferation, the cyber attacks to climate change. i look forward to hearing from mr. russell how he will tackle these challenges and the new position. america's economic national security interests are tied to east asia's strength, stability and security. the rebalanced is a statement of our intent to foley invest in the region to support our allies and partners and to contribute to the economic prosperity, stability in the region. i look forward to what the policies will be in the balance in the coming years. how critical the denver so values of human rights and good governance are for security and prosperity. what the rebalanced policy means for the democracy come good governance and human rights to illustrate this point. they should be interpol to every element of the rebalanced policy. for instance in my second

hearing of the security cooperation made it clear that the military engagement should support human rights and civilian control of the agency, humanitarian assistance and disaster relief to get on economics the transpacific partnership and the centerpiece of the regional economic engagement can move forward if progress is made on the labor rights and basic human freedoms. they threaten food, water and energy security. i welcome how to undertake the rebalanced not only three military and economic strategies by expanding human rights and good governance to the eye can see opportunities for progress and many fronts. closer engagement active partnership with organizations such as the key to the successful rebalanced. they are working towards a binding code of conduct to resolve the south china sea conflict which is encouraging. myanmar's emergency youngdahl mobocracy is also a bright spot.

i've met with myanmar's president and speaker and i am impressed how to continue space progress. cautious engagement has worked and we want to see if they continue the reform to succeed on all fronts especially human-rights. there's been signs of movement on or after the recently as today with some reports. how should we proceed the korean peninsula. during my visit to the republic of korea i encourage the president to pursue her vision of the helsinki process to realize her goal of the northeast asia confidence-building dialogue. to continue her humanitarian approach to help starving darfurians. i welcome your id else to how to engage the saturday did founding as of two nations to move towards reconciliation including through closer cooperation with china. that brings me to china and the stumbling block to the relations human-rights.

how the government suppresses human rights is still not healthy to disagree with the government. how you can end up in the labor camps without trials for years you must continue to have an honest constructive dialogue with china when human-rights come cybersecurity and intellectual property. we want them to stop stealing our ideas and come up with their own to become an innovative society that is a true partner. we can partner with china and many years such as the military relations and climate change i was encouraged by president obama's meeting with the president that symbolized the kind of relationship building necessary to increase mutual trust. and with their agreement to reduce the hydrocarbons, climate change as a promising area for cooperation. we must get our relation night in order to contribute to peace and stability in the region as the two great specific powers. as you can see you have a full plate ahead of you and you will

not be bored in your new position. we look forward to your testimony. and with that, i will turn to mr. russell and just acknowledge that your full statement will be made it part of the record. you may proceed as you wish and then we will engage in questions. >> thank you very much mr. chairman for the hearing today. thank you very much for your comments and also for the leadership that you have shown since taking over the chairmanship of the committee on the asia pacific account. with your permission i would like to begin by introducing my wife of 31 years who has stood by me and sacrificed so much for me and my career and also the country. i would also like to introduce my son's. and they, like their sister who is mercifully gainfully employed

and therefore couldn't join us today with what is called for in service brats. they've grown up bouncing around the world changing countries and schools and houses and languages every three years and that has represented a great sacrifice as has they're waiting for me lead into the night and missing me on the weekend, so it's something i am very grateful to them to the and i appreciate your comments about families in the foreign service mr. chairman. i think that my own family exemplifies the service which is that the spouse and the children are the unsung heroes and i can't thank them enough. mr. chairman, senator murphy, i am really honored to appear before the committee today and am grateful to president obama ne secretary carried further

confidence nominating me for the responsibility of serving as assistant secretary of state for east asia and the pacific which is a region vital to our national interest. as a career member of the foreign service, i've devoted 28 years to serving america's interests abroad largely in asia. in 1985 my first assignment was to serve as the staff aide to the u.s. ambassador to japan who at that time was the former senate majority leader mike mansfield and he took me under his wing. he and his wife became mentors to me and my wife he became a lifelong friend, and to this day he remains my hero, my role model, and my inspiration. his life exemplified honor, honesty, hard work, loyalty, modesty, respect for others it's

from him i required a deep respect for this institution there's hardly a day that goes by that i do not think of him and missed him. my public service also taught me the value of the state department's greatest asset which is the wonderful and talented and dedicated men and women who serve in washington and served abroad. in my career i've been entrusted with assignments that carry the responsibility for management, for security and for the welfare of american citizens pitting if confirmed, i pledge to maintain high ethical and managerial standards. i would insist on the best possible security for the personnel, rigorous safeguarding of the national security information, clear and straightforward communications including with this committee and your staff. mr. chairman, as you mentioned president obama has made a commitment to rebalance the

policy toward the asia pacific region because america's prisoner nettie and security are linked to that region. i've had a privilege of serving as the president's special assistant for asia and i know his objective in the region is to create and ensure a stable security environment and advance a regional or rented and economic openness, peaceful resolution of disputes and respect for human rights and freedoms. secretary perry has affirmed his strong commitment to the strategy and if confirmed, i will vigorously pursue this approach which is yielding important benefits to the american people and the region. i firmly believe america's alliances underpin our strategic rebalanced of the asia-pacific region. more broadly the u.s. has a strong interest in clothes of interest and regional institutions as you elated to where the country's work together to confront the common challenges.

