they are not buying votes to the party conference. the reason the right honorable gentleman has his job is that trade unions force votes in the labour party and put him where he is. that doesn't happen in any other political party. and if they've got any sense at all they will realize it's profoundly wrong. >> i'm sure the prime minister will agree with me that there's no better way to build a stronger economy and a more fair society that through apprenticeship. the number of apprenticeships has no double already and i am on a mission to build on this success by working with local businesses to create 100 apprenticeships in 100 days. will the prime minister support that? >> i service aboard her campaign. all members across the house to encourage people to take of apprenticeships. that's about encouraging young people but also about

encouraging businesses. in solihull with the advantage of land rover a company powering ahead take you on many more employees and also investing heavily in apprenticeships. >> this morning -- [inaudible] can the prime minister tell the house did tell the house today with the government is doing to analyze the effect of rail service on the mental health of this country? >> as i've said many times i was happy to look at individual cases but the fact is we badly need to have welfare reform in this country. this system was completely out of control. housing benefit was out of control. dla have gone up by a third over the last 10 years. we need reform. it's no good the shadow

chancellor gesticulating. is now in favor apparently of welfare reform. .com is he opposed all 86 building of the reforms we have made. >> mr. neil carmichael. >> thank you very much, mr. speaker but engineering work financed by this government is under way to redouble the line between stroud and -- this is fantastic news and does the prime minister agree with me that a good example of sensible investment in infrastructure leading to economic growth? >> i think my friend is right, investing particularly in some of the branch lines which have been singletrack lines like the ones that serve my constituency instead of double track lines make the service far better, far more reliable and we can get more people out of their cars onto trains and use the service like that. >> [inaudible] [laughter] >> what i say to the honorable

gentleman is that he needs to examine again this relationship between the unions and the labour party. that's the problem. they do this, yes, they give you the money, they buy the votes, they by the leader. that's how it works. >> order. statement, the secretary of state. >> you on c-span2 relieve the british house of commons now as they move onto other legislative business. you have been watching prime minister's question time aired live wednesdays at 7 a.m. eastern while parliament is in session. you can see this weeks question time and again sunday night at nine eastern and pacific on c-span. for more information go to c-span.org, click on c-span series for prime ministers question, plus links to international news media and legislatures around the world. you can watch recent video, including programs dealing with other international issues. >> you are watching c-span tea

with politics and public affairs. weekdays featuring live coverage of the u.s. senate. on weeknights watch key public policy events. every weekend the latest nonfiction authors and books on booktv. you can see past programs and get our schedules at our website and you can join in the conversation on social media sites. >> at his senate confirmation and, since if your director nominee john thompson discussed how the next u.s. census could be conducted more efficiently and with a smaller budget. mr. thompson is probably the ceo of the national opinion research center at the university of chicago. senator tom coburn chairs the hearing of the senate homeland to be a government affairs committee. >> committee come to order. welcome, mr. thompson, to you. these two handsome young men who are with you and all of our guests, we welcome you this morning.

iran into dick durbin earlier today and i think he is going to come to introduce you. and he is, as soon as he joins us we will working in. i will yield to him and ask him to just, just that. today, dr. coburn and i, senator johnson, are pleased and will probably be joined by others on our committee, but pleased to consider the nomination, presidents nomination john thompson, the director of the u.s. census bureau. and i think we all realize the role of the senses is to serve as a leading source of quality data by the nations people and our economy. the. does this by conducting as we know numerous surveys, sometimes we think it's every 10 years but it's actually every year.

those surveys in turn provide lawmakers like us, citizens, businesses with a few of our nation social and demographic makeup. the most important visible survey is of course the one we do every 10 years. that is often described as the largest peacetime mobilization in american history. however, the census bureau also conducts other important service such as the american community survey which provides federal, state and local governments as was the private sector with up-to-date information about population, within a certain geographic area. the collection of these data is important so decision such as how to distribute grant funding, where to build schools, hospitals, retail stores are now made with data that is nearly a decade old.

additionally, the census bureau collects data that provides us with their monthly unemployment numbers. the census bureau's role in this and the federal governments efforts to effectively target initiatives aimed at the growing economy should not be overlooked to the census bureau -- [inaudible] with this director for nearly a year. wind and director bob grose departed last august to become the provost of georgetown university. a real loss to our nation. a real gain for georgetown university. we are pleased the president has nominated what we believe, what i believe to be a qualified candidate to lead the census bureau for lease the next over years and maybe even beyond that. i intend to work with dr. coburn, my colleagues on this committee to complete our review and hopefully report this nomination drafted by the full senate as quickly as we can. the nomination of john thompson comes at a unique time during

this cycle. while most people only pay attention to the census bureau and the year or two link up to the census, it is these interim years in the middle of the decade when some the critical research, some of the critical testing and planning phases are completed and the groundwork is made for the actual count. last decade were many problems as we will recall leading up to the 2010 decennial census. the roots of these problems were multifold included planning and cost estimation. i would add to that the inability to use technology in ways that were cost effective. most notably the census bureau were five and $95 million contract to the development of a half million handheld computers. these devices promise to reduce the time and cost of large operation such as address canvassing and nonresponse follow. however, the project experience constant setbacks, including

technical problems, escalating costs, and missed deadlines to the decision was made in april 2008 to abandoned the use of a handheld computers for much of the 2010 decennial census and different back largely to pencil and paper for the costly nonresponse follow-up operation. this decision ended up adding some $2 billion to the cost of the 2010 census which until cost taxpayers nearly 13 billion does, the costliest enumeration in our nation's history and twice the cost of the 2007 at i don't want to rehash the details of handheld contract or other problems in the years and months prior to the 2010 decennial census, but i do want to call on lessons learned during that experience at this committee as this committee conducts oversight of the census bureau as we head into the 2020 decennial census. as i will mention in great detail during the question and answer session for each

decennial census, the census bureau has invested more resources to ensure quality results. the cost of conducting the census has on average doubled since, doubled annually since 1970. is that growth continues the estimate for the 2020 census won't be $13 billion but it would be closer to $25 billion. money we don't have. at a time when agencies across the federal government has been asked to do more with less, $25 billion decennial census is just not acceptable. if you're confirmed, mr. thompson, this committee will look you to develop an intimate initiatives to control costs while maintaining the quality and accuracy of the count. another thing i want to address is the seven-month leadership vacuum the bureau struggled with, and in 2009. less than one year before the census date and facing a number of challenges the census bureau was without its senate and from

director. while the nomination confirmation process was part of the reason for this lengthy vacancy the main issue was the 2008 election and the transition from the bush administration to the obama administration which created the vacancy at the beginning of 2009. an election in a year ending in, ending in a number eight can lead to a months long vacancy at a critical time for the census bureau. to address that problem, a number of us introduced legislation to create five year terms to the census bureau director first term started in january 2012, future terms would begin in january of years ending in seven and the number two. so the drug would be in place for the beginning of either the planning phase or the decennial census or the operating face. this provision was adopted in legislation moving through congress in 2012, signed into law that you. mr. thompson, if you are confirmed, you'll be the first person to be confirmed, it was

