send a subpoena, i've signed it now, to secretary lew, who by the way i'm hoping he can get about his statements on the phony scandal about this and realize this scandal israel. real americans were really victims. now, and those victims, i would love you to sit down, look at the law and make the appropriate decision, which is withholding details on people who were victimized is not the intent of 6103. ..

my limited remaining time i was with the chairman today. i've looked at his releases. i am up to date. he was frustrated and said so in a letter to you with the speed of the release and the fact you don't have a reason to do anything other than complot e and turnover. the fact is the american people need answers and people who've been victimized need it, so i'm joining the ranking member in the sense now that you in and out of thin air and help the progress of a victimized when we have a sworn statement that they were not, but that he make available every possible peace under the uniform interpretation

of 6103. if you want to go to the level but mr. cummings wants on lot 6103 is, great. be consistent and lower it to the lowest level. more importantly, go back and soul-searching that legion of attorneys and say hello in the world can we keep victims a secret and that's what you're doing today standing behind this. i do not believe that this is a minimum reduction under 6103. i don't think you believe it either. as you go off into your private life, i want you to think about the legacy of whether you help to victims or hindered the investigation. i think the chairman and i yield back. >> we can probably get two minutes. >> let me be very clear. when we got to the ig, there were things that were left out of this report that he admitted. she admitted there was

sard to documents 6103 and what came under 6103. clearly you have, based on the testimony we had in the last hearing, and you had folks whose job it was to determine what was or was not 6103 to say that these documents could be released; is that right? >> that's correct. >> and there was disagreement. the mere fact that one disagrees with someone doesn't mean you question their integrity. i disagree with my wife a lot but i love her and trust her. so, what we have said is that we want the truth, the whole truth, and nothing but the truth so help me god. that's what we want to read what your it is progressives, whether it's liberals, with its conservatives, anything in between.

we simply want the whole truth. and so, you know, on the one hand they say in the one hearing we have to be careful with 6103. in the next hearing they say we don't like the way you are dealing with 6103. give us everything as fast as you can. 17 lawyers working full time going through documents -- let me tell you something. on the one hand, if you release information about taxpayers, they would be all over you. i'm just saying. you are damned if you do and damned if you don't. the best thing to do is to obey the law, period. mr. mckinney coming to have recommendations mr. werfel talked about losing 8,000 employees, sequestration. how does that affect your recommendations? >> as it relates to identity that?

>> yes. [laughter] >> well, obviously they have to draw when they have a problem they have to draw from the existing employee base that affect the other operation. that is the concern and will be a concern of ours also. >> okay. let's see, you have two and a half minutes. >> they did release the information. the inspector general said so for different times and one of them was referred to the justice department for prosecution. the justice department won't prosecute. so they did exactly what -- i want all the information. so we have the irs releasing 6103 information that they can't give us the e-mails. i don't care if you send 70,000 pieces. you can make it a million pieces of information, but if you don't give us the e-mails what is it? i want the e-mails. here's an example, we have some limited e-mails regarding mr. wilkins from jeneane cook who i think works of the chief

counsel's office. in e-mail she sends to mr. wilkins and she says bill, thought you might be interested in this. it deals with the tax code citizens united. bill, thought you might be interested in this in light of your earlier e-mail. so we get that e-mail but not the earlier e-mail. we want all the e-mails. this is a great example. he said we are sending you some. mr. werfel, we want them all. let me ask you this why have you limited the search? like a few limited the search to may 10th, 2013? there's still all kind of case is pending. people still haven't got a resolution to their tax-exempt status. why are you limiting -- >> i can answer all those questions. first let me point out the process moves forward. it's not like it's over today. there is a corporation that can access of and if you have particular documents you are not seeing coming through in the midst of all of these tens of thousands of pages, you bring it to our attention -- >> you told me earlier that you

haven't finished -- >> we are reviewing them and i can explain the subject of that review as they are ready they come over but they are being reviewed for the responsiveness. as an example, we might get an e-mail that we pulled down that is an e-mail exchange between a worker and their spouse about an upcoming medical appointment they might have for a day care arrangements. we aren't going to send that over. it's not responsive and if you do you are loading the documents with things that are not helpful to the review. they make sure that we are giving -- >> you can't have it both ways we brag about the 70,000 pieces of information documents you sent over and then say we don't want to give you too much. >> so if you have a particular e-mail -- >> i tell you what, we will take all of those e-mails calls all of wilkins e-mails adel of the e-mails from the irs staff to the white house and we will be the judge of you being --

>> i'm going to review them for responsiveness because that's a standard procedure that's done. but let me just add one point. you picked up a piece of paper that we provided to you, discovery. and you said this is interesting. i have an additional question based on this e-mail. that's great. tell us that and we will look for the document you are asking for because this is a process. this is not in pavement, this is cooperation and that's like a cat. >> i think the gentleman about the witness. and the members of the panel for participating today. as we conclude, just let me say that we started out of course the issue of identity fraud dealing with that and the revelation that the irs is being used under the piggy bank for the fraudulent tax returns. as i said, we started -- we are trying to look at the some of

the problems within the irs and the conference contracts another hearing and to the fraudulent returns will continue that. we want to make it a correct situation and we do have these scandals to deal with. we diverted a bit. i guess the frustration by the members on our side, and when you have thousands of pages you did in fact provide the pages, and then the president and others that are orchestrating the scandal title to these investigations. just in closing i will put in the record the statement the president made when this became public about the scandal. i reviewed the treasury department watchdog report and it is inexcusable. it's an excusable, it says

americans have the right to be angry about it and i may agree about it and will not tolerate this kind of behavior by any agency, but especially the irs. these are the words of the president and then directed the secretary treasury to follow up with a viag to see who is responsible. we are trying to find out who is responsible, too, and we will continue to do that. so, thank you for being with us and participating as members of the panel. with of there being no further bills before the subcommittee on the government operations will leave the record open a total of seven days for additional questions that may be submitted to the witnesses. again, steve reef for your dissipating and this hearing is adjourned. [inaudible conversations]

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[inaudible conversations] we take you live now to the

national press club just under way steven gross is the chief actuary for the social security administration talking about social security and retirement income costs. we will bring you live coverage on c-span2. >> we think we are at the turning point in history on just about anything that is happening. everybody is audacious but not so much -- sometimes there are things and conditions that are changing. example, we've gone from what, 3% a few decades ago to 18% of gdp expenditures on health? is that trajectory going to keep going forever? how long until we enter our percentage of gdp and have to start borrowing just to pay for health when we spend more than 100% of gdp on health? obviously that's not going to happen. conditions will change in the future of health and on the future of everything. this is why we are always very reluctant to put too much weight on putting the rule on the past trend.

you really don't want to do that. you want to look and understand the best you can what research is all about. what are the conditions and the drivers of what has happened and what is involved over the past because if we really understand those drivers and those conditions, and then the hard part is speculating about what conditions will prevail in the future. if we conclude the conditions exactly like the past get out the door, no problem to the but if we conclude, and this is the hard part about projections and the judgment and expectations will be changing with the the last city measure in the past what effect the changes have had the lost city and the effect in the past on the measures we are looking at. those could change in the future. lots of uncertainty and again we have to be humble about trying to project these into the future

the one thing we try to do in our office to try to convey this is we never make forecasts or predictions. so, one actor larry joke which is the actuaries love meteorologist because they make us look good. but they are wrong all the time. we are right once in awhile. but we don't make forecasts or predictions. we make productions on the basis explicitly stated and shared assumptions that gives everybody as a consumer or season the projections we need the opportunity to say those assumptions don't make any sense. and then they don't have to say i don't like the projections. they can say i don't like those assumptions switch to get a variation on the assumptions. there is uncertainty in the projections going forward.

we have a lot of different ways trying to do this and we crept into the annual report of the board of trustees. our job at the office of the actuary with 47 more doing the work which is a good thing we spend half of our time working on the annual report that the trustees admit to congress on the actuarial state of the status of the social security trust funds and much of the work that we do on the office also reports over the population and the economics that goes into the medicare trust fund projections. that is about half of it and the other half that we do basically is yes, those people on capitol hill and in the white house, they have lots of ideas. as do the people in this room and people in the think tanks we try to do the best we can to fuel all of those ideas, the best of them and the worst of them and try to do what we think are the most reasonable possible looks revelations of all the indications would be in the

future. well, the thing that we look at -- you'll probably see most what is sort of foundation or the trustees' report foundations which are the projections of what the cost to the program is going to be and the revenue coming in under the current law. really important under current law. it's not speculating out what it might be in the future. that's what we do when policy makers come up with their ideas about the changes of law will be. we just sit there and try to estimate the best we can with the implications will be. but the foundation baseline as what will happen under the current law. i'm sure it's obvious how critical that is because if the policy makers see that their implications for the estimating of the best way we can for the future are not what they want to have happened there is an easy fix. changeable all. so obviously things like that in 2016, having a 20% drop and the amount of money that is available to be able to pay the full schedule of benefits for the disabled workers in this

country probably congress will not be very interested in seeing that happen and we can depend. illustrating uncertainty we have some different mechanisms you've probably seen the scenarios and the intermediate deterministic assumptions we have the high cost and a low-cost version that we have various assumptions and sensitivity analysis. they illustrate if you change one basic major assumption at the time for mortality and productivity if you change these one at the time of the implications will be so the people can sit there and say we don't like your assumptions and the trustees' assumptions it allows people to do that and maybe a decade on the projections. we worked with them on the projections, too. a little bit more on that

briefly, but no limitations. one of the limitations is incomplete models, incomplete models on how big can your model become how many equations, how many factors can you take into account. we always joke with the economists about the models that are so good affecting the last unexpected thing and we build the model but of course tomorrow is the next unexpected thing that we didn't anticipate. so that is just a great illustration of uncertainty. and one that i like is what is more uncertain than the sort of range and the parameters of uncertainty itself. and speaking to that i have the backup button i tried to hit it again. okay. now i understand why people are having trouble. so illustrating the uncertainty triet let's go to a picture that will be more interesting. this is something a lot of you

have seen and you have these in the trustees. this is the so-called cost rate. this is the cost of providing the schedule of benefits under social security as a percentage of our taxable payroll which is basically all of the earnings everybody in the room has up to $13,700 per year and this is a projection with a little dotted lines are whate have on the scenarios the high cost low-cost intermediate. interestingly perhaps they are what come out of the stochastic model on the 90% confidence interval. and what we are trying to create on the high cost and low cost right around the bounds of the 95% confidence it just sort of worked out that we luckily. that was in one of our technical panels a while back. i think ron had come up with the model and showed the balance reflections were just what we had for the alternative one and

three. so it was just kind of luck or whatever. or maybe there is a general sense that we got in stat 101 what you ought to be thinking about so it is just ingrained in us. the way that we work. so we have this and you can see this asymmetry here that actually our 95% confidence on the model which, like every model, is under specified, is a little bit wider than our alternatives. the high cost is a little bit higher cost. the low-cost is a little bit low were cost. it seems like it's a pretty good story. one thing i want to observe about this though is when we talk about uncertainty coming and you can see the projections are 75 years into the future talk to corporate america about that one. maybe 75 days, two or three quarters max. but we make the long-term projections and in this the short term projection. one huge question i have that a lot of us had is the uncertainty just in the out years?

we all know there's a huge amount of uncertainty about tomorrow. we're willing to go tomorrow? where will interest rates go tomorrow? based on what ben bernanke says or any other number of people. there could be an awful lot of fluctuation that can happen in the very near term. we saw earlier today would have been in the stock market over a brief period of time i think on jim's slide hitting it so we do not in our models in the deterministic models have that much enormous deflection in the near term. we have more deflection in the long term. but there's one other aspect of it. our stochastic model evin is based on having the individual parameters flecha bate around the extent to which the year to year fluctuations are in the past. we don't have built in either perimeter of certainty or what we sort of think of as the sort of central tendency variation. all of our projections on stochastic are based on taking

central tendencies like fertility rate 2.0, the real wage growth, taking them as a given. and those are the facts of nature, haha and then putting a variation around them to bring to some extent averting and this is what we end up with. so is this really a good representation of the 95% confidence see or is it in fact a lot lighter than that? we are getting into some big speculation going out for into the future. but one other thing again by the way of our illustration, that is that the annual cost rate. the cost as a percentage of payroll ninth year by year basis. we also look at social security, obviously as what has happened to these trust funds. this picture shows something which the trust fund assets are above the zero line and when it is below the line of course those aren't trust fund amounts any more but you can't borrow. so the unfunded obligations.

this is a measure of the shortfall. and you can see that we have projected shortfalls and unfunded obligations going forward into the future on the dotted lines for the deterministic scenarios. but our stochastic scenarios are showing sort of displaced. they are not sort of outbound on the scenario. the reason as it turns out we discovered was because our high cost and low cost, we had the low-interest rate variation for our stochastic we have some interplay between the interest rates and other factors, and we had kind of expected we would have something like the deterministic and the low-cost scenario where the economy is doing well that we might have lower interest rates and the high-cost scenario we might have higher interest rates or vice versa. we ran the mall as we found out in some of the work he did and we talked with other folks in this room turns out that we are not getting a whole lot of

significance in terms of the relationship between growth and the economy and real interest rates in the past. why is that? maybe it's just because the fluctuations that we were capturing over that finite period of time are just across little cycles and we are not able to look across the different 75 year period historic cui when it is much faster or slower than what the implications for periods, and going forward we may be looking for the ret for their variation, and looking forward to letters and thoughts from you all on this. so let's go now a little bit =to how have we done in the trustees and projections. remember, everything done by the folks in this room and past generations and all of us has contributed towards our trend of developing all of these assumptions, technical panels, all of the stuff on the rrc and and the trustees try to consolidate this and come up with the assumptions in the past. now when there is a change in

light 2010 the affordable care act or 1983 the big change in social security or 1994 when we had a change in the rate because they were running out of money, of course right away. there was not a lot of uncertainty while medicare -- this generally not a lot of uncertainty about changes in the law. we just go with it and we just pop it right in. but when they are changing conditions, when things have really changed their meaningful way, we are never really sure whether that is going to stick. is this really a new shift and things or is it just an hour to fly here? so, the heart of this and the difficulty is always deciding how quickly do we reflect things? times said why don't you reflect what we suggest right away? there's uncertainty in our trustees and we listen to everything that is said to

synthesize all that and try to do a little bit of that. show me, wait until you have seen attwell before you start making major changes and the part of that is because of course these projections and the word that you'll do have a public policy impact and we want to be careful about not having the wildly fluctuation going back back and forth. having said that, the trust fund depletion date over the reports for the program as a whole is fluctuated between 2029 and 42. there's a little leery asian and that is just the projections on the time period. let me show you just a little bit of technical on this, we actually have done pretty well on the demographics. that is projecting the birth rates, the death rates and even the immigration, the population, and most importantly the age distribution of the population. we have done pretty well on that and you can see that on this particular chart. if you look at 1982 which is the

blue line on the number of beneficiaries per 100 workers which is a pretty good measure of what the cost is going to be was rising up as we knew because of the changing demographics and was growing higher. along came the greenup line which is what we estimated the 1983 trustees' report affecting the changes enacted in 1983 he. then the line dropped down some. pretty good. that is what the law were cost of the payroll looks like. fewer beneficiaries per worker affecting the average benefit level. how have we done in reality? the black line is the 2013 tr and the recession still have consequence, as we all know too well. we have had a black line on 2008 and 2009. we had more people filing for benefits but more important a drop-off on the work force and the earnings that are subject to taxes. but other than that, it looks like we are on track.

the demographic projections and 82 and 83 had been pretty much realized. that's the good news. the not so good news is what happened on the economic side. let me share with you at the time of the 1983 report, the trustees were serving the real wage growth of about 1.5% per year. since that time that the average is just about 1.0%. and we are projecting that in the future of the trustees are some of the ultimate average rate of growth in the average real earnings would be about 1.1%. ..

we've changed from 1983 and 1984 when we had 90% of all those covered earnings fall below our taxable maximum to about 83% now. interestingly at the height of the recession we got back up to 85 and change percent on that but it slipped back to 83% right now. that is essentially where we're projecting in the future. this is one of the aspects of uncertainty i want to share with you, should we, do you think we should be projecting further dispersion in the future?

we're not. our assumption is that we're not going to have major substantial additional dispersion in the future. that our taxable ratio will stay at 82 1/2 to 83. if dispersion continues like it has been in the past this would drop further. should we expect further deceleration in average earnings? i would share with something a couple of us in my office were lucky enough to be at, nbr summer institute a while back where some guy who spent some time at treasury, larry somebody, was making some comment about the implications of capital and capital utilization towards production. and he was making observation, maybe we're not longer in the world where capital is used to augment, aid and abet the efforts of labor and enhance labor but it is being used to replace labor and more and more in the future could be that. if that is true, labor's share of gdp could not be the constant which taken it to be. it could drop in the future.

all kinds of interesting possibilities and uncertainties. lit me share with you one other little illustration of uncertainty that has been kicked around a lot lately in the disability. this is pretty topical because we do have our two trust funds for social security. ssi trust fund and di trust fund. everybody knows the acronyms. di trust fund is on the nub. we're three areas away from it depleting its reserves. not insolvent, not plat bust, just depleting reserves. even if that were still to happen, even if congress didn't do anything we have 80 cents ever taxes rolling in for every dollar of taxable benefits. that's not a good solution but to make sure we're clear on that, back in 1995 trustee's reports right after, you can see what the trust fund ratio is dropping as we approach 1994, the di trust fund ratio was dropping heading towards zero would have been a big problem. congress stepped within a year of that being projected to

happen and did really, really simple fix. let's reallocate some of our 12.4 total tax rate put a little more in di and little less than oesi to equalization of the fund. the di fund was the black line. it would go on up. well back at time, back in 1994 we hadn't really fully anticipated what some have come to call the new economy. anybody remember that in 1995 to two thousand five? everybody was convinced 20% returns on stocks. this would go on forever, the bubble would never burst and go on forever. some people knew better and others didn't. based on this kind of exuberance and went on and and experience piled up. with getting better and bet, the trusted funds are getting better. it is difficult to say we're don't believe this. trustees were not in the position as you understand so we couldn't predict bubble would burst and bottom would fall out.

we started getting more optimistic looking projections basis on this new economy. funny thing happened and we rediscovered cycles n around 2008 when nbr came along said, yes there is recession. they can happen again. somebody was talking other day about equity returns. somebody asking me, oh, does this take all of your you know, thoughts about the possibility that there would be real equity premium over long term bonds? i said no, i think actually the equity premium is a reflex of uncertainty and greater volatility of stocks. this is what it looks like. so if we, if we're worried about an equity premium, yeah, equity premium is probably here to stay as long as we have these kinds of massive fluctuations. the market will presumably will demand it. if not i hope people that know much more about it than i will throw spears here when alicia tells me to stop. what happened with the recession lo and behold we came along with recession and we had to get away from the blue line, what just

happened and came back to the red line and lo and behold we're projecting 2016. this is coincidence. it wasn't designed this way but reflection of the uncertainties being in a position reflecting what happened recently and projections and cumulative effects they can have. we looking at and thinking about ways to improve our projection methodologies so it will not be so much reflective and dependent on recent experience but we all know a body in motion tends to stay in motion and there is that kind of thinking in economics and demographics and everywhere else. one other aspect about all the items of uncertainty, we spend a lost time thinking about, working on it, our trustees and everybody else in this room does do policymakers really care? remember what we're here for? we're here to provide this information to provide illumination to policymakers and to provide the information that could help affect getting them to make good decisions but do they pay a lot of attention to our talk about uncertainty?

there was up, one of my predecessors way back when an old story goes he said, i'm going to refuse to do midline projections anymore. we'll give a high cost, low cost. didn't have stochastic back then. members of congress said, we want your best guess. if you don't want to give it to us we'll add the two together, divide by two. very, very simple. that didn't work out and they went back to giving intermediate estimates. after cbo came out stochastic estimates i asked them a year laters how is it going? people in congress getting warm and fuzzy about the fan charts and, all they ever want to look at is the dark line down the middle. that is sort of the way it is. it is in part because members congress, policymakers are busy. they're busy people. they have a lot of stuff on their plate. there is another thing too, when err talking about private business and companies that have to stay in operation we do worry

a lot aboutne risk, about greater risk, worried about failure and default but think about it for the moment. think you're all members of the congress. aren't you just about as worried about overfunding, meaning attach more than you had to as you are about underfunding? much more of a balanced risk assessment for members congress. so we of course do our darnedest not to put any kind of bias in any of our estimates moving in one direction or the other or print any margins. we try to play play it straight up. uncertainty people always want to see the center line estimates and i'm sure everybody is confronted here with just exactly that. let me hit, we have a couple minutes? okay, thanks, alicia. a couple things about what isn't uncertain? and of course there is nothing that isn't uncertain but maybe a few things really are not uncertain. okay, death and taxes. it is the old saw where, we all know that.

