>> we are pretty encouraged of what is for being

improving quality for health care. >> but to the extent we want it to happened to make sure the incentives are right but for decades they have not been aligned. there is an opportunity here to save small businesses a lot of money to grow more rapidly. >> just very briefly defied the incentives. >> for years the primary symptom is that it is such a powerful point if you look at one man's cost or another man's revenues of the cost that you pay if you compare

our performance versus other industrialized countries you spend 60 percent more than other countries but you don't see better quality measures or outcome so the incentives the opportunity to modify those incentives by the act and the contract being that it encourages is profound but what you see is hospitalization come down but that means they glad of business and that is a real challenge to say that is not a good thing but it can accommodate the extra volume with those spee mori efficient if they become more efficient than this

model can work. >> hospitals are no place for sick people and would it provide care in the community? knbc that happening because what i imagine with those accountable care organizations but that is not really what it looks like? >> most of the relationships how physicians practice what happened is physician practices with the hospital now on the order to be aligned with the hospital so

they create that units of care to those physicians were they say i am the one that controls on health care is spent by a doctor i will take accountability for the health and wellness of disease management and i will control that and use the hospital as a store i dunno which model works out better wages have to see the future. >> i cannot find any in that field right now but. >> i share the pain.

not thinking too much of the general conversation but government is releasing data to the public with the initiative but like that the company would not exist because the data is so valuable. sober eighth period of time the existence and pricing this will all be public can't much more about the use of the ability and information there is a time to figure it out. it is very time-consuming there are the businesses.

those that help consumers navigate through the system's the data is increasingly coming out there. it is also allowing users to have independence from the insurance industry. usually in the old days they can get some information and now is much more available which is a great thing and it will be transformational. >> watery talking about? >> the early days the provider data, and medicare

quality scores and go behind that to say it is publicly available for the 50 attributes. the overall quality but somebody with diabetes will have much more interested in those five attributes for the treatment and you can do those things now. >>, as a related concept for what is helping to drive change. too many times we have various positions -- decisions of the different quarters that is very encouraging. >> this is where stimulus dollars come into play because it created on the

order of 30 billion on dollars to deploy a health information and in essence with what physicians and hospitals do and that has been very effective to get those systems out so there is an infrastructure there. but to make bad data -- that the dead interoperable is actually a large effort going on with the standards committee of policy committee to take the infrastructure to turn it into interoperable data that will have tremendous benefits to complement that you see with the innovations and the private exchange innovations because now we have real data to optimize the patient choices in a position traces.

>> you say we've made progress but i hear complaints that it is hard to use, it is worse to even get on the health exchanges. [laughter] will we see innovation of that maybe there is waste recognition software? >> there is tremendous innovation but the problem with the technology the doctors are using but what is out there today was built for the volume based medicine how'd you get the physicians to use that it is an to get more reimbursement but now is how you use technology to take down those populations and anticipate their diseases diseases, get them on the right treatment that is evidence base to keep them healthy?

that is fundamentally different so what you say the industry struggled that we built the technology for this older model and that is the work and progress. >> privacy is a huge issue that the administration has been accused of not protecting people's privacy. is a really an issue or manufactured issue? >> it is very understandable why it is an emotional issue with the data we have seen so far the data does a good job there is no personal identifier everybody gets out important that is that the data comes out any ability to tie back to the individual. is there a risk? sure. to the extent sedated becomes so important as a

prerequisite, but there are risks involved with there is a huge upside so had to manage the risk down at zero? >> how did you know, to ask me about my big toe this morning? [laughter] >> those hospital gowns that don't close. we have to get over a few hurdles. [laughter] >> how does this move forward how do we get at 2015 and beyond was what changes do you see coming with us exchanges or is there something else we have not talked about that will make things change? >> the employer based system continues there are a lot of stressors with the employer mandate to encourage people

to manage the 30 hour syndrome the level to take at least 100 and the individual taxes like the health insurance tax that burdens plans as much as three or $400 per family. so there is a lot of opportunities but there is a lot of imported costs that turns out to be a barrier to people getting that coverage your company or individually. >> did you just call for a single payer system? [laughter] >> i did not say that. there are moving parts than the affordable care act.

