yield back the balance of my time. >> i thank the gentleman. we're not -- now going complete as fast as we can as many as we can before the vote. i'm sorry. if you please go next. >> thank you, mr. chairman. i wanted to thank you for your perseverance today both with the witnesses and. i have struggled to find out as we don't pursue what happened with the tea party cases. i think they look back and put them in the context. i'm trying to find out on the baseline how cases were handled normally before tea party got put in to your life. first, you were working in a division that was responsibility for you was to make decisions about people who were applicant for these 501(c)(4) designations. is that not accurate? >> yes, sir.

>> and in that period of time, you had to make decisions numerous times about the very characteristic we have identified here that would include the possibility that sum of it might be political activity and some may bed a vote casey for their activity; correct? >> sir, i worked cases that had all different activity. i worked 501(c)(3), all different tax exempt codes. >> once you made those decisions. what did you have to do? when you made conclusion that passed muster? what happened then. >> we would worked paper and provide a marry of the case use the appropriate law and come to a conclusion. then i would recommend to the manager and decide whether or not to sign off and approve the case. >> did your manager and approved and signed off on the case, what happened then? >> the applicant would get the exception and get the letter.

if it were mandatory -- >> what creates mandatory review? >> well, they can be manager designated. we have an internal revenue manual that designates numerous cases made to a review. >> that's what happened with the tea party cases at one point in time? >> it may have done the road after i left. >> okay. but normally you were able to make a recommendation, your supervisor presumably in cincinnati then approved it, and the normal course of business many of those cases then were the exemption granted and went on the way. >> that's correct. >> okay. when you were making those calculations you would ask who designed the questions? >> sir, the individual agent myself designed the question based on the information typically in the file. >> once again, it was part of your analysis. nobody else was looking the questionses to make the

calculation were they? >> generally that's correct. when you were assigned this special class of cases that were now going to seek approval of working on the tea party cases is in the first time then you then had to automatically make sure it went to eo technical? >> yes, sir, that would be correct. >> now, when you asked the questions at the outset, did you design that questionnaire? >> well, mr. hull had provided me copies of the letters he sent to the applicants. and i used those and tailored them to my particular applicant activity. >> did you design those to all of the question nears that were used in the applications for the tea party? >> with regard to those cases assigned to me -- >> simply two cases? >> two cases. >> okay. >> i prepared a letter asking for additional information from the organizations. no one reviewed it. i signed it. just a letter.

how complex was the letter? was it a lot of issues being asked for? >> i don't recall the exact number of questions, but usually if you listen with a page of questions or maybe a page and a half. >> okay. a page and a half. >> the circumstances, sir. >> thank you. did you get any other extensive question questionnaires directed to you from washington, d.c.? >> no, i did not. >> that the point in time. okay. you didn't ask those questions. when you forwarded these to mr. hull then, which was technical and your responsibility, mr. hull, in all of the cases or only in a few of these to make decisions on the recommendations that were made by mrs. hofacre with regard to tea party? >> in the beginning it was a first -- applications came in. there was a manager that overlooked it with me. he decided at the end of the first group he didn't need to see anymore. i looked at all of the questions

that mrs. hofacre -- >> how did it change? when did it change? >> how did what change? >> he decided he didn't need to see anymore. i'm presuming you made determinations, sent them down to cincinnati in the beginning as you stated with some of these cases, and that was the resolution, and it was either granted or appealed? >> i made suggestions to mrs. hofacre on the letters that were sent enough information. >> when did it change there was a requirement not simply to send it back down to her with the recommendations you had to send it to other places including chief counsel for resolution? i had to send it to chief council to find out what would be appropriate as far as they were concerned. at which point when i finally learned what was appropriate, i would be able to tell mrs. hofacre how she might want to tailor her questions. >> if the gentleman can wrap up. >> i want to thank you.

i was asking about routine process. >> i thank the gentleman. we go to the gentleman from massachusetts who will complete this panel and be excused following his questions. >> i'll do it quickly. thank you. just on the reform side of things, both of you had an extensive history the agency. we thank you for your service and experience. let me ask you to put the experience to work. do you have any suggestion as to how the process might be speeded and run more smoothly as a result of the issues that bring us here today? >> i never thought of it, sir. >> i'm sorry? >> i never thought of a suggestion with regards to how it might go faster. it never occurred to me. >> okay. >> so many unknown available and facet to a question like that. i'm not in a position to give an answer. >> okay. i always say it. part of the problem people thought they were getting delayed and seemed to be endemic for the entire system on that.

i don't know if it was a manpower or lack of clearer guidance or what it might be. if you haven't thought about it. you haven't thought about it. i thank you. i yield back my time. >> i thank the gentleman. that allows us to dismiss the panel. i want to thank you for your years of service, i want to thank you for your patience with -- if you will, i'm not trying to be unkind. we know you were asked the same questions over and over again. we know you heard the same speeches over and over again. you have moved in a decisive way toward the next level of investigation. i do not expect to ask you to come back. i do expect you to enjoy your retirement, mr. hull, and liz hofacre, i hope your career is as long as you want to have it. something tells me it may not be 4r-8 years. hopefully we haven't diminished your confidence in congress.

[laughter] >> i want to thank you for your service and thank you for being here. mrs. hofacre, i have tell you one of the most painful things i've heard when you said there was some threat or whatever to you and your family. you know, that is totally unfortunate. if there's anything we can do, i know the chairman joins me in that and all of our members. we want to make sure we do what we can to help you. and again, thank you very much. your testimony has been quite helpful. >> thank you. >> we stand recessed for the next panel. [inaudible conversations]

>> when they weren't qualified for out. then when the mandate kicks in a

year from now. you'll reconcile the records, and you'll find there are a lot of people in this country who signed up for exchange subsidies that they weren't excitemented to. they'll get -- entitled too. they'll get a passive bill taxing them for the exchange subsidies that they weren't entitled to. how is that not the case be you only delay one of the mandates and not the other? >> mr. aye write f you could answer that question in writing, that would be terrific. >> thank you for your testimony and the work that you're doing. i imagine, just to get to mr. ryan's point, it's not all that unlike people who take certain expenditures, and there's possible audits. that's no different from what individuals or businesses do today. that's a whole other subject. but i am also, like mr. thomas, in the category of applauding

the administration's decision in this remark, that we feel it's important to get it right than to do it fast. and i applaud the administrationing's outreach to businesses large and small, to individual businesses and the associations. when you're receiving feedback that they need more time. some of this stuff is a little complicated. were you hearing from them that they can't do this at all, or they just want additional time in order to get their records and systems in place so they can do a proper job of reporting this? >> mr. kind, we were hearing from, and congress was hearing from, broad segments of the planned sponsor community that they needed a little more time and specifically people such as representatives of the retail industries, the food service/restaurant industries

and others within the business community indicated they were adapting their systems. they're working on compliance with these requirements but need a little more time. >> well, that response is not surprising to me, because my own individual outreach back home talking to businesses, i was hearing the same thing. there are some things they need a little more time in order to work through with their systems, but they think they can get there. i find it humorous seeing these crock lisle -- crocodile tears from the other side. with that approach i ask the department of health and human services if they could calculate for me the provisions in the affordable care act, roughly 400, that have to be implemented already or on track, what percentage of those are they going to be able to hit the target on. and their response was, you know, out of the more than 400 aca provisions that are funded, the administration has implemented or has scheduled to

implement approximately 93% of them on time. now, clearly, that's not 100%, but i don't think anyone on this dais or any reasonable american would expect that a program as important and complex as health care reform would expect 100% seamless transition with what needs to be done. so the ability to make adjustments and to be flexible in doing this, i think, is going to be an important component of how much help businesses and individuals receive under health care reform. and i think treasury's decision reflects that practicality. but the real news today isn't this hearing that we're having yet again about the administration's decision to delay the reporting requirements for business. the real news is what "the new york times" reported that mr. thomas cited. health care costs for new yorkers set to fall 50%. mr. chairman, i'd ask unanimous consent of to have this article inserted into the record -- >> without objection. >> it states, and i quote: beginning in october individuals in new york city who now pay

$1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. and with federal subsidies, the cost will be even lower. and this is what we're hearing from oregon and places like washington, california and vermont and maryland. and this is what comes from the exchanges. that's going to increase competition and transparency. so, again, this is exactly what the exchanges are meant to accomplish, and this is exactly the type of information that's coming back. and sometimes i wonder whether or not their greatest fear on the other side isn't the delay and isn't the hiccups, but the fact this has a chance of really being successful and helping businesses and individuals be able to obtain affordable and quality health care coverage. mr. thompson also recited a fact sheet that all of us were given about the impact of the affordable care act in our individual districts from individuals to seniors to businesses. and my numbers line up pretty much with whether thompson was just reciting as well of the positive benefits that are

already going out, that people are feeling and seeing directly because of the effect of health care reform. mr. chairman, i would ask, again, unanimous consent to have these fact sheets that we were given today inserted into the record. >> without objection. i also would like to put into the record the hhs compilation of the provisions that have been implemented so the public can see that as well. if you have a copy of that, we'd like to put it in the record. >> mr. iwry, it just seems as if spd the administration is taking a pragmatic approach and not trying to rush things whose time may not be ready for implementation. and that's certainly reflected in the outreach that you did and, again, i commend the administration for listening to businesses and associations and making this, i think, very reasonable and pragmatic decision. >> thank you. time's expired. >> on june 7th, president obama told the american public this is referring the way it's supposed to. as it turns out, that's not correct.