i wrote in her, laughter, hopefully. if anybody is still awake. there is death and taxes but there are other things that were really pretty certain about. and one is, a little pitch here, that the trust fund are real and, my old thought on this is, i know we have a lot of people say the trust fund aren't real, they don't really matter. something is real if it has consequence, if it actually has an effect. if you look at history of the social security look at times like 2010, when the trust fund started expending more than the tax revenue coming in, thereby some kind of, you know, unified budget kind of look it started having an effect on the unified budget. both, did that really have any effect historically? we've gone into that kind of position many, many times, where the tax revenues are insufficient to pay, so we dip into the trust fund reserves that does have lots of economic and market consequence in various ways but doesn't seem to be very motivational for congress. what is motivational for

congress when the trust funds are approaching or achieving depletion because that really is consequence as i assume everybody in the room knows, the trust fund do not have any real or any significant ability to make any borrowing. now, osid and di trust fund are a little unusual in the federal sector, right? there is little bit of borrowing, 16 trillion by the fed ral government in total? a fair chunk of that actually is even the social security trust fund having loaned money to the rest of government but social security trust fund can not get into a negative asset position. because we don't have any borrowing authority. it just can't happen. congress could change that but again under current law there is no borrowing. so we can't do that. and, this sort of leads then to really a little observation that i would like to make when you see the sort of regular budget projection, cbo, omb, all of them do this and show gigantic debt accumulations keep in mind

i wish we could convince them if they did really current law, where social security reaches point where we deplete the di trust fund or osi trust fund in 2035 at that point we can't follow tenets of budget scoring convention. pretend above the law that the treasury will give money or loan money to the trust funds to keep paying all those benefits which under law we can't do and can't borrow and there is no transfer mechanism to give to trust funds that way. actually that couldn't happen. when we show going out on extrapolations on budget conventions gigantic levels of publicly held debt but that really isn't current law. the key point i think really when we approach the point, i'm the genius of having to social security trust funds operate so that they can't borrow as it does in fact force everybody's as it has historically congress to act when we approach the points. they have done that.

we have experience. 83 amendments. '94 amendments. di tax reallocation. as long as we have that operational we have a fair amount of confidence that will continue to work. now the, the last thing or pretty much the last thing i really wanted to mention was, will congress really act to avert? i know we've gotten to a lot of 11th hour 59 minute kind of deals here lately but looking historically on social security congress has always acted and i always think it is because imagine we are all members of congress, getting reelected, generally speaking a pretty high priority. and, we've heard of all the surveys about social security which most people of all political stripes thinks, you know, they expect to get something from social security in the future. if you're over 40 at least or know somebody already getting an think it's a high priority. most of the surveys seem to show people would say, dare i say taxes pay more taxes in order to the support the system because

they know so many people are getting it and it is not welfare. and so as long as there is re-election thing we have, can you imagine the congressman come along and abolish social security? so it is unfortunate that we have so many people acting behaviorally on the fear that it won't be there tomorrow and that is probably something we all should strife to find a way to better convey. not chilling as really the last point, i guess a little bit what alice rivlin was talking about yesterday, what kind of compromise will prevail? anybody who's a student of past and loves to know we have tended, rs and ds whatever the political parties are when we get down to having serious changes in social security, reform, which, it would be better to do sooner rather than later although remember the history unfortunately is that serious social security change tends to happen when the trust fund are fast approaching depletion. now on a combined basis assuming something is done to fix di from having a problem in 2016, on

combined basis we're in 2033. do we have really good prospect for congress acting in ways that would be hurtful or perceived to be hurtful to a lot of people? that is a hard thing to do. imagine yourself as a congressman. we are trustees. everybody in this room i'm sure encouraging change sooner, more possibilities. can be phased in, give people notice but getting congress to actually do that is difficult. if and when, not if, when it is done sometime next 2010 years i would suggest we've got a really almost certain prospect it will be a balanced package. there will be extra revenue. there will be some trimming of costs. will be done in more progressive way than we have the in the current system. very probably, time will tell, but again, i would just close with, the research that you all do and my office as consumers of it and we do some of our own is really the grist for the mill to

try to get the most you know biased, most objective and most valuable information to people on the hill and other policymakers can have to try to make the best possible decisions for the future. so, thank you alicia, john, for the invitation today. >> thank you. will you take some questions? >> well, of course. >> people want to get at you for years. >> lot of people already found ways. that is not a problem. we have technical panels. full scope audit. >> you think they may be bored? >> yeah, probably. and anybody, anybody who is bored raise your hand? if there are no hands that means they're probably not bored. >> any questions out there? everything perfectly? yes. questions? >> i've known david to have questions about our work before. >> everybody else just being

polite? >> oh, politeness. challenge everything. that is the first rule. >> yeah. steve, i disagree with a lot of the stuff that he has done at social security, i have been suspicious about the results that his office has come out with. i've been well aware of all the politics that goes on and i know he is under a lot of political pressure and i know that, i discovered that the chief actuary of medicare as well and he was politically pressured to lie about the cost of the drug program came out. he admitted this publicly because, he was threatened to be fired if he didn't come out with a number that the conservatives wanted him to come out with. my background is very quickly -- >> do you have a question for steve? >> yes, i do. >> okay. i want to establish, that i have some background which is vermeer main to this. i won't spend very much time on

it, but i was told by the former chief actuary, bob myers, he invited me to stay at his home when i was in washington. at one time he acknowledged to me there was a bias in the choice of the assumptions that were being used and, as a result i accumulated last 20 or 30 actuarily reports and i studied them and, two things that i found and, steve already knows about this. i did 10-year study of the actual assets versus protected assets and the found out interimmediate assumptions were table compared to the low-cost assumptions that recommended they switch over to low cost assumptions because there is no deficit in social security if you use low cost assumptions. i also studied how they arrived at gdp to see what, what they used, prescribed acutarial methods for doing so and i found they didn't and they were projecting the future not on

basis of anyutn their hunch. >> okay. let's give steve a chance. >> my basic question, of casting doubt over, many, many years, over the results coming out of social security administration, and it is difficult job they have in any event? >> response. >> i would suggest you redue analysis. analysis at 2005 period end of new economy. things have obviously changed, estimates have changed. i tried to explain that today. i would suggest some people in the room probably know this, i will take a bullet before we'll modify anything under any kind of political pressure. that is just an absolute. my sense is that there are some jobs if you take them you have to be willing to do whatever it takes. if people don't like it, that's too bad. you have to do the best you can. i'm lucky enough not only to have the benefit of knowing, virtually everybody in this room, i hope everybody, and enjoying knowing all of you and listening to what you all have

to say and understanding and appreciating some of it, but also having another 49 people in my office who are like, amazing civil servants. really, really smart people and work harder than you could possibly imagine even though they're federal employees. so i would just, i would just suggest that we're, we're giving it all we got and objectivity, challenge everything and no known biases is always the mantra. if anybody, including david, ever has any thoughts that we're having stuff that is biased, please share because we want to hear it and our trustees do too. >> jim, did you have a comment? >> yeah. i was going tough but the chance, steven, since you've the non-ssa community, external community to gather here say a little bit about, if you were going to try to make a priority list of where research could in some sense help to narrow your uncertainties, not necessarily where the uncertainties are

greatest but your sense where the value add from studying some of the pieces that go into your 75-year projections would be highest, you know, not in any ranked order but where would you sort of guide us to try to think about focusing our attention? >> well, that's really, to narrow and to better understand the uncertainties of the future. one of the things, our stochastic model we pay a fair amount of attention to and some people in this room do too, we're looking at people have the thoughts about to more fully put forth what uncertainty is. ben, we just had these, you know, equations for individual parameters. for example, if you look at our individual parameter for something like birth rates, which we're projecting in our central assumption to be 2.2 fertility rate in the future. we allow varyizations. our 59% confidence for that one

parameter. usual sort of fan thing and goes on. but if you look at what the average birth rate is across the 5,000 scenarios we run on this, on cumulative basis they start pinching back because, because there's a lost variation but they tend to be offsetting variations over many, many years. should we have central tendency variation built in addition to that? that is i think an area of -- again i would step back and say would that make a difference to congress? there's one concern i guess about uncertainty. if you showed the level, the range of uncertainty be too big, people say, i really don't care. now you're not telling me anything. i think we're sort of at risk of that and in the uncertainty area and so i'm not really sure what to say. i would say generating, more ideas, more thought on this would be really useful but not only in terms of analyzing what the uncertainty is but how to put it forth. how to entice policymakers to understand it and but also, to

think about, is there a value, are there reasons that they should be paying attention to uncertainty? let me share one tiny little story on this i remember one time many people talked about and it has been talked about in the last couple days, retirement age. maybe we should have automatic adjustment with longevity going up. three different flavors. doing automatic adjustment to longevity. we could have a automatic adjustment to longevity. i remember talking to a member about congress several years ago, wouldn't this be a great idea? you miss the point entirely. he says you might think it would be great because your projectses would be more certain. they wouldn't vary much but the longevity went around but my constituents want to know what the retirement age will be when they retire in 10 years. that is what matters to them. they don't care about your silly projections. so we have to keep in mine uncertainty, uncertainty about what and to whom? >> way back there sorry, we'll

talk this >> i'm bonnie wells. i'm a wealth manager, not a academic. my question is, the effect of knocking down doma? it is not obvious if that is reflected in the figures you're talking about. what are your ideas how the numbers might change if they will change. >> are you sure you're not working with our auditors? [laughter] doma was just affected obviously by the supreme court and we don't really have estimates on it. we don't have absolute clarity yet as to exactly what the implications are going to be about how that will play out, the implications of those benefits and once we get that we'll be working doing estimates. our sense it is not going to be a gigantic game-changer in terms of costs. probably a little bit more costs but not really big. we have things like the daca, forget what that is, last year the presidential policy which we reflected in the 2013 trustee's report that came out at the end

of may. >> thanks. i'm sort of sympathetic to the notion that policymakers often just want a bottom line because they don't really know what to do with the wide range of estimates even if they understand what the confidence level is. a small sample, this is a bit after problem, this is annual thing, not a daily thing, if you look, you had a few charts going back what we said then and what happened. have you sort of looked at probability, what has actually happened and how, how well that fits the probability distribution that you're sort of range of estimates would indicate if you took them as comparables? is it conceivable you're overstating uncertainty considerably for example is one possible outcome? >> i think our projections turned out to be reasonably within any kind of bound what we used to have as alternative one and three but how much of that is luck? one of the little jokes we often times have if you have a model and it has problems, hopefully it has a lot of problems and they're offsetting so there is no net effect.

in terms of making a projection that is kind of what you hope for. you have a lot of parameters. tough make assumptions or educated guesses about. as i mentioned we did pretty well. actually the total fertility rate in '83 would assume it is 1.9 going forward. it is 2.0. we had more immigration than expected. nailed it on life expectancy and deaths at age 65 and over. much to the surprise of many people in this room. our actual reality evolved on population side turned out to be good. yes our trustees and we were overestimating back then after 1.58 real wage gain and we maybe could have and should have done better but we surely did not anticipate at that time this dispersion of earnings that has dropped. that's a huge drop from 90 down to 83% of all covered earnings being under taxes. that is loss, what, 8% of revenue, just from that dispersion of earnings. we did not anticipate that. that's why i want to disclose to you all, we're not projecting

more but, what do you think? should we be? huge uncertainties. yeah. >> so i think on that note we ought to thank you. >> okay. [applause] get the slides. >> yeah. so until 1:00, you can do anything you want for the next five minutes. the final panel starts at 1:05. thank you. >> the u.s. economy added 162,000 jobs last month, and the unemployment rate dropped to 7.4%. those numbers released this morning by the bureau of labor statistics. shortly afterwards the

white house issuede council of s said, quote, with the recovery entering its fifth year we need to build on the progress we've made so far and now is not the time for washington to impose self-inflicted wounds. the administration continues to urge congress to replace the sequester with balanced deficit reduction and promote the invests our economy needs to put more americans back to work, such as by rebuilding our roads and bridges. >> what are the milestone years for first ladies through history? >> well, i would say certainly mrs. adams, her period, the first to live in the white house. she was very opinionated and bright lady. capable lady. on a more social side, dolly madison and the melodrama of the burning of the house. then, you have other first ladies but you go through a

period where there really aren't many first ladies. they, i would take it up, from there to harriet lang, president buchanan's niece. the white house, everyone would remember some of the old people clearly in the 20th century, say that was the grandest white house that ever happened. >> more with white house historian, william seale, sunday night at 8:00 on c-span's q&a. a live picture of the u.s. capitol on a summer's day here in washington. in just a few minutes we'll be outside the capitol live with a group of house republicans talking about legislation they call, the stop government abuse act. that bill would allow federal agencies to put officials who are under investigation on unpaid leave. it would also give people the right to record their telephone conversations with most federal employees. soon as this begins, we'll have it live for you here on c-span2. until then house minority leader

nancy pelosi earlier today talking with reporters in the capitol. >> here we go. >> good morning. >> good morning. >> how do you explain to the american people about today congress will go into an august recess and after more than six months in this congress, this republican congress, we still have no jobs bill. we have no budget bill. and we have the threat of shutting down government and not raising the debt ceiling. without repealing the affordable care act. this, was a do-nothing congress and now it is gone to something worse. it is an aimless congress, that is falling into chaos, toake co.

we should not leave until we address the challenges that we face. as soon as we arrive back here in sent, where we will have eight or nine legislative days only in sent, we will be faced with a deadline of the end of the fiscal year. how can we explain to the american people why we have leaving here now, not having done our work? this week the republicans pulled the plug on the appropriations bill on the floor proposed by the committee. . .

hear it from small-business owners trying to deal with regulations and the threat of more tax increases. all of that is making it harder, and today i am pleased that we have taken action this week to stop the abuse and to hold these agencies, these federal agencies accountable.

we have taken control of the act. this is legislation that we have seen championing in the house for several years now that would bring back the legislative authority to proposing new policies. when there's rules and regulations that have a million-dollar impasse, they should come back to the house for approval to make sure that they meet the intent of what phil law is and that elected representatives of the people make sure it is what we had intended. so i am pleased to see joined today by several of my colleagues who've been working on specific bills as a part of this whole effort this week before we go home for a few weeks. i'm going to introduce the lead out of health care, dr. tom pryce. >> thanks madame chair and to the colleagues for the wonderful work that they have done this week and in this congress for the first seven months since

2013. i represent the sixth district of florida on the ways and means committee. earlier this spring and was on the committee that the irs and the internal revenue service have been targeting groups to get them in status linking donors to the groups for the political adversaries and the audits. this is not an organization that is the irs that the american people have any confidence in at this point. that trust is going to have to be rebuilt. the last thing we want is an internal revenue service being able to implement and enforce obamacare and the affordable care act. it got bipartisan support today in the house of representatives which h.r. 2,009 simply said the irs may not implement or enforce obamacare triet common sense legislation on the bipartisan support to the house of

representatives we are doing the kind of things the american people want us to do. we call on our senate colleagues and presidents. we are happy to join to the clincher is the gentleman from pennsylvania. >> i'm from the 12th district in pennsylvania. very excited day. my tongue in western pennsylvania and the concentration there and folks we have in the health care industry and financial services have more regulatory reach going on in the government. so the act allows people in congress to take responsibility for the regulation. i look forward to the regulations that what be in effect and good for the american people and improve the level of accountability. why people across the all wouldn't want that accountability i think is a good question for them. so again i look forward to them

taking out the act and the power plants in pennsylvania and the people being thrown out of work. we look at the health care goals through the roof with respect to obamacare and you look at the difficulty that some of the community banks are having the onslaught of regulations that i think is appropriate for congress to reclaim some of its constitutional authority with the activity that is supposed to be doing. so, i think that -- >> it's good to be here to read this week we focus on stopping government abuse. and we had a number of pieces of legislation that were just that. we learned that the irs has been targeting people for their political beliefs and the american people have had enough and quite frankly, i have had enough. when we start to look at lois lerner over the past six years

that she got bonuses of $110,000, for the gentleman that is best known my guess for his leading role in the year that he started at parity. i can tell you the people back home don't understand it. when i'm talking to the career of federal employees serve the country well. we are having to deal with furloughs and pay freezes. yet here we are going out thousands of dollars to the federal employees here in washington, d.c.? they don't understand it. i have single moms who said i would be glad to work for an entire year for the bonus of the act. yet what we have is a double standard. the people back in my district are tie year of that double

standard. one standard for washington, d.c. and another for main street america. enough is enough. if we were able to pass some legislation this week that i encourage my colleagues over on the senate to join with us and say you know what? it's time that we align ourselves with the american people and stop this government abuse. that's why part of this legislation was something that we could all be encouraged about because it again puts the government control back in the hands of the people where it belongs. i but like to turn the microphone over -- we have people to trust in this government that they used to have and now they look at us and

they wonder what are they going to do to us next? what are they going to regulate us with and how much more are they going to tax us and what are they going to take away from us? where i come from there is a lot of work to be done and the saying was don't worry about the muel just load the wagon. the muel i represent are ready to one hedge themself and walk away from the wagon that they can no longer pull and they are looking to us to bring credibility back to this wonderful government - and the people that fund this magnificent business what do you do? why do you overtax them and over regulate them? this week i heard the president talk about phoney scandals and there is nothing more phoney coming from pennsylvania avenue than reuniting the country bringing together people. he isn't a uniter, she is a divider that divides race and income. he picks winners and losers and he tells people other parts of

the laws we will enforce. the individual still has to do it. i spent some time on the phone this morning with stephanie hi cantelon the business but i do ret. she said the biggest thing of all of this and everybody we talked to in our businesses, they don't know where to go because it isn't done yet the regulations aren't in place. yet we talk about a fee phoney scandal but there's nothing wrong. i would tell you, my friends, if that speech h. white to a duck and quacks like a duck then it's a duck. we are telling the congressman we are represented of the folks back home that send us. we came here with one thing in mind and one thing only and that is to serve the american people of the united states. people tell me the trouble with you people is you just don't

understand. let me tel you something, i understand. i get it. i've watched how much erosion we have and how much our freedom and liberty is under attack. i understand it but i want to assure you i don't agree with it and we don't agree with it as a party and it has nothing to do with republicans and democrats. it has to do with what is best for america. if we can sit back and watch this unraveling and think you are obstructionists if i can stop the country from unraveling i want to be an obstructionist in stamford people with that is a target on my back for the reelection then put the target their and on the front, too. if i'm going to be held accountable for holding the government accountable, amen. the piece i have this one in vv come morning was the accountability act. if we have people clean their offices and it's all of those wonderful 2.1 million private citizens that serves and work for the government, no pity it was for 1%. the senior executives who reach

up to $199,000 a year with a bonus near 230,000. what did we say? let's hold them accountable. but in all the concept told the people you elected to work for you accountable. i would say we are trying to protect the 155 million americans who pay taxes every year to make this country such a great country. thank you for being here. thank you so much. it's good to be with you. >> let's open up for some questions. >> -- to be enacted into law and if not? >> we certainly hope in the legislative process the house passes bills and the senate passes bills and the goal is to get them on the president's desk. this is a very important action and a step that has been taken by the house on each of these bills. we are hopeful the senate will take them very seriously.

it is important in restoring trust and bringing back power to the american people protecting them from what has become an overbearing and overreaching federal government so we are hopeful the senate will take action. we will continue to talk about the proposals to promote them. what do we feel about the idea to get on the same page as to get towards the september 30 deadline and the fact you have to pass. the bills that have passed the house is taking action on these appropriations. we have taken action on several of them and we are committed to continuing to bring them to the

floor. we had a lot on our plate this week in the transportation bill was going to take longer than we had first anticipated. i believe we will get it done. we need the senate to act and to start working on their appropriations bills because that needs to happen in order for us to go to the conference and get these bills on the president's desk to get it's pretty fundamental of the governing that you get a budget in place and each one of these bills are important in that process and we are going to continue to do everything we can to get them through the house. you can china and when you want to. okay. >> last question? >> talk about the deal allowing the government to make the employer contributions for health care, for the members. do you think that is fair for americans to be subsidizing that when they cannot opt out of obamacare? >> our priority is to get obamacare repealed. we believe that it is making it harder.