not made under this new law actually fill out the term that ends not in five years from the date of your swearing in, but ending in december 31, 2016. you would be eligible if confirmed to be nominated for an additional two full terms. we will get there, we will cross that bridge when we come to it. additionally, the provision that was signed into law set forth qualifications for the future nominees. and logout request nominees to be, -- expressed in collection, analysis and use of statistical data. i'm pleased the presidents nominate someone who i believe meets these requirements. if confirmed, mr. thompson, returns -- spent some 27 years old increase conditions including associate director of the decennial census and chief of the casino management division but in the year 2000, he was pitching a career employee responsible for all aspects that you decennial

census. 2002 he left the census bureau, moved to chicago to become executive vice president of national opinion research center center at the university of chicago. he performed the duties of that jobs was that in 2008 he was elevated to become president of that organization. pleased he has agreed to lead chicago to return to washington, d.c. and to lead the census bureau into the next decennial census. if he is confirmed. we look forward to your testimony today, mr. thompson, and we also look forward to an introduction of you by our friend and colleague, senator durbin. welcome. >> i was downstairs at a meeting coming back and forth, i apologize for coming in a few minutes late. i wanted to be here today to introduce john thompson, formally as senior senator of the state he calls home. he has for nearly four decades had experienced in research and statistics and he's a strong candidate for the position of

director of the census bureau. he serves as president of the national opinion research center, headquartered in chicago which conducts social science research in the public interest. in addition to ensuring the quality of the research, mr. thompson also oversees a nationwide staff and has helped make in our cities activities more productive and cost-effective. while at norc directed national immunization survey from 2004-2006 was the largest telephone survey of its kind in our nation. before starting at norc 11 years ago mr. thompson worked at the census bureau for 27 your stored as a mathematical statistician in 1975. going on to become senior officer responsible for conducting a producing the 2000 since the he is also a leader in the social science research community. like it fell of the american statistical association of elected middle of the committee on national statistics answers

on a national academy of sciences panel. addressing census concerned. mr. thompson's decades of research and sisters like sprint will serve him well if he is chosen to lead this new agency to its primary mission is to provide reliable data about americans and our economy. i can imagine a more qualified nominee. is shown he can be an effective person when it comes to providing, producing quality data and managing large organization. he will be able to use his experience to move the census more fully into the digital world and make it even more reliable, accurate and accessible. i would also like to note on a personal basis that while living and working in chicago, mr. thompson had the chance to cheer on his favorite national hockey team, the chicago blackhawks, and now that the team has secured the stanley cup, he is willing to lead chicago and consider moving to washington. but we hope the cup with

hollinger, which it has in the past, and i had it in my office four years ago when the blackhawks were last stanley cup champs. on a marsh is no talking to mr. thompson and the press with his enthusiasm for taking on the response post as director, is one person who will make them a great addition to this agency. he has ideas about a government research methods which i'm sure you get into during the course of a string. is pleasure to from introduce him, and to say that i fully support this nomination and to help i can be excused to go back to the senate judiciary committee downstairs and do a little work there as well. >> i think we should vote on whether we should excus excuse . what do you think? [laughter] okay. thanks so much for coming and introducing your constituent and offering a little bit of humor. and when senator durbin leaves we will talk about the chicago cubs and why he didn't do a better job of getting them to

the world series. dr. coburn. >> thank you, senator durbin for that endorsement john, welcome to i enjoyed our visit in my office, and as you know this is an area that i've taken a keen interest over the last nine years. allows census cost almost $50 per person to count. it's ridiculous. and i think senator carper raised the issue that the census has to be accurate but also has to be affordable given the financial places that we are in. we visited a large number of things that senator carper mentioned the contracting for handheld device and you and i have discussions on that in my office. i think he has done a good job in redirecting the organization and i've every confidence that you will continue to improve on that. i look forward to asking you some specific questions this morning, but i am supportive of your nomination and have

expressed to you personally my desires and goals does your organization be very successful and very efficient. so with that i will yield back. spent thanks, dr. coburn. john thompson nominated to be director of the census bureau has filed responses to a biographical and financial questionnaire. is answered prehearing questions submitted by our committee can have his financial statement review by the office of government ethics. without objection this information will be made part of the record. with the exception of the financial data which will be on fire -- file. our committee rules require mr. thompson as you may know that all witnesses at nomination hearing give their testimony under oath, and going to ask if you want to stand and raise your right hand and i will give this a shot. do you swear that the test when you're about to give to this

committee will be the truth, the whole truth, and nothing but the truth, so help you god? >> i do. >> all right, please be seated. >> i'm going to go ahead and ask you to share with those your statement and then have a couple of traditional questions that we always ask that are required by law and then we'll ask for general questions. welcome. we're glad you're here. feel free to introduce these two guys sitting on your left shoulder and anybody else sitting there in the audience, any family or friends you feel moved to introduce. make sure your mic is on, please. >> thank you, senator clinton start by introducing my son stated how old? >> he was born in 1980. >> that's good. john thompson, my other son is 25 years old.

[inaudible] i don't know how old she has. [laughter] she's young. and dan who also works with me at norc spent when people engage with my 2 cents i said i don't know their ages but i know the names. [laughter] i know their ages, too. 23 and 24. well, welcome and glad that your two boys could be with you. i know we are proud of them and their pet of you. please proceed. >> thank us into. chairman carper, ranking member coburn, and members of the committee, i am pleased that you convened this hearing to consider my nomination to the position of director of the u.s. census bureau. i would like to begin by thanking president obama for nominating me for one of the most important positions in the federal statistical system. it's both an honor and privilege to be given the opportunity to return to public service. i would also like to thank my wife, my family, and my

colleagues at the national research center for their support and encouragement. let me start by saying that i agree with the views of a number of previous census bureau directors that democracy is credible, objective and timely information on the growth of its population, the changing hcfa six of its communities and health of its businesses to form the basis for a solid policy decisions and other critical functions of government. assistance to agencies or to such information i in the united states if they're kind of buy principles of nonpartisanship, protection of individual privacy and provision of high quality information to inform decision-makers and the public on the important issues facing our society and nation. the census bureau is an important component of this information infrastructure. the statistics of collection used to produce economic indicators to determine the needs of local communities and to inform policies to make american businesses more

competitive. we are seeing a growing need for such data as of our economic growth and engage our office and it is playing an increasingly significant role in all aspects of our daily lives. going forward, our country will rely more heavily on institutions like the census bureau to deliver this vital resource. the next leader of the census bureau, therefore, must be committed to maintaining the bureau statur stature as exemply collect and disseminate are of the highest quality information to help american. however, there are a number of rapidly emerging challenges and opportunities that have the potential to dramatically change the way in which information is collected, analyzed and disseminated. organizations that will be successful in the future must seize on these opportunities to produce quality information on a more timely and efficient basis.