we want these institutions to help ensure the stable rules based environment for economic growth to promote respect for international law and to encourage the resolution of disputes. i also recognize the importance of opening markets and leveling the playing field and a deepening america's economic ties to asia and if confirmed i will work closely with congress and other stakeholders to promote exports and job creation to advocate for the u.s. firms to foster integration and work to advance initiatives on energy and on the environment and climate change. similarly, with respect to china if confirmed i will work to encourage china to resolve the key bilateral issues to ) on the regional challenges such as north korea and the maritime security and play a constructive responsible role in addressing global challenges i will seek to impress on the chinese government protecting the

universal human rights is in china's interest and we will press them to take stock of the cyber threat of american companies intellectual property. if confirmed by will implement president obama's policy of promoting the rules based system in the asia pacific respectful of universal values, human rights, good government and democracy. mr. chairman, and mentioned north korea's situation. north korea present through its nuclear and ballistic missile program a serious threat to the united states allies and the global non-proliferation regime. if confirmed i would actively pursue the verifiable denuclearization of the peninsula and work to block their efforts to proliferate or blackmail its neighbors. i am also concerned about the well-being of the north korean people including those that have fled tyranny. in addition, the united states

has a profound interest in the peaceful resolution of territorial disputes in the south and east china sea. it is essential that we uphold freedom of navigation and commerce and it confirmed i will support the u.s. policy of opposing the persian or the threat or the use of force of reinforcing steel devotee and adherence to international and preventing escalation of conflict. i would like to close by you reiterating my commitment to do everything in my power to advance american security and american interest. and i am committed to good coordination with the legislative branch and if confirmed, i look forward to close cooperation with you come in your colleagues and your staff. i look forward to hearing your views and answering questions. >> thank you. you've already answered one of my questions about your

cooperation with the committee in congress the or four times in a statement to reinforce the willingness to look closely at the kennedy. as bennett on this step forward we hope to be able to move the nomination forward expeditiously i want to explore the interplay of the rebalanced with respect to what is happening at the state department for diplomatic channels but also how that works together with our military rebalanced and i wanted to ask you to talk about this in the context of the maritime territorial disputes in the region. they greatly worry me. and i know that we have in part dedicated more military resources to make it clear that we are going to continue our

historical commitment to maintaining the open seas. but i also know that we have been encouraging for some of the regional forms to be used as a dispute settlement mechanism with great resistance from china. i would love to hear your thoughts about the path forward and how the united states interplays with some of the dispute but also how you see the interplay between the tools that we have on the diplomatic side and tools we have on the military side specifically with respect to this question. >> thank you. i think the juxtaposition of the issues that you've identified, which is the coordination of the resources between the security and the diplomatic track and the maritime space is in the central

challenge that faces the united states of the moment and in the years to come. the essence of the president's rebalancing strategy has been to create a stable environment in the region that is critical to america's future prosperity in the interests that is built on the existing investment by the united states by the security arrangements that have allowed from the development and the prosperity of the region has seen the structure and the system of the rules and the norms that our respect love and consistent with international law. nowhere is it more evident or more important to us and to our friends and partners for the approach to the territorial

sovereignty disputes in the asia-pacific region to be had dressed in a peaceful and diplomatic manner in ways that are consistent with international. the united states is itself not a claimant. we have no interest in the territory itself but we have a profound interest in the conduct and the claimants and the parties including in particular that of china we firmly opposed to worsen in the threat and the use of force. it is a key element of rebalancing as you alluded to the president has made clear in that asian and pacific region as a strategic priority for the united states, and i know that my colleagues in the pentagon

have planned and operated on the basis of that strategic guidance. at the same time, the president has also made clear that there is an important role for the state department on the diplomatic side in helping to build up the relationships between the u.s. and our allies, the rebalancing strategy has begun with modernizing our alliances. we have invested heavily in the development of the institutions in the region that are built around the association of the southeast nations and most importantly president obama to begin participating personally in the east asia senate which we see as the emerging as the premier form for leaders to discuss security and political

issues, something that frankly they can't do in any other form because the only other regional institution is an economic cooperation organization, and i think the president feels that we have made some headway on that firm. they have to play by the international norms and they have to be a player in the regional settlement forms and thus far we haven't seen a lot of interest in them to do that. tell me about what pressure the chinese feel to join in on these efforts and what we can do to try to encourage them together. >> rather than continue to be a diplomatic row. >> the issue of china's engagement with the other claimant countries diplomatically as well as

china's particular behavior on the seas, but it is in the scarborough or in the south china sea as well as the east china sea is an issue the president and the top officials including the secretary have raised consistently with the chinese as well as the east asian summit where they are accounted for in the multilateral with the chinese they are no doubt that america stands by our allies. as a competing plan and our relationship with japan with whom china has a sovereignty dispute over the east china sea. these are issues that the

chinese understand that directly implicate the u.s. interest and it will have an effect on the prospect for the u.s.-china relationship. so i believe, senator, that we have delivered this message consistently and clearly and we have reinforced the confidence of our partners and allies and have given a constructive boost to the efforts to begin the negotiations directly with china on a code of conduct. i think that we have supported other diplomatic recourse to the national law on the part of the claimants and if confirmed, sadr, i certainly will do everything in my power to lower the temperature and push the claimants including china into a diplomatic track and continue to warn them their region in which china will flourish is a region