we are already seeing where it is making it worse on our health care system, on the economy, on individuals and of families. that is going to continue to be our priority. the president issued this ruling last night. they had a conversation with the senate democrats yesterday. we are going to continue in the house on appealing obamacare. >> yes, please. >> this is an important question because what we believe is the members of congress and the staff ought to be treated just like the american people. that's why we push for the inclusion of that provision in the affordable care act. what we have now is governance by block post and press release. at 9:00 last night understand this week came out and there is no paper. there's nothing specific and there is no rule that we have seen yet. so we look forward to seeing the rules but our commitment and the principle is to make sure the

members and the staff must be treated the same as the american people. >> thank you very much, everyone now as we started to do earlier we will take you inside the capitol earlier this morning with house minority leader nancy pelosi who briefed reporters. >> good morning how do you explain to the american people but today congress will the winter in august recess and after six months in the congress, the republican congress we still have no jobs bill, we have no budget bill and we have the threat of shutting

down government and not raising the debt ceiling without revealing the affordable care act. if this was a do nothing congress and now what has gone to something worse. it is an aimless congress that has fallen into chaos to make matters worse, congress. we shouldn't leave until we address the challenges that we face. as soon as we arrived back here in september, where we will have eight or nine legislative days only in september it is based on the deadline at the end of the fiscal year how can we explain to the american people why you we are leaving here and now not having done our work. it is opposed by the committee and they pulled the bill.

it is such a bad bill they probably didn't want the world to see how bad it was in contrast fugate to see the bipartisan support on the senate side, and now as you see republicans in the senate have come out to make sure that that bill doesn't see the light of day. a transportation bill. initiatives they are talking about the reform bill, $30 billion in cuts. that probably ensures that there wouldn't be a farm bill which would be most unfortunate. they pulled the interior appropriations bill and this is chaotic. this is not a professional approach getting the job done in getting solutions and resolving issues for the american people. now what does it mean to you if we do not on the full faith and credit on the united states of america there are three things it could mean to you that you're

401k retirement account would be very adversely affected. just the threat on this discussion of not raising the debt limit had the impact of lowering the credit rating to years ago. it means that homeowners interest rates will be affected and will lead to credit card debt the would be affected as well. which again, this directly relates to the financial well-being of the american people. why? because an aimless and chaotic congress cannot get its act together. the president has offered a compromise with to lower the corporate rate in return to get some investments in job creation in the country which in turn will inject them into the

economy and produce the deficit. even with the president going that far to meet the republicans' priorities, they have rejected that. they just do not want to work in a bipartisan way, which is the only way that we can get this budget issue resolved. so especially the new members, they can't even understand why we came here. they expected that we would have a jobs bill. they haven't seen what we have seen in the past two and a half years. the expected that we would have a budget bill to. so here we are. and it's unfortunate. i wish that we could stay. our members are prepared to stay and work. the american people are working and we should be working for them. we spent a good deal of time address in the members about

dressing in a way that meets the standard and the dignity of the house. how about if instead we pay attention to how members dress and how the congress addresses the needs of the american people with job creation, deficit reduction and growth for? with that i would be pleased to take any questions that you may have >> i understand this is your last day with us. congratulations to you. as you know i usually call on you first because you are always there. >> congratulations. thank you very much. we have been briefed on the reason why the embassies are going to be this sunday and now there is a worldwide travel alert through the entire month of august. what is your understanding of the threats, and should americans be very concerned about security right now?

>> the house has been briefed on the subject. my staff was at that briefing and the briefed me as to what the basis is. yes, we have been briefed. and it's not that it's in the public domain that the embassies will be closed and there is a travel alert for americans traveling abroad there is some understanding of the seriousness of the threat. the management on how the handle of the congressional employees. have you been briefed on that, number one, and do you have any sense of how that might work in the special case of how certain the stuff would be? >> de bigot questions say that the members of congress be on the exchanges.

yes members of congress would be on the exchanges, and the staff must enroll in health the market places as the affordable care act requires. as we continue to ensure the smooth implementation of the affordable care act, we look forward to the start of the enrollment in october. it's important for us to get this information before we left for august. with this landmark in place we would be holding up insurance companies accountable, we would be enhancing the patient's rights, putting money back in the pockets of consumers with the medical loss ratio and reducing the cost and strengthening the economic and financial and health security of working families so because of the role in the coming months, americans will expand the choices and more affordable care

>> briefly there wasn't -- [inaudible] [laughter] >> to describe what the concern was had there been people that don't make that much money on this staff assistance positions -- >> its self evident that it's part of the compensation here that they would have health care and health insurance and now they will under the affordable care act for the exchanges. as you describe the situation and resolves it. >> the staff did tell me that there would be a problem. maybe it is a good opportunity for us to pay tribute to the

staff handled all that they mean to the working of congress, the tremendous intellectual resource. people who could, shall we say be better compensated financially outside and happily they enjoy the psychic rewards of the public service at least for awhile. so i think the main targets of that piece of the legislation is that members of congress and the collateral damage was to staff. that no doubt has been removed and members of congress of course have always been in the exchange's. there was a different g isham stuff if you were leadership stuff for personal stuff we're waiting to see the actual final language because we haven't seen that but that is what we are working on now. >> the speaker said there will be timon's of timber to deal with the issues that are still

out with congress not to invest the deadlines. the typical one in five or six week recess every august. what's different this time? >> what's different about this time and the year before is that the republicans haven't done their work leading up to the break. that's what is different about, having the plan in place to address this. usually what you try to do is if the semester is coming to an end and you have your papers and get the work done in a timely fashion. if the work they want to get done is nothing then the are right on schedule. but if they want to resolve the issue -- by the way, we should have been doing much more up until now, that they have rejected as an overture to the president has made in a bipartisan way to talk, to

propose, to agree on lowering the corporate rate. now, let me just say this. when we are talking about the budget and talking about the economy, we are talking about confidence. and confidence is a very important value to the economy and the american people and that confidence is something we should be sustaining and strengthening rather than questioning and undermining. so in september we have beautifully and respectfully so the holidays but after they are finished we have a week off because we just came in for eight days. succumbing to know, even with the time off for the holidays, which we respect, they take another week over and above that, the 24th of september a

full weekb end. i always have markers of where are we? the sixth month. now the seventh month to control the house once again. in that period of time since it passed a budget bill they said in the beginning of the term we want regular order. we passed the budget bill and the senate hasn't. that's what we did four months ago. and now they said they didn't want to go to the table. why didn't they go to the table? they didn't want to go to the table because they don't want the public to see the contrast during the budgets. now it takes its toll in the confidence that people have been. if they think nine days inns of timber is enough time to resolve all of the difference is they

can't even resolve the difference to bring on the probation's bill to the floor, i think they are wrong. i think they are aimless and chaotic and i think they are making matters worse for the american people when they should be resolving this and coming to terms. that is what we were sent here to do to define a common ground but don't say nothing is our agenda. never is our timetable. does never work for you? if you have any economic security, nothing and never do not work for you and therefore it doesn't work for democrats in congress. yes, sir. >> you mentioned there is nine days in september and you said before that if immigration reform doesn't happen by the end of this year it would be tough to do in an election year. considering how much effort is going to be dedicated for the

immigration reform to pass out of the house this year? >> i will answer that if you tell us about your glasses. [laughter] >> they are google glasses. >> are we selling this? >> telling your family what you're going to eat for lunch as soon as you look down. >> my mom made me lunch. [laughter] >> here's the thing. what's different about the budget is it has a fiscal year that ends on such number 30 event begins october 1st, and we have to have a solution before the fiscal year runs out. the calendar year relates to the immigration bill. i still feel very confident because the public sentiment is

where the opportunity get something done on immigration on a bipartisan pass to pass the bill the president would sign on the comprehensive immigration bill on the legalization. secure our borders, protect the workers and have initiatives that promoted for american ingenuity and entrepreneur scheppach ravee h-1b visa and the rest. it contains a great deal. the badges of wall enforcement folks and the business people and the bipartisan way and the evangelicals are in a faith based organization.

we are on a positive path to getting something done. i'm sorry that we haven't seen more acceptance of the bipartisan group and house of representatives but maybe that is eminent. i don't know. but i do know that they work very hard over a number of years to put together a bipartisan bill and would be great if they could have its own bill, one that is out again in a bipartisan way, compromise. but that's okay. that is what we had hoped would happen but it hasn't yet. but i do think that's during a break they will go beyond and that may be the picture of difference on the timetable and the legend of come september.

>> how confident are you that we will have a farm bill in september? >> i'm not confident, unfortunately. again, regular order on the budget we passed a budget and the senate passed the budget, it didn't happen. regular order in terms of committee, the committee which in a bipartisan way to produce the bill that has some very serious cuts but enough democrats voted to make it bipartisan in order to bring it to the floor in a bipartisan way with the anticipation of a what respect of the work of the committee and we see what has happened since then we are going

to cut $40 billion from food stamps. welcome our high-ranking member mr. peterson who always works in a bipartisan way says that means we probably won't have a farm bill if they stick to that. let's just go to the table. the gitmo fund for it. now, to go back and life and even with that bill as horrible as it was at least it is a path to the conference table. but to put their numbers on the record as supporting $40 billion in cuts whether it makes the path back a harder one for the farm belt. >> the question is what comes back from the table. >> what comes back has to have a strong bipartisan vote. can they produce any votes on their side think about the children of america.

everything we do with it is the budget or whatever it is on the farm bill, how many millions of children are affected by having the food stamps cut and the attrition programs, families affected very drastically and there will be cuts in the food stamp program and the attrition program. we know there are some already on the senate side. about $40 billion is to say we do not share the values of those that think america should not be a country. that's really what their statement is. that is that serious problem. have a good august. you never know when we might come back. let's all thank her for her professionalism. you make us feel that way.

thank you and good luck on what you're doing >> the house subcommittee's held a hearing on how the u.s. part manages its firearms program. shares in exchange for maturing with congressman rob bishop of utah and to officials with the park service. ha >> mr. f jarvis, the question was who was ultimately responsible, not what have you done but who was ultimately responsible? >> you are often responsible for this? what about ms. chambers, what culpability does she have on this chain reaction? >> she is the supervisor and is also responsible. >> right. >> there was a 2003 report that was given. they ended up in a pawnshop. a 2008 report that showed

problems and the 2009 report showed problems. all of you were on the job there. what specifically did you do to implement the findings of the 2009 report? >> i was unaware of the 2009 report. >> but it can under your watch. you were the director after the report was taken. the report was permit it. even if it came after you when you took office, which you did not, what should you have done about it? >> i should hold my line supervisors accountable. how much accountability should you have? how much accountability should you hold. >> the information for the

firearms manager -- >> what about your responsibility? >> so that i have a more direct line of communication. it is my response ability. >> i'm going to yield back to the gentleman from michigan. >> on c-span2 house is in session after voting today to block the irs from enforcing the health care law. the past to 32 to 185 with four democrats joining 128 republicans voting in favor of that bill. in washington today vice president joe biden's war on summoned the power as the ambassador to the u.n.. you can see a picture of the vice president administering the oath of office at the white house one day after the senate confirmed her by the vote of 87-10. now we will show a portion of this morning's washington journal.

>> if we turn away from the needs of others, we align ourselves with those forces which are bringing about this suffering. >> they ought to take advantage with nothing short of the public health [inaudible] certainly when somebody had their own agenda >> the concern for what is going on with american women. >> she becomes the chief confidante. >> many of the women that were first lady's a lot of the more feminist. >> they are and how many ways more interested as human beings than their house and because

they are not first and foremost to find the political ambition. >> because you go to the white house today and it's really roosevelt's white house. >> i think in every case the first lady has done what was in her personality and interest. >> she wrote in her memoir i myself never made any decision. i only decided what was important and when to present it to my husband. now you stop and think about how much power that is it is to

fight the feared mccaul that accompanies the disease. >> she made it possible for countless people to survive and flourish as a result. it's an impact on the way we live our lives. >> just walking around the white house ground i am constantly reminded about all of the people that have lived there before, and particularly all of the women. >> first lady's influence and image and the original series produced in cooperation with the white house historical association. from edith roosevelt to michelle

obama. you are watching c-span2. now we are ready to show a portion of this morning's washington journal, a discussion on the keystone xl pipeline. >> on your screen as congressman terrie republican from nebraska and the commerce committee in his eighth term. we were talking about the budget process in the first segment of the washington journal and the fact that the congress is leaving and there's budget issues coming out and a potential shutdown on august 1st. what are your thoughts? >> this happens every year this time of year we would start one without the continuing resolution because the appropriation bills have not been passed. we have four or five in the house struggling even beyond that. so, it just means september is going to be an interesting

months. >> why does it happen every year and would you like to see happen in september? >> it happens every year because there are different interests and different philosophies on passing appropriations bills between the house and the senate. so it seems like we always get to this point but this year is more dramatic because we have obamacare and many colleagues on both sides of the aisle and both sides of the capitol want to use this. this is where we really want to put the stake in the ground on obamacare to be funded and so we will have that discussion in september when we get back whether or not we are going to do that. >> what do you think of what the speaker had to say yesterday about continuing the continuing resolution on the sequestration to stay in place? >> guest: absolutely. sequestration has to stay in place. those are the only budget cuts

we have been able to get. certainly a machete approach is inappropriate and maybe we can work on doing it the right way but we need to keep them in place. the speaker is trying to work to have the least dramatic october 1 or september 30 at and that's his job and i wish him well on that but it's going to be difficult. >> representative, a couple of the articles we saw on this morning's paper were about divides within the republican party. the rand paul, chris christie tea party. is there a position in the party as well? >> there's a range of philosophies in the party as well as the democratic party. we seem to get more attention for hours rightly so because it does seem to be more dramatic so

that puts more pressure on the speaker and the majority leader to build coalitions to speak. but i think it is healthy to have the range of philosophy from libertarian to more moderate republicans. but most of us are in the traditional mainstream republican that's the majority of the party. but i like variety. >> host: we are going to put the numbers of the fuel to produce pete this morning. a couple more issues we are going to put on the table first including the issue of this morning's vote. what is the bill the house will be voting on this morning, the irs health care bill? >> the bill is hopefully to prevent the irs from being the masters of obamacare. many of us are concerned especially after a scandal where

politics has overcome cents a devotees that they can do the same thing if they're in power over people's health care. they will be the enforcers so they will have all of the health care data whether you are a sign that or not that's part of the data. all of that information is funneled to the irs and we want to make sure that is protected and that the irs has less involvement in our health care. >> host: something that goes right through your state, the xl pipeline. what is the status? >> guest: limbo is the status. the president has made some comments that lead us to believe she is leaning against the pipeline. he made some rather dramatic comments on the lack of jobs being created that were totally

out of thin air and we don't know where he came up with them or why. so that leads me to think they will either continue to ignore it had best or go ahead and kill it. congress needs to be pleased to act. two months ago we passed to the keystone will there would see it approved and maybe the senate would be in the position in september to do the same. >> host: wire your support of about pipeline? >> guest: it is about job security and the jobs are a bonus. i would like to see us get off of open caps -- opec oil coming to the united states. the study from the state department as well as others show that we would have tens of thousands of construction jobs and then according to the state

department study as much as 42,000 spinoff jobs during the construction. >> host: when you look at the map and you see how it bisects, what is the impact? environmental and other impact? >> the environmental impact is the focal point right now and there have been the environmental studies done. the main study and then the supplemental the change their route your nebraska and the whole point was to study the ecological impact and we found that there would be minimum. canada has added a safety precautions into the pipeline to ensure or do their best to prevent any leaks and if there were it would be smaller than other pipelines. >> host: republican from nebraska, the phone numbers are a on the screen if you would like to participate this

morning. from cresco pennsylvania, on the republican line. please go ahead with your question or comment. >> caller: yes, i listened pennsylvania and is regarding the sequestration. i don't understand why they have to protect the hard-working person that worked all their life and try to make something of themselves. it's just senseless when they need to do something else other than at act -- attack hard-working person. the need to start controlling for oil and stop sending factories overseas. they need to start letting people work that want to work. >> host: i think we got the point. >> guest: i agree that we need to focus more on jobs and job

creation. we lost 5 million manufacturing jobs over the last six to seven years and we need to get it back. so you are right on point and i think that should be the focus. on tax reform again, getting manufacturers back tax reform is important but it's also when we have projects like keystone xl that would employ directly 10,000 come 6,000 to 10,000 construction workers when you add the southern route those are the projects that get people off the bench and into construction and working again. so for windows jobs to the site is wrong and we need to increase those. energy is a good part or a good start. >> host: eric and freeport texas. good morning you are on the washington journal. >> guest: everyday the rich zero leal executives sell 40 million gallons of gasoline

and diesel to foreign countries. every day by over a million barrels of crude oil. we don't want to say a word about it. why is it you don't want to talk about energy experts? i think we should approve the pipeline as far as oklahoma so that it's easy to sell to americans and hard to sell to foreigners. we should ban the sale of gasoline be sold. thank you. >> guest: i personally think exports are a good and healthy for our economy. they create jobs, too tebeau i want to make sure that for the keystone pipeline perspective that the oil transported from canada to that pipeline does stay in the united states. the reality is that it goes to as many as six or seven refineries from kansas, oklahoma, texas to louisiana.

there is no doubt the vast majority of not 100% of the gasoline will be distributed within the united states and not put on. but there have been -- we do export diesel because we don't use it like europe does so we have had a symbiotic relationship. we send them our diesel and they send us our gasoline. so, that would continue. also some of the manufacturing products that are bipartisan from the oil that we don't use would be exported, too. those are actually healthy for our economy. >> host: in issue that does affect nebraska but you don't necessarily think of it when you talk about immigration. how does it affect nebraska and where are you personally on emigration? >> guest: it does affect nebraska.

we have a lot of plants and agriculture but to rely on and we have had a good share of immigrants in both omaha and my district as well as other cities throughout nebraska so we need reform and make them attack that issue. where i am and i think this is the consensus of the republican conference, too. it's hard to get to how we deal with the 11 or 12 million when we haven't resolved the issues of border security and those that are hiring undocumented workers? so if we can secure the borders with a measurable goals along the border and then they have a tough i would go as far as using biometrics then we can get to the next phase.

i personally want to see those in place or a trader before we get to the next. i'm willing to put on the table a pathway maybe not to citizenship but a legal status. but we have to have the border security first. >> host: when you hold town meetings what is the number-one issue brought up? >> guest: i have no doubt that during my town halls in august that immigration will be number one. i hear from the stories and e-mails sent in to my district that climate change will be an issue. and since i am the keystone pipeline laogai i assume i might even have people traveling to omaha to express their concerns about the keystone pipeline and using oil that supposedly has a bigger effect on the climate. >> host: what about the nsa

issue that nfacing? >> guest: it's an interesting issue that concerns me but interesting that when i'm home i don't hear it much. i hear it from a small group of people but when i'm at the coffee shop that one doesn't come up. the irs one comes up a lot of though. >> host: jake in massachusetts on the independent line the republican of nebraska is the guest. >> caller: people think they need to make a lot more money than they should. in that case they should get a good tax credit to the people working good full-time jobs but not making a bunch of money. so, people would want to get a part-time job but not such a great job. it would put more money in their pockets at. and i notice when people get

their tax returns and what not, they put all that money back and buy a new tv or read a4a pity the the what help the economy. it's just i talk to people and they think they should be making 20 or $30 an hour because they think they deserve that. but really what i think is if they give a good tax break to the part-time and the people who may be are making the $40,000. >> guest: that's a very good point, jake triet if you are a part time the only tax is the one in your social security and medicare account for your future when you reach 65 or maybe a little bit older if there's any reforms if you are a young person. but we need to reform the tax

code. there are two philosophies that are competing right now. it's part of the arguments on tax reform. one is the republicans are looking at how do we make our country and our businesses and our people more competitive in a global economy when other countries have lowered their corporate tax rates and individual rates to become competitive stealing our manufacturing jobs or is it used as a social issue to redistribute income in the united states and by fall on the competitive side. let's have a tax code that makes us more competitive and to grow good paying jobs and have increased wages and i think that is the story of how we increase the wages. >> host: representative terrie, an individual tweets a to you does e-verify mean all americans will need to carry the id which is a back door to national id?