isn't that, isn't that the point? >> respectfully, mr. roskam, i strongly disagree with that. >> so in your view, in other words, it's going just the way it was supposed to? it's working the way it was supposed to? and this delay was contemplated the way it was supposed to? is that what you're testifying today? >> congressman, the marketplaces will be -- >> in other words, did you do the delay, did he do the delay on purpose? was this cop templated? -- contemplated? at the time of which we've heard from administration officials over the past several years that it's all on track and, in fact, the president put his american note on this, this is working the way it's supposed to, are you saying that the individual mandate and the blog post release on july 2nd is the way it was supposed to go? is that your testimony? >> congressman, the individual,

it's called the individual mandate, the individual responsibility provisions are fully on track. >> how about the employer mandate? that's not -- this isn't -- i mean, this isn't supposed to be that tough. you're not making the representation that the employer mandate is going the way it's supposed to. you're not saying that, are you? >> congressman, this is a very ambitious legislative effort -- >> but it wasn't supposed to be like this, right? it wasn't supposed to be that there was a release of a blog post that said it's going to be delayed. so you're not, you're not going down that cul-de-sac where you're defending this as part of a plan that it is going exactly the way if i know you said you're not on the communications side of things and that you're on the technical side. can i just give you a piece, a recommendation? don't defend the delay as being on purpose. so at least you're acknowledging

with me that this was not intentional, right? >> congressman, as i was saying, this is a very major piece of legislation -- >> sure is. >> -- with historic benefits to the american people. there are various significant parts to provide coverage to tens of millions of people who haven't had it before -- >> right. but the point is it wasn't on purpose, right? the timing of this was not on purpose. the delay of the employer mandate was not something you contemplated. moments ago you were asked questions of the chairman what was the timeline of this, and the communication that at least the representation to the committee was that this was basically a revelation and a discussion and a decision that happened at treasury in some consultation in the white house around june. isn't that right? wasn't that your testimony? >> congressman, i believe that the chairman asked when the final decision was made as opposed to when the decision or

when the process of thinking about whether -- >> in other words, are you kidding me? did you have an inkling? did you have a foreshadowing that this was going to have to happen at the time when the president of the united states tells the american public it's working the way it's supposed to? >> congressman, the law as a whole is not something that i think anyone would have expected -- >> all right. there you go. at least thank you for acknowledging that. all right. now, let me focus your attention on a statement that you made a couple minutes ago to mr. johnson. you said that individuals, shifting gears, individuals have a different way of interacting with the system. they sure do. to follow up on mr. ryan's point, if individuals who aren't represented by anybody except us -- they don't have lobbyists, they're not part of some big coalition, they're just individuals. if they get on the wrong side of the law based on the characterization that mr. ryan

had, here's what happens to them, and this is according to mr. jost who was a democrat witness last week. he said that there are serious consequences for applicants who misrepresent their employer coverage, applicants who receive tax credits for which they're ingle jill, they'll have to -- ineligible, they'll have to pay them back, mr. ryan's point. that can cost a $25,000 fine. here's a tax form that the irs requires under penalties of perjury, representations under penalties of perjury, a criminal act, and yet you seem like you're very cavalier about in this. this risk, in this different way that individuals have of interacting with the system. yeah. they're more on their own. i yield back. >> thank you. mr. blumenauer's recognized. >> thank you, mr. chairman. it's been interesting sort of, i

tried to distance myself for a moment as i've listened to the back and forth and wondering what this would look like from a normal person from a distance. this controversial decision is controversial because people claim it's controversial. the notion somehow that we take 5% of the businesses who represent 1% of american employment and there's a year delay is not earth shattering. this is not something, you know, i would think as my friends have tried on a piecemeal basis, i notice my good friend, the chairman, couldn't even reference exactly how many times they've tried to repeal it. that somehow a small portion of the bill being delayed for a

year creates such trauma and drama would be hard, i think, for a normal person to really create into some sort of massive controversy that merits drilling into the bureaucracy, the timing, trying to parse a general statement from the president about the bill working as intended to somehow that each tiny detail is exactly as contemplated is foolish. and we could do this with any of the landmark legislation that some of my republican friends may be proud of and ask if every single detail is exactly as was contemplated? no revisions, no change, no

modification? of course not. that's hokum. i am from one of those states where people have not spent all their time trying to derail it. and there are some that have. but in oregon, and i would ask, mr. chairman, unanimous consent to enter into the record two articles about how it's working in oregon. >> without objection. >> how insurance rates have dropped. how thousands of people in my district are benefiting. and i'd like to be included in mr. kind's unanimous consent because i think this is important. the goal here ought to be to to work to pick health care -- to make health care more affordable and more effective for american people. we are burdened in this country paying almost twice as much as

any other country in the world for results on average that are mediocre or. mediocre. we get sick more often, we take longer to get well, and we die sooner than some of those countries that my friends on the other side of the aisle have denigrated when we are in the process of debating health care reform. in my state we're making some progress. if my state -- in my state if everybody practiced medicine the way it is in my metropolitan area, we would live longer, we wouldn't get sick as often, we'd get well quicker, and we wouldn't have a medicare funding crisis. and be this hearing is an example of why we're going to be continually stumbling forward, because the goal of some people

in congress is for the bill to fail. they didn't work with us in a bipartisan way to try and refine it. there are changes that i would make. i think this bill is maybe a b-. and it's not enacted the way that anybody in america would have done so, but we had a complete breakdown in the legislative process in the senate, so it had to be adopted via reconciliation. and since then no plan from my friends who talk about repealing and replacing, no man that would come even close in trying to put sand in the gears in every instance. i think that's unfortunate. planning for legislation to fail and make it harder on american employers, the health care system and the people we represent, i think, is a sad expression of politics today. but in my state -- >> all time has expired. >> you could do it in yours. >> mr. gerlach is recognized.

>> thank you, mr. chairman. thank you for testimony today, mr. iwry. i want to go back to the individual mandate provisions of the act relative to the employer mandate provisions which under this notice has been suspended until 2015. the testimony you presented here today as well as prior correspondence from the department of treasury cites the legal authority for the delay in the employer mandate as being section 7805a which is a general provision giving the secretary of treasury the ability to, in essence, promulgate rules and regulations for the enforcement of the title as well as doing things necessary by reason of any alteration of law. pretty general prescription of authority and what you call in your testimony longstanding administrative authority to

grant transition relief. based upon that authority, section 7805, wouldn't you agree then that the department of treasury also has the ability under that section to suspend the employee mandate of the law? >> congressman, we have not analyzed the question whether that different provision, the individual responsibility provision, is one that we would have authority to provide transition relief for because the -- >> is there any specific other provision in the act or any other prior decision by the department or any other rule or regulation that would prohibit you from delaying the individual mandate compared to just using section 7805 authority to

suspend the employer mandate? it seems like it's a pretty broad license of authority under that section. so why wouldn't that section also apply to the individual mandate? >> congressman, the authority you're referring to under 7805a in particular when used to provide transition relief with respect to the timing of implementation of a statute is exercised very carefully in order to provide in circumstances where the facts make it clear that the statute presents -- that the timing without a transition relief provision, that the timing would present administrative

difficulties that are very considerable. >> well, my colleague, mr. roskam, and mr. ryan highlighted the problems that individuals if they continue to face the mandate may experience relative to penalties in the future. and so the question is by way of fairness, is it fair to suspend the mandate on employers but not suspend the mandate on employees? and i would note a july 9th letter to chairman fred upton of the energy and commerce committee from the department of treasury indicating that on prior occasions that same section, 7805, was used by the department to relieve responsibility for payment of taxes in air transportation services and in other situations. so given the fact that the supreme court has ruled that this individual mandate is, in fact, a tax and the fact that this section 7805 has been used in the past by the department to relieve individual taxpayers of

taxpayer responsibility because at the discretion of the department it was an important thing to do, why is it not fair to individuals now under the affordable care act to have their mandate of taxes be relieved and suspended while the employer mandate is also being suspended? when you clearly have the authority, the discretion under 7805 to do that. >> congressman, the decision to provide transition relief in response to the requests from those in the planned sponsor community for more time to complete the successful and efficient implementation of their reporting systems was made very deliberately after assessing the credibility of those -- >> and you made mention in the past, in the last few minutes about the number of different employers that contacted you about that need. did you get any input from individuals about the need to not have an individual mandate

placed upon them? did you get anything on your web site in mail, e-mails from individuals around the country that didn't want to see this individual mandate implemented? >> time has expired. if you could answer that question in writing, sir, appreciate it very much. mr. pascrell's recognized. >> thank you, mr. chairman. and, mr. chairman, i've got to give credit where credit is due. you've run a very civil discussion, questions. but it's pretty bizarre when you think about here we are again trying to undermine the law. when you come right down to it. >> you had me on the first part of that statement. [laughter] >> i meant it. the affordable care act is complex, no be question about it -- no questions question about it. it was passed and con tapes skyrocketing costs. we could not sustain the similar as it was. many companies were going bankrupt. and to give uninsured americans access to affordable health

coverage. and i think we need to insure that that is done. that should be our priority. this delay should not be just another excuse for obstructionism. i think we should be working to insure that this law is implemented effectively. it seems more productive to me than voting over 38 times to repeal it. mr. iwry, thank you for participating today. you're a senior adviser in the treasury department to the secretary, correct? >> correct, congressman. >> of my friends -- many of my friends on the other side of the aisle are asking why the administration would delay the component of the law and not delay the individual mandate. they are fond of talking, a talking point that says that if

the administration is delaying the employer mandate, they should delay the individual mandate, you've heard that many times. this is comparing, to me, apples to refrigerators. on a scale and scope that are quite different. how many businesses does the employer mandate impact? >> congressman, i don't have that exact figure with me, but we'd be happy to get back to you with an answer. but it is, as you know, 95% of the american employer community that is small or than 50 employees and, therefore, is not subject to the employer mandate. 95% of businesses are not subject to -- >> well, if we apply those