i am seeking your support for my nomination because i believe that i can provide leadership and guidance that the census bureau needs at this critical time. if confirmed i can assure you that i will use all of my skills and elect to take a view into the future, building on the exceptional groundwork that dr. robert groves has already put in place. a little bit about me pic i spent 27 years at the census bureau followed by over 10 years at the national opinion research center. at the sense of the i held a number of management positions with increasing responsibility for the 1980, 1990 and 2000 census. the most significant being from 1997-june 2001 when i served as associate director for decennial census to the career executive was responsible for all aspects instances 2000 the i am proud to note that since his 2000 was the first to employ state-of-the-art technology in optical scan and

intelligent character recognition that capture all the information for the questionnaires and all major operations were completed on schedule and within budget. i joined the national opinion research center, or norc as it is called, in 2000 as executive vice president and became its president in 2008. norc is a not-for-profit independent organization affiliate with the university of chicago and has been conducting important research in the public interest for over 70 years. norc uses vigorous methods to conduct large surveys as well as to analyze and disseminate objective information that informs decision-makers and the public on important social, economic and behavioral issues facing the nation and the international community. during my tenure i dealt with dramatic changes that imaging technology can have on survey processes. importantly i've dealt with the

growing demands to produce more information faster and less expensively through adoption of new technology and data sources. these are challenges that leaders of both private and federal statistical organizations, including the census bureau, must be prepared to successfully confront. the census bureau, however, has a unique challenge and at the same time opportunity with respect to planning the 2020 census. i believe that the resources now available will support a new census designs that were funded to change the way in which census are taking within a state. a design that has the potential to produce significantly less costly and faster results that are of similar or data quality than in previous censuses. among the most promising options to accomplish this are, first, using the internet as the primary self response option. second, taking advantage of technology and operations

research methods to reengineer the field data collection operations, reducing both the infrastructure required to support these operations and the actual hours spent collecting data. third, making better use of federal records to further reduce the dependence on in prison visits for data collection. and, fourth, drawing on extensive array of emerging geographic tools and data sets to eliminate the need to physically canvas large portions of the united states to prepare the list to support the 2020 census. in summary, the environment in which statistical agencies conduct their business is in a period of dynamic change with both risks and opportunities. i know what it means to manage in such an environment. organizations that will be successful must possibly track emerging trends and advances and determine how they can be used to generate new and more effective processes. most importantly, organizations

must create and foster a culture of adaptability and creativity. i want to bring the skills that i developed inside and outside of government to lead the census bureau. if i am confirmed, my goal will be to leave a legacy of innovation in all areas and all levels of the census bureau. and to design a 2020 census that represents a fundamental change for the future. i am committed to publishing this in an environment that is open and transparent to all stakeholders. thank you, and i look forward to working with this committee. >> thanks very much for that testimony. let me start with a couple of simple straightforward question. why do we need a census? the constitution says we've got have a census every 10 years. why do we need it? why is it important? >> the census is important for a number of reasons. spent before you do that let me ask some perfunctory questions.

number one, is anything you aware of and your background that might present a conflict of interest to the office of which have been nominated? >> no. >> never to come to know anything personal otherwise that would prevent you from discharging responsibility of the office for which have been nominated? >> no. >> number three, do you agree with a reservation to respond to any recent summons to appear and testify before any duly constituted committee of congress if you are confirmed? >> i certainly do. >> good, thank you. back to my question. why do we need a census? why is it important for a -- for our country? >> the census has a number of important issues. >> that's not so important in delaware. [laughter] >> [inaudible] >> secondly, it provides data that is used to redraw the

congressional boundaries every 10 years. and third, it provides a variety of data that are used to administer important federal programs and are used by businesses, city planners, academics, people interested in the status of our question. >> how do businesses use this information? >> it's important because they use it to make decisions that will help them grow, help them make right decisions like where to put a new franchise, where certain individuals on that will buy their products, ages, demographics, income. >> all right. i think a lot in terms of growth of government, we all do. one of the roles is to provide a nurturing environment for job creation and job preservation. i've explained it what the census does is provide information to businesses so they can make smart business decisions.

.. >> i actually, i believe i recommended this committee he be considered to be the director of the census bureau. he's a longtime colleague. he's one of the best survey methodologieses in the world, so he brought that knowledge to the census bureau. he brought management skills to the census. i foe the 2010 census needed a

lot of leadership, and under his leadership they ended up with, ultimately, a census that produced what appeared to be very accurate counts. but he also started at the census bureau to foster a culture of innovation and drawing creativity from all areas of the bureau. and i think those are the three fundamental things that he brought. >> the, what do you bring? just be -- don't be immodest. this is a time to -- i don't, frankly, i appreciate humility, i admire mod decemberty. what -- modesty. what do you bring? what did the president see in you? >> well, senator, i understand a lot about statistical methodologies. not at the level of robert groves, but i don't think there's anybody else in the world that probably does. i have experience in managing large operations. i have experience in motivating people to do very good work, and

i believe i have the kind of experience that will allow me to form relationships with the many stakeholders of the census bureau and to put in place the groundwork for a new census process. >> i think i mentioned to you i was out in many silicon valley about two years ago at a technology summit, the summit on innovation and technology. and i think it might have actually been hosted on the campus of google, as i recall. and during one of the panel presentations, four or five of these companies, very successful technology companies talked about how they use social media to solve any wide range of challenges and gave just very interesting presentations on how they were able to solve problems and address issues in a way a couple years ago we never would have imagined could be done.

how do we capture that kind of innovation and that understanding of how to use the technical skills we have, many on our handheld devices today? how do we, in the census bureau, capture that input from the private sector and harness their ideas to be able to drive us to a more accurate count in a cost effective way? how do we do that? >> senator -- >> because i think there are folks out there that would like to be part of it maybe not even with profit in mind, because it was interesting, challengings, important. >> i feel very strongly that the accept us bureau needs d accept us bureau needs to form partnerships with the private sector to bring in new skills and new ideas, and if i'm confirmed, i will certainly work toward is setting up the appropriate vehicles, avenues for that to take place. >> talk to us about the, the survey that we do i guess every

year. the american community service, community survey. it's a -- i think folks are critical of the census. if you're including some members of congress, they look at -- they talk about the american community survey, and they indicated among other things some of the questions are inappropriate, some that are deemed to be invasive in people's privacy. why does the census need to know some of the answers to some of these questions? and dr. coburn and i and dr. johnson over here, we're big on common sense. and we learned that from our parents. you probably did too. of i think you make a good case and others make a good case for the value of not just the -- [inaudible] survey of the census to, among others, our business community