>> guest: at quinby eddy date but the reality is that we need to have a system where employers can check on whether or not they are documented or undocumented and the legal or not. there has to be a system. if they hire them that system is in place and they go ahead and how you're an undocumented worker it should come down harder on them, but they have to have that ability. >> host: how dirty is the canadiens and oil? it goes to texas to get refined and then put on the world market degette >> guest: it is priced at of the world market. i may split hairs with you that it's put on the world market that there is no doubt that it is a commodity wherever you're selling it, omaha, nebraska, texas, the reality is that it is at the world level but it can be distributed within the united

states. the dirty aspect of it first of all it is equal to the oil that is coming and it's basically the same heavy crude, yes it is a heavy crude but that is the majority of the imports right now. >> host: from virginia, republican steve. >> caller: [inaudible] perfected which makes coal the cleanest energy source we can use to burn the heavy crude that devotee is worried about. people say that's why they call at refining. we are taking it out of the gasoline and putting it in our cars. it's not rocket science, its

refining. for people not to understand this there's only 40 scientists that believe in global warming, there's 32 -- 32,000 scientists who've proven that the scare tactics of the global warming extremists are nothing but fraud so i don't know why we keep talking about something that simply does not exist in the fact that global warming does not have any scientific evidence to prove that. >> guest: i fall in the category if we can make it cleaner and make it more efficient, then we should. i think that as a conservative lawyer. i have no problems with this making our vehicles more energy efficient. but you are right on the legal aspect. it's somewhat dirty and that is with the refining aspect is is to take out the impurities and make a usable type of fuel and we have to use that pitted has

to be a part of our portfolio but we also need a diverse portfolio which is why i support natural gas going into transportation which is a clean fuel made in america. >> host: i want to get your reaction to this headline in "the washington post" this morning on the budget impasse. but the sub headline is democrats say the gop is paralyzed by a distaste for federal spending. ..

again when we get to the c.r. and then the debt ceiling in november. we're going to have a fight over spending. >> host: how would you grade the 113th congress as far? >> guest: i would give the house a be and i don't know if i've ever rated the senate above a tandy your they take things more at a slow the pace than i'm used to in the house. it seems to been aggravated over the last couple years. last couple sessions, and that's very frustrating. it seems to be in the senate that if the president doesn't want it on his desk, nothing gets through the senate. >> host: next call from will in ohio, democrats line therefore good morning. representative terry, a couple

quick points. first of all i would like to know why do republicans always skin everything quick like into, and tell the truth? i'll give you a couple examples. the tax rate, we have the highest corporate tax rate in the world. but what the never say, ever say is that the effective corporate tax rate in america is actually one of the lowest in the world. when you take out right us in deductions and that sort of thing we are one of the lowest corporate tax rates in the world. in fact, one-third of american corporations don't even pay taxes, federal taxes. the second point i would like to make is the keystone pipeline. you and i both know that the american people will take -- take all the risk for this pipeline, but almost all the profit from the pipeline from the vast majority will be shipped overseas at a higher probably. it will not be used by the american people. thank you for listening to my comments. >> guest: i don't know if

there's a point there i would agree with. the facts clearly show that the oil is going to refiners in the u.s. that will mostly be distributed. and i went through the process where the gasoline is going to mostly stay here, if not 100%. and yet, there's been oil products always exported out of the united states, even we have the deepest reliance on opec oil. this does make us more energy secure, and what was the first part of that? i didn't get that written down. i think it was just some of our democratic talking points. that i would also disagree with. the oil one kind of overtook me because that's just a bullet point that the environmentalists are putting out. >> host: he was talking about the corporate tax when it comes -- >> guest: i disagree that the effective tax rate are the lowest in the world, compared to other flat taxes around the

country. we have major companies in the united states, or just in omaha, nebraska, that are paying an effective tax rate in the '30s. we had testimony in front of my committee. i chair the manufacturing and trade subcommittee, and we had a manufacturer of car parts in michigan testified that they wonder why they don't just move across the border to canada that has a 15% flat tax. that's a real-life story of our tax code is actually hurting manufacturing. >> host: a tweet. representative terry, do you support the pipeline materials in made in the u.s.a.? and, what are your concerns of the ogallala aquifer? >> guest: . first of all, i've met with our u.s. steel makers in transcanada on using u.s. steel. most of it is u.s. steel, but

transcanada says that they can't get enough, get u.s. steel and have to supplement what they import. we have asked them to use as much u.s. steel as possible. mike doyle, democrat from pittsburgh, was part of those discussions as well in -- and a real advocate. so i thank mike doyle for allowing me to team up with him on that effort. the ogallala aquifer runs from basically south dakota and nebraska, kansas, oklahoma down to texas. there's a rocky formation that holds water or it is important to our agriculture in nebraska, and we have to protect it. i am glad that we have had conversations with transcanada and the pipeline. they are adopting additional safety issue, equipment and engineering to protect the ogallala aquifer. the two studies that have been done on how the pipeline would

affect the ogallala aquifer says that the risks are minimal. >> host: c-span democrat tweets in, our society is too complex with the small government republicans won. nothing gets to the house that the tea party doesn't want. >> guest: if we build up coalitions and votes, so it's more than just what the tea party wants. it has to be what the majority wants. and so we are a small government, and so if you're asking what will republicans vote for more government and more spending? no. that's it is our philosophy. >> host: raised in long beach new york honor independent line. good morning. you were on the "washington journal." >> caller: good morning. i remember the alaskan pipeline. >> guest: yes. >> caller: i remember how that -- [inaudible] they hide a lot

of people and then they start messing with the -- [inaudible]. what is going to happen with this -- [inaudible] >> host: we have a bad connection but i think we got the point. she's talked by the alaska pipeline. sounds like she felt pretty negative about how that turned out. >> guest: yeah, the alaskan pipeline has been a great asset to the united states. if you ask most of the tribal people in alaska, that they have benefited from it greatly. not only from the direct jobs but the payments to the tribes for going through their lands. so one of the aspects with the alaskan pipeline now is that it is running only about half capacity. and we have to figure out a way -- >> host: why is that? >> guest: because the north shore oil is diminishing and we need to be able to expand. there's a lot of oil out there that we can't get too. and that's parto th

we could fill up the capacity of the pipeline if we're allowed to expand safe ecological drilling, but the wages are the highest wages. i'm, there's people before the explosions that -- not explosions. the boom of oil in north dakota. they would go to alaska to work on the pipelines because of the great salaries that are paid. >> host: have the big ecological problems with the alaska pipeline? >> guest: there probably have been. but i can bring up one story that there's been negative ecological impact. in fact, the only one i can think of is a positive one that the caribou population has increased, because i hate to say it this way, it's kind of crude, but the warm, they huddle around

that. naturally the population has increased. something about warm and reproduction go together. >> host: deal is in dayton, ohio. republican line. >> caller: how are you? >> guest: great. our you today? >> caller: good. first of all i love your comments but clean and efficient at its conservative. stick with it. really proud of that comment. what i was calling about is this phony argument that there's not enough natural gas infrastructure to have natural gas cars. my point would be that every day i take a shower with a natural gas water heater. i cooked steak on my natural gas grill. my wife seems to operate a natural gas of them pretty easy. why can't i felt my garage, you know, and i could even contract for that natural gas on an annual basis and know exactly how much i'm going to spend on

fuel every year. and the argument that you have to have a bunch of gas stations out there so you can start is a phony argument that i think is brought on by people that sell smokes and cokes, because if you don't have to go to the a.m., you know, to the minimart to buy gas, you don't like cokes to you by smokes, you don't like the data chips. and i think the real argument is that are just fighting it off. because the infrastructure in place is what they're defending rather than arguing that there isn't an infrastructure to provide natural gas. >> host: we will leave it there. turn two i have friends in omaha that have actually put in fueling stations in the garage. so they can hook up their natural gas vehicle enterprises with a few natural gas vehicles on the market today. and it takes but $6000 to create that fueling station with a natural gas in your own garage.

i think a sweet spot of getting the infrastructure, and it do believe you've got to have infrastructure along with come and the smokes and cokes people, i should i be meeting with them. they are anxious for this transition. they don't mind it. at least the discussions i've had with them. in fact, alonh interstate othe stops are putting in fueling we stations, natural gas refueling stations right now. we just but one in at the flying j. right outside of omaha. probably by next year you'll be able to go from chicago to denver on natural gas. so the infrastructure is slowly coming out. we are working with the chairman of the transportation committee. we want to take some efforts to try to encourage more of the infrastructure along our interstate corridor. because if we can get the trucks and the fleet to move over, then i think it will trickle down more to consumers, regular drivers like you.

>> host: final tweet for you, congressman. barbara tweets and republicans want to privatize all government services and believing that it won't benefit the people. it will just make money for corporations. low pay, bad service. >> guest: well, i don't think we want to privatize everything. but many, i will say with education, we are talking about privatizing education, but bring it back to the local communities and empowering parents, yes, but there are some things government is doing everything the private sector could handle fine, and should be doing. and as part of our philosophy. and we think businesses and corporations, some have done evil things. when you talk about skilling and enron and those type of people, but the reality is this is a free enterprise, country. and was built on freedom and

business, and good hard-working people and entrepreneur's. i like that model and it is made is the most successful country in the world. >> host: representative lee terry come in his eighth term represents omaha. he is a cornhusker through and through. he went to the university of nebraska in lincoln and got his law degree from creighton university law school in omaha. thank serving on the "washington journal." >> we will take you to the national governors association, meeting in washington, d.c. they will be kicking off three days of their summer meeting. sorry, that's in milwaukee that in the adobe kicking off a meeting in just a few moments. governors meeting from across the country, they're participating in discussions about the economy, infrastructure, health care and cybersecurity from the governor's point of view. this year, the chair of the government association am national governors association as delaware governor jack markell, and the vice chair is

oakland governor mary fallin. we will just watch for a minute as the room starts to fill up before their first meeting. [inaudible conversations] again the national governors association kicking off three days of summit meetings in milwaukee in just a few minutes. we will bring you back to the room, but while we wait for it to get under way we want to show you some of the house subcommittee hearing from earlier today. in hearing oversight committee chairman darrell issa asked irs officials about the agency's targeting of political groups. take a look. >> i have some frustrations i will bring to you today.

months ago president made it clear that the behavior that occurred in an isolated bases in cincinnati was unacceptable. and he charged that we get to the bottom of it. but we've gotten to the fact that it's not isolated to cincinnati, as was said. it's not isolated to washington. it goes to your chief counsel's office. and as we go to do our discovery, that's where the rub is. you promised us full cooperati cooperation, and yet the office of chief counsel and 70 attorneys. they're delivering for documents a day per a journey to us, and they look like this. and there's in minute print it says 6103. now, if the law is working on documents, four pages a day per lawyer, are you going to tell me that this is, in fact, minimal

redaction as required by law? >> well, there's a couple of state without like to make if i could -- >> no, i would just like your answers, please ste skip we, the lawyers take very seriously their legal responsibility to redact information under the law to redact information that is specific to an individual taxpayer, and all such information, bottom line, mr. chairman come is all such information, whether redacted or unredacted, is delivered to this congress. it is delivered to -- >> you have delivered a less than 1% -- excuse before standing but i have to get over your stack -- you delivered less than 1% of the documents, actually to the ways and means committee. you're not delivering to the ways -- >> i disagree with the conclusion. >> i'm afraid that's what chairman camp without any put out in writing. >> i disagree but if i'm allowed to when i can provide -- >> here's what i --

[talking over each other] >> here's my question to you. we produced i believe 63 search terms. you added some search terms. i'm not disagreeing with your adding progressive and looking for progress as. that's fine. i want more not less. you came up with this. it is that up to but a total of 80 search terms and then unilaterally your people, the office of chief counsel, reduce that down to a dozen. they are not searching on the terms we've asked for. our -- i requested all information related to this when you limit search terms unilaterally, you are obstructing us are limiting the scope of discovery. do you understand that, mr. werfel? >> i do but i disagree with the premise of your question and fact you are offering did you in fact, did you people them at the search terms below the search terms that are delivered actually in your response letter today as you look at it? >> we are prioritizing searches able to get you more doctors work with and that's having an

impact. in fact, this week alone the amount of document production we been able to produce has increased dramatically. that doesn't mean we have a limited search terms permanent. it means when making modifications in order to make sure the -- >> that is not your call, mr. werfel. let's go into a little quick detail. what's interesting about this page, i understand why you have removed taxpayer specifics but this is also, this information is being delivered without headers. if the names with her i still wouldn't know what those numbers are. somebody deliberately printed out information, or actually created digital, in which they strip out the meaningful data so you know actually what these columns are. even mr. connolly would say this doesn't look like a spreadsheet is only a because spreadsheets say what is on top of it. additionally, we asked you for information. we set the priority if you're going to slow rollers and you are slow rolling us. >> that is not to.

>> mr. werfel, you frustrated this committee. you promised to do things and you are not. the office of chief counsel, as far as we know that make the decisions to limit search terms come is that correct, or did you? >> i working together with the office of chief counsel. we are not limiting the search terms in a permanent way. we are prioritizing to get the most relevant -- >> okay think if i can make a point spent i would ask unanimous consent for an additional four minutes spent mr. chairman, i will gladly give it unanimous consent, provided the democratic side of the of the about to respond given the fact that we are now off-topic with respect to this hearing. i respect the wish and the prerogative of the chairman to use this opportunity to query mr. werfel, on a different matter and i respect that but i'd like an equal opportunity to respond. >> i would grant the full committee chair that time, and we will grant additional time to the minority spent i thank the chair for his graciousness.

ha you. >> mr. werfel, let's go through the numbers spent i thought i was about -- >> no, no. of been granted additional time. the democrats seem to be carrying your water. i think i'll just use because i think there are important facts for me to get and hope that i could -- >> yes, there are important fact to get out and your obstructing them. >> i am not. that is not true. and not supporting. >> mr. werfel, apparently you're put in by the administration to uncover until somebody knew would come in. it is now, it is now my time and i'm going to explain to you what this committee has found. mr. werfel, in two months, out of 64 million pages you delivered 25, or delivered 12,100. and this is over 2500 of them. that are completely useless. your interpretation of 6103 is so broad that you're delivering no meaningful information. more importantly we have prioritized a number of discovery.

lois lerner, a woman who did not properly but did attempt to take the fifth before our committee, we've asked for all correspondence. it has not been forthcoming. we've asked for corresponds to the white house. mr. werfel, let's understand something. corresponds with the white house by definition had darned well better not include 6103. the redaction is not appropriate. were not covered by the privacy act. therefore, even if it includes names of individuals like sheldon adelson and now you're going to target him for something o, even if it included that, quite frankly it would not b61 owe three. it would be communications outside. additionallythe additionally yor people have unilaterally chosen to redact according to them private information. mr. werfel, you don't have the right to have private communications on government time and government equipment. if lois lerner or others have private communications they are not subject to 6103 because if there is 6103 in their we expect them to be referred to criminal

prosecution. yoyou can't have private conversation and really 6103. that, of course, would be wrong. so as we go through this discovery and find far access redaction, no question at all, slow rolling discovery, limiting search terms, you may call a prioritizing, but you're not prioritizing as we need him. it is my expectation that we should've offered receive communication to and from the widest. we should have received communication between anyone who is conducting non-6103 business. we should have already received lois lerner's entire packet. these are not my expectation. these are the american people's expectations. your speed of delivery is such that you will be long gone. the president will be long gone. lois lerner will have retired before we would receive a sufficient amount of information to be meaningful. you are leaving the choice. i've asked you for information to you are not forthcoming. your own chief counsel's office appears to be clearly

compromised. the lawyers there are included in this investigation. for communications to and from those lawyers clearly mean that the office of chief counsel, a political appointed office, has been compromised. you are leaving me choice. i will be preparing and sending a subpoena for these documents to the secretary of the treasury who will be remaining on. and our expectation is that the treasury department will take over the delivery of documents in a timely fashion, use of such attorneys as they may see fit that they believe are not compromised, and i would ask you to immediately instruct chief counsel that they, that chief counsel's office may not any longer be part of the decision-making. only attorneys who are not part of our investigation. and quite frankly i am deeply disappointed. it was my expectation with our past relationship, and your past work that you would come in not just wanting to be a caretaker, but actually get to the bottom

of this. but as cincinnati turned washington, washington turned to political appointees, offices, and the president began calling this scandal phony, and secretary lew began calling this scandal phony. what i can't understand is how you can think of the american people would accept this as phony. this is a real investigation. we need real discovery. if these doctors need to be redacted, then by definition you have no reason to deliver them. if you can only delivering a blank pages, completely bank -- blank pages, deliver them to the other committee. i'll tell you one thing, as these pages which are almost impossible to forget where they came from our gone through by the ways and means committee, you better hope, you better really hope that we don't find something there that clearly should not have been redacted because we expect we will. moreover, i'm sad to see you go because i thought you could do something. i'm sad to have to issue a

subpoena because that's not what i thought we were going to have to. we did not enter this investigation thinking that this was some grand conspiracy. we entered this thinking this was something fundamentally wrong. my democratic friends are convinced that progressives were targeted. even though your own inspector general has said he found no evidence of it. while he did find evidence of other groups generally called tea party groups having been targeted. we don't want to find only one side. we want to find anyone that is targeted and we want to hold people responsible. today, lois lerner is being given full faith and not held accountable. our job is to find out everyone that should be held accountable and make sure the american people can trust this will not happen again. because i believe if we are thwarted in this investigation this will become a pattern of behavior whether by the chief executive of the united states or simply by individuals who have power within bureaucracies

such as the irs, epa, osha, and the like. >> that was just a portion of the irs hinted you can watch it in its entirety online. go to c-span.org, click on the tab for the video library. things about to give underway here in milwaukee, wisconsin, were governo governor jack marks taken to putting. is the chair of the national governors association this year. >> please take your seats. >> well, good afternoon to our governors and our guests. if i had a gavel i guess, i guess i do have a gavel. here it is. i want to call this a summit meeting to order. we've got a very full agenda for the next two and half days. following this session the

education and workforce committee will discuss innovation and workforce training and the climate services to create jobs and grow family incomes. at the same time the health and homeland security committee will discuss two topics. providing for our veterans and homeland security preparedness. saturdays is his agenda begins with a joint meeting on the economic develop and commerce committee and the natural resources committee to discuss the state of our country's infrastructure. we would have a governors only lunch and business session followed by a session about advancing corrections reforms across the country. sunday morning we will begin with the governors only breakfast and business session. this summer many will conclude with a session on cybersecurity. and i look forward to seeing you at all these sessions. we are honored today to be joined by several distinguished

guests from the international community, and i would ask you to please stand so that we can recognize you. first of all, it's a great honor to recognize the ambassador to the united states from morocco, ambassador. [applause] >> he is with a great guy, he has done a wonderful job. he's also, here represent the u.s. air the chamber of commerce. we've got representatives from the canadian interparliamentary group and the canadian council. we ask you all to stand and be recognized. thank you. [applause] >> we've got representatives from the mexican governors association. thank you. [applause] >> bienvenidos. they didn't really acknowledge they understood what i have to say. that's my problem.

we appreciate your being here. if i could have a motion for the adoption of the rules of procedure for the meeting, governors as you know under our new policy process that we adopted policies for two years at the winter meeting everybody has any questions regarding the policies, please see david of the nga step. so if i could have a motion for the adoption of the rules. second? any questions? all in favor? all right, very good. and i want to announce that governor malloy will be come he will be chairing the 2002 -- 2013-2014 nominating committee. governor malloy, thank you for doing that. and with that i very much want to thank the host of this year's meeting, governor walker, and his wife. we really appreciate you having all of us here. we are off to a great start but a lot of us had a good time last night and i would like to invite governor walker to come up and to say a few words.