of order in the region of respect for neighbors not one in which there is coercion. >> i think the administration has been clear on this point and i don't mean to suggest that it hasn't been. i am pleased with your nomination and i look forward to working with you. thank you mr. chairman. >> let me follow-up on the maritime security issues because the senator is right on target hitting it as you've pointed out we have treaty responsibilities with several countries involved in the maritime disputes. there's also the shipping lanes and importance to commerce. when i was in northeast asia, the north china sea disputes were mentioned by just about every public official that i met with as being a major area of concern. in the course of the south china sea, there are very serious issues that could -- that have

already in some cases turned into violence and could be more widespread. recently vietnam and china agreed on the hot line to deal with fishing instances. one can look at that as a positive sign and they have a way of communicating if something develops. but it's also of concern as to whether china is trying to circumvent other forms with these issues that need to be developed particularly with a code of conduct. what is your prognosis on how we can cool down the maritime issues and get the parties directly negotiating rather than seeing the loss of life and violence? >> thank you mr. chairman. before i begin, let me say that i think that your visit to northeast asia was very productive and i thank you for taking the time to go there and

i will put in a plug if confirmed by in a great believer in the tremendous value of congressional delegations. i can promise you east asia pacific hero and posts will roll out the red carpet and open their doors not only to you, senator, that any member of congress or any staff member who is willing to take the time to go because it is very important. with respect to the claimants to the disputed territories and the south china sea, it is our view that there should be a consensual inclusive collaborative process among the claimants that it is unacceptable for any party including china to demand that only bilateral negotiations are possible war or allowable. by the same token, we are not

being a claimant we are entirely comfortable with bilateral discussions and negotiations being part of the mechanisms for addressing both some of these disputes and the question of how to appropriately chair and manage the maritime resources which are measure that belong to the people specifically the negotiations among the claimants should not only be friendly and diplomatic, but should be undertaken on the basis of international. we've called on them to clarify their claims in ways that are consistent with blood all of the sea specifically on the recognized land features.

at the same time we think that a broad diplomatic process that gets at not just the question of who owns what and who's border begins and ends where but the issue of how the nation's be paid in the south china sea and in a common area particularly in areas of dispute is critically important and urgent and we have given our full backing in their efforts to go beyond the declaration of conduct that they have agreed to in 2002 which is somewhat theoretical to a practical code of conduct. now they have held informal discussions. i understand that there are plans for meetings later in the summer of the ministerial level. the secretary will travel at the end of this month to attend the regional forum and these are places where there is both an

opportunity for china to make progress with, but in the case of the ossean were president obama will attend for the senior u.s. officials to speak out clearly and constructively to the adherence to principles of life mentioned but also to try to galvanize the kind of diplomatic process that will address both the need for the irresponsible conduct and the desirability of the actual negotiations. >> and i think the united states has been very clear about our commitment on the maritime issues i don't think that we can have any doubt because it is of a major cancer concern to our partners in asia. when the president was here she mentioned the security dialogue organization for northeast asia. and when i was over in the republic of korea and also by

the way in japan and china, i talked about a regional security dialogue and was favorably thought about by all of the parties. one of the things that i think surprises most americans is that we think of the public of korea and japan being our strongest allies in that region and the relationship between the countries can certainly use some improvement. they certainly have areas that still remain unresolved. a regional dialogue organization may help resolve some of these. and of course dealing with china and north korea, and they also see the participation of russia and the united states i think there is a lot of promise to that type of organization after the helsinki process. do you have a view as to whether a separate organization in northeast asia could be helpful?

>> thank you, mr. chairman. i am very familiar both with the helsinki commission and also with your role as the co-chair. i served for six years in europe, and i saw firsthand the progress the helsinki commission was able to drive on the european fighter coming and i think that you are asking a question that's worth looking into and if confirmed, it is something i would like to continue to probe to idle some of this earlier this month and so the reference to this there are analogies between the helsinki process and the northeast asia peace and cooperation initiative that the president has put forward

looking at quite carefully there are parallels. there are likely to be some differences in asia and one outstanding question would be whether there is a role for the helsinki commission itself to help and to cooperate in the region or whether there should be regional institution developed along those lines to get an seceded question would be the balance between engaging on some of the softer issues that help build confidence and help build trust. i've heard her speak out her initiative. she has tended to favor that approach starting softly set to speak. i know that the key six by northeast asia have come

together repeatedly both in the sixth party talks itself. to continue with a security lighting at its heart the security challenge and the pacific region it is manifest most vividly in the threat from. >> we have the six-party talks dealing with north korea and there has been some encouraging signs just very recently that there may be a desire for north korea to engage in the discussions under the framework that complying with their agreements on the denuclearized korean peninsula. the interesting part about the process as it relates to north

korea is that we are all focused on the nuclear ambition and the military process. but as we heard over and over again from the president and other south koreans that in order to have a stable korean peninsula isn't just getting rid of the next, it's also dealing with the human rights conditions of the people that are living up in the north and economic opportunities for the people who are living in the north. so, it is a more comprehensive approach. and what they seem to be warned is that for north korea to comply with their commitment for the nuclear-free peninsula but then to engage on ways there can be cooperation with the economic development. and the basic respect for the rights by the government of the people in north korea at the

risk of quoting you back to yourself, i need remember watching your speech at csis earlier this spring and you use a formula that really made an impression on me. you said the government's need to understand that they will never achieve economic security or political security without respect for good governance and human rights. i think that is a critically important principle that applies in the east asia region and nowhere more so than to north korea. president obama said very clearly that north korea can never achieve the security, respect or economic prosperity that it says it wants in its pursuit of nuclear weapons and missiles. i think, mr. chairman, the two issues that you have identified