numbers, it's about 10,000 businesses. my math comes to that figure. is that far off? be am i in the -- >> happy to confirm that or check that for you, congressman. >> would you? which is 1% of the workers, correct? >> congressman, it's about 5% of the employers that are largely -- >> i'm talking about the workers now. >> right. when it comes to workers, the percentages are different, and i don't have them in front of me. >> right. >> but of the 5% of the employers, 95% of those already provide coverage. >> well, i will stand corrected if you come back to me with that. i'd appreciate that when you have time. >> certainly, congressman. >> 1% of the workers will still have the option of using the state exchanges to purchase health care. i'm not talking about the businesses, i'm saying the total number of workers. according to a just-released urban institute repealing

the individual mandate would cause the uninsurance rate -- if i can use that term -- to be a full 50% higher than it would be with full implementation of the law. am i in the ballpark? >> congressman, be happy to review that study and give you our -- >> pretty startling -- >> views. >> -- if it's true. i didn't pick these numbers off the shelf. i talked to the labor department with numbers, and you start making divisions and multiplications, and that's what i got. now, this is additional now if that's true -- and you're going to get back to us -- 13.7 million people without insurance. an additional 13.7% without insurance. i think making sure these 13.7 million americans have health insurance on january 1st should

be our focus here today. and tomorrow. and the next day. if the majority wants to discuss the plight of the individual, that's who we should be talking about. i yield back, chairman. >> time has expired. dr. price. >> thank you, mr. chairman. and i, i want to just say to my friend from new jersey who just spoke what we're simply trying to do is to make certain that the health care system works for patients and doctors especially because that's where all of us interact with the health care system is when we become ill and have to go see our doctor. it's clear that the administration and the treasury department now see that it doesn't work for employers. so what we're asking is, well, how about just plain folks? how about my neighbor? how about the couple that run the corner grocery store in my neighborhood? what about them?

mr. gerlach asked you at the end of his time have you heard from any individuals who have had concerns about the aca and the implementation? >> congressman, we've had interaction with and comments from certainly organizations that represent individuals -- >> any just plain folks? >> the administration has heard from thousands and thousands of individuals about various provisions of the affordable care act. >> and their concern about the implementation thereof, is that right in. >> congressman, i think that the input from individuals has been on all sorts of aspects, and many of them, i believe, very supportive of the affordable care act. >> of them opposed as well, i mean, that's what we get in our office, right? >> i assume that the input from

individuals has panned the spectrum -- spanned the spectrum. >> absolutely. so if the administration is saying let's listen to the employers -- and god bless you for doing so, thank you very much. we've been telling you this for three years, three and a half years now. shouldn't we listen to plain folks? isn't there a rationale that could be made if we're going to give this kind of year's relief for employers, for businesses to comply with all of the machinations of this complex law, shouldn't we give that same relief to just plain american people? >> congressman, my understanding is that among other channels that many individuals communicate with all parts of the various parts of the government, hhs, the white house, etc. -- >> yeah, but the question is shouldn't we give that same relief, that same delay? >> and that much of what

individuals are asking for is the protection from pre-existing condition exclusions, the protection from -- enter but the chairman clearly identified that a delay in the individual mandate wouldn't exclude the opportunity or that portion of the law, isn't that correct? have you had any discussions at treasury about the possibility of a delay of the individual mandate? >> mr. price, i'm not part of all the discussions. >> have you -- >> at treasury, of course. >> have you been involved in any discussions at treasury in the irs to consider a delay in the individual mandate? >> with congressman, we have not -- >> have you, mr. iwry, had any discussions at all about considering a delay in the individual mandate? >> congressman, i do not recall

being part of any discussion that involved a view on our part or my part that there would be a necessity to provide more transition relief than congress has already provided for individuals under the individual responsibility be provisions -- provisions, the transition relief that is phased in that provides a much lower level of penalty in 2014 and lower in 2015 -- >> but you were involved with the discussions about the delay in the employer mandate, is that correct? >> congressman, very much involved in discussions about whether transition relief was needed with respect to the employer reporting and the broader employer responsibility

requirements. >> let me get -- i've got just a few more seconds, and i appreciate that. there have been questions about this 95% of employers who employ more than 50 individuals currently cover their employees with health coverage. 5% do not. do you know how many that is? how many folks is that? how many employees? in that 5%? >> the 5% of employers who are over 50 -- >> correct. >> -- that do not offer coverage current hi? >> correct. >> be happy to get you that figure. >> a thorough analysis that you all said you did, these are the individuals that are now thrown into the individual mandate, right? these are folks that now have to provide coverage for themselves, and i look forward to following up. thank you, mr. chairman. >> thank you. mr. smith is recognized. >> thank you, mr. chairman, and and thank you to mr. iwry for being here today to share your insight. can you tell us what the first indicator was that you detected

that would eventually lead to this delay in the employer mandate? was it just the weighing in of business folks, or were there other indicators? >> mr. smith, as you, as i know you appreciate, we are in continual contact with stakeholders. >> but more specifically, what would you say was an cearl indicator? -- an early indicator? >> and for at least the last year or so, a number of major representatives of large portions of our economy -- people such as the retail industry -- >> okay, so it was concerns by the private sector that were raised that were the earliest indicators that perhaps this needed to see a delay? >> mr. smith, i'm not sure i'd be comfortable in trying to

reconstruct -- >> okay. >> -- the earliest indicator. but clearly, a very prominent request, a very pronounced request for additional time has been coming very publicly. not treasury in particular as opposed to anyone else, but to anyone who would listen, certainly to congress in congressional testimony and in press releases and public statements -- >> okay. >> -- from industry that more time on the reporting systems issues to adapt their systems to the reporting rules, to collect information that they would need to collect more efficiently and at hoer costs -- >> right. so then on the reporting issue are you saying that that just, that the administration won't be enforcing the the reporting? how is it, explain again how this can be done without congress codifying the very desire for the one-year delay?

>> congressman, happy to do that. the announcement that we've made indicates that one additional year would be provided before the reporting requirements for the entities that are required to report employers -- >> so that's, that is authorized in the law itself? >> the law itself provides for the reporting requirements for insurers, employers -- >> but for the delay? >> the delay is one that we have made pursuant that the transition relief is something that we have provided pursuant to our authority under the tax code section 7805a to provide when necessary -- >> so did this authority exist before the passage of the affordable care act? >> congressman, not only did the authority exist, but it has been

exercised by administrations on both sides of the aisle on a variety of occasions to provide appropriate and necessary transition relief not just to employers, but to taxpayers generally when the circumstances persuade the treasury department that additional time would be consistent with the furtherance of what congress intended when it enacted the particular requirement at issue. >> with okay. so now shifting gears a bit, on -- if an individual qualifies for a subsidy that is conditional upon employer provisions of health insurance but there would be the delay for the employer provision -- this was touched on earlier -- can't, can we really effectively still mandate the individual situation

when the employer mandate is not in place? >> congressman, the transition relief with respect to the employer responsibility does not at all make it impractical for individuals to be be able to report -- >> but it is a condition upon which an individual would qualify for a subsidy, is that correct? >> if an individual wants to apply for a subsidy for a premium tax credit, there are a number of conditions that apply including the individual's income, whether the individual actually has acquired coverage. >> yes, time has expired. thank you, sir. mr. rangel. >> thank you, mr. chairman.

can you hit your microphone, charlie? >> yes, i think so. good. thank you, mr. iwry. you seem to be hesitating in a lot of the responses from the questions that are being asked of you. it is my observation that it is because they sent the wrong person here to answer. you've indicated and your record shows that you are involved in policy, and this committee needs someone that's involved in politics. because there is no question that no one cares about what the policy is, and no one cares whether the president delayed anything. actually, most anything that the president wants the majority party in the house, they don't want. if the president actually walked on water, i'm certain that the

speaker's group would be saying that the president can't swim and that we ought to take another look at him. now, it's very unusual for me to remember any circumstance where a major piece of legislation is being opposed and suggest that it be repealed when they have a president of the sponsor of the legislation if office. m and so i don't think you have to be a policy -- a politician to answer that. if the republicans were to repeal the affordable care act, does it appear that the president of the united states would veto it? >> if the -- >> if the repeal is passed by

the house and senate which is almost politically impossible, does in your opinion would not the president veto it? >> my understanding, mr. rangel, is that is certainly the case. >> and everybody in the house of representatives and the senate, they know this. so, obviously, they don't give a darn about your policy or the president's policy. it's here to embarrass the president or the administration as it relates to doing what they want done. they not only want to delay, they want with it out. there'll be bills on the floor to delay and to repeal other parts of the bill. my question to put on your policy hat is if their political goals and legislative goals were achieved, what would be in place to provide health care for

americans? what would be there? >> mr. rangel, if this legislation were repealed -- >> wiped out. >> -- we would continue to see tens of millions of americans, more than 50 million, without coverage so many of whom would get coverage as a result of this act, we would continue to see insurance taken away from people buzz they've gotten -- because they've gotten sick or the pricing -- >> well, what about young people? would they be a able to get on their parents' insurance program up until 26? would that be available to them? >> it would not -- >> if it's repealed? >>ed>> it would not, mr. rangel. >> okay. what about the prescription drugs discounts that are provided in this law for

seniors? would that be available if this was repealed? >> no, sir. >> okay. now, what about these preventive services; not waiting til you get sick, but to be able to see a doctor and get medical advice and help before you get sick, would that be available if we repeal obamacare? >> it would not, and it would not be required to be provided at no cost. >> what about the lifetime, is it possible that you could make insurance companies keep you insured for life, or could they continue as they had in the past to just cut you off? >> that is another protection of the law that would not be in effect if the law were not in effect. >> and if you were applying for health insurance and they said, well, you've been sick before, we don't want to take you, if you wiped out obamacare, would

they be forced -- >> time has expired. >> send a politician down here next time, mr. iwrc. >> thank you for your brief, clear, concise answers. i hope that will continue as we go on in the hearing. mr. kelly? >> thank you so much for being here. i was reading over your resumé, it is really impressive. i mean, there's no question about you being an authority on this. so with that in mind, and you're also a graduate of harvard law school, i'm understanding. let me ask you, because this is where the crux of this whole problem. where i'm from bam home people expected -- back home people expected to be treated fair and equally under the law. the patient protection and affordable care act is the law, right? so there's a feeling i should be treated fairly and equally under that. the question then comes down to what's the definition of fair? in i'll tell you, fair is defined as marked by impartiality and honesty, free from self-interest, prejudice or favoritism. but back where i'm from you know