[applause] >> well, thank you, jack of not only for the introduction but thanks for your leadership the mentioned earlier a of the press covers but i think all of us as governors appreciate jack's leadership and the incoming leadership of mary fallin and given a great team for the pastures we appreciate the. welcome to wisconsin. we're glad to have you here. i hope for those you who are in yesterday had a good time. i know not on the governors and families but on a number of folks who just introduced a number of our international guests here as well. what a great time at miller park last night. i think, it was as a kind of funny. i think back to 1990 was the last time we held an nga conference here in the state of wisconsin. before that is all the way back to 1914 and i was in madison. 1998 the governors from all across the country came here to milwaukee and there was one particular cover that such a great time, he brought all his

kids year, terry branstad, that i swear he brought have the state of iowa last night. they had a great time. his kids and grandkids and in-laws in it but it was your. it was great to see that but that was a good example of hospitality. we are glad to have the branstad's and all the rest of you here as well. i look around. i saw some a folks having a good time. late in the evening, i think late enough so that people have consumed enough of the mill products. i got up and sang and mary and dennis join me. they didn't sing but they with the backup. for those of you left early, you missed out on that but we had a lot of fun. we had a great time. i think the best outfit, other than the brewers jersey i wore last night goes to jim brewer, who actually has a brewer on the brewers jersey. because of the brewers have cactus league down in your home state. so we had a nice picture with our backs to the camera that

said walker and for other, which is kind of fun. so we had a great time. we hope you all had a wonderful time. there a lot of kids out in it that a lot of kids at heart who are out if you. tonight we'll try to live up to the height of last night. a number of you will be joining me out on harleys or for those of you looking to tonight's activities i would advise you to be at the harley-davidson museum which is just down the way before seven. because about seven you here the roar of more than 100 harley-davidson motorcycles. a number of you will be joined with us but our vice chair even took lesson and she's going to be there as well as well as a number of other governors. we will be joined by about 100 combat veterans, including about a half-dozen who are disabled veterans will be writing inside cars but it would be quite a sight. it will be a wonderful time. will have a wonderful celebration. harley davidson has its 110th anniversary in just a few weeks. so this is our way of showing something unique to milwaukee and wisconsin. and then tomorrow night we're going to be down at the

lakefront, lake michigan, beautiful lake michigan but one of our great, great lakes and will have a wonderful time there. discovery world, a museum that is really on top of the lake itself so we're looking forward to having a good time. it's great to see all of you here. as a kid, governor nixon, i didn't sing out on the field last night at miller park because i know just what i would be at busch stadium, it's a little tough but a newbie out for all the other good activities. >> just think of 1982. [laughter] spent you could've rubbed it in because we had about half the team from 1982 out there. we didn't bring the cardinals up at all. but thank you all for being here. tonette is out with the first spouses and we appreciate you being here. we hope as a number of you have already, dennis and linda were in early. jackets to get around all of it up in door county. we appreciate that and we'll figure out a little fishing spot. we will find a way to help you get connected wou've you or

your family and your staff want to be connected with the we appreciate you all being here. thanks. [applause] >> thank you, scott. you know, one of the privileges of being the chair of the nga is that you get to choose the organization to spotlight during the year. and we all know how critical jobs and employment are to the citizens of our state. and to our economy. and my initiative, will be called a better bottom line, employ people with disabilities, usually about providing governors and policymakers with very practical ideas about how we can put more people with disabilities to work in our states. people who are really not yet fully included in our labor force, people with disabilities. and the numbers are staggering. the estimated 54 million americans living with a disability, only 20% are

employed or seeking employment compared to almost 70% of americans without a disability. and as governors we know that when barriers prevent a significant segment of our population from participating in our workforce, talent is being wasted and our economic competitiveness suffers. we all want to be jobs governors and want to be jobs governors for all people interested want to work. so this year my initiative focused on ways that states and businesses can work together to include more people with disability in employment throughout the nation. now, many of you around this table participated back in february in the sessions at the winter meeting of the nga. we heard from the ceo of walgreens and where from other business leaders as well that employing people with disabilities is not just a matter of charity but it is what's in the best, it is what is in the bottom line interest of the company.

for them, this is not about charity. it's about doing what's in the best interests of their shareholders to at the end of the winter meeting i promise you that would be coming up with some very practical things that companies can do to advance employment opportunities for individuals with disabilities in our state. and we have done just that. we've identified five key areas where governors can move the needle. but before i dive into those five areas let me tell you a little bit about the process we used to get to where we are. since last july, my team and the nga staff has conducted more than 60 meet with subject matter experts including state practitioners to inform this work. and i want to thank the nga staff for really having done an outstanding job. last fall, we held two roundtables to collect information from experts in the field. that included advocates, that included self advocates were living with disabilities, it

included business leaders and researchers and policymakers. in february at the nga, you all joined me in hearing directly from business leaders about as i said a moment ago, why employing people with disabilities is better for the own bottom lines. and, finally, in may we hosted, the nga hosted two state institutes where we really drilled down in the practical things that states can do to advance implement opportunities for people with disabilities to we held one in pittsburgh that was hosted by governor corbett, we held one in seattle which was hosted by governor in the late. 33 governors sent state teams to those institutes. with more than 100 participants at each event. many of you sent your policy staff at the some of you said experts from the workforce agencies come your education agencies, vocational rehab, health and budget and finance officer. you really set very, very hittable people. and it was great to spend so

much time within. on our team would include a couple of state legislators, governor inslee also include a state legislature on his washington safety. governor do guard joined us out in seattle. and he attended every session for both days that i would want to thank you for your participation and your leadership on this initiative. thank you very much. and as you can see there was quite a broad range of perspectives and it made for a very rich discussion. and the state teams were able to learn best practices. not only from experts in the field but also from each other. many of you are already doing innovative things in your states. for example, right here in wisconsin, governor walker has been doing good work supporting youth with disabilities and their preparation for the workforce. wisconsin have a lot of innovative practices to share, including a work experience program where the state helps

employers cover the cost associate with job training. wisconsin and delaware are also partnering with walgreens to launch what they call ready, which is retail employees with disabilities come something you're basing and walgreens stores across the country where these retail stores will, in fact, employ people with disabilities. we heard a lot from your teams about things that governors can do internally take state governments from the. to be with disability as governors we have the ability to make our state employment practices, our processes and materials and websites more accessible and welcoming. for people with disability a good example is maryland where governor o'malley started posting his video messages with closed captioning. earlier this year governor daugaard record a video message to south dakota state government employees encouraging awareness and inclusion of people this vote as a part of a statewide focus on culture.

he started the video in sign language and it has the captions throughout. there's a lot of that we governors can do within our state government, but business plays an important role here, and we just cannot get this to on this issue without having businesses embrace it. so as part of the institute, we focused on a business perspective and we heard from a number of business leaders representing all kinds and all sizes, all types of business. we did it so we could learn directly from them about how we can support them in hiring people with disability and this for me was a major focus to make sure we understood from the business perspective what we can do better. in pittsburgh we visited high mark, major health insurance provider, bank of america as well as bender consulted with is a disability own firm in pittsburgh are also all participated on a panel. in seattle we were hosted by microsoft, executives from nordstrom and the ceo of a

disability own firm from portland called inside, participate on the panel. it's powerful to hear from these business leaders report that employing people with disabilities is for the better of their bottom line. and i asked the business failed to focus on one simple question. what can states do to make businesses more likely to hire people with disabilities? because it really has got to be our focus. and all the countries on the panels represent different industries and different sizes. their answers revealed some common themes and implications for state policymakers, and i want to give you three takeaways i have from those business panels. one, skills are the top of the listed businesses don't care about the disability. they care about the ability. we've seen that in delaware where the state has partnered with the regional i.t. firm

called the ai, an international organization, ashley started in denmark called special easter. which is dedicated to employment of individuals with autism to cai is a company, and i did, and i get coverage that includes thousands of people across the country your they have committed them they just did this in the last two months but have committed to hire people who have autism for more than 3% of their consulted workforce. because they recognize that these individuals are especially qualified for technology roles like software testing, data quality assurance, programming, data mining, and data entry. and as states we cannot educate and prepare workers with the range of disability to meet the skills that are needed by our businesses. that's number one. number two, states need to stop approaching businesses with and ask. we have got to transform the way we do this, and instead of seeing our people into

vocational rehabilitation. instead of saying i have a fair to ask you, can you please find a job for these five people. we've got to change our mindset. and instead we've got to be business partners to these businesses take these businesses are looking for talented people. and oftentimes they will look to our department of labor to help find talented people. and so we've really got to make sure that we are offering to help solve the challenges they face in finding people with particular skills with particular a bit of these instead of focusing on the disability. and number three, businesses want to hear from other businesses. they told us very clearly that businesses are more likely to buy into the benefits of employing people with disabilities when they know that a pure business, another business in the private sector, is already doing it. one of the things we as governors can easily do is bring our business leaders together to

talk apic bout tso they can hear from each other and so they can learn from each other. and insights from the business panels at these institutes reinforced the same thing that we heard from businesses who participated in the fall roundtables and in the nga winter meeting. now, as leaders of these states would've to respond and support businesses better in the future. supporting businesses is one of five practical things that governors can do to advance employment opportunities for individuals with disabilities in our states. and together these five practical recommendations that have surfaced over the last year are, number one, making employing people with visible as a part of a broader state orchestras but that's what i've just mentioned are changing the mindset so it's not about going to ask a favor but it's saying we understand you're looking for people with particular skills, we will help you find those skills. number two, find and support more businesses to hire people with disabilities. number three, you know, it's a

lot easier for us to go to businesses and tell them that this is something they ought to consider when we as states are model employers ourselves. there's a lot of work that we can do to put people to work in our state. number four, we've got to do a better job of helping our young people prepare for an expectation of a lifetime of work rather than the expectation of a lifetime on public benefit. and there's a lot that we can do. that's right within our control. and number five, we've got to make the best use of scarce resources to advance employment opportunities for people with disabilities. most of us come from states where resources are still scarce. there are federal resources we can t.a.p. into. there are also private and foundation resources that we can t.a.p. into. so we get if we design our meeting agendas around these topics. as a result of thes these insti, your state is already hard at work implement in some of the best practices that they gleaned from the beach. for example, we've all reheard that many of you are working to

integrate people with disabilities as part of your overall state workforce strategies. which is fantastic. you a false our destinies are shown to focus more on finding supporting businesses to give people this those a shot. one of my biggest takeaways from all of this is that governors can play an important role of bringing together businesses so that they can talk to each other. it is very powerful for these businesses to hear from each other. i've heard this from a number of states, and governor branstad was just telling me that he is planning on pulling together a summit of these business leaders on this issue. governor corbett did the same thing, and understand it was a big success. as i mentioned a moment ago, we've got to walk the walk. it's not enough. is critically important to reach out to businesses by we've got to walk the walk. we can applicable this those in our state. governor patrick has been working on this in massachusetts since 2000. his state team is working to

develop a strategic approach to take their model employment effort from version 1.0 diversion 2.0. this is in part because the information that his folks gleaned at the nga institute. another example is governor inslee in washington state. he signed an executive order, the second since been i in offi. decided to arrange a meeting out there. on and point people at this was to increase the number of employed by his state government. and for more ideas about things that you can do in your state, i encourage you to take a look at the final publication of the initiative, our blueprint right here. everybody should have come you all should have one accuracy. and it is full of a lot of really good ideas. it's practical. please don't let this be just another report that sits on a shelf someplace. there's a lot of really practical concrete things that you can do. and i believe that each of us focus on innovating at least one thing from this blueprint in our state, and together we can

really move the needle on this very important issue. and with that i very much appreciate your attention today, and i certainly appreciate the support over the last year. as i mentioned, governor to guard cannot to washington state. he was extraordinarily compelling as he was in february with all of us in washington. and i wonder, governor if you're going to just ma be me take a minute to share some of your insights and experience on this topic. >> sure. thank you. first, let me say i really applaud governor kill for making this his initiative. a better bottom line, employing people with disabilities and the first few words really says it all. a better bottom line is something that we can sell to our employers and to ourselves as we look at the state government as an employer but because it's not about helping those who need a hand up, but it's helping all of us, helping ourselves as well as helping our citizens with disability. some of you know both of my

parents were born deaf, and i came to this initiative knowing because of my parents that many individuals who have a disability know more about hard work and perseverance and determination than those without disabilities. those with disabilities have to have determination and perseverance. they have to overcome the obstacles and challenges that most of us cannot even imagine to i also came to jack's initiative knowing that the majority of people with disabilities want to be employed. we all want to be self-reliant and feel the dignity of taking care of ourselves. no one likes to feel dependent on others, if they can support themselves. they want to. they want to support the family. they want to contrary to society in whatever way they can, with whatever knowledge, skills and abilities they do possess. and they want to be seen for the skills and abilities, not their disabilities.

of course this belief was strengthened as a result of participating with governor markell and workshops where i was present. i was fortunate to meet many individuals with disabilities to reinforce the beliefs i had. and really delivered and demonstrate that people with disabilities have a lot to offer. and it isn't about employing people with disabilities in the workshop and virus. that can be part of it for some who can't otherwise be employed, but for many citizens with disabilities, to confine them into a shelter, workshop, is really cheating them of the opportunity they deserve to be out in the workforce in the mainstream with the rest of us doing what we all do to make our society work. when -- what i learned was how much more as governors we can do to help t.a.p. this incredibly underutilized resource. and by doing so what a difference we can make for people with disabilities, and private industry and our respective states.

you know, i'm extremely fortunate to be governor of a state where the economy is doing pretty well. jack dalrymple and i joke, and dave, dave heineman in nebraska, who is going to be the lowest unemployment rate in the nation. just a slip up about nebraska last month and south dakota is not second lowest on the plane breaking the nation. and, of course, that's great because it shows our economy is doing well but it's a two edged sword because you talk to employers in south dakota and what is their common concern now is where are we going to get workers? how are we going to find people we need as we expand and add jobs? and here's one answer to that question. citizens with disabilities can be one answer to that question, and how much more important is that in my state where workers are in short supply to make use of every citizen that wants to work on whether they have a disability or not. we can't afford to leave one person out of the workforce.

i also learned through this initiative there are numerous private businesses that are far ahead of state government and employing citizens with disability. we heard about some of those employees that nga in february at some of the songs. they have recognized resource and the valley of employing citizens with disabilities. i also learned through this initiative that a need to and can do more to ensure that every person in south dakota with a disability who wants to be employed is employed. i quickly realize i have to use my role as governor to provide the necessary leadership to ensure this happens. i can show leadership by ensuring state government is setting the example, not asking for presenting the opportunities that private industry when we haven't done it ourselves. so the first thing we need to do is make sure state government is setting an example. and i'm going to be doing that. i also learned as a re ring toge

business community, that was one of the five points that governor markell pointed out is found in the blueprint that's at each of our seats year. we can get together the business community. we can get together state agencies, people with disabilities and advocates in south dakota, or in our own states, to develop a roadmap to ensure that employment of citizens with disabilities is a priority. it's really our philosophy and our commitment as a state, and to help those private employers see the way to make that happen for them. and i encourage you all to do something like that. last week, i announced the appointment of a task force consisting of 3 39 south dakota, businessmen is represented in individuals with disabilities, legislators, private providers of services to citizens with disabilities, and cabinet sectors from five of our state

agencies. and their job is to develop some specific recommendations that are probably going to be drawn from this blueprint and from our own expenses in south dakota. but show how we can become a leader and follow some of these blueprints that have been laid out by some of you in your states. and take the best ideas when they are found, and adapt them to south dakota situation. so i just want to say thanks again to governor markell for this initiative. when you see the title and you see welcome it's about employing citizens with disabilities i think it would have been easy to see that as a feel-good, soft, easy to talk about, and then really to produce no concrete results. and i have to admit when i first saw that at the initiative on thought, i wonder if that's what it will be. i was wrong. i was very wrong to governor markell, you denigrate job opening my eyes to the opportunity, and how stupid. i should've been one of those

that had therwidest open. but i really thank you for making this your initiative. i know i can do better as governor to make south dakota a better state for all of our citizens. and i want to assure you that the report your initiative produce is not going to sit on my shelf. thank you. [applause] >> thank you. and for those, anybody else who thought this might just be a feel-good soft thing, read the report. there's very good stuff any. very, very concrete spent but i interrupt for just a second speak with yes. >> i want to share with everyone how active you been in this initiative. this was your idea from the very beginning, and like governor daugaard we weren't quite sure what it meant. we have any folks that nga who were not familiar with it. so we went along with you. bot out of a collection have not

keynoted events on this issue and you been given national award, i in fact that i couldn't for you. spirit of the ada award, award from the council state administers, in both we have, the lease on, lease on award. i thought it was right on at first but it is the lead on award. champion equal opportunity oh or. i just wanted to say from us that nga it's been a pleasure working with you. it's always good when you're that active, and you, as i said, where there from the beginning until the end. so thank you. >> thank you. and want to thank the nga staff as well for doing an excellent job. we now turn our attention to health care. and her keynote speaker is jeffrey brenner. a number of you have heard them before. he came, was in washington meeting, to one of our washington meetings and a fantastic job. he is based in new jersey, from

camden, founding director of the camden coalition of health care providers. primary care crisis for patients of all ages. the camden coalition spearheading a number of initiatives that are really designed to address some of the underlying factors that leave patients utah cost forms of health care delivery when more coordinated and lower costs interventions are available. into the governors we just had a conversation about this and our governors only be. i think you will be very impressed by many of the insights that dr. brenner has to offer. he owned a private practice in camden. has experience in implementing electronic health records, running a paperless office, open access scheduling as those firsthand knowledge of the fairest challenges that are facing primary care physician at primerica generally in the current system. he is now serving full-timea

the executor of the coalition. he spends a lot of time meeting with stakeholders and policymakers, including us in delaware. advocating for the models of care that the coalition has developed and has demonstrated through some very data-oriented, data centric results. as i mention he's worked with commuters across the country, including ours, to assist them in developing appropriate kinds of interventions to reach that holy grail of improving care and reducing costs for high risks and high costs nation's. dr. brenner. [applause] >> thank you so much for the chance to come and speak with all of you. it is really an honor, and thank you for a chance to work with the staff and the national governors association. i'm deeply concerned about medicaid. i've been a frontline medicaid provider for my entire career, and we're not spending our dollars will. we could do much, much better.

the costs keep going up, and as all of you know, the cost drivers and medicaid are colliding with other other state parties. we have to figure out how to deliver better care at lower cost. notches in medicaid but in medicare, in your state employee insurance programs, and in the entire american health care system. in some ways the problem is with a problem of success. we can do incredible things for people. but what is great is adequately complex system where many of us get lost in the system. it's not just the poor they get lost in health care system. i bet you have storie stories ir own families to adequate in this room can think of stories in their own family. and many of us will pull strings to get workarounds to our family can navigate through the delivery system. you will call friends. you will call people but, you know, and that's really a testament to a system that has gotten too complex for us to be able to navigate. i wanted to start about time that a few stories. i work in camden, new jersey, one of the poorest cities in the

country. and ironically, or perhaps sadly, it turns out to be a great place to innovate health care because no one is fighting over market share. that if i were in other places or other communities i wouldn't probably be standing and cuk that i'm doing, and in many ways that is identifying one of the key problems in health care. i want to talk to you about a patient in camden, a 52 year-old woman who is spanish-speaking and repeatedly admitted to local hospitals for shortness of breath. ..

one year pre-enrollment was beginning to work. she had $7,045 hospital bills through the hospitals in camden and $95,000 in payments just for her hospital care to go back over and over. she had 55 totals saved in hospitals and a one-year period. after we began to work with her she stopped going because she did the hospital. she didn't want to be there. let me introduce you to work. she gave permission to tell her story. her name is lillian and she's here with her diploma as she worked with us for 90 days in a program that we run. we meet patients at the bedside. we go to the hospital bed and say i bet you don't want to be here anymore and most of them say absolutely i'm sick of the hospital and then we follow them out of the hospital and visit their home. we go with them to the primary

alre officto the spec office so their data driven intervention. we collected data from all hospitals and week up with a list of everyone thath been admitted to the local hospitals. but at tremendous amount of local sharing. the people you see here were volunteers that worked for this whole year for teach for america and they worked as coaches in the field. and behind them is jason, one of them nurses. it turns out that a lot of this work we don't need more doctors, we need more committed nurses and social workers and more young people on the front lines knocking on doors, going to people's homes, and helping the patient navigate our incredibly complex challenging health care system. her story is that she and her family were overwhelmed by the ventilator. they were terrified of it if you can imagine what would be like to live hooked up to raise and a leader. they were driving her to the hospital over and over and be

convinced the insurance company to let her go to a long-term care for a while to get trained how to use the ventilator and then the health care team with your primary care provider and she hasn't been back to the hospital. there are certain people who like to be in the hospital. if you are homeless in camden, if you have a flat screen tv and three meals it's probably a good thing. but there are people that don't like the hospital and they ignore them. 25% of the elderly medicare patients are readmitted to the hospital within 30 days. that is an absolute failure to our seniors. people are being thrown off a cliff when they are discharged from an american hospital because the medications are changed and they have a follow-up and they are overwhelmed by what has happened to them. another case if you think this is just a story of poverty this is a middle class woman and she

was in a hospital that is part of a hospital system that is completely connected electronically so the doctors have access to the records any time a patient comes back. since 1996 this patient had 102 emergency room visits, admissions to the hospital, 140 capstans and 73 to the head. this is one of the cat scans. that is actually enough radiation to increase your cancer risk and this is a woman with a master's degree. this is a failure of the american health care system. and that is really what i've learned and begin with the outlaw years of super utilize terse. that is people go more and more often and we ignore them. we don't have a system built to meet their needs. and it's a very expensive system as well. i want to tell you how i got started in this. this was my dream to open an office in camden, and it's

currently boarded up and closed as there are many offices in the city of camden and frankly many of the primary offices all over the country. in my time in camden my rates kept getting cut and at the same time we built new wings on the hospitals and expanded the size of the emergency rooms and i managed to get a hold of the data, this is business intelligence from the local hospitals. people like me never get a hold of the the like this. this is a project by a medical student. let me show you what i found in the data. these are three competing hospitals. those of this would be like target and wal-mart giving their business intelligence and letting you combine it together. so this is rare to be doubled to put a data set together. what we learned from this data set we put it in exile and that didn't work. we still use microsoft excel and analyze this data. and we learned half of the population of camden uses an emergency room or hospital.