and state and local governments, but there's also great value in this american community service, community survey. but i'm not so sure that some of the questions are entirely appropriate or are needed. and i just want you to think out loud about that for us here today and what changes, if any, might be appropriate as we look at, as we try to address the criticisms of this particular survey. some would say let's just get rid of it. i don't know that that's the smart thing to do. but if it isn't permit, how do we make it better? >> senator, let me start by saying that i think the american community survey is, it's very important. it replaced the long form, so it provides the information that used to be, come from the -- [inaudible] long form every ten years, now on an annual basis and now at small areas just like the long form. i'm also aware at a very high level of a number of issues

associated with the american community survey. i'm looking forward to being confirmed, i'm looking forward to digging into those issues with the many stakeholders of the american community survey. i wouldn't want to design a new survey without getting the right kind of input in place. >> okay. we'll probably have a chance to talk about this one some more. dr. coburn with, please. >> thanks again for your statement. the more than community survey is kind of tied up in this lack of confidence in government today which is difficult for you because it makes your job more difficult. what in your mind is in the american community survey that's also captured by private and other organizations out there in a sampling method? >> senator, i'm not aware of any private organization that

provides the level of detail comprehensively for the country that the american community survey does. but i understand also that there are undoubtedly opportunities to draw on resources to make the american community survey more effective and, again, if i'm confirmed, i would really look to finding ways to make it more efficient, make it less burdensome on the american public. while still providing the same level of information. >> you talked about in your opening statement about doing, being able to provide a census more efficiently, more effectively, the same quality of data or better and do it for a better price, and most of that's going to be technology related. does the committee have your commitment that that's one of the things that you will strive for every day as you lead this organization? >> senator, that's one of the primary reasons that i'm excited about going back to the census

bureau, is to lead the effort to design a fundamentally new way to take the 2020 census. so you have my commitment on that. >> you and i in private conversations talked about getting the census online as a part of that and incenting people to comply. have you given any thought on your future plans for the 2020 census and how we will try to move towards using this new technology to where, in fact, we can do it more effectively, more efficiently and incentivize people to comply so that we don't have the after-census review costs that are so expensive it's often times so difficult to ascertain? >> senator, i really think that motivating self-response by the internet is an incredibly important goal for the 2020

census. it will reduce the need to print hundreds of millions of questionnaires, to process those questionnaires, to have the storage spas for them, to -- space for them, to mail them. so that's very important. but i also want to note i also understand that there are parts of the american population that won't have access to the internet even by 2020 and will need to have some other way they can respond. >> sure. that's part of your comprehensive plan. but the fact is that won't lessen your desire or intensity to utilize that technology. >> no. >> just being aware there are areas where we're not going to get feedback utilizing it. one of the criticisms that tom and i held, senator carper and i held a lot of hearings on the 2010 census before it came about, and one of the problems was contracting at the census bureau. and what i'm looking for is a

commitment on cost plus contracts. first of all, we're not going to utilize them unless they're an absolute necessity, and then we're going to make sure we get value out of cost plus contracts. what are your thoughts on that, and what with will be your policies that you set up to guide those thoughts? >> yeah. well, senator, i agree with you that a cost plus contracts if you can provide the level of specification are the best value for the government. but even if you do cost plus contracts, fixed price contracts, the real key is you have to have if place some detailed specifications, you have to have in place performance metrics, a delivery scheduled to for getting the results, and you have to have in place good management procedures that include formal change control processes. and if i'm confirmed, i really want to work towards defining the level of specifications that will maximize the use of fixed price contracts. >> okay. one of my biggest frustrations

here is when we have contracts, and today don't perform -- they don't perform. the justice department doesn't seek out a redress for the federal government based on lack of performance. would you commit that if you have contractors that are contracting for you either under fixed price or otherwise, you'll give a referral to the justice department to make the federal government whole in the money that it spent in that regard? >> senator, you have my commitment that i will use every, um, legal option at my disposeal to direct towards contractors that don't perform. >> all right, thank you. we've heard from, my office has heard from a lot of private entities as have other members of this committee that they can perform some of the mapping work that the census currently undertakes on its own for a tiny fraction of the price that the census spends. are you committed to making sure that the census takes advantage of the private, this new private

industry rather than tasking the government to recreate the wheel when it's already available out there commercially? >> senator, you have my commitment to that as well. i think that there are a number of sources of emerging geographic information that can improve the process that the census has in place in that area. >> one of the other concerns i have with the census but really it applies to the whole government, we spend outside of intelligence $85 billion a year on i.t. contracts of which about half are failures. i think it's really important that you're on top of any area where we have an i.t., and i think you've already demonstrated the weakness in the problem because setting performance standards and holding compliance to those performance standards before you ever purchase something is the key to that. that's where we fail across the

federal government. i mean, we're throwing $40 billion away a year in this government on i.. the contracts, and -- i.t. contracts, and i hope is you'll foster testing that has worked rather than taking products off the shelf and change them because the census doesn't want to meet the i.t. program. the program is we have great i.t. programs out there, the government tries to change the program to fit the government, and my hope would be that your leadership would be exerted that if we're going to buy something off the shelf, we actually take advantage of that technology from that proven off the shelf product rather than try to change it to meet -- because it's easier tan changing some programs -- than changing some programs or parameters within the census. the other area is just your thoughts on counting prisoners and military personnel in terms of the census, how we approach that. what are your thoughts on that? >> be -- so that's a very good question, senator.

my thoughts on that are that before each census the census bureau works with stakeholders to define the rules they use to determine where to count people where they usually live as of the census day. and then after each census because of our population and society so dynamic, they review those rules for the next accept us. and my thoughts -- census. and my thoughts really on that are that i'm going to, if i'm confirmed, i'm looking forward to reviewing those rules with the stakeholders and planning for the 2020 seven us so there's -- census so there's agreement that we have the right rules in place. >> thank you very much. >> thank you, dr. coburn. senator johnson. >> thank you, mr. chairman. mr. thompson, welcome. thank you for your testimony. it's my understanding the fines if you don't respond to that american community survey range between 900 and $-- 100 and $5,000, do you understand that as well?