what it means? treat me the same way you treat somebody else. that's all it means. you don't have to have a law to understand that. the other thing is equal. what does equal made? the same measure, quantity, amount or a number as another. like and quality or status. but i thought the part that was best was like for each member of a group, class or society. so now on july 2nd there was a decision made and, according to your testimony, there was great deliberation over this. is that true? >> congressman, there was very careful deliberation. >> from okay, listen, i've got to tell you, aisle real simple -- i'm real simple. a yes or no's easy for me. there was great deliberation, yes? was there also consideration of if we do this with the employer mandate, what do we do with the individual mandate? any discussion on that? that's just a yes or no question. >> congressman, there was -- >> mr. iwry, you don't need to

build me a watch. please just tell me the time. yes or no, was there discussion on the individual mandate? >> congressman, as the employer responsibility provision transition relief --? >> i'm going to ask one more time, was there a discussion on the individual mandate? you said there was quite a discussion on the employer mandate. my question is a yes or no, sir. it's a very easy question. >> congressman, the individual responsibility provision, how it would be affected and how it might interact -- >> okay. >> -- if transition relief was given on the employer responsibility reporting provisions and the other m employer requirements, consideration of the -- >> consideration. so there was discussion. there was discussion on it. >> certainly given. >> okay. hurt. there's discussion on it. i don't want to be disrespectful, but i only have a little bit of time, and i need you to answer the questions. these are all yes or nos

really. my next question to you is do you know what a deadline is? i looked these things up. i have never seen an organization that mays less attention to deadlines than this organization. deadlines really aren't deadlines. now, the private sector if there's a deadline, by golly, you're held to that deadline, and if not, you're held responsible and accountable for not being here. but in here we'll pick and choose what we want to do, we'll figure out what's fair and equal depending on what we want to do. a deadline is a date and time before which something must be done. okay, the deadlines were all established under the law. go back to march 23, 2010, that's when we started working this. my goodness, it's over three and a third years, and we're still trying to figure this out. now, i've got to tell you, i am an employer. you want to sit there, i keep hearing about, well, you don't understand, for a lot of big people, it didn't matter. a lot of big people got waivers on it. i'm tired of hearing all these different excuses of why it

couldn't be done. this is absolutely pathetic that we have to stand here and have this type of conversation when the answers are all yes and no answers, and the truth of the matter is we keep hearing the overwhelming support. my friends keep saying about, you know what? we should delay this. we have to take our time. my goodness, we don't want to rush this through. isn't it a shame they didn't use that same philosophy back in 2010? would it will be a little -- would it have been a little bit easier? i know you have 315,000 people -- 115,000 people that work there, but i expect a little better performance, and i expect a little better return on the investment by the american taxpayers. this is unraveling before our very eyes, so i would just ask you, you have said that you guys studied it, you talked about, there was intense -- maybe not intense, but there was deliberative discussion on it. july 2nd it comes out, boom, we put it on a blog. we wait til friday afternoon which is the way everything

comes out of this administration, and then we drop this bomb on them. so the individual mandate has to be kept in there, can't be considered even though we did it for the employer mandate, we can't do it for the individual. yes or no? >> time has expired. >> all right, good deal. >> mr. reed? >> thank you, mr. chairman, and thank you for the testimony today, sir. i share the concern about this decision of the administration for the employer mandate. but what i would like to do in our exchange here today is to clearly get a understanding from treasury's perspective and for my constituents as to what you did over the last three and a half years since the enactment of this law in march 2010 and what are your concrete steps going forward as to what treasury needs to do, will do and that we can hold you accountable to so that12 months from now we're not faced with another last minute announcement

through an internet blog saying, well, you know, we're not ready again. so the question i have for you, sir, is what did treasury do? you knew this employer mandate was coming the last three and a half years. what did you do to prepare for that? where did you fail? because, clearly, you failed because you didn't meet the deadline. and what are you going to do over the next 12 months in detail to make sure that we don't have another delay going forward? so let's start with what did you do. what did you organizationally do? >> congressman, what treasury did, has done with respect to the employer responsibility part of the affordable care act includes an extensive set of guidance that involved five rounds of interaction through

written comments with the private sector and the whole stakeholder community. >> so those guidance are documents you prepared based on input to say what to the employers? >> we've issued proposed regulations in december of 2012 that told taxpayers they could rely on the rules in those proposed regulations for implementation -- >> so it took two years to get those proposed rules ready to go. so where do we stand today on those rules, and where are we going over the next 12 months? >> so, congressman, those proposed rules tell taxpayers that they can rely on those rules for implementation in 2014, that the rules embody the results of the intense dialogue with plan sponsors and

stakeholders in all parts of the -- >> so if those rules are all done, why do you need any delay? >> the -- >> you're -- that's what i'm hearing. you're telling me that the rules are done, and you've given guidance to the industry and employers, and then you come out in the same breath and say we need a delay. that doesn't make sense to me. explain to me why i'm wrong. >> congressman, i'm happy to explain. the employer responsibility proposed rules relate to most aspects of employer responsibility under the law. employers asked us to give priority to those particular rules, to do that first in our discussions with them when we asked them what's most important -- >> okay. >> what's the critical path. the reporting requirements are not part of that proposed regulation. the employer -- >> do you couldn't do the reporting requirements as part of that proposal because it was

too complicated for you to deal with the reporting requirements or because the employers said, well, we just want you to focus there first rather than on the reporting requirements? is that what your testimony is? >> congressman, employers told us that that of the very significant different portions of this legislation that need to be digested and implemented and worked out in regulations, the employer reporting requirements were generally something that they thought we should do not as the first priority or the first step, but rather as a second step after the main body of employer --? >> okay. >> responsibility. >> my time's running short so now going forward -- >> yes. >> what are you going to do over the next 12 months that i can hold you accountable to next time you come up here and ask for a delay? >> congressman, we are moving

forward now to take advantage of the feedback we've received from plan sponsors and other stakeholders on the reporting requirements in the form of written comments which we've asked for and gotten, and we're now moving to prepare proposed regulations on those. >> all time has expired. mr. crowley? >> thank you, mr. chairman. thank you for allowing me to participate. i'm not a member of the subcommittee, and i appreciate the opportunity. mr. iwry, thank you for your testimony today. while i know in this hearing is focused on the employer responsibility requirement, i want to point out something about the individual responsibility requirement as well. today's new york times, as i know my colleague from wisconsin, mr. kind, mentioned earlier, highlights that in new york's marketplace individual policies are expected to see a rate drop of 50% or greater.

that's a huge success of the affordable care act or obamacare. because the major thing that's changed in new york's market is the addition of all those healthy people into these plans. this is a tangible success and proof that all the doom and gloom my colleagues on the other side is not likely to come to pass. i believe that most employers will continue to offer health insurance coverage. my republican colleagues want to use the aca as a scapegoat for business decisions that may well be happening irrespective of health reform. but i'm confident that the overwhelming majority of businesses who offer coverage today without any requirements will continue to do so. many iwry, aren't there a number of surveys suggesting that employers will continue to offer coverage? >> mr. crowley, we do think that

there is a good reason to believe that employers that have been offering coverage will, indeed, continue to offer coverage in 2014. that employers will not drop coverage in 2014 simply because of the one-year transition relief with respect to the employer reporting and because of the employer reporting with respect to the employer responsibility. >> and it's not just your belief. i want to point out for the record a survey by the international foundation of employee benefit plans found that most employers, 99% of employers, will continue to offer coverage. is that not true? or correct? >> congressman, i don't have that survey in front of me, but happy to review it and get back to you on that. but that's consistent in general with our expectation that

employers will continue to provide coverage. >> thank you, mr. iwry. clearly, employers view providing health insurance as good for business. and continue to do so -- and will continue to do so. in a recent survey, over two-thirds of employers said they value offering health insurance because it helps them retain current employees as well as attract future employees. having healthy employees is also important for reduced absenteeism and increased productivity which i know my republican colleagues would all support. so i thank you, mr. iwry, for your testimony today. if you have anything more to add, i would yield you time if you had more additional information you wanted to provide. >> well, mr. crowley, i would add i think it's important to note that another reason that employers have been providing health coverage to such a great extent and another reason to

expect employers to continue doing so in 2014 as they look to the 1/1/2015 implementation date for the m employer responsibility provisions is that very considerable tax advantages associated with employer-sponsored health coverage that is the employee's ability to not recognize income on the value of the employer coverage provided to the employee. the income tax exclusion, the payroll tax exclusion and the employer's payroll tax exclusion for the employer-sponsored health coverage. and those advantages have continued and will continue

throughout to make it particularly advantageous for employers to provide coverage in addition to the factors that you mentioned. >> thank you, mr. iwry. mr. chairman, once again, thank you for allowing me to participate in the subcommittee hearing. thank you. i yield back the balance. >> you bet. dr. boustany? >> thank you, mr. chairman, and, mr. be iwry, thank you for being here today. you're widely acknowledged as a preeminent employer benefits lawyer in this country, and i know you've spent three-plus years working on the regulations attended upon the statute dealing with the employer mandate. and you, the administration have now acknowledged it's not ready, not ready for prime time. clearly, it's complicated. you have a talented team around you. you're one of the preeminent lawyers in this area, and yet you're -- there's an admission it's not ready. you've met with industries, various stakeholders in all of

this as have we. we've heard lots of testimony on this. and so i i just want to run through a couple of industry sectors and get your opinion, basically, a yes or no. do you think that the employer mandate statute would have a particularly large impact on employment practices for the franchise industry? franchisees? i mean, we've seen a lot of reports in various articles about this. >> congressman, you're asking whether we think that the employer requirements do finish. >> yes. >> -- would have an impact on -- >> their employment practices, their hiring. >> the -- >> will it affect the franchise owners? will it affect restaurants? individually-owned restaurants? what about retailers?