on north korea's egregious pattern of human rights abuses and its failure to feed its own people and its pursuit of nuclear missile capability that is highly destabilizing in the region these are two sides of the same client. north korea is choosing not to feed its people. north korea is prioritizing frankly useless. the pursuit of a useless military capability against an imaginary bat at the expense of the kind of growth and economic development that it claims to want and then its people deserve to be a i am deeply concerned about the plight of the north korean people as well as those that have managed to escape from

tierney. i am concerned about the continuing efforts to proliferate and further develop nuclear missile capabilities that we find so threatening. i've dealt with the north koreans and the issue for more than 20 years in my position in the national security council. i've traveled to north korea. if confirmed, mr. chairman, i will make the effort to accelerate the achievement of the denuclearization, not just the theory to actively help bring about a rollback and an elimination of north korea's's nuclear program top priority and i believe that in that effort we stand a much greater chance of being able to address the human rights problems and the country. islamic in the country that can

help us achieve change is china. >> i was impressed by my meetings with the chinese as to how sincerely believe they are to have a change about the direction of north korea as it relates to nuclear weapons and opening up their economy has china has opened up its economy. you cannot help but notice tremendous change in china. you see entrepreneurs on the streets, and you see more freedom than has been enjoyed in the past generations and you see a country that is clearly moving in a more aggressive way economically. having said that, as i said in my opening statement, the one-party communist rule country violates basic human rights of its citizens. it's not good to disagree with

of the government in china. they still have these education labor camps where you can beat the team for an extended period of time because you disagree with the government. i was so disappointed talking with religious leaders as to how the government stops any organized religion from being able to carry out its normal assembling its. and then most of the people in the country are locked in to where they are born and have a chance to benefit from the economic advancement of the country. you have the have and have-nots. we need to develop a long-term relationship with china. we need the help including north curving and the environment and the factor of the members of the current council in the united nations security council to

reassess how we handle china recognizing its strategic importance to the united states to the concern for basic good governments and human rights. >> thank you mr. chairman. china is hugely important and consequential country and relationship for the united states. before i turn to china let me say that i entirely agree china has an important role to play in our efforts to deal with north korea. i believe also, mr. chairman, that burma does as well. i think that they modeled example of burma on the authoritarian leadership that made an affirmative decision to pursue a peaceful path to democracy and economic reform stands as a tremendous role

model for what north korea should and can do and i think the strong support from of united states and the rest of the international community in backing the reform answers the question the north koreans answer which is how can we trust that if we make the right decision and take this path that you actually will support us. >> with respect to china, mr. chairman, thank you for expressing your views in advance of meeting the president had at sunny lands i know that reached the president and he appreciated as long as your other comments including today. the president has invested since the day that he took office in attempting to build a balanced relationship with china. he has made clear that our

interest is in seeing the peaceful rise of china that is stable and prosperous and that rises in a way that is consistent with and reinforcing of the international and the regional rules and norms that are important to all of us. ..

you you are you shoe company reached an important agreement on the flow of cards and content carbon and it will pay dividends down the road. i think these areas are positive for cooperation. it is not only positive but essential. including president obama nuclear rising north korea. human rights is not a stand-alone issue. either in the region or in the u.s. and china relationships. it is something that we have raised always at every level in virtually every meeting both of

which you alluded to. this is who we are as americans. it is continuing to demand good governance. it requires a willingness to abide by rules and laws.

we talked to the chinese and various about the general principle as i said in my statement. because in china's interest, they are demonstrating respect for human rights it is enshrined in its own constitution. the chinese citizens can access this and we do this is we want a stable china. we did disrespecting china's choices. but we do it in a conviction that not only are these universal principles central to the prospects for successful. >> our u.s. consular offices also bought.

>> the cyberissues are real. and the access to the internet has cyberthreats and we're moving forward. it was just reported today about the forest fires in indonesia. when i was in beijing come i never saw the sign. there is a huge environmental challenge in asia today. the good news for dealing with it is that it is so visible that it is a problem. there appears to be a real opportunity for countries who

were not engaged couple of years ago and international leadership. so this is globally on climate change initiatives. how do you see your role in regards to promoting that type of leadership. >> thank you, mr. chairman. i couldn't agree with you more. this includes all the countries in the region we are helping to

address the climate issues and environmental degradation but partnerships. not just as rhetorical talking points. one of them is an initiative the president obama launched. this is an effort to promote renewable energy. low omissions, energy sources. as well as to facilitate the world electrification that is critical to the responsible growth of the southeast asian region.

they are working to preserve forests and access to water tare forests and access to water this is important to the ecological system there. another is the industry transparency initiative. i am very proud that i have been able to help in a small way, including in cooperation with our u.s. mission in burma. because burma, like its neighbors in cambodia and laos, along with vietnam and thailand have phenomenal environmental

resources to protect. there is also,, in the south china sea, a treasure trove of wealth in the form of fish and coral and hydrocarbons responsible for management of those resources. it is a priority not only for the owners but for the people and for the region. so on those issues as well as other environmental challenges, like wildlife, where there is a nexus between poaching of elephants in africa, including terrorist related groups and consumption of ivory in east asia, if confirmed, this is an area where i think that the state department and the bureau and i can make a difference. i would like to work closely