324 times in five years, some and 113 times in one year. we the public spend $108 million a year for camden residents, a city of 79,000 people, to go over and over and over to the hospital. now, our health care system in america we spend twice as much as every other country. let me say that again. we in america spend twice as much as every other country on our health care system. we can do amazing things for people, but i don't believe we are getting our money's worth. a $2.8 trillion, 18% of our economy. but i can't get my head and not a member that big. i know what that will buy. and for one person of that, a million dollars, you could buy five of me. there's only 15 primary care offices and camden and they are getting bored it up. we have to reinvest that money on the frontline of care rather than building more hospitals, extending emergency rooms and

buying more scanners. the problem in america is we set an incredibly high price if you scan and hospitalize. and we set a very low price to talk to people. the market has responded. if you look at every major city, the claims that are about building new wings and extending hospitalthet has responded. if you overpay for something you will get too much of it and we will eventually get a bubble of hospital bills, and we will destroy the other part of the market of being able to talk to people come accord made their care, deliver decent primary care. the most expensive patient in camden had a 3.5 million receipts, 30% of the cost go to the patients, 14% of the patients and 90% of the cost goes to 20%. unless you can cut them off and hospitalize them we don't talk to them, we don't help them navigate through the system and once again that's not just the

poor, this is your grandmother, your family members, these are disabled people with disabilities. the number-one reason to go to the emergency room as head colds. we had 12,000 visits for head colds and ear infection and on and on. these are primary care problems. i can tell you all of us are paying 150, 300, $500. these are my patients lagat 19 to $35 if they were seen in my office that we were paying ten, 20 times more if they were seen in this setting. if you pay too much for something you will get too much of it and that is what is happening in our health care system. patients using emergency rooms in america are injured. it is a message that it's the and injured driving it and medicaid is an empty promise. you call for an appointment, leave the message, no one calls you back and that's before the expansion. it's going to get worse as time goes forward. this is mapping out of the

claims on the map. fight years of data and the home address of every resident and this is only nine square miles in the community. 6% of the city blocks, 18% of the patients, 27% of the visits and 37% of the cost. this is just the emergency room and hospital care. it turns out all over america not just in camden, they are collected in the buildings and many of which you are funding for state funds and federal funds. these are the two most expensive buildings in the city. they are beautiful cities with management. they're mostly dual eligible. these are disabled seniors that have 12 million in payments for care to go back over and over to the hospital. the building at the bottom had 300 patients. it's a nursing home. 300 at 15 million in payments to go to the hospital. we mapped out data allf now pcic

buildings collecting high-cost patients. in the state of maine with the help of the governor and his commissioner we mapped out three counties. as you get older and more disabled it's hard to live in the middle of nowhere. they didn't want to show it to you but these are hot spots of complex patients that gets down to the building level that we even in the rural state are collecting high-cost patients into buildings and the question is the service delivery innovation to we want to move those people there now or bring care to them? i want to closed with a really important announcement the fountain of youth has been discovered in pennsylvania and it's not in florida. this is a very important study. this is a randomized controlled 1700 patients over a ten year

period. we will never have a bigger study to look at the population health and care coordination. this was part of the medicare chronic care demo and in this model is a nurse going every week or every other week and a specific data driven high fidelity model going out and a visiting elderly medicare patients and the heady 25% lower risk of death from getting a visit every week or every other weekend over the tenure period the mortality benefit didn't taper off. let me repeat, 25% lower risk of death. you have to go back and medical history to find anything with that impact. when we give you drugs and treat your cholesterol and blood pressure it's a few percentage points of the impact. this is a stunning impact you have to go back to the days of polio and hiv to see any kind of impact of this magnitude. at this rate tell you would be clamoring for it and the stock

would have tripled. the most interesting part of the study is the highest risk patients had made a 50% reduction from having a nurse come out and visit them every week or every other week. i think what the story tells you is you have an excess mortality in the world and the fragmented uncoordinated system of 50% because the nurse coming out of visiting your grandmother is enough to drop by 50%. something is profoundly wrong in america's health care system. people are overwhelmed and confused. it also had the highest risk cohort of the hospitalization and 22% says the total cost to medicare. here's the sad part of the story that medicare as a demonstration project has tried to pull the plug on this project three times. most recently, that they actually dismissed the patience and stopped seeing them and so there was an article in "the

washington post" calling attention to this better care at lower cost doesn't have a constituency. medications, medical devices, hospital beds of constituency. so the blockbuster on the health care system we have to many hospital beds in america. we have a bubble in hospital technology. and we have to help our industry make a shift. there had to have been a moment in blockbuster video on a young executive cannot and said to the executive leadership people are starting to rent videos online and you can imagine the leadership say no, no we have internal data showing that the public every friday night spent one hour and 50 minutes in the stores. the story of america is that capitalism creates and

and the industries become obsolete. hospital beds are becoming obsolete. we don't need all hospital beds we have. we have, you know, many of use are using your authority to support and back up and underwrite those bonds. you are doing more than cutting for these facilities and every corrine that goes up and ribbon cutting is an invisible tax on your employee benefit program and on every business in your state. we have too much of this. i want to make a couple suggestions to you that i believe this is shifting to the state level that you regulate these facilities and the providers, that everyone who needs to be here to fix the american health care system is right here in this room and governors can take the leadership and states can take the leadership. all of the states that inspire me to happen at the state level. you can use your leadership to agree frame the issues and still

talk about this in different ways. keep it simple. what i see over and over is we often have carved out an hour state-run system. so you will be moving into managed care and every different constituency group says no, no we don't want to go on managed care. and you end up carving out, and all sorts of things and that's the point in your staff they can't run the programs and simultaneously run contracts, fee-for-service, managed care system. i would encourage you to be all and all out in the system and run it well. i think arizona is a wonderful example of this. my understanding of it is they are all and. everything is all in and as a result, the actively manage their contract. this is a chemical problem if you to privatize and move to managed care you have to manage the project. you can't be a passive purchaser. we need the telephonic

management. nurses and cubicles aren't going to have any impact. we are spending a lot of money all over the country on the case management models that don't work. there is no evidence for them. we have to free up the data and use it differently and we have it locked up in so many different governments all over the health care system. look what happened when the doctor got a hold of the data and imagine what would happen if we freed across the country. so there's nothing if they tell you that they won't let you free of the day that they are wrong. we have to test innovation. where do i not on the door in state government if i have a good idea and i've proven that and it's hard to figure out how to navigate the state government when you have a good idea.

you need a pathway of how to test early ideas and made a state ids. it's hard to figure out how to innovate and to bring ideas forward. the last recommendation is to push accountability down to the community level. this is the basic concept of accountability. new york has some of the lowest crime rates in the country and he pushed accountability down. he made the precincts the unit of accountability, the denominator and when he made the precinct captains the affordable manager we don't have accountable managers when there are failures we don't know who to hold accountable. you can't hold up your managed care accountable because they are too far away from the point of care. we have to rethink about how we push accountability down to the community level. health care is a local problem and the fixes would be local. we have to figure out if you were going to procure through

managed care you have to then actively manage those contracts so that they are pushing accountability down to the community level. if the doctors won't play nice with the hospital's or the nursing home or the locals you will not fix this problem. thank you so much for the chance to come and talk with you. i welcome the chance to take some questions. [applause] first of all, doctor i think this was the most exciting presentation i have ever heard. i just went through a very tough legislative session where the house bill association threw everything they had that our effort to try to come up with a healthier iowa plan. so your remarks really resonated with me. and that's one of the big challenges i think we have as

governors is how do we overcome the tremendous amount of money and clout in connections they have because you have some of the best leaders in the community serving on these hospital boards. they have a tremendous amount of resources. they are nonprofits, the but they are making a lot of money and building all kind of buildings. i think when you said makes a whole lot of sense. and you as one family practice position have put together a really strong case. and i would be interested in getting more information. because we did get our health and wellness plan approved. at the bottom line for the hospital is the want to expand medicaid, give us the money. and i guess what you have given us is an indictment that the present system hasn't worked. it's gotten worse and worse results. my goal is we want to become the healthiest state. how do we get there and i guess

your approach makes the most sense. i would like -- if there is more than you can add to it obviously i would like for you to come to iowa and if you can do this in camden new jersey -- and i've been there and visited. i have a great respect for what you've done and i would be interested if he would get more insight into what the governors can do to overcome the tremendous clout and power of the hospital and the previous job as the president of the medical school we had the same thing. we had a chronic care consortium and we finally get to the point we had a plan to hospitals would bail on us because they could see that it was going to hurt their bottom line. the first step on this is starting to talk honestly. there are people that run hospitals and they are in a tough spot.

i actually feel an enormous amount of sympathy for the chief financial officers and the ceo of hospitals so we need to shift the dialogue. the most dangerous thing in america is an empty hospital bed. and mt cat scanner, it's a cardiologists with an empty spot. so that's the capacity problem. we had created an enormous amount of capacity. 18% of the economy is health care come 11% is housing and 7% as finance. the state budgets for psychiatric hospitals and a tour predecessors because of lawsuits and other things and he topped the psychiatric hospital will and spent 30 years cleaning up the mess afterwards. we have to deinstitutionalize health care and we are going to have to have transnational money to do that.

ready set go merge and consolidated. the move to the global budgets as fast as possible because right now the economic model was the same as the hotel industry and the airline industry it is a volume based game. the third thing i would have to do is shift the language about this. health care is a very healthy market. it doesn't follow any of bill walls of the market. it's much more keen to the utility. how many do you want in iowa city?

how many swedes do you want. the problem is that by allowing them to compete and forcing them to compete with a rectal bleeding is combining the limited market share of brain tumors for people that need open-heart surgery and smaller and smaller groups and it turns out the best way to destroy quality health care is to lower the numbers of the procedure that you are doing. so, ironically here competition divides the marketplace and fragments it to the place that the delivery is much more lower quality. so, this is much more akin to the utility. you want one hospital doing amazing open-heart surgery what five of them doing mediocre. so this is a monopoly problem. we don't have the right flank which to the we failed on this on the railroads we tried to have them compete and they all went belly up and we are going to do that in the health care industry as well. we have safety net hospitals in the inner city.

much different problems than suburban hospitals. all of our meeting to become major teaching hospitals in chicago have billion dollar construction programs and they just about finished them. then you have the safety net hospitals in the same city and neighborhoods which are having severe problems. so how do you go to the model for these local safety net hospitals that really are in dire straits. >> if it is up you would need a third less hospital bed. so this is like the closings. we have to buy down the capacity and forced the mergers and consolidations and begin to close institutions. the sooner we do that the better off we are because when they go

under they go under have has of late. they can't make payroll and they call you up, people are dying in. it is a mess when you have had hazzard closures. the best thing you can do is to push the merger consolidation. but if you do that and you keep the existing system, the price will go up to it at the same time you have to move them towards a different model that is moving towards other global budgets. let's think about a lot of discussion about how the health savings accounts and using the competition in health care let's be clear the point at which you are the most extensive you are on your way to the hospital with your wife who is in labor at 29 weeks and it ought to have a premature baby. you are not a consumer your on the way to the nicu with your recently premature baby. you are not a consumer. you were diagnosed with cancer and you are not opening consumer

reports to see what's the best value in the institutions. so health savings accounts are interesting and compelling ideas that you are talking about essentially healthier people but the people the most expensive you are 85 in the last years of life. you are not in the position to be consumer at that point. >> a quick question first of all. one of our biggest issues in the states is so many of the county's especially the rural counties and the employer is government and hospitals. the argument the hospital's use is you cut employment. they presented the jobs argument to us and as time went on when the unemployment is high. we see a lot of consolidation of hospitals. the issue is they are cherry picking the consolidation based upon where the least amount of medicaid or medicare patient suggest because they are looking for the people on insurance.

the people that can pay the bill. how do you determine that where you have the consolidation because the hospitals are using a business model to consolidate not necessarily a community model or health care model and that is -- understand the business equation. how do you deal with that disconnect. you tell us to consolidate but some will be left out because of the cherry picking. >> it's a great question. maryland solve this problem and we had a solution in 35 states all over the country when we had an economic downturn in the 70's what that meant is that regardless of whether you are a medicaid patient or medicare. right now what we have done is set a payment very low for

medicaid. do you really want that -- i love marketplaces and competition. do you really want people fighting over commercially injured patients with brain tumors? is that the kind of competition that we want? so, weedy regulated the hospital and the only state that still has it is maryland. what that means is regardless of which pay here you go to the door of the hospital and they are getting paid the same amount. so i think we don't want this abiding up the marketplace is to decrease its dynamics in the marketplace. and the only thing they would solve this would be global budgets for the region, colorado has done that so this is your budget. you need to get your act together and find out how to spend with in this budget. it would be regional.

you could mathematically safer this region at the state of delaware you currently spend this much and then you are going to go up 1% a year and if you go above that you are not going to get it now you have to figure out how to fix this it's hard at the state level to tell people to play nice. you say a few locally can't figure this out, then you are going to go belly up. >> given what you said about the installment you said it's not the hospital's fault is just what those are the rules that have been made. so how do you get them forcing the consolidation? how do you redesign if the need of a third less hospital bed it's good for everybody except for the hospitals. so what is that strategy?

>> it's going to create different jobs. instead of being a floor nurse you will become a visiting the home of nurse and go to people's homes. so, you know, what this does is shifts to a whole new category of jobs instead of being in the hospital be on the hospital and instead of the hospital system being a giant hospital having very small out print you have a bigger output in a much smaller hospital. these are just economic shifts. at some point the steel industry needed to shift its model and dewaal as governors can play strong leadership role in your rhetoric and in your actions to send a signal to all of them to begin shifting. interestingly when you go to their conferences they wouldn't disagree with me. they would agree with everything i'm saying and they are talking among themselves but they are all terrified because they have 1 foot on the fee-for-service model and they are getting all of the signals over the value model and they don't know how to make the transition so it's a

classic economic transition problem and a business model transition problem that you can be so the program could be a leader in this. you're medicaid program could be a leader in this. >> what happens in the consolidation that could be consolidated away are the lowest cost at the lowest cost hospitals because in the world were the strongest survive the strongest happen to be the ones with of the most commercial patients -- >> that is the episode of care. the episode of care payment is right now we pay for every little piece. what you can do is say for 40 days before for the hospitalization and then all of the rehab afterwards, six weeks afterwards we are going to give you one price. but we fragmented the market so much it's hard for one to take the lead on that and that's why the government can play such an important role because you can get out in front and say our medicaid plan is going to play an episode of care we arlington after a global budget and the

rest of the marketplace will follow. you will have to pull a couple letters at the same time and change how the payment happens. >> of the global budgeting you are seeing the region. obviously, from hawaii. so the phenomenon that we have their is a separate islands and the majority of the island is concentrated on one island versus others but doesn't necessarily fit so easily. but the urban and rural construct does. how do you differentiate or maybe that is the wrong way to put it. how do you incorporate into what you are suggesting the idea of urban versus rural because the capacity in their floral area where you have a very high percentage of older people in hawaii right now and in one variation or another in all of the rest of the state's it is

increasing. and the number of those people that are living longer is increasing. and therefore, the question of expenses at the latter part of life rather than extending life and the expenses associated with it are just exponential. so how do you take into account the question when you're talking global budgets and consolidation and more utility reverses the free market how do you take that into account in the rural areas where they simply do not even have the basic capacities and you have to transfer people geographically in order to get basic services especially as we have an aging population? >> there is a wonderful model in alaska. the interesting models are all in the middle of nowhere.

they are not in the centers. they are in south-central alaska which is a native american system in the middle of nowhere in alaska. it's the system in pennsylvania. its camden who jersey. it's at the edge of the power structure. so i think the answer to what you are describing on the the the is a fairly rural area every week, every other week in the stricter the intervention was enough to keep people out of the hospital and also begin to have the hard discussions. they don't have to ration health care. they have to deliver great health care every day that's truly a patient center and the rest will take care of itself. if you explain to them what's going on and build a relationship with them all of these other discussions take care of themselves. >> one further element. can you discuss for a moment the

relevance of hospice care in the context? >> extraordinarily important and a big part of the outcome in that data set is the connection the made with hospitals and having a long-term relationship with of the whole family, having the time to sit at the kitchen table and build a relationship with someone and then with all of the family members to be about to have that discussion, you can't do this in a ten minute primary-care office. when you think about what we have, we have the seals model in primary care of the highly paid professionals running from room to room in ten minute meaningless encounters. that is what we are paying for. >> does the house this deal include the patient centered health care? i wanted to have that input patient centered hospice.

you don't necessarily have to go to hospice. why can't hospice be in home if you were visiting people? does that make sense? >> i think hospice is that. one of the patient center services and america is hospice and many patients die at home, not in facilities to be a but the core mission of hospice -- i think hospice is way out in front of us we just don't use it. a lot of people don't get referred to hospice until a couple days before death because the doctors are uncomfortable with having those discussions because you can't have a hard discussion in a ten minute office said -- visit. >> with respect, is there a difference between the for-profit hospitals and not-for-profit hospitals and is one group getting it faster than the other? >> i think that is a broad

question, to me it is immaterial. there is good behavior and miss behavior on both sides and there's an argument about managed care versus fee-for-service. someone has to manage the risk and someone has to pay claims. just do it well. someone has to run the hospital. i don't care, just do it well. i think we had the wrong argument all along which is you can make any system work if you have the right expectations, if you manage it well and have transparency of data, public reporting the the. >> but it seems like the for-profit hospitals are taking the lead on consolidation currently. >> local hospitals have local boards and local business people and local attorneys. nobody wants to give up local control. the problem is these tiny little

hospitals don't havea professionalism on the board to really run a complicated hospital. so when i go around the country, the large systems by interact with are doing incredible work that you can't do until you get a certain size and scale. >> can you give us a little primer on the language of consumer health care that would help move the ball down the field? you talk about the example using blockbuster. consumers also really made that trees as to whether or not to spend the one hour and 15 minutes or figure out how to do it some other way if it required a little work. but it seems like we are talking a lot about the business obviously in the systems and what not. but ultimately you are going to need consumers to be empowered inside of the system to help drive decision making to the next place. what sort of language for

discussion -- >> regardless of the level, some of the most incredibly of empower consumers in our world are people that are sick or hurt for a devotees waiting on the lines or decided which a doctor to try to see or which therapist or all of the various work around that you talked about before. what sort of language do you think could be in powering and motivating to the individuals that will assist us in getting the market driven kind of solutions that we are talking about? >> its skepticism. there is a study the was looked at. you get a scrape on the knee and the average patient is 40 to 50 so overweight. they had some swelling in their knee and pain and they go to see their primary care provider and the eventually get to the orthopedist and it shows the terror in their knee and they did a study to fid if they

do a change in the cartilage works, what they did is you got randomized to either having the usual procedure or to having the scope they put it in and to get out while you are asleep and you have no idea which group you are in. they got that at the same rate. we do 650,000 a year. what happened is medicare set a high price and everyone raced to do it and we built the capacity. we built billboards and then we ran out of sick people. then we worked on the continuum to less and less of people said this was a brilliant thing. the fact we could put a scope and and repair your knee was incredible. if you were an athlete, 25 and you have a tear, it's incredible. if you are 250 pounds and so-years-old, it doesn't work.

is because if i took any of you out of work for 12 weeks, put you in physical therapy, told everyone in your house to take care of you you would be healthier at the end. that's why they get better. [laughter] so, there are examples all across the health care system that we are doing that doesn't work and hurt people. so, there is a famous study looking at angioplasty, and if you have an acute heart attack is a miracle. they did a study where they took a heart disease and randomized you to medicare management controlling your blood pressure, controlling your cholesterol. they got that at the same rate. what happened is we went out of heart attacks. then we started with 90 and 80% blockages, 70% blockage is because everyone wants to do it. we built the wing. we hired a local cardiology group and bouvier on board.