grocers? small businesses? >> right. all of the franchise operations and small businesses, restaurants and so forth that have fewer than 50 employees as defined in this legislation would be completely unaffected. >> no, i understand that. but what about those right at that mark? what about those that are just above? are they -- do you acknowledge that many of them are shifting to part-time employees to try to work with this statute as it is implemented? >> congressman, i don't think we have seen evidence yet that a lot of these employers are, in fact, shifting. clearly, there has been conversation about whether they would, to what extent -- >> we're seeing it in our congressional districts. i mean, we're hearing it directly from employers who are making those kinds of changes. so i guess i would follow up

with this: we have slow growth, record unemployment, people are not looking for work, people are out of work particularly in the younger demographic. what does a one-year delay do on this when you've acknowledged it's very complex, you've been at it over three years, and you haven't come up with the final package on how this is implemented? health care's complicated enough, and yet now we're putting this additional, very complex set of regulations potentially on these business owners in a very sluggish economy. i mean, what's one year going to get us? what kind of certainty will that provide for these business openers? >> congressman, we've been in very close touch with business owners, small business, large business. we have had many, many conversations at the nuts and bolts level about how this law would potentially affect them and about what we can do to make it more workable, as workable as

possible for them and as easy as possible for them to work with and help their employees get coverage. and what we have done as a result of all that is to actually be ready. we have put out employer responsibility rules -- >> but you're not ready because you've asked for a one-year delay on this. we're trying to understand what does a one-year delay get us after three years of very hard work trying to put this in place? to me, it's an admission that we have something that's far too complex and probably should be repealed. >> congressman, the one-year delay responds to the employer requests for more time for them to adapt their systems of information reporting and for us if we can to find a way to simplify or streamline that particular aspect of the employer requirements.

if we can find more ways to make it easier and more cost effective for employers that are already providing coverage to their -- >> that's a very big if. very big if. >> congressman, we've been, we've had a good experience working with employers and finding creative ways to make the other employer requirements more workable. we hope to do the same, if we can, with respect to reporting. >> all time has expired. the top of this hearing was the delay employer mandate and the fairness and equality of treating workers differently than the treatment of businesses. i want to thank you, mr. iwry, for being here today. since you were not informed of the key elements of the timetable, earlier in the testimony you agreed you would provide promptly in writing to the committee when the treasury department made the final decision on the employer mandate, when they informed the white house of the decision, when they informed the hhs and they answered the question of

were any members of congress or the staff notified of this decision ahead of the blog post. i would encourage you to provide that promptly, within the week, a week to this committee. agreed? >> mr. chairman, we will certainly be happy to respond the your request -- to your request. i can't speak for the whole department in terms of the exact timing for details, but -- >> we figured that out. >> happy to work with your staff and cooperate. >> as a reminder, any member wishing to submit a question for the record will have 14 days to do so. if any questions are submitted, mr. iwry, i ask the witness respond in a timely manner. with that, the subcommittee's adjourned. [inaudible conversations] >> today a house hearing looks at treatment for sexual assaults available to active duty troops is and veterannings. military -- veterans.

military survivors of sexual assault and officials from the pentagon and department of veterans affairs testify. live coverage of the veterans affairs health subcommittee begins at 10 a.m. eastern time here on c-span2. u.s. trade representative michael froman was on capitol hill yesterday to talk about the administration's efforts to reach trade deals with asian countries, especially japan where negotiations are focused on lifting import restrictions on u.s.-made cars. this hearing of the house ways and means committee is two hours. [inaudible conversations] >> the committee will come to order. well, good morning, everyone.

i want to welcome everyone here today and extend a special welcome the united states trade representative, ambassador mike froman. first of all, let me congratulate you on your con fir payings. you are now leading one of the most professional and productive agencies in the united states government. we're glad to have you here, and we wish you very well in your new responsibilities. you take the helm of ustr at a critical juncture. we are in the midst of three major trade negotiations, all of which will need strong administration leadership to complete. we are in deep, deep into negotiations on the trans-pacific partnership which i hope will be finished this year. earlier this month you held the first round of negotiations for a u.s./e.u. trade and investment agreement which holds enormous potential, economic benefit. and negotiation for a trade and services agreement have begun promising huge commercial gains and attracting new participants. we had initial hi seen some encouraging movement at the wto

on expansion of the information technology agreement and a trade facilitation agreement, but that progress seems to have stalled, particularly with yesterday's announcement about china forcing us to suspend ita negotiations. we need to find a way around these obstacles in geneva. each of these negotiations will support more better-paying jobs here in the united states birdies mantling barriers to u.s. execs ports and creating mechanisms to prevent future barriers from emerging. these agreements will tackle tariff and non-tariff barriers as well as new 21st century issues like regulatory coherence and trade facilitation. in addition, these agreements help to more deeply integrate u.s. companies into the global supply chains that are the reality of toed's marketplace. quick movement on these negotiations is important because other countries are signing agreements that open markets and increase their competitiveness at our expense. i look forward to continuing to work closely with you on each of these negotiations to insure

that each is ambitious, comprehensive and concluded as soon as possible. however, finishing these negotiations will not be easy. for example, in the tpp i have serious concerns about japanese nontariff barriers in the auto, insurance and agriculture sectors. in the e.u. we face regulatory barriers to u.s. exports that must be resolved particularly in agriculture. i look forward to hearing your testimony on these issues and working together to insure that these barriers and others are fully addressed before any negotiation is depleted. finish completed. another critical issue is how to deal with currency in our trade agreements. i believe that currency misalignment is a serious problem, and i look forward to hearing more from you about how the administration plans to address this issue. in last congress we passed and the president signed into law seven bipartisan trade bills including implementing trade agreements with colombia, panama and south korea. i hope to build on that bipartisan cooperation to move a bipartisan trade promotion

authority bill, tpa is essential so we in congress can outline our priorities for you, establish b how you consult with us and create the mechanism for crring implementing legislation. it's no overstatement to say that the success of your work at the negotiating table absolutely depends on passing tpa, and we simply will not with able to enjoy the benefits unless we have tpa authority. i look forward to hearing today from you, ambassador, about how the administration plans to engage on this issue as well. in addition to negotiations, we must also pay attention to the challenges and opportunities presented by trading partners around the world. take, for example, the major emerging economies, china, india and brazil. each provides enormous potential opportunity but also significant and growing barriers. we must seek ways to engage these countries constructively and address trade and investment issues. we should use our bilateral investment treaty agenda as one tool to address these concerns and also to seek to expand our

agenda to new partners. finally, i also note that we continue our work here in congress on several important initiatives. i will continue to seek a path forward to pass as soon as possible the bipartisan miscellaneous tariff bill can ranking member levin and i introduced yesterday to provide tariff relief to u.s. manufacturers for products not made in the united states. our bill remains a model of transparency with benefits available to any entity that uses the products covered by the bill, and i'm very aware that last december duties increased for over 600 products. ranking member levin and i also introduced legislation yesterday to renew the generalized system of preferences, and we will continue to work together to find a path forward in the senate that insures that the senate can move the bill without amendment. in addition, i hope to move a bipartisan customs reauthorization bill quickly. a robust international trade agenda puts u.s. job creators back on offense. let us seize in this opportunity, and i will now yield to ranking member levin to make an opening statement.

>> thank you very much, mr. chairman. and, ambassador, on behalf of all of us, if i might say so, a warm welcome. with negotiations spanning the atlantic and the pacific illustrating that globalization is accelerating, we face major opportunities and challenges. i believe that this administration in which you have played a key role has on some important be occasions demonstrated a broader vision of international trade. it has helped to create jobs through exports while also looking actively at the impact of imports. it is working to incorporate enforceable worker and environmental standards and trade agreements. it has been more active in enforcement from initiating wto cases to a applying the china safeguard on tires to creating

the itec. it has responded to a series of tragedies in the factories of bangladesh, tragedies that have shaken conventional resistance to building some basic standards to shape the human impact of the heightened flow of international trade. as ustr, you face many challenges; forced localization in china and india, for example, continued concerns about labor rights in colombia, evasion of antidumping duties, even the future success of the wto. tpp can expand our imports in many sectors including services which are also under negotiation in japan. while there are many outstanding issues, japan's engagement raises a broader policy question whether and how to address

one-way trade, a very unlevel playing field. the u.s. has had massive trade deficits with japan for decades. the vast majority in the auto sector where japan has taken advantage of a completely open u.s. market while japan's has been tightly locked to imports from us and anywhere else. if the principle of two-way trade really matters, and i believe it does, we need to chart a course to achieve it. what the u.s. negotiates with japan could have important impacts on the u.s. economy and also how tpp would be received in congress. i am working with stakeholders to develop a proposal and hope to share it next week. the transatlantic negotiation withs also provide an opportunity to expand our exports and strengthen our economy. just as important, they can

establish new rules for global trade promoting an equitable and market-based economic model over the emerging model of, in quotes, state capitalism. these negotiations won't be easy, but our relationship with europe is unlike any other. we should build upon the strength of that relationship and should reflect, and it should reflect our many common objectives and values while also respecting our differences. the discussion on tpa has begun, and there is widely-shared interest in getting it right. first, tpa sets the rules for engagement between congress and the administration. a significant, sustained role for congress is critical. today trade agreements address a broad and growing range of policy areas, so members of congress must play an active role in their development.