with the relevant posts with our ambassadors and that includes coordination and partnerships to make some real measurable progress on this issue. >> i want to mention one other area in regards to china that has recently come to light. that is china has downgraded in the state department the persons report from the tier two watch list to the lowest that tier three. so this is trafficking, and that is one of our highest priorities. will you commit to make this a top priority and work with the chinese? this is an area where i think that most countries really want to do the right thing. so it seems to me that there is a way that we should be able to help china in dealing with this modern day aspects. >> mr. chairman, the short answer is yes. this is available in its own

right and it's important for moral reasons. it's important for development reasons. regionwide but also in china. i am aware of the fact that yesterday that the trafficking in persons report was unveiled by secretary kerry and that, i think, that is part of the automaticity in the tier two watch list system there is no question that the problem with trafficking in china and some of the neighbors is a very serious one. one in which the u.s. can be helpful and one that i would

make best efforts support. >> the administration's economic initiative is top priority, to train specific partnerships, that includes a variety of nations in our hemisphere and in the asian region. it was mentioned a couple of times and my visit to china. they are not exactly sure what this means as far as china is concerned. but there is some concern that it is being used to try to contain china. could you just please briefly review what the committee the priority placed on why? >> thank you, mr. chairman. yes. the president has directed many of my colleagues, including a recently confirmed u.s. trade

representative. spare no effort to work towards the completion bonus partnership by the end of this year. the president believes that this is a high-quality high benefit trade arrangement that has immense economic as well as strategic failure. i know that the negotiators are hard at work on this. if confirmed, i would like to contribute and participate it

will represent 40% is not an exclusive trade agreement. but it is not exclusive in the sense that it is perfectly consistent with the important work that we are doing elsewhere. including and through aipac. or for that matter, the other trade discussions that are occurring on the bilateral or multilateral basis is. what we are looking for, mr. chairman, is trade arrangements that will lower barriers to trade. double increase access and

exporters to foreign markets. that will support good labor practices and standards we would like it to be inclusive and transparent as trade arrangements. and in doing so, we think that this will pay huge dividends to american companies and american citizens and lend a real boost to the entire region.

>> we have the opportunity to make those advancements. i would hope that you, in your new position would remind negotiators that we would be expecting progress made on each of these fronts. so i understand this is dealing with pending cases on child abduction. so will you help us and help the embassy try to close a deal with as many of these open cases as we can, to try to end this chapter in relationship with japan on child abductions? >> thank you, mr. chairman. first, with respect to this, i

couldn't agree with you more. i think the political relationship that we have is an important one. certainly, we are in the midst of negotiations with vietnam over the transpacific dimension of our relationship. frankly, it's part of the problem area where we are not satisfied. and in fact, unhappy about some degree human rights this includes political respect for

intellectual property. if confirmed, that is something i will work on. >> you alluded, mr. chairman, to the issue of japan's belated accession to the hague convention on parental child abduction. this is an issue the president obama has raised a directly with his counterpart. if confirmed by the state department, this is an issue that i, too, will work on. the story has not ended for the parents of children who were taken back to japan. those who will not be covered under the tree that japan has just exceeded two. i'm the parent, as you see.

i am deeply sympathetic to the plight of these families i know that the department is committed to working to make sure that the welfare and we can try to facilitate access. i will do what i can, mr. chairman, should i be confirmed in a new position to be supportive of them. >> thank you for that response. these are difficult issues. we appreciate your priority and not. in my visits to japan and china,

i raised the iranian sanctions in countries under that portfolio, which play a critical role in enforcing sanctions against iran. i know that president obama has made this a top priority. we want to use every opportunity we can that we have very close relationships with. for example, we don't want to see a nuclear power on the peninsula. they could use less iranian oil. so i think that needs to be something that we could focus on for reducing the amount of oil purchased in asia. >> i thought i would put it in to the record we have talked a lot about if you just had to

quickly summarize what you hope you would see during the next three years as far as the u.s. and purchase of the nation in asia, what would you like to see accomplished in the next three years? >> thank you for the opportunity to address the questions, mr. chairman. it is really close to my heart. i certainly am committed to sustaining the rebalance end up moving it to the next level, so to speak. i would say that the three areas that i would propose to focus on with regard to the rebalance if confirmed, it would be the diversification of it. the security element and underpinning of ecurity elementd underpinning of this strategy is hugely important.

we must strengthen that. but there is more to america than this. in fact, it is the economic agenda and the energy agenda. the education agenda. the values agenda. the people to people connection. one that i think in the long run will have a most significant and enduring impact in this young and thriving and dynamic region. i think secondly what i would consider a balance within the rebalance. i think that our relationships in northeast asia are very mature and well developed and of course they will take a great deal of our attention but i think that southeast asia and pacific areas are right for intensification of american

engagement and involvement. i think the return on investment for the u.s. and the u.s. taxpayer in our programs both operationally and in terms of foreign assistance is absolutely huge. it is a region of the gdp with 2.2 plus billion dollars. 600 million or trillion dollars, 600 million people. at least half who meet the definition of middle class. this is an area where the united states and we can make great strides including with education and other forms of exchange. already, the educational exchange programs that we have to bring huge benefits.