>> i understand there are fines, i'm not aware of the specific level ott fines right now -- of the fines right now, but let me just say i don't think fining people is the way to encourage response. i mean, the accept us bureau is a data collection agency, not a enforcement agency, and i really think that explaining to people why it's important, why their data's important, what it will be used for is the best way to encourage response. >> do you have any idea how often those fines are assessed? really is it the census bureau that has the discretion in terms of how big that fine would be? >> senator, i don't have any current understanding of how the fines are assessed. i know that the census bureau does not term those fines, they're determined by statute, and administered by the justice department. >> do you think that's appropriate? as head of the agency, would you pretty well try and minimize

those fines? >> um, that -- senator, that's a very, very complicated issues and i really don't have the insight and understanding to really make an effective decision there. but if i'm confirmed, i can assure you that -- >> we should talk. >> -- we'll talk. >> the information i had in terms of the house per household is $39 in 1990, $70 per household in 2000 and $96 per household in 2010. there's, obviously, some inflationary gains or cost increases. do you know the reason for the cost increases outside of inflation? >> where um, i do know something about the cost increases from the 1990 to the 2000 census. and in 2000 there was a

situation where the census had been planning to use sampling to make the counts less expensive and use statistical adjustment to make the counts more accurate. that was a fairly controversial position, and hate in the game -- late in the game there was a decision by the supreme court that sampling would not be used for the purposes of apportionment which then meant that the census in 2000 had to be redesigned starting in january 1999 which added considerably to the cost. >> which -- do you, moving forward, have you established some type of goal with the advances in information technology, do you have a goal in terms of productivity gains, actually reducing that cost per household then? >> senator, i believe that if we can get the right level of

resources and justify the need for those resources, of course, to do the research necessary, that we can put in place a census that should be no more expensive adjusted for inflation than the 2010 census. >> okay. well, hopefully, we can actually reduce that cost. you mentioned sampling. statistics was not exactly my best course in college. what percentage of the population is actually canvassed? i mean, physically accounted for? >> for the decennial census? >> right. >> the goal is to count 900%. there are -- 100%. there are some processes in place where some statistical computation is used for households where they just can't get and despite all their efforts a response from an individual. but the goal is to count everybody. >> are so you said there's quite a bit of controversy in terms of sampling using statistics, so we do not do that in any way, shape

or form now then? we don't augment the canvassing with kind of sample or statistics? >> no. let me, let me just draw the line here. there are a lot of uses for sampling to do quality criminal, things like that -- >> okay. >> -- that make it more effective. but there is not a use of sampling to produce the counts for apportionment, and i believe that there are far better ways than using statistical adjustment to improve the other counts do finish whether so how do we fail on the counts then? is there no adjustment to the actual can vasing? in other words, the people that we count, that's the number, or do we augment that thinking we only got about 95%, so maybe bump it up by 5%? >> no, no. [laughter] there's -- that would be a statistical adjustment. they don't do that. there is a process for a small number of households, at least this was the case in the 2000

census, where despite the best efforts to knock on a door, you couldn't get a response. and for a very small percentage of cases a determination had to be made regarding was the household occupied or not, and if it was occupied, how many people would have been there? if you just said, no, you'd be so many assuming that it was all zero, and that wasn't right either. this was a very small portion of the count -- >> okay. so, but it's specific to household, it's a very detailed -- >> right. >> -- augmentation. now that i'm senator, i actually use the seven us web site more than i did as a private citizen. i just want to get your evaluation and opinion of the current census bureau web site, ease of use. >> um, i actually don't have that much trouble using it, but i'm sort of like ap insider. -- an insider. the web site's much better than

the web site when i was there, so i find it easy to use. but with i think the real determination of a web site is to really, you know, wok -- work with the various outside users and get their opinion on how easy it is to use and then build in improvements. >> picking up a little bit on senator coburn's questions, you are coming from the private sector now. are there other private sector models that you will bring that, those models and that experience into the census to improve whether it's the web site or just your whole data collection your productivity? >> well, the experience that i've had at norc have dealt with dealing with using systems to automate telephony, to use the internet as a response option, to use mobile computing, to use social media. i intend to bring those findings into the census bureau. >> okay. well, again, thank you for your response. thank you, mr. chairman. >> thank you, senator johnson.

senator ayotte, welcome. good morning. >> good morning. thank you, mr. chairman. i want to thank you, dr. thompson, and let me just say we're, your qualifications are impeccable and i'm very pleased that you want to take on this important position, and we look forward, i look forward to working with you. i just wanted to start with whether you had had ap opportunity to review -- an opportunity to review the 2012 2012gao report which really focused on concerns about the cost of the census. have you had a chance to review that report? >> i have reviewed the report, but not at a very high level. >> okay. because i think one of the things the report identified in it was that the cost of the decennial census rose from $8 billion in 2000 to $13 billion in 2010 which would be a 56% increase, and i know you talked about a supreme court case that would have changed sampling methodology, but according to the gao one of concerns they raised in that report was that

the census bureau could not identify specific sources of cost growth from 2000 to 2010. and so within the report the gao found that the bureau had not developed mitigation or contingency plans for looking forward to 2020 which i know dr. coburn already asked you about. so i think that's one of the key issues for you thinking about the prior cost growth, thinking about, obviously, the fiscal challenges facing the nation of not doubling the cost growth looking forward to the 2020 census and having a strong plan. and what thoughts, initial thoughts do you have on that for us here today to make sure that we're responsibly using taxpayer dollars? >> well, let me first say that, um, i do have the greatest respect for the xao and for the ig -- gao and ig. they actually helped me a lot when i was there in 2000, and if i'm confirmed, i want to sit down with them, really understand their concerns in

detail. >> good. >> i think it's important you have a well laid-out planning process with metrics, with milestones, and you have a good cost model so you can control costs, track costs, understand where you are. um, i think that's very important, and that's one of the things that i would plan to have in place. >> and, dr. thompson, to the extent you can, would you be coming back to the committee also to share some thoughts as you came up with the metrics and modeling looking forward to 2020? >> oh, i would welcome any opportunity to -- >> terrific. >> will -- work with the committee. i would value the input. >> great. and i know that, i know that you've already been asked questions about the american community survey. but this issue really, certainly as dr. coburn with identified, this is an issue that, of trust with the government and also my constituents, i mean, i hear it some deep concerns about some of

the questions and the depth of this survey. and it can't be underestimated. the stories that we hear, of course, are that my constituents are contacted, they're visited, they're visited, they're visited, and then they find out really the extent of the questions that they're asked. and so what i did today was just looked at the current survey just to kind of get a sense of what it looks like, and it's about 48 questions, but that doesn't include subparts, and i think if i went through the subparts, it probably gets close to a hundred questions that they're asked. and some of them are quite intrusive. i look at things like because of a physical, mental or emotional condition, does this person have serious difficulty concentrating, remembering or making decisions? that's a very personal question. or does this person have difficulty dressing or bathing, obviously about someone with a disability. there's a whole length of other questions, i mean, very detailed questions that this is an issue

that i would hope that in your new position that we would not be asking questions of individuals that aren't fully justified or necessary, pause these are very -- because these are very intrusive questions to ask individuals about. and, obviously, these questions go from any, from the background of your heritage all the way to your income to where you live. i mean, i love this one, does the house, apartment or mobile home have a sic with a faucet -- sink with a faucet? these are very detailed questions. so you can understand with your average person where they're subject to fines being asked detailed questions by the government that are very personal why that would raise very deep privacy concerns with many individuals. so that is what you're hearing from the public, and i would think that our responsibility both as members of congress and your responsibility in your new position would be to be as least intrusive as possible in terms of respecting the privacy of the american people.