>> i thank you will see tremendous changes in the health industry but what we're trying to do is to be more of the info media what has it done? we have stated that primarily for the purpose is that in the future when you contract with a ceo with they're accountable for the population of patients what data can you share with me to manage those patients more effectively? in the expertise we have built over the years some health plans will move you will see the scope of activities narrow and

fadeaway in the background and i thank you will see others who are trying to get into the information age to use technology and tools to support the delivery system to achieve their goals that is high-quality and low-cost i really thank you will see the health plan industry to go through disruptive innovation. >> a lot of change can arise from that direction but we don't line up well or queue up well and i think the affordable care act will be through disruptive change to the marketplace help people obtain coverage and maybe the future public of how they get the care moving for

word. we continue to think innovation comes from the private sector based health care system. that is of fundamental strength of our system. >> we have hit the innovation tipping point where you don't see the results yet, but having done this a bunch of years you have the creative ideas come to you it is only a partial risk, how do you make that work? have you get paid to employment this decide? if you can go to at ned out to say i have this thing that i invented and i can prove to you if you will save money and have a similar outcome or with more money and a better outcome if you can prove that point in the environment, you wind. that is the first time you

have that opportunity and the innovation has a bit of a lag but is there. >> i don't know how long you have been sitting here but i am sure you are eager for your opportunity to ask questions so we will move into the audience. i thank you probably already know there is a microphone is going around. lettuce no to your inquiry or with some are panelist can structure their questions accordingly. >> i am a practicing primary care physician. with all the plans aren't there tremendous transaction cost with the new system which will also hath significant health itt cost and management costs?

nobody has talked about the cost specifically with this disruptive change. >> i would say there is the tremendous transaction cost today. view lookit the amount of money we speview lookit the amof money we spend on administration of a good current system, it is high. i think i would not call them transaction costs but investment that needs to be made to help reinvent how the health care system works so i thank you will see a lot of organizations making major investments of additional technology maybe in the physical plants that our community focussed. but i don't think there is any reason to believe the transaction cost is any higher the yen today and

with the greater focus or transparency macy a renewed effort to reduce cost. some that we work with clay are investing in software that helps to manage the supply cost others are investing in software that helps them staff more e efficiently to demand which is things they did not worry about in the past. you will see those investments in kerb but ioc washington would necessarily go up. >> what was that formula they would give you for restocking? i guess we moved past that. [laughter] more questions? >> i with the national association of social workers. i interested in hearing if one thing is to anticipate

or changes or plans to implement the mental health parity regulations that are anticipated to be published by the end of the year and how that works with the affordable care act? >> i actually spent a lot of time on that issue and it has been a long road in congress to actually getting it to the promise of delivery soviet anxious to see that and we're hopeful it will not add additional cost to the system but i do think in countless ways we need to do better in communities to create people to avoid those tragedies

large and small the real have experienced. >> another question? >> let me ask the panel had you seen anything in the past few weeks that have surprised you in particular positive or negative? >> you are starting to see some of the unintended consequences. so we did some work on the subsidy issue that as a person gets older it is the cliff of the subsidy to the point to get the $10,000 subsidy.

as it comes into more of that, we tried not to get into the politics of it but in a perfect world it can get ironed out hopefully that is still the case but it is a complex lot to be expected but i think over the next couple months we will see a number of those things pop-up along the way. >> we are long overdue for a technical fix. hopefully congress gets passed and moves forward on the implementation. >> did what i have been thinking a lot about as washington continues its patters -- patterns of dysfunction we're already long overdue for corrections so even the framers what

they do when time goes past but now they look ahead there are all kinds of things that did not get calculated just right. how effected is the individual mandate going to be? will people buy it or not or what does the second year looks like and how does that go back? >> and policy makers have to make decisions to deal with that. i don't think any of us have the confidence in the current environment. >> not with this congress. >> with the speed of change

term with a happened pretty slowly. and those that just raise $100 million to go out to do very innovative things there are massive investments and innovation, new companies i have never seen this kind of speed before. >> are there any more questions? >> i am from the american medical association about the now networks of the public exchange. what are the metrics that aetna will use to decide who is in or out of the network with physicians or hospitals? now find a page with a chronic disease how do i know at a time when i pick a plan whether or not -- whether or not the position i need is a network?