i am told that students who come to the united states from the asia pacific region, including to my residence state of maryland, this has to do with the u.s. economy. specifically the bureau within the department has been. >> as we have seen in the fiscal year 14 budget, a 7% increase. i will fight for the tools and resources to allow the wonderful men and women working in the

area and in the pacific bureau, to earn the benefits for the american people that are there for us. >> i appreciate that answer. i agree with you. i think this is a critical part of our success. i think that we have a better understanding and it is critically important as we develop stronger ties. your answers are complete. i thank you very much. as i said, a you have been incredibly generous with your talents in the country. we very much appreciate that and your willingness to serve the post that you have been nominated to. it is one of the most important posts in the country and will keep you very much engaged in

long hours. we thank you for the willingness to continue to work on this. with that, the hearing is adjourned. [inaudible conversations] >> when you talk about transparency with the american public, you're going to give up something. you are going to be given signals to our adversaries as to what our capabilities are. this includes having people sitting around, saying okay, now i understand what needs to be done so it is a price to be paid

for the transparency. >> this weekend, director robert mueller makes his last scheduled appearance before the senate judiciary committee. on c-span2's booktv. books and issues in the news on saturday at 10, the nsa before and after 9/11 and sunday, immigration stories on c-span3's american history tv, interviews with key house judiciary staff investigating whether there are grounds to impeach president richard nixon at 3:00 o'clock. >> the senate has been debating immigration immigration legislation. they reconvene on monday to continue debating legislation

this includes additional border fencing. the topic includes a vote scheduled on whether to move forward with the bill. life senate coverage here on c-span2. >> the senate homeland security committee will look at how government employees and contractors have been security clearances. this is after edward snowden leaked documents about government programs, tracking e-mails and phone records. hearing is an hour and a half. >> i call this joint hearing on the subcommittee on the federal programs and federal workforce.

i want to say thank you to the oversight committee and senator johnson. senator mccaskill. senator porter as well. this afternoon's hearing is safeguarding our nation's secrets. examining the security clearance process. i want to thank my colleagues who i mentioned previously as we move forward, it is critical for us to examine the scope of the programs we have to have essential liberties protecting our privacy. it is asking critical questions about how the government is letting individuals, whether federal employees who have access to our nation sensitive data. last week, i asked keith alexander, the director of

national security, pretty straight up question. after the outcry after the presidential executive order calling for improved security, and after spending tens or hundreds of billions of taxpayer dollars to keep outsiders from accessing our nation's secrets, how in the world is a contractor , who has been on the job for less than three months, how did he get his hands on information detailing i highly classified program that i have shared with foreign media outlets. the long answer is one that ultimately requires a great deal of soul-searching throughout the government. but the short answer is that in terms of security classified information, we just don't have an external problem but an internal one. 5 million individuals inside of our government who have been granted security clearances and access to our most sensitive data. 1.4 million hold a top-secret

security clearance. getting an increasing amount of classified information to produce the increasing number of folks to the information, we have a real problem on our hands if we can't get it right. because of the national security implications involved, there is no margin for error this includes the management of carrying out investigations for the grounding of clearances and i hope and expect the particular rules of a play in the security clearance process. we need to know what we are doing right. we need to know what we can do better. a lot of progress has been made in recent years that we certainly still have a ways to go. i would like to turn it over to my good friend, senator claire

mccaskill. welcome. >> thank you. >> i hope that this is the first of many hearings that we have with senator portman and senator johnson, i think that all four of us have demonstrated a desire to get after various problems that are sometimes indebted in our government without adequate oversight. i am very happy to work with all three of you on this offer today. >> both government employees and contractors are conducted by the office of personnel management, including our background investigations for members of the military and defense department, civilian and contractors. in preparation for the hearing,

we have received information regarding how the government plans and conducts background investigations. this information portrays a government agency where there is fraud, but it accountability, and no respect for taxpayer dollars. and this includes a revolving fund structure in which both for agency employees and contractors. i was shocked to learn that this has never been audited. the agency simply doesn't have or keep the records that allow them to do an audit. we also learned that at least 18

investigators have been convicted of falsifying investigation since 2007. these convictions called into question top-level clearances this means it is possible that there are far more. all the investigations are conducted by contractors. this also has a contract to provide support for the office of personnel management. managing and overseeing investigations. work which appears to be in the position of being a contractor to do the investigation and then to be the contractor overseeing

their own employees they have received more than $200 million as of last year. we have received information that uses this under criminal investigation under the office of personal management. we have also received information that this is related to systematic failure to adequately invest under the contract. this is part of the time that is under review. we are limited in what we can say about this investigation. clearly, it is an ongoing investigation we cannot always comment. but it is a reminder that background investigations have real consequences for national security. federal agencies like the defense department rely on these background investigations to make assessments of whether people should be trusted with

the most sensitive information and this hearing will answer this important question. are we handling background investigations in our government effectively and in a way that is deserving of our trust. >> thank the ranking member from wisconsin. this is a really important topic. once again, the security clearance process is critical because it ensures that our nation's most valuable information is protected while ensuring that we had the

necessary personnel to conduct the duties that we need to protect our country. if it is done poorly, it can be incredibly damaging. including our agencies to filling their missions, as we have seen cases over the last couple of years and our ability to build alliances around the world. almost 5 million government and contractor personnel had been authorized to have some form of security clearance, up to 5 million people. given the many challenges in the past, it is only appropriate that we follow up today to see how these agencies are progressing. in light of what just happened, to see why it is not working as well as it should be. for six years the government accountability office had personal security programs on its high risk list.

it got off in 2011 and there's a long list of recommendations for the department of defense and for other agencies involved there other tools across government and shortcomings and metrics. the reciprocity. most troubling is the pressure to meet these metrics impacting the quality of investigations. >> this includes financial oversight of the revolving fund. the numerous investigations and the adequate steps to taken with these negligent investigators. we must have an adequate and timely completion of such attention has been paid.