so that is the commitment i'm asking from you today, because i could understand if i were asked system of these questions why i would get my dander up. >> senator, let me -- well, let me say that i would not want to unduly burden the american public, and i would be committed to insuring that the questions that are asked have to be asked and there's a right purpose to them and a documented purpose. i also want to assure you that my whole career has been devoted to protecting the privacy of the respondents both at the census bureau and at norc, the company i'm at now. it's just critical to being in the position to continue to earn their trust so that you can collect vitally important be information. >> what i would hope is, obviously, every single question on this survey that it be

scrutinized very carefully to really ask put yourself in the shoes of the people being asked, the american people, and then also why is this necessary for government to have this information, and i think there has to be a fairly high justification particularly with some of the very personal questions that i raised. so i would hope that you would bring that kind of standard into reviewing this process. >> yeah. senator, i would really -- if i'm confirmed, i would love to explore these with you in more detail. again, i'm not -- i don't want to unduly burden the american public. but at the same time i want to collect the information that's necessary to administer the important programs that the american community survey is designed to support. >> now, i appreciate that, and i think it's the issue of, you know, people understanding us making sure that we are really scrutinizing this so that information that doesn't need to be collected is not collected. >> yeah. >> so i appreciate very much

your willingness to take this on and your prior experience in this area and look forward to working with you. >> thank you, senator. >> thank you. >> senator ayotte, thank you. thanks for coming. thanks very much for those questions. sometimes people say to me what have you done before you were senator that actually prepared you for what you're responsible for doing now, and there are a number of things i've done. we all came here different pasts. dr. coburn had an incredible life and career that enabled him to lead businesses, big businesses, become a doctor, serve on the congress. but we all come different paths. but we pick up training, experiences from those different, from those different paths, core values. my core values i talk about from

time to time, figure out the right thing to do, do it. not the ease i thing, the expedient thing, the right thing to do. treat other people the way we want to be treated. really how do we focus on excellence in everything that we do. and just don't give up. we don't give up. so those are my core values. talk to us about your core values. as a human being, as a leader, where do they come from? where do those core values come from? and how are they going to help you in what you do? you know, we talk about job experiences. sometimes our core values are more important than anything else, particularly as a leader. >> so one of the values that has motivated me throughout my career is to produce information that has ap important social good -- an important social good. and that's one of the reasons i went to the census bureau, so i could work on that. another value that i really think is important is that, um, i have always been very honest,

very open with people and to do things that have integrity to make the right kind of decision and to be open about it. my core value is, i guess, really based on honesty and integrity and openness. >> does that come from? i mean, how'd you learn these things? >> well, i guess it started with my parents who did a good job convincing me that it was very good to be open and honest. and then as i got to the census bureau, i got to work initially both at census and outside of accept us with some of the finest statisticians who built the field. and they had this ethic about being open and about being honest. and learning from them was very important. >> uh-huh. i was talking with someone the other day about lessons learned, and they were talking about we have good role models, and we have bad role models, but we can

learn from both of them. and from the bad role models we can learn how not to do bad things or stupid things. so both of those work. you have the opportunity to go to, to lead the census bureau after, i think, about 27 years. and to go off to join the folks at national opinion research center. most people never heard of it. everybody's heard of the census and the census bureau. most people don't have a clue what the national opinion research center does. you're out there, ended up being the president of the operation for a number of years. and just talk to us, for people what don't have a clue what they do oaf at the national opinion research center, talk to us why that was an important thing for you to do in terms of your growth and your ability to assume these responsibilities that you've been nominated for in. >> yeah, thank you, senator. actually, i probably am one of the few people that had known the national opinion research center for quite a while. they had provided a lot of

advice to me when i was at the census bureau on very statistical matters. they have a long history of doing excellent survey methodology work. so when i was looking around to retire after 27 years at the census bureau, i visited a number of companies, and norc was a company that shared my vision of doing work that was very important for the public good. and at the time norc also offered a new challenge in that they were reinventing themselves at the time and needed some help to fix their data collection operations. and i was happy to go help out this organization which shared this view of doing high quality work in the public good. and as i got to norc, i had the opportunity then to work with

technology to make operations more e factive and reduce costs -- effective and reduce costs, and i had the opportunity to establish a vision for the company when i took over as president which was based on establishing a leadership position in our field and drawing on our most important resource, our employees, to do that. >> during the time i served as governor i was involved in the national governors' association, and i remember meeting with other governors, we'd talk about the challenges that we faced in our respective states. and i'd go back, and we'd have cabinet meetings, and whatever issue we were focusing on was raising student achievement, environmental issues, or it might be job creation, financial controls, i'd always say somebody in some state, some governor in some state has wrestled with this issue, they've figured out how to deal with it in an effective way, and we've got the find that state,

find that person, figure out how they do it and see if it's something that could be exported to us. just about every other major country in the world, i think all of them, conduct a census. we've been doing it for a long time. some of them probably do it pretty well. some probably not. who are the countries that we can learn from, and what are some specific lessons we might be able to learn as we prepare for 2020? >> i think right off the bat our neighbor to the north, canada, would be a really good place to start working with. they've been using the internet as a primary response option. i believe that they had a very successful utilization of that. so i think that would be one really good country to start with. england uses some similar methods to the united states. they would be another good country as would australia. >> and what could they learn from us? >> what they -- well, what they

would learn from us, i believe, is how to use automation in a very, very diverse setting because our country, i believe, is more diverse than england and australia, and how we go about putting that in place would be, i think, very valuable for them. >> okay. i want to go back to the american community survey again. senator johnson talked about the level of fines, you indicated -- i thought it was a good response. our focus shouldn't be so much on how we're going to fine people but try to better explain why the american community survey is important, why it's a value to our country and why we need for folks to spend some time to come pry with that -- comply with that or respond to it. it's a shared responsibility though. it shouldn't fall just on the census bureau. it should fall on the business community who use that information, state and local

governments, federal government, but on us. we have a responsibility, shared responsibility to explain why it's important and not just to say, okay, if you don't do it, you're going to get fined. that's not the right response. i think the american community survey can be considered almost a dress rehearsal for the deaccept y'all and -- decennial and give us a chance to experiment with some new ideas, new technologies, new approaches that we don't want to like bet the house on every ten years, but we might be able to try some things on the acs that would inform us going to 2020. talk about how that might happen. >> certainly, senator. well, first off the bat you have the, the acs is now starting to offer the internet as a response option -- >> talk a little bit more about that. just expand on that. >> so there are options to learn how to motivate response via the