we use of legal technology so it's that conundrum we are the most amazing health care system in the world because we can do all this stuff for people. we are doing it unnecessarily. >> yousaf on an issue all of us thought about and that is unnecessary procedures. doctors like yourself for the most trusted in the communities. everybody looks at the doctor with great respect. you see take care of me doctor. i don't feel good, tell me what to do. we have too many scopes' being done that may be inappropriate, too many hysterectomies we've heard that in the past. doctors doing preventive medicine because of legal issues and of liability concerns to but

how can we get to the point that the doctors are doing the right thing for the right reasons not just incentive. they are getting another procedure and get paid every day. that is a concern some half profit, not for profits. can we trust the doctors and hospitals to do the right thing for me as opposed to being motivated by something else? >> i hate to say it but we have destroyed the american health care profession and its professionalism has eroded like many of the fields in america. who sets the prices of health care? there is a committee that's gotten a lot of publicity lately and it's of the american medical association. they decide the relative value of the price for everything in health care.

there ar and recommendation to congress about how prices for medicare should work and 90% of the time they've taken the recommendations and of the committee of doctors are setting their own prices and the cofids attached to the prices are copyrighted by the american medical association, you can't download that and lookt so the way that medicare and our country pays for all of the doctor tells is copyrighted by the association that sets its own. that is a stunning thing. if you look around for room there are three primary care doctors and the rest specialists and they get out voted every time. so they set a very high price to cut the scams. a very low price if you talk to anyone. then all over the health care system the insurers negotiate a percentage of that schedule so when you go to negotiate with

aetna they say we will give you 110% so it is built into that system and promulgate everywhere and it goes back to the origins of medicare to negotiate if they agree to the usual customary charges and incredible by es is built into that fee schedule will be. you could correct that in your medicaid and employee system and send a signal back up to the federal government that you're not going to tolerate the by a cs that are built into that schedule. >> one last question. >> [inaudible] so many of our physicians and our hospitals practice protected medicine because they are afraid all the time that if they don't do something, if they don't run a test or take advantage of everything they've been taught,

we will have those lawsuits coming upon them. what role does toward reform play in all of this? >> we have a perfect study in which 50 states you could track the health care costs and some states like texas was that those caps and they haven't seen the lower trend line because they set the cap so it's true the doctor's practice defensive medicine and and it's true the system doesn't work and we need changes. that's true but it won't fix the trucks cost trend because of an unnecessary capacity it's because the rationality in the system and because delivering too much of the wrong kind of services. so, you know, you have the ama system that's toward reform and you can say yes you're right the system needs to be fixed but that's not the answer to the cost trend. >> thank you, dr. brenner.

that was interesting. [applause] >> with that, i want to ask our executive director to give an update on the work of the association and assisting the states to control health costs while maintaining quality. >> you probably won't be surprised to learn we are trying to emulate what he's doing. we actually have an agreement trying to utilize his techniques. many of you know that we have just awarded seven states and the projects the next 12 to 18 months to see if we can take the techniques he has developed and applied them to the state to see if they can be replicated and then scaled up. we don't know the answers yet but we think it will work and we are working with those states. in the meantime we are working with pieces jeff has done to make them available to everyone like software to identify the most expensive patients.

we can provide that to you for free. so we are looking at other pieces of this that we can replicate and distribute as well. work force. we mentioned how much we are working on work force. many of the folks that work in a community medical personnel we don't really have a definition of what the community medical worker is and we don't have a training program that's recognized for a certification program in most of the states so there are things that get people to replicate or at least use some of these techniques. we are also working on the payment system reform. what does it take to gather the payments together the way that it's been done in various parts and pieces of the system to be able to then partition them and that brings up an initio we haven't often dealt with which is antitrust. it's ironic but nonetheless true they are not really competing for market share.

yet the department on the federal trade commission was quite interested in what they were doing and new jersey passed some walls to codify what jeff was doing. the regulations are written and they were demanded to look at them and they took changes negotiating in the state but as we get consolidation whether you think of it as commercial populations or monopoly positions or working with them like jeff, the trust is granted be a much more important issue across the health care system so we are trying to work to see if we can get some clearance and guidance on how they will think of at least these projects. so all in all we are going to work intensively with a number of your states to see what we can do to replicate jeff's work and we will have parts of the system we can offer to all of you as we move along. so part of the answer, governor, is can jeff come to iowa? i'm not sure he can, but we can and we would like to do that so

we are going to be duplicating this work. we also have a compendium of best practices. what jeff talked about you can actually replicate. whether it's for your medicaid patient or whether it's for your employees and retirees. it works like this and so it's about eight chapters of pieces of the contracting process that you could employee to require transparency or look at other aspects. the data reporting and those kind of things. we have a couple contracts that have much already. arizona was one and tennessee was another so there will be full contracts as well but we are also talking about written chapters tell you set up the prices and risk that just. you don't need to do it all by regulation. you can do a fair amount by managing the contract. we also do work of course in the specific health areas. it's important to all of you of

course and we have been working to see how we can do better. as you know half of the births in the country now are financed by medicaid so you have a big interest for the financial health concerns of health health affairs and the state's. and we continue to work on that as well. we struck a deal with the institute of medicine. they are going to begin holding some statewide retreats. the basic notion is that there will bring to the state or within the state the health care side of the state and governors can bring the political policy side of the state and essentially spend a weekend in the room talking about what the barriers are on the true reform and try to get a better sense of the dancers. we aren't going to answer the questions to be sure. we might if we are lucky that the process is we will find at least some of the big

impediments are and what questions are and we hope to be able to jump-start some of the reforms you have in the states and the parallels that you are doing with the states and other things. the test case is going to be the state of wisconsin in october the first retreat here. if any of you know his enthusiasm and when i talked about this he said let's do ten states. i said let's do one. let's see how this works. i think it will be worth replicating and it will be back to you on whether you like us to do this exercise or not. so we are looking for the top level all the way down to some of the things jeff does every day to see how he can replicate this work and expand it and make available the tools and the knowledge of how to reform dealt care system. you all have data come a dedicated data and if not you should get it. you have data on the employee

populations and on your free ty cherry populations. the largest purchasers of health care in your state so you can move a lot of material around. as i had you back in february and the states have many letters to pull you control the entire health care supplies you have anti-trust powers and purchasing powers and regulatory powers, by deploying those in that way is coming you can actually change the system with some liquidity. so we are hopeful to be able to have 24 or 25 of your governors of advisers in washington earlier this week to begin getting them to talk to each other as well. it was the first time we had the health advisers together at once and begin the discussions and sharing what they are working on that it's important to learn what we have to offer them and important tough for them to tell us what you need. we may not have guessed right in some cases but if we can take a

successful experiment and test in other places to see how we can adopt them to go through state and local health practices, we can begin i think to advance. some of you are already testing out of the models and as we work our way through this we have other models to offer as well that we can have to pass. the whole point of the health care exercise is that you have a lot to do with it and if you will decide to do so we will help you try that. at the governors have a lot of say over how health is delivered in your state. so we stand ready to help you with that. >> thank you very much. we are going to be in national next summer for the 2014 summer meeting. i want to ask the governor to come. >> if you all come to an ashbel i promise not to sing now.

[applause] if you heard me you should have clapped louder. we are excited to invite you to national 2014. next summer july 10th through the 13th. everybody knows it is national music city and we intend to entertain you appropriately with world-class musicians and we will go to the auditorium, the grand ole opry and the country music hall of fame that music is more they've recognized national as one of ten cities you should go to in the world before you die. since the next closest lummis paris fi suggest you come to national now. they named it the tastiest and most cool city and rolling stone the best for music and even "the new york times" said it is the it city right now to do so i can promise you you all have a wonderful visit in national and the discussion that we just had,

more hospital beds are managed than any other city in the u.s. and you can come and decide for yourself if that is the impact on policy pivotal summitry hundred eminem sifry de and sell a little jack daniel's whiskey along the way. we have a whole lot to entertain you. for those of you that would love to think well i can't check out the politics of tennessee and some of our space friends might say it feels a little red for me to go. we are going to have dinner one night. andrew jackson may be the founder of the democratic party is home and there will be two things the republican or democrat will reassure all of us that nothing has changed. his home contains more items and personal effects including the newspapers that he marked up every night to give you a great reassurance that nothing has changed in terms of politicians views of the media. his remarks are fairly blunt. i will put that way. the second thing is you can note

about the jackson the politics just recently turned nasty when jackson went into the last days at his home and someone came and interviewed him and said do you have any regrets and they were thinking this was his chance to be a statesman because he's long since retired from the presidency and he said i wished i had shot calhoun and hong clay. calhoun was his own vice president. regardless, we promise you an entertaining and educational time and we look forward to seeing you next july and national -- in nashville. [applause] >> all of the fellows know we as a wonderful relationship with our fellows and we are very much appreciative of their commitments to a nga and working

with all of us. as many of you know, this program really facilitates the exchange of ideas. in many ways they are partners with us in terms of improving public policy and we want to take this opportunity to recognize a few of them. i'm going to ask the governor to join me up here. governor fallin is the chair of the center for best practices and she is going to help me recognize some of our long standing companies. this year marks the 25th anniversary of the corporate fellows program. the first one back in 1988. back then there were a dozen companies and today there are more than 100. one of them has been a member since the very beginning and today we recognize a member of the nga corporate fellows program that is at&t. we are very appreciative of the partnership over these many years. [applause]

and i'm going to ask wayne of at&t to join us here. now you can applaud. [applause] >> i'm going to assume -- who are these? that's great. ..

we are very appreciative of them as well, and i know that all the governors join me in expressing our gratitude to them. [applause] >> that concludes this plenary session. committee meetings are starting soon and we look forward to seeing all of you over the next few days. thanks very much. [inaudible conversations]

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[inaudible conversations] [inaudible conversations] >> and that many of the national governors association happening here at the wisconsin center in downtown milwaukee. just a couple blocks west of the milwaukee river. they will be here throughout the weekend. we will bring you more national governors association meetings saturday and sunday on our companion network c-span on

saturday 10 a.m., transportation secretary anthony foxx and the chair of the house transportation committee will be talking about infrastructure and then at 2:30 p.m. on saturday eastern time, the states integrating into the global economy. we will carry this on into sunday, the last day of the nga meeting. 12:15 for a talk about cybersecurity. all of that coverage on our companion network c-span throughout the weekend. earlier today acting irs commissioners testified on before congress and we will take a look at that in just a moment. >> but it's been almost three months since lois lerner had a

question asked where she told the world that this was going on. and we have been asking ever since that happened for lois lerner's e-mails. and you guys won't give them to us. now, that's not redacted. we just, we just want the correspondence from the person at the center of the storm, and you guys don't give it to us. it seems to me that's a couple hours to get $1500, why can't you give us her enough? >> i don't know that that's the case. [talking over each other] >> we should clarify that. in fact, i received a letter recently which i attached an e-mail from lois lerner that we produce. so we are producing these e-mails. in fact, when you make a specific request to us -- >> we want the e-mails from anyone at the irs, corresponds with the white house. why can we get that? >> we have looked at that also. and in some ways, in some searches we came up with zero, no e-mails between the individual and the white house. this is the point i'm trying to

make. if you have a particular request give it to us. will move higher in the priority. >> why i think we -- [talking over each other] >> i don't know. two things about william wilkins if i could. one, i think today or this week we are producing come you made a specific request and as part of our cooperation, if you want to put something in front of the line please put something in front of the line because that will help us. the other thing about bill wilkins is we've offered bill wilkins to be interviewed by this committee. last week we made an offer. it's a standing offer. at this time or staff has not taking us up on this offer. this is not about obstruction. this is the bout offering as much information as we can and the fact is that i know you fact is that in the above question about bill wilkins. we want to get you those answers but we've offered him to be interviewed by your staff. you haven't taken us up on that. >> i want to be clear. every single e-mail of lois lerner that we've asked for, units into a?

>> i -- no. but we provided hundreds of her -- >> but speak this is a process. >> no, no, no. it's pretty simple. you go to their computer and to get her e-mails. >> it's not that simple. >> it shouldn't take very much. >> the challenge that we have -- >> a little bit ago you said you did send us all the information. been asked to the question was at every single e-mail from a lois lerner, and you said no. so which is a? did you send them all or not send them all? >> we say many lois lerner's e-mails but -- >> that's different. you've got to be square with us. we want every single in the from lois lerner. we want every single correspondence from bill wilkins and any correspondence between the irs and the white house. you haven't given it all to his. >> here's the answer if i could, which is this is a process and we are providing information on a rolling basis. we are getting as quickly as we can do you. if you have a specific request will do our best to put that off

the top of the priority -- >> we want every bit of correspondence from lois lerner, and you won't give it to us. here's the later broke the story with a planted question. here's the later took the fifth. here's the lady was at the center of the storm come and we want every bit of e-mail from her and you won't give it to his speed i will take -- >> you've had three months. >> i want to be what we are committed to be we're committed to rethink everyone of her e-mails and providing the response. some of it has to be redacted, 6103. some has to be reviewed for relevance and -- >> why would lois lerner have 6103 information in her e-mails? she's a policy person. >> it might be very normal for lois lerner you know someone inside the irs spent let me ask you to do this. when you go back to the office today, can you tell those 70 lawyers amongst the 16 are get at the irs, can you tell them to

fos on one thing? every single bit of correspondence for lois lerner have sent to anyone on the planet, we want that information given to this committee so we can get to the bottom of the story. will you do that? >> i will go back and ask the team to prioritize that over other document request that we received because you've asked. that's part of the partnership. >> the president wants to work hand-in-hand in congress and you want to get to the bottom of this. why wasn't that done back in may when this story broke? here's the latest taken the fifth approach us with a planted question who tried to blame it on to rogue agent. is a lady at the center of the store. why wasn't that done the first and you came on the job for you said, you know what? here's the lady at the center of this whole thing, let's get every bit of correspondence and let's get that to the committee. if the president wants to work hand-in-hand with congress to get to the truth, i would've expected that be the very first action were taken, mr. werfel, and we are three months later and you're telling us in this committee we have only send you

some of lois lerner's e-mails. why wasn't that done day one? >> i think the process of -- >> don't you think the american people would've liked to have that information from day one? >> a couple of responses. lois lerner xenos are on the top of our list and looking -- working through it. >> that's not, we want them and you want an inmate. you still haven't gotten into us in august. >> we have produced a lot of information. she is highly relevant to your investigation. >> you can watch the entire hearing with acting irs commissioner tonight at eight eastern people have it on a companion network c-span. the pentagon says more than 83,000 prisoners of war and service members who are missing in action from world war ii, the korean war, the am and the persian gulf are still missing in action. yesterday the senate government affairs committee held a hearing on soldiers who are pow or mia. and this is about an hour and 20 minutes.

>> this hearing will now come to order. i apologize for my cold. i will try not to sniffle or cough into the microphone too much today. we are here today to review the department of defense's management of pow/mia accounting. our nation has made a commitment to service members and their families that we will obtain the fullest possible accounting for the missing and recovery of remains for those who died serving our country. today, the defense department estimates that there are about 83,000 missing u.s. personnel from past conflicts including world war ii, the cold war, vietnam, korea, and the persian gulf war. over the last five years, congress has appropriated nearly $500 million for this effort. in 2012 alone, this amounted to over $132 million, approximately

$50 million more than the previous year. these added funds were intended to ensure that the department had every resource it needed to increase its capacity to account for 200 missing persons by 2015, a requirement set by congress in 2009. on average, however, the accounting community has identified and accounted for only 72 previously missing personnel per year. although congress has more than doubled the overall budget of the joint pow/mia accounting command, known as jpac, over the last five years, the additional funds have not yet yielded any significant increase in identifications. we cannot put a price tag on this mission. but we can and must ensure that hundreds of millions of taxpayer dollars are being spent as efficiently and effectively as possible.

according to a recent report by the government accountability office, the defense department's capacity to account for missing personnel is being undermined by longstanding leadership weaknesses and a fragmented organizational structure. in addition, disagreements and lack of communication between the various defense department commands and offices involved in the accounting mission have harmed the department's ability to improve its accounting capacity, as required by congress. gao also identified significant duplication and overlap between jpac and the defense department's defense prisoner of war/missing personnel office, known as dpmo, and between jpac's central identification laboratory and the air force's life sciences equipment laboratory. the subcommittee has also reviewed an internal report regarding jpac's internal operations. this report, which was prepared

at the request of jpac's commanders by a fellow hired by jpac's central identification laboratory, found that jpac's research & analysis division was so mismanaged that it risked total failure of jpac's mission. it called the division's processes acutely dysfunctional and also found that jpac has wasted or abused taxpayer funds on travel and military tourism. this report was banned by the former commander of jpac and its findings did not become widely known until earlier this summer. these findings are deeply disturbing. however, since announcing this hearing, the subcommittee has heard from nearly a dozen current and former employees of jpac, dpmo, and experts in the accounting community who have questioned this report's independence and accuracy. i wish to state clearly, at the beginning of this hearing, that the subcommittee does not have a dog in this fight. i am not here to take the side of jpac, or dpmo, the central

identification laboratory or research & analysis. i am here to give a loud wake-up call to everyone involved that it is time to put your squabbles aside for the good of the mission and the good of our nation. it is unacceptable for dysfunctional bureaucracy to impede our efforts to bring closure to the families of missing personnel. to all those in the accounting community who work every day to find the missing, to identify remains, and to bring peace of mind to the families, i thank you. you should be so proud of the work that you do. and you should serve as an example to those throughout the chain of command whose pettiness, negligence, or willful ignorance allowed these problems to develop and remain uncorrected for so many years. i hope by the end of this hearing we will understand more about the issues the accounting community is facing. i intend to raise some very hard

questions, including how many of the missing personnel can reasonably be recovered and identified, and what it will actually cost to achieve this mission. we need to get these numbers straight. the family members of the missing deserve honest answers about what is feasible. what we may not know is how quickly the department can fix these problems. i assure you that both here in this subcommittee and in the armed services committee, i intend to stay on this until they do. i thank the witnesses for being here, and i look forward to their testimony. please today to b be joined by senator ayotte, listserv with on the armed services committee. my ranking member could not be here today, so she is sitting in that seat, and i couldn't be more thrilled with that and i will now turn it over for her comments. >> thank you so much, madam chair. and it's an honor to be here with you this morning. and i enjoyed when we had the

opportunity to be the chair and ranking member on the readiness subcommittee and armed services committee. and i think since we both serve on not only this committee but the armed services committee, i want to ago your commitment to making sure that we address the problems that have been identified by the internal report by the gao reports, and that this must end to make sure that we can do what's right for those that we have left behind and bring them home. so it's an honor to be here. as you know the soldier's creed includes the following words, i will never leave a fallen comrade. these words are memorialized, are memorialized and memorized by our soldiers, are just as true for our entire nation. coming from a military family, as i mentioned as a member of the armed services committee, i am determined, as i know that

chair is as well, to make sure that our nation does not waver from this solemn vow. that's why today's hearing is so important. we have a solemn duty to recover the remains of our service members who made the ultimate sacrifice in distant battlefields, to preserve our freedoms and our way of life. they have earned our enduring gratitude, and stand as a lasting model of patriotism and courage to us all. and their sacrifice has directly contributed to the freedoms and safety that we all enjoy today. that is what it is important that we live up to the words of a pow-mia flag. you are not forgotten. according to the defense prisoner of war of missing personnel office, dpmo come we cannot account for over 73,000 americans who served in world war ii. 8000 who served in the korean war, 125 in the cold war, and over 1600 in the vietnam war.