as to effectiveness and efficiency over the process. i look forward to hearing a progress report, mr. chairman, on meeting these recommendations that were provided and the actions that have been taken. again, i think the witnesses for being here. i think the subcommittees bringing this issue before us. >> thank you, senator. the ranking member of the financial oversight committee, welcome, senator johnson. >> mr. chairman, i would like to thank the witnesses were appearing here today. this is exactly what this is all about. how do you develop a process that actually works. coming from a manufacturing background in business, there are all kinds of processes that we have standardized. there is things like surveillance audits on an ongoing basis.

as i was reviewing the information prior to this hearing, that is what kept jumping in my mind. if we could apply that across the government. probably the best piece of legislation is an article written on february 20 the 2013. a former deputy secretary of defense. i would like to enter that into the record. it really describes how this gentleman was going through the clearance process and he had already filed this. it was somewhere in a government computer. he had to fill it out again. a four-hour process, a review process and a contract employee basically coming through question by question by question. where he was in the private sector business in a similar process. they had a 95% review in terms of where that person had

remained. we can get to this in the private sector. and hopefully with this hearing is about, coming up with this standardized process that actually works. because i agree with all of you that this is critical. >> what is the name of the document that you want in the record? okay, so ordered. now, i would like to welcome all of you here today. i would like to point out that we have extended the invite. i know that they are under huge demands right now. i'd acknowledge of the issuer and it can happen next time. i'm sure there will be a next time. we are fortunate to have assembled a great panel this afternoon. we start with patrick mcfarland was inspector general of the

united states and the office of personnel management. making him the longest tenured federal inspector general of opm. he is part of the investigative program to identify the programs administered. sir, i understand it you are a police officer at st. louis one time. hopefully that past did not pass that senator mccaskill. >> only we could put criminal in jail. [laughter] and. >> very good. he is also accompanied by michelle schwartz. the inspector general for investigations. welcome to you both. martin miller is an associate director of investigations for the services. the largest provider of background investigations. he is responsible for the operation policy and contract oversight of the investigation

program. mr. miller has served a long and distinguished career. please come to montana, we are going to be looking for you. then we have stephen lewis was part of the physical security policy and the office of the undersecretary of defense process. that office is part of the strategic oversight over the defense department and counterintelligence including the security clearance process. today, mr. lewis is accompanied by stanley sims, director of the defense security service at the defense department. welcome to you both. welcome both to the hearing today. thank you for the service. last but not least, we have brenda farrell, who is part of the government accountability office and in that capacity she is responsible for the military and dod civilian personnel issues, including governmentwide personal security clearance issues.

she has worked on a number of national security issues since she started her career at yale in 1981. thank you all for being here today. it is accustomed to swear in the witnesses who appear before us. i would ask you all to stand, including mr. sims and please repeat after me. do you swear that the testimony you give will be the truth and the whole truth and nothing but the truth, so help you god? >> yes. >> they all answered in the affirmative. let the record reflect that. >> each of your will have five minutes for your oral statement. i would just tell you that your entire written testimony would be part of the record. and you can add more to that complete written testimony up until july 8. we would certainly appreciate it. >> thank you.

>> the ranking members and other distinguished members of -- members of the subcommittee. afternoon. thank you for inviting me to speak about our oversight work related to the opm program office. in 1978, the u.s. congress took a step in creating this act. bull that was an experiment borne out of the multitude of governmentwide mistakes, serious problems and just plain wrong doing. in the face of much opposition from entrenched government bureaucracy, it was, i believe, will congress have pledged to be an american citizen that the expectations of the government and tax money would be protected. the concept includes transparency at its core functionality. it must be transparency without any shade of gray.

indeed, it is with this understanding that we argue the independence required of them, free of political influence, which congress mandated today you ask me here because of concerns about the lack of transparency in an organization that plays an integral part of protecting our national security and integrity of the government's work force. the federal investigation service conducts approximately 90% of these background investigations for the federal government. these investigations are used by agencies to determine security clearance. due to recent events and key public debate, it has become bush we trust with access to sensitive information related to national security. the very first step that the government takes in answering this question is to conduct these background investigations. i'm here to inform you that

there is an alarmingly insufficient level of oversight of the federal investigative services program. the lack of independent verification of the organization that conducts these investigations is a clear threat to national security. if a background investigation is not conducted properly, all other steps taken for issuing security clearance are called into question. everyday i have the privilege of leading an organization dedicated to a work ethic that embodies knowing our business and responsibilities better than anyone else. at the close of the day, to say that we did what was right to the american taxpayer. this having been said, what is most noteworthy is that our oversight of the federal investigative service program has been thwarted by virtue of an agency funding decision. >> under current law the federal

investigative services must price of products and services in a manner that allows it to reveal the cost of administering the program. as part of a financing vehicle for these activities. for several years they have taken the position of oversight that was not considered to be an administrative cost, and thus our office has been denied access to the revolving funds. i don't think that anyone here would argue about the oversight and financial audits and performance audit and investigative activity are part of the administration of any government program. to compensate we have used the $3 million that we have had for non-press on work to maintain oversight viability on the programs. with special emphasis on the federal investigative services program because of the national security implications. please be assured even with