>> first of all, i will distinguish between the networks and the aco's was a designation of a health plan of a select group of physicians or hospitals that have quality criteria date -- criteria. not what we're doing. now we're doing the organizer of care a big hospital or medical group and they decide who they want to include common not us. when will get the organizer of care before does this set of institutions and hospitals broad enough to take care of 80% of the population? if they are we are open to dealing with them.

but we are getting out of the weirded dictating tuesday physicians then in some cases of private label him health plan was a complete transparency and that allows them to be empowered to see specifically in the claim data how they compare with others how the pharmacy costs compare with others. then typically with technology to influence the of practice pattern to achieve the outcome necessary. but the empowerment of the physicians or the delivery system into the private exchange to create a direct relationship. the days we say we are in or out we are away. >> we have time for a very

quick question. >> what is a way to improve coverage? you get it in the new system as affordable care buy you show up but the emergency clinic and you are told they don't take medicare so you find a physician but in some cases they may be open for business did you can get something done on a quick basis. another question if you have a hand surgeon you are referred to show what but then you find out they don't take aetna but they do take medicare so now you have another problem so what to do? and other hand surgeon indicates they will not take getty of them they want you to work out something with the coverage that you have

to file your own claim is there some way to simplify for the public? >> is that what they are supposed to be doing? is partly system issue partly technology issue. so the technology will help to be able to go to your smart phone or your computer or ipad. to say i need to find somebody in my network with the quality information and pricing. once you start to clear the information problem, then you know, if it is a quality of the carrier or the health plan but hopefully you can do that sequentially and a lot of that data is becoming available but it will not happen overnight.

>> we will have to cut it shores of the people can get to their net working break. think you to repair telesco -- to our panelists. fate you so much with the question is that we had to answer to explains -- to explain with interesting and innovative future for our health care system. thank you for your attention

>>. >> we have a good crowd here tonight i assume most of you work for the federal government and needed something to do. i want to think "the national journal" to allow me to speak on this timely and important topic. also to say thank you to anthem blue cross and blue shield in kentucky one of our biggest insurers and does business there the connection with the ana is special because the president of the association doctoral holden from

lexington kentucky the great doctor there and we're very proud she heads up the ana this year. i am here to talk about how and why kentucky pose proudly and aggressively is leading the nation to implement the affordable care act. i know we were thinking. kentucky? a red state? that seems an odd choice to be affiliated with our president but it was one of the first dates to have the health benefits exchange certified and the only southern state to both expand medicaid and develop its own state based exchange. quite honestly it is because

the notion that most of you have about kentucky are wrong good as kentucky's governor let me tell you a few things about my state that people that and then national media in the political scene had been slow to recognize. for example,, 25 years ago a court case challenging the adequacy of our school system led to an inspiring top to bottom overhaul of our schools that sock kentucky emerged as a national leader in innovation and reform. since taking office in 2007 i have the accelerated that momentum as we have adopted a new testing and accountability system. it became the first aid in the country to adopt the national common core academic standards.

kentucky became the second state in the country to adopt the next generation science standards. this year we raise the dropout age from 16 up 80 yen moved up an astonishing 24 spots in two years in education weeks of the ranking moving from 304th in the country up that tenth. in the world of business kentucky has also been recognized for our aggressive efforts to emerge from the global recession a lot sooner than most states. in 2012 we ranked number two in the entire country for job growth rates over the previous year's. his number three auto production number to with the growth of exports we set a record in 2012 and on track to better that this year. number three in growth of manufacturing gdp.