there have been 37 american pows since 1973, and all have been returned except one. in my home state of new hampshire, we are still waiting to learn the fate of six service members from the vietnam war, and 43 from the korean war who remain unaccounted for. we entrust the joint pow-mia accounting command to work on the half of the american people to fulfill our moral obligations to find and bring home the remains of american heroes who served overseas. in light of the great trust that we place, not only in you, general mckeague, but in each of you, i am incredibly disturbed, as the chair has mentioned, with not only the intro finding of the report that was done within the dod, but with the recent gao report it and i think the chair hit it

well when she talked about the leadership, weaknesses identified in the gao report. but what bothered me most was reading about the petty squabbling between the three agencies in which all you can which each of you has been charged with leadership. that is not the way, that is not the way we do things. and we owe it not only to those fallen hero's that we need to bring home to their families and to the american people that the squabbling and, that we get to the bottom of this, that we understand as the resources have been given to you that as the chair mentioned have increased, but the outcomes has either stayed the same for decrease in terms of bringing our fallen heroes home, that we can do so much better. and you know, having served on the armed services committee and hearing about the disputes between your agencies, it really

troubles me. so we've got to get to the bottom of this. and i want a commitment from each of you that this squabbling will end, that we will work together, that we will drive efficiency to make sure that we are all working for the same result. and that is, to bring our fallen heroes home, to be honest and truthful with their families, to make sure that their families know that they are not forgotten. and so the reports they raise serious questions. i know the chair will have many important questions for all of you, as will i. and i want to thank each of you for being here today. and we need to walk out of your knowing, i know this will be one hearing, i think this will be one of many to make sure that we get this right. thank you. >> thank you, sir i got. let me introduce our witnesses. major general kelly mckeague is the command of the joint pow-mia accounting command, which supports the department of defense personnel accounting,

search and recovery, and laboratory investigation. general mckeague assumed command in october 20 for. general mckeague began his military career serving in siblings in an officer enters assignments in u.s. air force. he has also served as chief of staff and assistant to the chairman of the joint chiefs of staff for national guard matters. montague winfield as the deputy assistant assistant secretary of defense for pow missing personnel affairs and director of defense pow missing personnel office. he is or sponsor before leaving the national effort in the fullest possible accounting of american personnel missing as result of hostile action. in addition to having served as distinguished 31 year army career, mr. wingfield was also the first commanding general of the joint yo w. mia accounting command. john goines is the chief of the

life science equipment laboratory. thank you all for being here. it is the custom of the subcommittee to swear all witnesses that appear before us, so if you don't mind i would ask you to stand and take the following oath. [witnesses were sworn in] room >> thank you very much.general l begin with your testimony. >> thank you, it's a privilege to appear before you today and i respectfully request my written test might be included for the record. when i took command of the joint pow-mia accounting command almost 10 months ago, i realize that jpeg is the operative word vision and effectively. since then my team and i and consequent also partners in the personal accounting community have worked hard to improve how we account for missing americans from past conflicts.

the way is nobody captured than in remarks, a social of an army helicopter pilot missing in the non-recently shared with me. she said, the vast majority of the families were involved have tremendous trust in your mission. and in those who work our cases. as jpac command i the distinct honor to lead a talented and dedicated team of professionals. our noble mission is global in scope with investigations being painstaking research, recovers challenged by in hospital environments, and tougher identifications demanding a world-class scientific enterprise. as responsible stewards of federal funding, we are continuously seeking efficiency and optimizing cost-effectiveness. in addition to optimizing our three nations that much of my focus over the past 10 months has been to improve communication, coordination and collaboration. oath within the command and with our external partners. to ensure jpac is structured

effectively anficiently publish our mission. established processes which will sustain and improve the organization and mission into the future. and to provide a quality work environment for the men and women of jpac. unquestionably, there are areas within jpac that offer opportunities for improvement, and we make consistent efforts identify and address these areas. given the complexities of our worldwide mission, it is cordless continue to strive to improve our efficiencies and performance. still, sequestration and a civilian hiring freeze the present us with challenges. however, i'm confident jpac professionals will sustain our priorities with fewer resources and balance requirements in the mission objectives. most importantly, we will not waver in our commitment to the families of our missing heroes, our veterans, and the american people which is a moral imperative of the fullest possible account of those who lost their lives in service to this great nation. prominently on a wall and jpac

headquarters sits president calvin coolidge's sage advice. a nation which forgets its defenders will be itself forgotten. the dedicated men and women of jpac endeavor to succeed as it never happens. madam chairwoman and senator ayotte, think again for the opportunity to appear before you. and more important for your support of this noble mission. i welcome the questions you might have. >> chairman mccaskill, senator ayotte, thank you for the opportunity to speak about what the department of defense is doing to improve the department efforts to achieve the fullest possible accounting for a missing dod personnel and provide answers to their families. i look forward to discussing the responsibility of the fairest members of the department accounting community come as well as a specific collaboration between the defense prisoner of war, missing personnel office, dpmo, federal prison of were

missing in action accounting command, jpac. based on my experience as a first command of jpac, i came to my current position well aware of the challenges i would be confronting. i know that the department personal accounting suffers import essential infrastructure weaknesses. which have been cited in other important study. many of these structural flaws relate to the primary problem recently identified by the u.s. government accounting office, gao. over the past year, maybe jim mckay, mr. goines and i along with others in the personal accounting committee have made significant strides to improve our unity of effort. but this is an issue that clearly needs further work. as i strongly recommended, the department has begun the process of implementing all mine at the gao recommendations. some of the issues raised in the internal draft efficiency report may require additional attention

and investigation. in fact, last week under secretary of defense for policy requested that dod inspector general initiate an immediate investigation into allegations of fraud, waste, and abuse. additionally, the undersecretary requested that the director cost assessment and program evaluation case undertake a review of the organizational structure the department employed to accomplish this critical mission. fortunately, the gao has helped us identify in a thorough and objective manner what the department needs to do to improve our performance of the sacred mission of accounting for our missing personnel. ..

>> we expect approximately 430 # family members from across the country to attend the two-day meeting that we will have the opportunity to brief them on their efforts and account for their loved ones. on july the 12th, a led a meeting in salt lake city, utah, briefing 80 family members of missing service members from world war ii, from the korean war, and the vietnam war. likewise, i had the great honor to address the veterans in foreign wars and national league of families of american prisoners missing in southeast asia in june. major general was with me at all these meetings. i know he agrees that the families of our strong external

partners are determined more than ever to account for our missing personnel and just as importantly to prove how we provide answers to their questions. many of our families realized that we may never find their loved ones, but they look to us to help them understand what happened, and they don't want us to give up. it has been made clear to me that not knowing the fate of a missing loved one is as painful as never bringing them home. with that in mind, the lessons and experiences we have learned from our families and veterans have helped us shape the department's view on how weeing the for those in iraq and afghanistan and how we support their families. i believe with the support of congress that the department of defense is addressing long standing challenges to efficiency and effectiveness in the personnel accounting community. thank you, and i look forward to taking your questions.

>> good morning, chairman mccaskill and senator ayote. i work at wright patterson air force base in dayton, ohio. it was established in 1983 with the function to investigate problems associated with life support equipment and solve issues related to air force mishaps. more than 30 years later, the support expands to meet taskings from the department of defense, armed services, and those of allied foreign nations. we occupy some 13,000 square feet and building 14 and fall under air force material command at in ohio. it is a unique facility within the dod and based upon comments received from numerous international visitors with regard to equipment studies and mission diversity performed, it's in all likelihood the only laboratory of its type anywhere in the world.

in 1988, the mission evolved from the chief who was approached by the joint casualty resolution center to examine equipment artifacts found in southeast asia to base solely on the equipment. they conducted investigations, studies, and instructional programs related to a broad range of military equipment which are defined as life sciences equipment. in 1993, it was tasked by congress and the joint chiefs of staff to become a support agency of the joint task force full accounting renamed the joint p.o.w. mia accounting command jpac in 2003 and other agencies like the defense prisoner of war department of defense mtmo. this became a p.o.w. mi mission commanded by specialists with work of the accountability of missing americans from the

korean conflict, cold war, and worldwide theater of world worlr ii. the mission coverage is complex and challenges, the staff remains dedicated to sustaining and improving the nation's military resources and accurately resolving resources for the families. within the context, we have supported 194 p.o.w. cases and accounted for the presence of 206 missing individuals out of 349 sought. on average, the support is ten cases a year with a budget of 250,000 dollars. the staff consistents of a viers group of equipment types deployed by american military services. through the use of comprehensive technical library and large collection of reference exhibits maintained, the analysts endeavor to match submitted artifacts to the equipment and specific systems from which the

artifacts originated from, identify its service applicability as well as the time period it was used. further testing can be applied, often employing state of the art equipment as well as four resources of other laboratories and specialists at the life cycle management center to enable identification to be confirmed. results are translated into determinations about the presence of missing personnel. accordingly, an identified artifact like a piece of a flight suit can determine the pattern, reveal information about what service utilized it, other details about when it was used, and what ark until along with all other artifacts and assessments, there's an image about what they support on the previous user and probable status. the staff is dedicated to the resolution of the p.o.w./mia issue and supporting other issues involved in the highest

national priority endeavor to fully account for our nation's missing personnel. i thank you for the opportunity of providing opening remarks and await any questions you have for me at this time. >> thank you very much. one of the --ic there's three major areas that i'd like to get covered today, and one is who is really in charge, and is the structure appropriate? second, what are we going to do about the turf battles, and, third, have we set realistic goals, and are we using taxpayer dollars in the most efficient way possible. let's start with the leadership question, i have to tell you that as i began preparing for the hearing, echoes of arlington began resinating with me because when we looked at the problem at arlington national cemetery, there was a lack of oversight that was really bred y

being in charge. look at the chart. i mean, is it any wonder that this is a mess? you -- and the frustrating thing about this is that back in august of 1993 the senate issued a report, and i'll read from the report. the u.s. government's process for accounting for americans missing in southeast asia has been flawed by a lack of organizational clarity, coordination, and consistency.

that was 20 years ago. and the notion that we are at that same place now just a real head scratcher for me. last year, the house arms services committee pointed it out, gao appointments it out, so what can you tell me about the department's plan because it's my understanding that all of you, really, if you look at it, the only person you have in common that you report it, in fact, is secretary hagel; is that correct? does anybody disagree with that assessment? >> senator, i agree with you. >> okay, and by the way, none of you are in the same boxes here. there's a lot of layers between you and secretary hagel. what can you tell me about the plans to change this ridiculous

organizational structure that's supposed to be working on a very focused problem? it's not like this problem is desperate. it's not like we're talking about, you know, needs for the air force or logistic needs for the army. we're talking about locating the missing remains which involve science, personnel of the various branches, but if it's not fixed, they will be back here in 20 years yelling at you guys. tell me, general, what are the plans right now for reorganizing this in a way that we can hold somebody accountable? >> chairman mccaskill, as you know, the gao, that was the first recommendationfuls to look forward -- recommendation was to look for consolidation. i don't look at this as this being we all have different roles. my role is the operational arm

of the accounting community. i don't delve in policy. i don't delve in notification to families, but i know my partners do. i assure you as part of the department's implementation of the gao's recommendation, recommendation number one will be looked at seriously. >> well, what's that mean? who is looking at it, and what's the time line? >> miller -- i'll answer what i know -- dr. miller instituted a review of the gao recommendations, as you know, the department accepted eight of the nine and partial concurrence of the ninth, and we are implementing many of those recommendations, some of them have already been implemented, and i would view the consolidation question to be at the top of the list. >> okay. that's not completely reassuring to me, and i'll follow up with dr. miller for a timeline.

we have to know what the specific response of the recommendation is going to be. this shouldn't take two years to study. this is something somebody ought to tell us we're going to look at the organizational structure and make recommendations for change by this day, and that's what i'm looking for. do either of you have any input on a date specific that we can look for some kind of plan to -- and i get we have different missions here, but you can't argue with the fact that even within your command you've got two departments that are fighting like 12-year-olds. >> senator, if i may, the department has, in fact, accepted all the recommendations from the gao, and in response to the gao, and the report, they directed that two reviews be conducted. first, he's directed the dodaig look at all malfeasance.

secondly, he's directed that kate takes a look at the organizational structure of this organization, of the entire accounting community. he has not put a time line on exactly when we'll have the results of these reviews, but i will assure you that it is not going to be a very extended period. >> okay. well, you can -- and we will, i'm sure the senator will join me in a letter to mr. miller. dr. miller needs to know that we need a date. >> yes, ma'am. >> we're going to hold him accountable to the date, so -- and i think we will also direct a letter to secretary hag hagel that this demands his attention to straighten this out once and for all, and it's not that i don't think you guys are not capable of working with each other, but the problem in the accountability piece of this, and this is what we found over and over in arlington is that when there's a problem, it's too easy for you guysto say with fi,

that's cil or that's, you know, that's over in dpmo, or that's j jpac. if we get this concentrated with some kind of very clear chain of authority, then we will do a much better job of making sure that we're not getting excuses as opposed to real problems that we have to help you solve. i have a lot of other questions, but i'll turn it over to senator ayote now. >> i want to thank the chair, and let me just follow-up on what senator mccaskill just asked about. you know, the 2010 defense authorization, in fact, directed this very issue. in fact, it asked the secretary of defense to implement a

comprehensive, and fully resourced program to find missing persons. that's an excerpt from it right there. section 541 set a goal of asking for this plan, a comprehensive coordinated plan be submitted so that we could accomplish, as you know, recovery of 200 remains each year to bring back to their families, and one of the things that the gao identified was the fact that because of the problems with the organizational structure and the disputes, that, in fact, as i understand it, jpac and dpmo actually developed competing plans; is that right? >> [inaudible] senator, based on information that we received from both of our ped sees sores, we know that to be true. >> okay. here we have where we've already, as a committee, said in

2010 that a plan is needed and the chair identified this goes back 20 years for the same issue has been raised, and, you know, you can understand why we hear this today with no deadline thinking when it something going to change because if we do not receive the coordination and plan that is already asked for 20 years ago was asked for clearing in 2010 with no deadline for how this structure is going to change and you both have competing plans as to who should be in charge and how it should work, this is just got to stop, and i will join the chair in this letter because i think secretary hagel has to focus on this as well and make sure that

we recle what the new organizational structure will be of one that eliminates the squabbling and eliminates competing plans, makes a decision that's going to accomplish what all of us want to accomplish in bringing the remains home. can you both tell me about the competing plans? have the two of you communicated about the competing plans, and have you yet, at your level as leaders, and, by the way, general, i know you have not been in this command long, and you adopted many of these issues so you have a real opportunity as well, all of you do, to set it right, but have you got together on the two competing plans and talk through what you think of leaders of dcmo and as jpac what should happen? >> senator, a couple points. we talked about a timeline. there is one portion of the timeline that dr. miller has put in place. he said limit the response of the review. after the review is conducted,

obviously, final decisions have to be made. i can, in fact -- when you talk about competing plans, again, when we -- i've been in position for a little over a year, and when we woat assumed our positions -- >> so you're relatively new to this as well? >> yes, i am. >> uh-huh. >> there's only one plan that was on the books, and that was a plan that requested resources, and of the two plans that you're referring to, the jpac plan was the one that was agreed to, so when we talk about competing efforts, the first thing that i was directed to do and agreed with my boss, dr. miller, was first to bring the accounting community together. the second thing was increase

transparency, and the third was to support the gao. immediately upon taking my position, we established a planning group. it was a joint planning group with members of all of the accounting community, and their goal was to take a look at creating the capacity and capabilities plan which gets at requirement that has been levered upon us. the requirement is to increase our capacity and capability by 2015. we'll face subsequent requirement to be able to identify 200. it is important to note that there is no immediate return on investments, and if we are funded, and we were, funded to increase our identifications, there's a long process. first of all, there's a lot of research and analysis conducted followed by an extensive research or investigation of it, specific area, the lost area, and then there's a recovery, and oftentimes it takes more than

one investigation, more than one recovery, and finally, goes to the lab for identification. it takes time before there is a return. >> and, you know, certainly, mr. winfield, i don't dispute that this process takes time in terms of the proper recovery of the remains, but i don't see, unless we get at the fundamental structural issues that the chair has raised so that we're all working together instead of spending the time or duplicating resources or not having clear chains of authority, how we could possibly reach the goal and most effectively do this on behalf of the american people. would you agree with me on that, that if the structural barriers are there, and people are not all working to the in the best way, then how, you know, obviously, no matter what time it takes in terms of the processes, then we're not going to be able to effectively achieve that. would both of you agree with me

on that? >> we have done extremely good job at unity of effort. we work together on a daily basis. i communicate with major every day. >> well, let me get at a more fundamental question. do you disagree that with the way things are right now, you've had these two competing, obviously, that came up through dpmo and jpac to address the 2010mbaa. you've seen the organizational structure. do you agree that things need to change in the organizational structure to make sure we get this right? >> senator, the -- we agree with the recommendations that were made by the gao, that there is a name to take a look at our organizational structure. >> so just a look? >> again, as -- it's important that the review is conducted and take a good look at the review and assessment of our

organizational structure. >> see, here's what worries me. you've been looking and looking for 20 years, and it is just very evident, i thought the chair's point was well taken, that the lines of authority here don't make clear authority so that would be the most efficient way to clarify results as identified in the report and 20 years ago and focused on in the 2010 and dea and many others we have not pulled up today, so we can keep looking and looking, but we need to go beyond looking. we need results, and that's why we are concernedded about driving a date on this about making sure we have an outcome of just -- i mean, i don't want to be here next year in the defense authorization asking the very same questions without some results, and i'm sure neither of you do either, so that's what --

when i hear "look," is raises flags for me. i know my time is up, but -- >> senator, if i could. the meeting plans were, in fact, shortly after we were introduced and goal established. there was competing plans for resources. i can assure you that there is no competing -- no competing plans today. there's the capability plan for 14, including all of the partners, and that clarifies that the cooperation and coordination between the two largest partners have never been better. i have complete trust in winfield. we communicate almost daily, and i don't see competings -- competing plans in the same construct. >> i think it would be helpful if you had the same boss. i think it's confusing. i know you guys are going to take a look at it, and i know it's hard to make changes in the

organization, and speaking from a lot of experience in the contracting field and, you know, we actually managed to get a contracting comant open because of this secretary hagel -- severe problem. there's two ways to organize it. the way you doing it in what you think is best or us doing it for you, and i assure you we'll do it for you if you can't do it yourself because we need to know who the boss is. i don't know if you're at fault or you're at fault, and you don't even report to the same people. your boss tells you a, and your boss tells you "b," and here you are trying to work it out. it doesn't make sense. let me talk about same of the fighting. does cil have operational responsibilities at all?

>> so both research and analysis have operational responsibilities? >> they both work for me, ma'am. >> okay. >> there's three mission sets. there's the searching, research and seasonal sis, the recovery, led by our investigations recovery teams; and then there's the identification part, led by the central identification lab. >> other than the personal attacks in the report, do you think the analysis of the dysfunction is accurate? >> ma'am, i would say we have issues in terms of sufficiencies, and i think dr. cole was astute in points out we have to improve procedures and efficiencies, and we have. i would say he was also helpful to us in talking about the need to improve the production of leads. >> were there parts of the report you thought were inaccurate? >> ma'am, i disagree with some,

rur arian civile research was inexistent, i disagree with that, had a plan, and multiple visits to southeast asia sites not justified. those are some of the things i disagree with. >> we have heard the subcommittee, and i'll talk about the whistle-blowers, but we heard numerous complaints regarding cil's management. after hearing from so many people with the same complaint, we have to wonder if there's a significant problem with the management at that part of your command. there are a very high number of discrimination and eeo claims pending. what is your take on that, general? >> ma'am, when i first arrived ten months ago, i found we were in desperate need of attention in collaboration and coordination, and there was this unity within the command that's

been my priority to unify the commands, by my priority to improve morale, and i believe we have improved it. are there squabbles between approaches both divisions take? absolutely. i think we can provide those in a professionally enhanced environment, be able to resolve those without bomb throwing and finger pointing. >> i want you, and we will have questions for the record, but i do want you to keep us posted on the progress of how you feel that you are solves p problems within your command because it appears, i mean, as we began dun this road, we assumed that the cole report was being squashed because the cole report was critical. well, now as we looked at it, part of it there was such wide disagreement in the command whether the cole report was

ginned up by mr. holland in order to make the other two parts of your comant -- command look bad, it was about promoting one part of the command at the expense of the other part of your command because of the squabbling going back and forth. you know, i hate it that we are at this level of micromanaging of your command. this floated to the service when we planned the hearing. we answered the phone, listened issue and it was shocking the amount of input we got. i mean, frankly, on the whistle-blower stuff, our phone rang off the hook, and the complaints were both about jpmo and jpac, where you work, mr. winfield, and there was -- we're getting a lot of complaints about retaliation about whistle blowing. would both of you address the large number of claims of retaliation within your offices?

>> ma'am, if i could address the part of you asking of commitment from me to keep you apprised. i'll keep you apprised of the progress made. our mutual friend pull me in touch with an arbiter institute, a managing consulting firm, that looks at responsibility, collaboration, and influence. bill, the general of new hampshire, adopted arbiter principles, and i brought them in to look at the same problem because, again, it is something i saw firsthand that we -- all the talented sciences in the word, most astute researchers and historians in the world are ineffected if there's no trust, no. acceptance of personal responsibility, and if it was a matter of everybody blaming everybody else, and that's been my focus to get at it to improve the morale and environment. >> well, i realize this is a

little bit of calling the kettle black, and we do too much of that here rather than working together, and so i realize there's a lot of people watching this hearing who go, well, they got a lot of nerve, but that aside, it is -- you have a choice as a leader. you can either lead making the other guy look bad, and, therefore, you look bedder, or lead by giving the other guy credit and communicating and then everyone does better. i think what you had is the former and not the latter. i think you've got -- i know you know you've got a ways to go. ..