resources because of recent developments discussed in my written testimony, we feel compelled to engage our office in the joint initiative between the audit and investigation divisions to thoroughly oversight the policies and procedures of the quality review practices of the federal investigative services program. this includes the fiscal year 2000 budget that would grant us access to the funds. i close by requesting your subcommittee support. part of the proposal so that the office will have the resources to finally do the job with which we have been entrusted. i thank you. >> thank you, patrick. >> thank you, chairman. german tester, ranking member

portman, and ranking member johnson. thank you very much for the opportunity to testify today regarding opm's role in the federal backed government secret clearance process. in response to the 2004 legislation was the opium functions, opium is continuing to enhance the background investigation process by including quality and efficiency. our successes are due in large part to our partnership and department of defense and other agencies that require security measures. we have no backlogs, we have increased automation the best we can. the services conducted investigations to executive branch hirings, security clearances and others. the process supporting this is highly integrated, automated,

consistently measured against timeliness and quality performance standards for federal hiring of the process reforms. this includes those that are largely recorded with the branch agency in congress. this includes suitability and fitness uncredentialed determinations by these agencies. since absorbing the background programs of the fiscal year 2005, the dod security clearances have been removed from the governments accounting offices. we have conducted over 95% of the background investigations required by the federal government. they manage federal employees and contractors responsible for conducting investigations. this includes the responsible

investigations and determinations and for developing system policies and procedures to ensure the effective and timely completion of investigations exists. we had approval from president clinton in 2005 by president bush very conducting investigations is one of the core missions. this includes 10,000 offices worldwide. there are more than 6700 contractors that form a nationwide network of field investigators and support staff,

as well as a cadre of federal agents that we have working abroad. we have federal contract workforce that provides a flexible and responsive and cost effective investigative program. this includes managing highly sensitive investigation requirements, and our workforce permits to expand and contract the workload and locations. information technology has been and will continue to be a crucial ability to support us in balancing our timeliness quality and cost goals. this is a key role to streamline operations, including eliminating waste and providing the best service for the agencies that require these investigations. in addition, we consult the security policies and standards as part of the investigations

programs including reciprocity and program needs, including these products. it has provided program enhancements by the quality of investigative products. and has laid out groundwork structure to support this in the coming years. we have the ability to recruit top talent and put people to work. those working with the dod and other federal agencies have established an executive branch training standards and investigative and adjudicative standards and processes. in developing reciprocity standards to gauge improvements and demonstrate savings. i thank you for the opportunity to be here today to discuss this important issue. i would be happy to respond any questions. >> i thank you for your testimony, mr. miller. >> thank you. >> good afternoon.

members of the committee. thank you for inviting me to testify today. my name is steve lewis and i am part of the oversight committee within the office of the undersecretary of defense of intelligence. we appreciate the effectiveness of the clearance process. because of your commitment to this ability to protect national security, we have achieved and look forward to more gains in the future. i am here today on behalf of of doctor michael vickers. i would also like to introduce the director of defense security service who is accompanying us. >> the undersecretary of defense is the principal staff assistant to the deputy secretary for

security matters and is responsible for overall policy for access to and the protection of classified national security information. in addition, it is the senior official for dod's personal security program. and has responsibility for policy and procedures including industrial-based security programs. the executive order designates the director of national intelligence as a security agent with the responsibility to develop uniform policies and procedures to ensure effective completion of investigations and determinations of eligibility for access to classified information, as well as acceptance of those determinations on a reciprocal basis across the government. with regard to the oversight roles and responsibilities within dod, ahead of the dod components are responsible for

establishing and overseeing implementation procedures to ensure protection of classified information. and taking prompt and appropriate action in cases of compromise. such actions are required to focus on correcting eliminating the conditions that caused this or brought about the incident. this responsibility encompasses military service members, dod civilians, and contractor personnel. under the security program, it is responsible for conducting oversight of those for dod and 26 federal agencies which use dod industrial security services. >> the department has instituted various process improvements

that have resulted in greater efficiencies and effectiveness with regard to adjudicating the background investigations. this has helped in the removal of the dod from high risk personal security programs. we have deployed multiple initiatives to ensure high quality investigative processes. highly skilled and personal security adjudicators and robust documentation of adjudicative rationale in support of these adjudicative decisions. this helps to ensure appropriate oversight and reciprocity. in october of 2012, the dod consolidated this adjudicative function of resources except for the dod intelligence agencies

and the centralized adjudication facility to realize efficiencies and to standardize practices of this critical governmental function exist. now, you specifically asked for the clearances of the department in fiscal year 2012, and the dod paid the office about $753 million for security clearance investigations and approximately 471 million for military service members and 30 million for the dod civilians and 252 million for the industry. thank you for your time. >> thank you for your testimony, mr. lewis. you may perceive. >> thank you. >> chairman mccaskill and members of the subcommittee. thank you for the opportunity to be here with you today to discuss the government wide personnel security clearance process. as you know, we have an extensive body working on issues related to this dating back

several decades. we have focused on this process and my statement today is based on reports from 2008 and 2013 on the dod personal security clearance program and the personnel reform efforts. security clearances allow government and contractor personnel to gain access to classified information for unauthorized disclosure that can cause great damage to u.s. national security. ..

to happen agencies determine whether or not a civilian position should require a clearance, and importantly no requirement exists to review existing positions with clearances. we made recommendations to the director of national intelligence, who has responsibility for this area to develop such guidance. the second part of my statement addresses having performance measures to measure quality. since then 1990s, we have emphasized the need to build quality metrics into the clearance process. executive branch efforts to reform the process have focused more so on