that might help you to better understand our put into perspective like kentucky leads the charge on the implementation of the affordable care act. there is a huge disconnect between the partisanship of national politics and the governors whose priorities are helping beleaguered family is to strengthen the work force and attract companies and building balanced budgets. that is why several governors not just democrats like we but said arizona sent michigan and ohio see the affordable care act not as a referendum on president obama but as a tool for historic transformation. in kentucky estate whose

collective self has been a horrendous we see this as a huge opportunity. and we are seizing that opportunity. kentucky ranks among the worst if not the worst of almost every major health category from smoking to cancer death premature death, a cardiac cards' disease, diabetes, and those rankings are not just from this year or last year they have not changed since they streaky -- started keeping them now we continue to make progress but incremental improvements are not enough. we need big solutions with the potential for transformational change. we are literally going to change the course of kentucky's history through

the affordable care act. we will make affordable health insurance available to every single citizen in the commonwealth of kentucky. right now 640,000 people in kentucky are not insured almost one out of six. these people did work before their jobs were taken away but it is either not available to them through their employer or simply an affordable. now these people as a group of aliens from a distant planet, we know these people. they are our friends and neighbors are former classmates and hunting buddies in the former on the tractor the substitute

teacher the seasonal construction worker the nurse's aide in the new graduates at a new high-tech startup for the grocery clerk. the folks we go to church with these people and sit with them in the bleachers on friday night and watched the kids play basketball and baseball a.m. the soccer. some of these folks are family members. lack of health coverage puts their health and financial security and risk. every day they rolled the dice and hope and pray they don't get sick. they choose many times between food and medicine and ignore checkups and the attached issues early they hope a condition turns out to be nothing and they live knowing that bankruptcy is just one bad diagnoses a

way. their children go on periods without checkups the focus on immunization, preventive care and hearing. if they have diabetes, asthma, infected dogs or a chronic condition it remains undetected and untreated. now for kentucky as hold that negative impact is similar and increased health care cost, a decrease to worker productivity and more quality of life, a depressed school attendance. the affordable care act will help us address those weaknesses. the 640,000 uninsured in kentucky 308,000 of them mostly the working poor will be covered when we increase milli -- medicaid eligibility of the federal

poverty level. think expanding medicaid is a good deal for us. when i made that decision i had to factors. one was easy. with -- is it the right thing to do but we do have 640,000 without coverage you have the opportunity it was the right thing to do. i had another part of that decision to ponder. can we afford to do it? i also have a fiscal responsibility that i don't make a decision to put our state in harm's way of a fiscal standpoint so i hired to independent groups pricewaterhousecoopers university of louisville urban institute and said let's get this and come back and tell me the numbers. they took about six months

and came back in they said governor you cannot afford not to do this. they concluded experience being medicaid would put $15.6 billion into kentucky's economy over the next eight years they create almost 17,000 new jobs and have costly federal mandates into the hundred 2 million of the positive impact if it would protect kentucky's hospitals from indigent care funding. of the other 3,302,000 uninsured are ones that are able to access to affordable coverage, the most with a discount to the health benefits exchange. the online insurance marketplace that we have connected kentucky -- kentucky's health care connections.

of those 642,000 kentucky ans, 92 percent will either be eligible for expanded medicaid or for a premium subsidy. now critics have insisted over and over that the affordable care act will never work but the facts show differently that for instance a similar approach put into effect in massachusetts by then governor romney is working and it is working in kentucky. let me give you astonishing numbers. we, like all states want live with the benefit exchange. we got the first contact on the web site at midnight it

has been an overloaded ever since. in the first 48 hours of connect more than 118,000 individual visitors visited that web site. more than 109,000 applicants were prescreened more than 13,000 began the application process in the nearly 8300 completed the applications. in addition small businesses started the application process. those members demonstrate to all of us a pent-up demand or a desperate need for affordable health insurance. as for the naysayers i've offended by the gamesmanship

to either overturned or defund the affordable care act. it is shameful they have not invested as a level of energy to improve the health of our citizens. but the families in my state are suffering. we need leaders were not interested in retaining political power those not motivated by a short-term political victory but a long-term progress for the country. the affordable care act was proposed by the president and upheld by the united states supreme court. is the law of the land. so for those more worried about political power i have a simple message.