there's also a chance that more effective, broader congressional involvement -- and i'd like to emphasize this -- would help to establish more common ground in congress for trade agreements. second, the tpa process must be a vehicle in crafting a broader strategy as we did in 1988 to tackle the increasing challenges and potential benefits of globalization anden hasn't u.s -- and enhance u.s. competitiveness. since we last considered tpa, the u.s. has experienced the largest trade deficits in our history contributing to lost jobs. these imbalances have more than one ingredient. one source often stems from trading partners refusing to pray by the rules. play by the rules. as the chairman mentioned, currency manipulation is a vivid example. there is precedent for pairing tpa with currency legislation.

we did so with the very first tpa bill in 1974, and we did it again in the 1988 act. the house and senate have both passed current su legislation, and -- currency legislation, and this issue needs to be part of the tpa, tpp and ttip. we're going to have trouble keeping these three things separate, aren't we? so i close to mention this, of interest i know to you in your new position. with sequestration ustr, like many other agencies, is working under difficult personnel constraints. we need to help insure that the administration can continue, can continue to devote the needed resources not only to negotiating new trade rules, but to enforcing those that exist. so, mr. ambassador, it's nice to call you that. we rook forward to working with you -- we look forward to working with you. >> all right, thank you. we'll now turn to our witness. i want to welcome ambassador

mike froman again to the committee, and thank you very much for being with us today. you have five minutes to present your testimony, and your full written statement has been submitted for the record. many ambassador, you're recognized for five minutes. >> thank you. mr. chairman, ranking member levin, members of the committee, thank you very much for having me here today. there's a long tradition of partnership between the ways and means committee and the u.s. trade representative, and that's a tradition i plan to continue. as president obama's adviser on international economic issues for the past four years, i've had the opportunity to work with many of you on a number of initiatives including those that are now my full-time focus, opening markets for american goods and services, and in doing so, supporting jobs here at home. we've made important progress. exports are at ab all-time high. increases in this u.s. exports have supported more than 1.3 million additional american jobs. and have accounted for more than one-third of u.s. gdp growth over this period. i'm pleased you invited me here today because there's so much

more we need to do together. as president obama has made clear, our focus must be to promote growth, create american jobs and strengthen our middle class. ustr can contribute to this effort in three important ways. first, by opening markets around the world that we can expand our exports. second, by leveling the playing field so that our people can compete and win in the global economy. and third, by insuring that the rights and trade rules we have fought so hard for are fully implemented and enforced. trade policy negotiated and enforced vigorously to reflect both our interests and our values gives our workers, farmers and ranchers, our manufacturers and service providers, our innovators, creators, investors and businesses of all sizes the best chance to compete around the world. the president has laid out one of the most ambitious trade agendas ever, and we at ustr are committed at getting it right. last week we completed the first round of transatlantic trade and investment partnership or ttip

negotiations. with the ultimate goal of enhancing what is already the world's largest trading relationship. and as we speak, ustr negotiators are in malaysia hard at work negotiating the ground breaking trans-pacific pickup or tpp, a 21st century relationship that introduces new trade disciplines. we are working on fresh, credible ways to energy eyes multilateral trade negotiation at the wto. we're working on a trade facilitation agreement and we hope to make progress on an information technology agreement. our service negotiators are hard at work negotiating a high standard trade and services agreement that will allow our already competitive services providers to compete for global business on a more level playing field. if we're able to complete these agreements -- and i say if because let me be clear, it's better to have no agreement than a bad agreement -- we will have created free trade with 65% of the global economy. these agreements hold real

job-supporting export potential for manufacturers in michigan and pennsylvania, farmers and ranchers in wisconsin and california and serce providers in new york and massachusetts. trade policy can only work, however, if it's fair. american workers are the most productive in the world. they deserve a level maying field to peat on, and this administration has taken a tough approach to trade enforcement filing 18 cases to enforce our trade rights. the interagency trade enforce bement center or itec has further enhanced the complexity, depth and reach of the administration's enforcement efforts. the obama administration is committed to pursuing freer trade, but we are equally committed to enforcing our trade rights and providing skills and opportunities for workers including through the trade adjustment assistance program which expires at the end of this year. trade is also a powerful tool for our broader development policy. i recently returned from africa where president obama announced a trade africa initiative. working with a new generation of

reform-minded leaders in some of the poor best countries in the world who are -- poorest countries in the world who are focused on trade, not just aid, investment, not just assistance as the key to sustainable economic development. in that regard i'm encouraged by the introduction yesterday by the leaders of this committee of a bipartisan bill to extend gsp, and i look forward to insure or the seamless renewal before it expires in 2015 is. trade policy fulfills its greatest potential when it's the product of close consultations between the administration, congress and a wide range of stakeholders. transparent collaboration leads to better policies and better outcomes. and while ustr has done much to advance transparency in recent years, in my view, we can always do better. and here, too, i look forward to consulting with you as we explore further steps. let me take a word that i know of importance to many of you, tpa. as i said in my confirmation hearing, tpa is a critical tool,

and as the leadership of our committees undertake a process to develop a tpa bill, we stand ready to work with you to craft a bill that achieves our shared interests. finally, all of these things i've mentioned, all of our shared goals are contingent on ustr having the resources to pursue its mission. we're managing our resources aggressively, and we'll do our best to achieve our priorities with whatever resources we have. but to be frank, i'm worried. at a time of unprecedent canned levels of activity, sequestration and other budget cuts are come probe poising ustr's ability to conduct trade negotiations and other market-opening efforts as well as to initiate new enforcement actions. financial constraints are forcings us to make difficult decisions every day, and the opportunities we miss have real effect on whether or not your constituents are getting the full benefits of a robust trade policy and the jobs and growth diplomated by our trade -- promised by our trade agreements. with that, thank you for inviting me to testify today, i'm happy to take your

questions. >> well, thank you very much. mr. ambassador, i've been working with mr. levin and our counterparts in the senate on a bipartisan, bicameral basis to develop tpa legislation, as i mentioned. and i believe you need this authority to bring tpp to a close. as well as the other things you mentioned. you know, the e.u. agreement, services and other negotiations. because it, as i said, it gives the administration the backing of the congress and a clear sense of what our negotiating objectives are. while we're making progress, we will not be able to do that without the administration's full involvement and engagement, and i welcome your statement both at your confirmation hearing and again today that you, that the administration's asking for tpa, that you believe it's a critical tool. but we really do need to be full partners in this venture if it's to succeed. what exactly are you and the president doing to help build the case for tpa? >> well, mr. chairman, i think the president and the rest of

the administration has been very much discussing the importance of our trade agenda, the implications of our trade agenda for our larger economic policy and are fully committed to moving forward with what's necessary to get our trade agenda done. with regard to tpa specifically, the bipartisan leadership of this committee and of the senate finance committee i know are beginning a process, working on a process to develop a bipartisan tpa bill, and we stand ready to engage and to help in that process as requested. >> regarding tpp, i'm, as i said, i'm committed to working with you on that, and i think a robust agreement will have significant benefits for the u.s. economy and sport job creation -- support job creation and better paying jobs here. japan's scheduled entry next week, i think, raises some very significant concerns. and japan's entry into the negotiations i don't believe

should be allowed to undo the work that has already been completed. and i think a robust package fully addressing japan's nontariff and tariff barriers that have been longstanding, as mr. levin mentioned, particularly as they relate to auto, agriculture and insurance exports i think will be essential to obtaining my support for this exreement. but, first, what steps are you taking to insure that japan will resolve these outstanding barriers to trade? >> well, thank you, mr. chairman, and this is a very important issue to us, and we appreciate your leadership and the leadership of ranking member levin on this issue as well. before we had extensive consultations with japan prior to agreeing to allow them to join tpp precisely on the issues you mentioned, on agricultural issues, on insurance and on the auto sector. and we insisted on making progress on those issues before they were allowed to come in, and we've reached some up-front agreements on certain airs but also on terms of reference for

ongoing negotiations in these areas that will be linked to and part of tpp. so, for example, in the, in the agricultural area they moved forward with their agreement to allow american beef into their markets in 30 months and under. on the insurance area, there's a standstill for the introduction of new products through their postal system and an agreement to negotiate in terms of reference for that negotiation for further opening of that market. and on autos, very importantly, we reached up-front agreements both on measures to allow greater access to the japanese market by more than doubling what they call their pmp program that allows expedited entry of u.s. vehicle, but also we reached yield on how the staging of u.s. tariffs will be done in the context of the overall tpp negotiates. and we laid out a negotiation on many of the nontariff barriers that you referred to and made it clear that negotiation of an agreement, an adequate and acceptable agreement on those nontariff barriers will be a key

part of the tpp agreement, it will be binding, it will be subject to dispute resolution. so we very much share your concern and your focus on the importance of opening up japan's market as part of their entry into tpp, and we believe we have structured an engagement with them through tpp and in parallel to tpp that can achieve that objective. >> as a follow up to that, i've heard a lot from various stakeholders and members of congress about japan's currency practices, and their past practices raise serious concerns particularly its uncoordinated interventions in 2011. treasury is concerned about those interventions in its semiannual currency report. and i've raised this issue before. are you considering including provisions on currency in the tpp? and what would those provisions look like and what factors should be taken into account in determining the u.s. position with regard to those? >> well, mr. chairman, we share the concerns about currency.