internet through the acs. there's a wide body of research going on in the public and private sector right now about how to motivate individuals to respond via the internet. and the acs certainly offers a good test bed for trying new methodologies, bringing in research from outside the government, researchers to work with the census bureau to put in place the internet. the other opportunity, i think, that the -- well, there's at least two more. another opportunity that the acs offers is the ability to try out new technology on a limited basis to see how it works, to understand the mechanics of it, to understand the human factors that are associated with introducing it. and finally, the acs because it is a widely- disbursed survey,

does offer the opportunity for people to do on-the-ground checks where you can look at some of the private sector, geographic products, and compare them to what the census bureau has and understand the may natuf the differences and the nature of the gaps in them. >> okay. want to go back several years ago to the run up to the 2010 census. and i don't remember this with great precision, but my recollection is we had three directors or acting directors of the census just over the period of like a couple of years in the runup to the seven is us. one of the -- census. one of the reasons why numbers on this committee supported the idea of having a five-year term for the census director was to provide some continuity so that we wouldn't ever go through that situation again. if you should be confirmed for this position, you will fill out the remainder of a five-year term that has been served by

dr. groves. i think it's about three years. and if you're interested and the president's interested, whoever's president, wants to nominate you again, they could do it, and that would carry us through 200. and hopefully face what we faced several years ago. i think most people in this country, how would you like to be director of the enus as opposed to -- census as opposed to being a movie star or a senator, whatever -- [laughter] people probably have other -- dr. coburn, i'm -- [laughter] the, people say this is not a very interesting or exciting job. actually, i think it could be a hugely exciting job. >> i think it's a very exciting job, senator. it's, at least it's very

exciting to me. i think there's tremendous opportunity to work as director with the other statistical agency heads to find efficiencies and adopt new technologies in government. the census bureau touches so many other agencies, there's tremendous opportunity. and the other thing that i think is really exciting is to really put in place a design for a 2020 census that is a fundamental change in the way censuses are taken. and that's very exciting to me. >> all right. last question is what can we do on our, on our side, government and legislative branch and this committee, what can we do to help the accept us to do a better -- the census to do a better job, better results, more accurate but not for a whole lot more money? >> senator, i, if i'm confirmed, i would hope that i would have the opportunity to work with you

and the other members of the committee on those issues and that you'd be amenable to having me come down and talk to you about ideas and things, gain your advice and counsel. but that would be just invaluable help. >> our collection begins with the beginning of cinema. the earliest film that we have in our collection comes from 1891. this is a camera test that was produced by the thomas edison company. it was part of a series of experiments that edison and his engineers engaged in in the early 1890s. where our collection really begins, though, is in 1893 with first films that were registered for copyright. what edison did was he exposed the record for a sneeze on strips of contact paper, affixed them to a cardboard backing and

sent it into the library to be registered as a photograph. now, you have to think about this for a moment, because we do all the time. the paper print collection as it came to be known in that sense really was an historical accident. the name has been lost to the midst of time, but we're very grateful for whatever library bureaucrat decided that it would be okay to register this as a photograph. >> see more sunday at 7 p.m. eastern and pacific, part of american history tv every weekend on c-span3. >> former irk rs commissioner mark everson discussed recent issue at the irs at an event in new york city. he also discussed how the irs is structured and how it interacts with the media. mr. everson headed the irs from 2003 to 2007. this is an hour, 15 minutes.

[applause] >> i'm going to correct the record since we're being filmed here. it's actually everson, but we'll go with that. and thanks for having us, and we do appreciate the relationship our firms have. we work in this space which is so important, and so i would say it doesn't receive the attention that washington needs to provide small and mid-sized businesses across america that really as you probably know something like two-thirds of the private sector work force are employed, those individuals are employed by businesses with fewer than 1,000 employees. and that's a space that doesn't get the appropriate attention in washington. the big players, the big

companies clamoring to be able to bring the dividends back from overseas, they've got a seat at the table, and the very small folks, a lot of concern about that. it's this sort of middle group of these businesses that we sort of work on together to help claim benefits to which they're entitled. they, they are the ones that oftentimes don't get to hear their story told. so we're happy to help them, and we're happy to also work with you as you help them. so i thought what i'd do is sort of talk about events at the irs. there's been a hot going on, as we -- a lot going on, as we know, and also make some observations on tax reform and the affordable care act which are two very important issues as well. we will get to questions and plenty of time for that. of we don't have to rush off. so let me start with january and

the set of events at the irs in terms of how this year 2013 began. nobody in congress really spends their waking hours worrying about tax administration, how the irs does its job. not unless, of course, you get to a situation where there's an eruption such as that we've experienced in the last six or so weeks. in fact, often times congress doesn't get its job done in terms of tax law until the very end of the year. when i was commissioner in 2006, congress didn't finish writing what it had called the extenders until just before christmas, and that resulted in some problems in the filing season. this year congress outdid itself, and they didn't finish writing the tax law for 2012

until january of 2013. a part of this fiscal cliff negotiation that you'll remember that went into the closing days during the holidays. so that made for a real challenge for the service, and i give the irs very high grades for the filing season that they completed. not easy to do what they did given the choices they had to make in terms of was there going to be an amt patch and some of the other issues, where were thy going to be dealt with by the congress. so the service was able to get the filing season up and going. it didn't start until a little bit -- it was delayed for about a week, ten days if you will, and then there were some, several millions of filers who couldn't get their returns in until sometime in february. but by and large, the filing season went smoothly, quite an accomplishment given that late

start and the actions by congress. because remember what has to happen here is the service has to file all its computers. it's not just as simple as printing up a form and giving it to you. they've got to make sure their computers will deal with the law and make the correct calculations, and they've got to interact with turbotax and all the other entities that are electronically transmitting information into the service. so that requires a lot of testing. it's not a light lift. you've got to train your people on what the law is. folks are calling in on the phone. it's a lot to do. so that was, that's a problem. that's something that was addressed, and the service did well. second point, identity theft. how many people in this room know somebody that professionally or personally has been subject to identity theft? yep, yep. we're over 50%. now, i asked that question a year ago, 2012, and the answer was maybe 30, 0%. now -- 30, 40%.