clearly, obviously, treasury has the lead on these issues. but these issues have been very much at the top of our agenda in engagement with countries of concern; china for longstanding, there's been a longstanding dialogue with china about its currency policy and whether it's through the g7 in the case of japan or the g20, the imf, elsewhere with regard to china, we've made very clear the importance of exchange rates being based on market-determined forces and our opposition to in the g20, for example, making it not just our opposition, but opposition of the bulk of the international economy to efforts to manipulate currency or to engage in competitive devaluation. so we do see this as a very important issue, and we explore and we pursue it in the way that we think is most effective at each juncture. >> i just think it's a real concern that we not allow this agreement to slip, that it needs to be concluded this year, and i think the active engagement of

the administration on this issue is critical if we're to conclude tpp this year. so thank you for your responses. mr. levin is recognized. >> thank you. let me just say, mr. chairman, on currency i think the administration needs to face up the very directly to the question of inclusion of currency issues in both tpp and the discussions with europe. and i don't think there's been satisfaction here with progress today. and so we just have to confront the formal introduction of this issue in tpp as well as with europe. and let me just say as to tpp and japan, there's immense pressure on japan, and they really haven't been very

unequivocal about addressing rice and other agricultural issues. and as a number of us said before and i'll spell out more of this in the coming days, i don't think what has been put forth so far on autos is likely to change decades of the same situation. many camp join -- mr. camp joined us in addressing this issue in korea, and the agreement was changed and strengthened. japan is an even sterner case. and nothing to date has ever worked. we're today in terms of our access to japan's automotive, its parts as well as assembled vehicles, essentially, where we were 34 years ago. so we need to have a very

emphatic dialogue on this, and i'm sure we will. so let me just say a word and ask you about tpa. i think it's important, mr. chairman, that all of us work together on tpa to determine what kind of a tpa. and not simply say let's just do it. we've been true -- through this before. in the '80s we had a fast track that was worked out that had rather strong bipartisan support. that fell apart in 2002. and it passed by, i think, three votes. ..

what access, not only members of the committee, very importantly in finance but others have to the negotiations that are underway? and i think that we just want to have on our side your assurance there will be a very active discussion of these issues because simply to say let's pass it without focusing on its contents i think is a serious mistake. substantively and procedurally would likely lead to much more

conflict instead of confluence. so just briefly your reaction. >> well, thank you, congressman levin. we certainly, as i said, stand ready to work with you all in your process as you proceed to develop a tpa bill that you say precisely reflects our shared interests and our shared goals. so we'll look forward, we'll look forward to that. on transparency in particular we think that's a very important issue. we think it's critically important vis-a-vis congress, vis-a-vis our advisers, vis-a-vis the public, we have a robust poll sieve engagement to insure we're getting the best input and explain it is what we're doing, how it is we're doing it and why it is that we're doing it. we're looking at a whole array of policies and procedures we have to take that forward. i think we've done a lot over the past few years and i will

mention one example. we now had, had our negotiations. tpp, we started that and did it last week, we organized an event for stakeholders to come and be able to present directly to negotiators. not just u.s. negotiators but our trading partners as well. so they can have a direct dialogue. when we had 350 people come to the session last week to be able to present those, their ideas. that is something that has never been done before but as i said i think we can always do bert and i look forward to working with you on that. >> time's expired. because today's hearing ends at 11, in order to let every member ask questions we limit members's questions to three minutes. mr. johnson is recognized. >> thank you, mr. chairman. mr. froman, i want to thank you for being here with us and it's a delight to hear you. while i was sad to see my good friend and fellow texan ron kirk move on but i'm sure you will be

equally up up to the task. as you know trade is very important to our home state of texas, and recent data shows the dallas-ft. worth area alone was responsible for 26 billion exports. millions of workers in texas depend on exports. that's why i think it is critically important that congress pass and develop bipartisan trade promotion authority to set out negotiating objectives. for the ongoing negotiations you already outlined. do you think your negotiations can be concluded and any agreement implemented without trade promotion authority? and is it, the administration in your opinion prepared to actively engage with the congress to build political support for tpa? >> thank you, congressman. we think tpa is a critical tool and we stand ready to work with the committees as they develop a

bill that addresses our shared interests an our shared goals. we're engaged in these negotiations. we're continuing to pursue them aggressively and we consult very actively with this committee, with the finance committee and other committees of jurisdiction to ensure that we have the input with regard to our negotiating objectives and how those objectives are translated into actual proposals at every step in this process and so we feel confident that as we're negotiating we're taking into account the input that we've received from our, from our committees of jurisdiction. ultimately to get through congress we think tpa would be very useful for the ultimate agreement to get through congress and in the meantime we will operate according to the longstanding procedures we have of consulting with you all and your colleagues in the senate and making sure that what we're doing with regard to our negotiating objectives are consistent with the input we have from you. >> thank you, sir.

welcome aboard. >> thank you. >> thank you. mr. wrangle. >> thank you, mr. chairman, and i join both of you looking forward to one possible bipartisan effort that this congress can participate in. we do have a record of sort in working together and with your help we look forward to improving even on that. i would like to report that our staff feels very comfortable with the relationship we have with your office and ask you to continue that because many times we have to depend on staff with our views and it makes it a lot easier for us to get some type of an agreement before something is presented to us than trying to convince each other that we are right. you've answered many of the questions that i have. i would be interested in seeing

how america as a result of the president's trip to africa, exactly what plans we have to be competitive with china and other countries that are taking advantage of this economic growth that's taking place. and also when you talk about supporting jobs, it is very important that your office understands that to a person that's unemployed orthos protecting the workers, you say trade and some people automatically think that means losing jobs. you have to help us in working with the education department and the department of labor so we can present new job opportunities that are going to be involved country by country and where we're going to lose because we can not compete we have to talk about training and retraining as though we're just

talking to americans and not to importers and exporters because we all are looking toward, for the same goal. and again, i don't have to tell you that we have to be competitive with countryies. with our automobile industry and what we have been through, i don't think it should be a hard sell that people should 23409 put barriers up when we're competing with a good product. there were changes that we had to make in detroit during the crisis have made those changes but we look forward to working with you and when you think of trade, trade, trade, some of us have to forced to think about jobs, jobs, jobs. so welcome onboard. >> thank you, congressman. that's a very healthy reminder that this is all about jobs,

jobs, and jobs in the u.s. and we need to do a better job talking about how we're doing through negotiations or through enenforcement and through export leads to greater jobs and higher wages allows us to deal into global supply chains and rather than being on the outside of them. i look forward to working with you on africa, training, auto sector and a whole range of issues. >> mr. brady is recognized. >> mr. ambassador, congratulations on your new role. thank you for the critical role you played in reaching sales agreements with colombia, panama, south korea. our local businesses, workers are looking for new customers and those agreements you played a critical role on leveled the playing field to allow us to compete. creating both new jobs in my region in my neighborhood and more secure jobs as well. thank you for that role. look to that going forward. in that vain, i want to ask you two questions, about the trans-pacific partnership, a critical region for those new

customers. and the role of bilateral investment treaties going forward. on the timetable for tpp, do you see that completing by the end of the year in being submitted to congress shortly thereafter? >> with the tpp we have stated that our objective is to finish it this year. now that is ambitious but our negotiators are hard at work as we speak in malaysia and we're going to work very hard with japan when they get in to bring them up to speed and not allow them to reopen or relitigate or delay the negotiations. so our focus is trying to get this done this year. >> do you think there is a good chance we can do that? always the tougher issues come at the end. you know what i mean. a little unpredictable as you near toward the finish line but are you optimistic we can finish in this timetable? >> i am. i think it is ambitious by i think it is doable. >> great. on the bilateral treaties, they are important because they take

a big first step towards a level playing field and they also provide protections for american investment when we're chasing those customers around the world. we as a government in the first term the president took a look at the bilateral investment treaties. we sort of pulled the truck to the side of the road. took a look at the engine, made some adjustments but now it is time to get back down the road and it is an important tool. so we look at china, india, pakistan, as we look at africa and other areas, a, do you see the bilateral investment treaties as an important tool and two two, are you going to use them to advance our trade agenda? >> yes, congressman, i think they are an important tool and we will use them as appropriate and i would just note that last week we had the strategic and economic dialogue with china here in washington and one of the outcomes was china agreeing to engage in bit negotiations on the basis of some of the key

principles of our bit, including national treatments and preestablishment phase and on the basis of coming up with a negative list rather than a positive list. obviously the devil will be in the details and we have not begun to negotiate and it will be very important to make sure those commitments are implemented fully but it is potentially a very positive development also in terms of the bilateral relationship but what it will require china to do domestically in terms -- >> i agree that is important role in china and other regions as well. thank you, mr. ambassador. >> mr. neil. >> thank you, mr. chairman. three questions quickly. i know this is abbreviated opportunity to ask them. first, footwear in new england. we're down to new balance. small operations after that. insuring their success. they're the last ones in new england to do athletic footwear. very important part of our economy. and certainly interested in what the administration position will be in enforcement of procedures

in competition. can you address the issue of financial service and regulatory issues in the u.s. and e.u.? did it come up in the first round of discussions? an opportunity for you to hold forth on the president's goal as to whether or not we've been able to double exports or are we on a path to doubling exports during the five years that the president has outlined, understanding it really is, last year i think fastest part of american economic growth, trade, trade-related issues. so abbreviated but the opportunity is yours, mr. ambassador. >> thank you, congressman. on footwear, that is obviously a very sensitive sector and we're looking at our domestic producers, our importers and our retailers to come up with a proposal that maximizes job creation and jobs supported by trade in footwear in the united states but we're well aware of the sensitivities there and indeed i've, i will be visiting,

i'm planning to visit the new balance factory sometime later this summer. thank you. >> on financial regulation, yes, we've had extensive discussions with the europeans about this and our view is the following. the financial services sector is a key part of the transatlantic relationship. it can not be left outside ttip all together. market access belongs in a trade agreement but since the financial crisis of 2008 and 2009, there has been an explosion of regulatory cooperation activity, bilaterally, through the g20, through the fsb, the bis, the iosco, iasb and we think that those processes should be encouraged to make process in parallel alongside the trade agreement's done we can look back and see we managed to bring the two markets closer together. >> lastly, are we on -- >> on nei, the president laid out goals of doubling exports

and increasing jobs supported by exports by two million. we have increased jobs supported by exports by 1.3 million. think we're broadly on track. on the doubling of exports a number of market the around the world we are at or above the run rate that would have us double exports but to be frank with the headwind in europe over the last couple of years that has been a drag on our overall export growth and we're going to need to continue to do everything we can to in terms of our export promotion efforts and opening markets and enforcement to continue on the path towards doubling exports. >> thank you. mr. nunez. >> mr. ambassador, welcome. i want to echo mr. wrangle's comments the ambassador works on bipartisan manner but we enjoy a long-term relationship with your staff and we hope that continues. i like you to quickly address sbs enforcement mechanisms specifically dispute resolution as it relates to the ttp.

i know we have short time. i will leave it at that and i have one additional question. >> this is a critical part of our negotiations and as we propose sps plus disciplines in tpp we want to make sure we have mechanisms for insuring that those disciplines are fully implemented. the substantive disciplines of sps plus are really rooted in the wto and the wto commitments and they are of course binding dispute resolution is available. the other elements of sps plus are procedural elements and most of those are also subject to dispute resolution in, under tpp. so we think the bulk of the commitments we're likely to achieve in tpp in the sbs chapter will be subject to enforcement through the wto or consultative mechanism in tpp leading to dispute resolution on the procedural elements. >> we look forward to working closely with you. as you know american agriculture

is strongly behind getting some type of enforcement mechanism in the tpp negotiations. i would like to, the remaining time for to you address our ongoing relationship, ever-improving relationship with brazil. we had a hearing on brazil about a month ago and we're looking at possibly doing some legislation to kind of redouble our effort on our trade relationship with brazil. i know you met with them recently. i think they're sending a delegation here in the fall. what we can do, from this committee and congress to improve those relations. >> well, thank you, clearly brazil is an incredible important country in the hemisphere and we really think has the potential to be an even closer economic partner of us going forward. we've had a lot of dialogue with the brazilians both business community to business community but also over energy, over trade issues and we try and make progress through these dialogues

on our outstanding issues. the president visited there as you know a couple of years ago. we talked about wanting to be a strategic energy partner of theirs as they develop their new energy resources. we've had discussions with them about, for example, pursuing a bilateral investment treaty if that would be a next step towards deepening our relationship. they have not yet responded postively to that but we will continue have those discussions as high level visits continue later this year. >> we're possibly looking into consolidating the dialogues into a more clairvoyant structure s that something you think would be helpful to get high level dialogue between not only your office but also the congress? >> i'm happy to talk further with you about that. we've got an energy dialogue, ceo forum. we have a, i believe a commercial dialogue as well and we try to use each of those to make progress on their respective agendas and of course our two presidents have a good

relationship and have an ongoing dialogue and we expect to see more of that in the future. >> thank you, mr. ambassador. >> mr. going get, and -- doggett and after i will proceed two to one. >> mr. ambassador, trans-pacific agreement by end of this year, what do you view as the deadline for congress approving fast track authority for president obama? >> well, thank you, congressman. i don't think it is for me to ell by when you diplomatss. but -- >> look, we look forward to working with you as you all proceed with your process on tpa our negotiations will pays and they are proceeding pays as speak. i think having tpa before we bring an agreement to congress is very important. >> so it would be sometime next year? >> i think getting the tpa right

is important and i think getting in time to before the bill, the trade agreement is ready to be submitted to congress would be very difficult. >> the thinking of the obama administration is that it can not get the trans-pacific partnership agreement approved in a fashion it would like to have it approved without fast track authority? >> i think traditionally, i think all but one trade agreement in history i believe, at least since the '80s has been approved under some form of trade promotion authority and i think that's likely be to the most productive way of moving forward on it. pp as well. >> so you're not saying you couldn't do without it? actually during the time i've been on this committee i think most of the trade legislation has been approved without fast track authority but you would, you would view it as essential to your work or are you saying you can do without it? >> no. i think, again, difference between trade agreements and

trade legislation. i think with the exception of the jordanian fta, all other ftas have been approved under some sort of fast track authority. i haven't thought through what it would mean to proceed without that kind of authority but i'm happy to work with the committee. of course we stand ready to work with you as you work on your process. >> in your work on t bp, has ustr undertaken or requested anyone undertake any studies concerning the economic subsectors where we will see job growth and those where we will see job loss? >> i think there's been a lot of work done by various think tanks and other research centers. i'm not aware of what has been done when tpp started 2 1/2 years ago. often times there was a sudden did i done by the itc, i'm not sure whether that was done in this case or not but i have to look back at that and get back to you. >> is that a factor in your negotiations? >> well, we certainly are looking to open markets for all

of our, all of our sectors and we consult very closely with stakeholders and get their perspective where they see the opportunities for expanded exports and job creation and that helps inch form our priorities as well. >> all right. thank you, mr. reichert. >> thank you, mr. chairman. welcome, good to see you again. i want to echo some of the comments made by members here. the working relationship we've had with the ambassador kirk and his team i hope continues with our staff and i know that our staff is continuous conversation with yours and we hope that continues. i just want to make a quick comment about it. pa we know that you don't have to make a formal request for that authority. it is congress's job to move forward with that but i think there's a perception that goes back to i think the korean agreements and goes back to the ascention of russia into the wto world that the administration wasn't, you know, as actively

involved in that process and those processes, as we'd like to see. so i think there's the perception today that the administration may not be as aggressively involved as we'd like to see them be in helping us promote the idea of the tremendous need for it. pa. so i would encourage you to be more active in the, and the president to be more active in that regard but i also want to ask a question on tpp. you mentioned that you have a focus to get this done by the end of the year. i want to get more specific. i would like to know what your strategy is to get it done by the end. year and is there anything we can do to help you get that accomplished? >> well our strategy is to work very hard and we're working around the clock. >> more details than that? >> i'm happy to go through more details with you but, look the usgr is doing a phenomenal job.

it is a very complex negotiation. 11, soon to be 12 countries in the negotiation. we have 29 chapters. many of the issues we're dealing with are new issues, issues none of the countries around the table have negotiated before in any agreement and that is an ongoing mutual learning process. we've done a lot of work over the last two years to close out chapters, close out issues, park issues. they're engaged as we speak right now in trying to move that agenda forward and they will be meeting with the japanese at the end of this, at the end of the this round to welcome them into the discussions and bring them up to speed on the status of the negotiations but we have, our strategy is to work country by country, issue by issue and to get a sense, particularly as we enter the endgame of where the tradeoffs are going to be and come up with a deal everyone will find in their mutual interest and raises the overall standards and achieves the

ambition we set out. >> we know your staff works hard and the fact they work hard and that is your strategy we can count on them being the timeline by the end of the year? >> that is our objective. as i said it is ambitious but it's doable and we'll do everything we can on all levels of government to make that happen. >> thank you, mr. ambassador. i yield back. >> thank you. dr. buse stan any. >> welcome, mr. ambassador. the trade services agreement or tsa, has massive potential and could be a great source of job creation for firms. and if you look at our economy, we have a competitive advantage in this area. clearly with 75% of the u.s. gdp in services, 58% of the private sector employment and currently 30%. our exports and as i look at tsa 70% of the world market is represented with those countries and yet several high-profile events have come and gone. i was glad to hereof hear you

mention it. sa in your testimony today but in previous occasions we've not heard the white house or the administration put the kind of emphasis that needs to be put on this agreement. i think it should be given as much emphasis as tpp and the e.u. negotiations. i sent a letter this week, earlier this week talking about some of this and i just want to get your assurances that tsa will be given the priority it really deserves going forward because i think the potential is immense? >> well, congressman, i totally agree and we think this is really one of the most promising areas ever trade stabilization going on in the world right now and we have a terrific ambassador in geneva in the form of michael punk leading those negotiations with our team back here and as you say it represents the 70% of the global services market so we think it's a very significant, could be a very significant market we hope other countries may join over time. we very much agree with you on

the importance of our economy and our jobs in the united states to promoting growth here in the united states and we're optimistic we'll continue to make progress. >> yeah. my home state's louisiana. we're an energy-producing state and in the energy sector this could be really beneficial. i was with chairman nunez down in brazil and they're struggling with the right kind of expertise and technology to develop deepwater resources as well as shale. other countries have the same concerns. we have the expertise. we have the engineering services and so forth. >> right. >> we can move forward. thanks. i yield back. >> thank you, mr. thompson. >> thank you, mr. chairman. thank you for having the hearing. ambassador, thank you for being here and congratulations. we look forward to working with you. the chairman started off talking about some tariff and non-tariff barriers as it pertains to agriculture and i would like to pick up on that. i represent an area that has a

very significant agricultural component. we produce some of the best wines in the world and some of the t tip and tpp countries present some pretty good barriers for our product. and so i would like to be able to get a good commitment that we work together to make sure we lower these barriers and work to protect this important agricultural product that we have. the 06 bilateral wine strayed agreement with the u.s. and the e.u. was a good start and i would like to make sure we continue that. along the same lines, counterfeit and imitation wines that are made by other countries that try and capitalize on our brand are a real problem and our geographical indicator system works well and like to make sure that we work to protect that as well. and the, another agricultural product that's important to

california is our rice and recently the president and japan's prime minister sent a joint statement that said, and i'll paraphrase, all tariffs are on the table. and the u.s. rice industry would like to very much make sure that this holds true to rice and that we don't exempt rice in any agreements that are coming in and that we include them and you work with them as we work towards facilitating this, this particular market. and then lastly, you had sent a letter to some of our senate colleagues talking about apparel rules and textiles and i think you said that appropriate balance between divergent views was important and i hope we can find more opportunity for trade liberalization other than just short supply issues. and i look forward to working

with you on all of these issues. >> well, thank you, congressman. let me just say with regard to the agricultural issues agricultural trade is at an all-time high our exports last year i think were a $140 billion. we see this as important opportunity for expansion. we're working closely with secretary vilsack and fda to all. nps plus agreement is important. >> some of our tariff and non-tariff barriers are at an all-time high also. when you look at china, when we send our u.s. wine there we're paying 56% combined tax and tariff. it is terribly prohibitive. >> these are all issues we want to work on. >> thank you. >> all right. thank you. mr. buchanan. >> thank you, mr. chairman. i really look forward to and congratulations,