now we're up closer to two-thirds, three-quarters of the individuals when you ask that question they know somebody. this is a huge problem for our tax system, and it's not getting any easier. what can the irs do about this? a lot of this is about, again, about the software, the computer programming. a real challenge because if you draw the lines in too tight, then that legitimate taxpayer files his or her return, and it gets held and investigated. and they're upset, understandably so, because that $2700 refund that they were banking on to come in in a week or two isn't coming in. and that's because there was something in their return that looked like it was out of the norm. on the other hand, if you draw those lines too loose, then billions of dollars of fraudulent returns are processed, and money goes out the door at a time when we, we

need the money in our country. in so that's the trade-off here. the service has upwards of 90,000 people that are working for it, and at the stage, frankly, something like 3,000 people are devoted to this issue. and that's to try and monitor on the front end, put in the right protections, but then those of you since you know people who have gone true -- through this, it's a horrible thing to unwind that problem once it happens. it takes months, 6, 8, 10, 12 months, and it's not a pleasant series of interactions, if you will, to unwind that. so that's a real challenge. i give the service good grades here too. i think it has demonstrably improved what it's been doing in this area. you're hearing fewer complaints. complaints we're getting now are hearing more about our, it's more the unraveling of this or unwinding of it once it's

happened. it's still there. people are still upset. but i think they've done a better job in terms of on the front end than had been the case in the past. another issue facing the service, sequestration. the service has an annual operating budget for this year of $12 billion. like every other entity in that discretionary corner of government, it took a 5% nick. that came out right at $600 million. that was well managed, in my opinion, as well. by the service. because what they did can was they -- did was they saw this coming. some entities refused to deal with it. but the management at the irs, they put in a hiring freeze, they stopped spending money in certain category, and that means that since most of the -- the way the sequestration works, every appropriations account gets that same 5% hit, and the two big accounts that the service has are both personnel

related. they're for the enforcement folks and for the service folks. the people who are on the phones or responding to correspondence. those accounts are over 90% personnel costs. what happens is you cut by 5%, that means you can't help but have an impact on the number of people who are working. this makes it challenging. the irs never gets more money than it asks for. congressmen don't love to come home and brag about giving more money to the irs. rick lazio works with us. he's a former congressman from this area. i'm sure he can say he didn't really spend much time bragging about how much money he gave the irs. but that's a dynamic, so the service is always challenged for funds. always. compared to certain other government agencies. but this set of changes, the $600 million, that obviously makes it tougher to bring in the monies, and let me tell you this, though, i will say this:

i'm all for sequester. congress doesn't do its job, doesn't make strategic cuts, then you've got to go forward. it's a blunt instrument, but it helped reduce the deficit. that's a good thing. i've spent two-thirds of my career in industry. i can just tell you that at the end of the day, every business i've been with when we had a shortfall making plans, at the end the head of the business would say, okay, everybody's sucking it up, we're each cutting our g and a budgets by 6% or something. it wasn't strategic at all. it's about closing that gap. and that's just how businesses operate. the fact that the government's doing this doesn't bother me at all. if there's no other way to get our fiscal house in order. as to the irs, though, i would tell you this: that results in not helping the deficit. you cut the interior department budget, you help the deficit, of course. there may be other costs associated with it, but you help the deficit. in the irs that's not the case.

when you cut the budget at the irs, your deficit is increased for the country. that's a factor. two more factors to sort of set the stage here. leadership, the evolution of the leadership of the service. the government has operated for years or did operate for years with, in essence, a defined benefit pension plan. people who joined the irs before the early '80s, they had handcuffs, as all government employees did. there were very real incentives to stay, to get their 30 years in, to be 55 years of age. that plan was changed in the early '80s so that it became more like a 401(k). i did my first stint in government starting in '82. i was a kid working in the reagan administration, and after about six months a personnel officer came in and said, jeez, you ought to convert over to this new retirement plan. well, it produced in me a lifelong distrust of personnel

folks -- [laughter] and also was a reflection on just how young and knuckleheaded i was. i converted over. i should have stayed on that defined benefit plan because with i ended up doing so far 12 years in government. i'd be far better off if i'd stayed on that plan. but the point is all sorts of people have just left the service and this year some are finally rolling off under that old plan. now the model is you work for the service 10 or 20 years, you get some great experience, and then you get picked up by a firm, there's no handcuffs keeping you there, and that means that there's both a different dynamic in terms of how you replenish your talent as you go along and right now a very real change, a rupture that's taking place, if you will, with the falling off of all these more experienced people not necessarily being replaced by folks who have come up through the system in quite the same way. the last dynamic that's affecting the service before you get to the most recent events is the affordable care act.

there are seats right up in the front. it's like church. the people who come in late, gotta come to the front. [laughter] so the affordable care act has just a myriad of impacts upon service. the greatest being the systems that about all this exchange of information, we've all been reading about the establishment of exchanges that are supposed to go live on october 1st. information's supposed to go back and forth from the irs including from companies and others that talk about really monthly financial data. there are all sorts of standards in terms of routines that the service doesn't have to deal with at present. there are changes in definition, things like family income as opposed to income of individuals. this sort of huge set of changes also involves new actors.

the city of new york or the state of california, they have strict protocols relating to the exchange of information. bill mentioned the release of social security numbers that just was disclosed over in the last 4 hours. 4 hours. 24 hours. the irs has done a very good job over the years of protecting private information. partially i had somebody work with me who was very sophisticated came in from a business, he said, well, that's because the systems are so archaic, nobody knows how to crack 'em. [laughter] and i think there's, there was some truth to that, but now what you've got is a whole new set of interalaskas all over the country -- interactions all over the country. all these new operations that are being created in the affordable care act, they're going to have sensitive information -- it's not going to be the health information. forget about michele bachmann talking about that, that is just dead wrong. but it's going to be financial television and personally-identifying information which is, of course,

also very sensitive. so you've got protocols on security, lots of different changes and challenges here that make this important. and i can only tell you that i know we hired a very senior individual from new york, oversaw all financial institutions for the irs around the country. and i was talking to him, i said isn't there a brain drain on all this coming off to help do the affordable care work in the service? the answer was, yes, absolutely, mark. this fellow named walter harris. he said let me just tell you a story. he said we had, i had two of my very best actuaries who did work on audit engagements, examinations of the large insurance insurance companies in the country. they were pulled off from that t work to do the affordable care act work. so the service is always going to do its very best to deliver a filing season. that is job one, to process those 145 million returns and

get those refunds out. they've got this real challenge of the identity theft going on, and then they've got the overlay of this huge domestic initiative which also happens to be very controversial. they are not going to fail on that. they're going to give that all their attention because the stakes are so high, if you will, on that. >> i'd seen some of my top people, and i hosted a dinner, a small dinner in the washington,

d.c. area out in mclean near the cia. this was a turkish restaurant, i'll put in an advertisement. it's my faith restaurant. -- favorite restaurant. and you also see some very interesting people. it's been there for 30 years right near the cia, a lot of interesting people come and go in the restaurant. but we had our area in the back, and i had 12 of the 14 people who i'd invited actually turned up, and we had a great evening. we were just telling stories. and i, there were no formal remarks, but i went around the room at one point and just said two or three sentences about each of the people, the men and women who were there. because i was proud of what we do. and i thought that this passage in my life looked great in the rearview mirror. not everything always does, i can tell you that from my own experience and my own mistakes. but i felt this was pretty good. interestingly enough, one of the