get over it. get over it. get out of the way so i can help my people. back home in kentucky we cannot afford to waste another day for another life. thank you. [applause] >> you mentioned mitt romney who was 61 percent of the vote there are very few states that he got 61 percent were they expand medicaid to run their own exchange so you may be that test case to see actual innovation will be accepted for the water you see in? >> the numbers tell the

whole story we have the naysayers that say this is a train wreck but there on the wrong track in -- trained. it is a huge success. we hear this over and over and but at 12 '01 midnight it lit up and has been and ever since into the hundreds of thousands of people that and anxious to find out and my message to them is very simple. i told people you don't have to like me it is about you when and your family is in we have an opportunity here that does not cost you $1 a to go on the web site or call the toll-free number to find out. i will guarantee that when

you do that you will come away positive. >> but my next question is you have people who don't have health insurance but are pretty conservative culturally and skeptical of the federal government will there be a cultural or ideological resistance to sign on especially it is known as obamacare? their testing this the way you'll not see it in georgia or oklahoma they don't take the same level. >> i am sure there is some in every state from the ideological standpoint, saw this morning on c-span he was raving and ranted about the whole thing and in reply i said all i do is challenge you to go look. just go look then if you find something that is good

for your family, shame on you if you don't get it. but kentucky is one of the few places where democracy still works. the democratic house of the democratic governor but we can sit down for the most part it act like adults and actually get things done. [applause] mime message from the time that iran is that i don't care for the next big idea. whether they're democrats or republicans but so far that it is extremely unique you

could do this unilaterally through executive action talk to you consider appear on exchange. >> fortunately years ago the legislature delegated for health and human services to regulate so all we had to do was issued the administrating regulation to expand those benefits and everything we needed to get the 130% for the exchange issued the executive order setting up the exchange and i was sued by someone that said i did not have the authority and i want -- i won the case. >> but now goes to the state

supreme court? >> most of the time the cases drag on. >> now going down the road you are in your final term so you are pretty confident you can protect this over the next several years then they will elect a new governor if there is a republican governor or legislature do you think this is vulnerable to reversal or will live be established? >> i think the roots will be too deeply you look at kentucky in the areas where the uninsured live yes summer in the urban areas but they are represented by the republican and legislators. once they have this into three years you would get most of those 640,001 way or

the other through the medicare exchange or the expansion and of the politicians will take it away. >> but with the flood of interest you had six hours what is this sense of how it is working? >> the first message for everybody is talk to a website company and they will tell you that you do not do this without a glitch. with that big volume we are having a love for the country. we had a few bumps on the first day but were fixed within six hours.

we have had any sense but we could have another one and we have six months to have people to get signed up we have longer than that but the penalties are so small at first we will have plenty of time. >> the coverage john day number two is to have good reviews the big exception is the for half the states that have chosen not to create the exchange that the federal government's ability >> obviously i am glad but in their defense i don't think when they went into this they have any idea what 37 states would default and let the federal government to it. they will get it done think kathleen sebelius is a great

secretary and is a former governor and that has been so important for the governor's out here in the country because she understands how to get things done and work with us to help us get over the glitches in the hurdles to get the exchange ready to go >> catalog to they have to get that together before there's questions? speeeight there is no artificial deadlines. it will get better every day. there is a pent-up demand and i know the politicians up here are doing very grandstanding to say this is a failure but this will be a success because people want health care coverage then they will make a prediction in another year or two they will look back to say what

was this yelling and screaming about? one of those questions? >> water those of expectations those concerned about the family's security they know they need help but natalie those people but those who don't feel they have health care so now you have the initial surge of interest how you feel of your status of the effort for those who are less motivated? >> restarted the education process we have been out with the public fare preachy out to young people and middle aged people and people that looks like me to make sure they understand what is going on.

i have been surprised is just the anecdotal evidence that people are going on there to say i am 21 working part-time and go to school this is the first time i can have health care coverage. that that age it is more catastrophic battlefield they need anything but i think war there would have expected initially are showing interest. >> so some of the aspects of this the affordability is critical to take a relatively minor repellent -- penalty where are you on affordability? >> i feel good and was

reading the same stuff as these rates will not be very good but then it finally dawned on everybody the rates don't mean much for all the news media wanted to compares the rates one state to another that is the sticker price but what people are interested in is what comes out of my pocket when i said 92 percent of the insured we there premiums subsidy once they look at the rate then they say that is all i have to pay? that is what will make it is to educate people. >> what does the participation look-alike from the insurer's? >> i believe we have three insurers or in every region of the states and then for

this small group market we have for of course, they offer the four different levels of plans in what goes with that so i feel good about the diversity. kentucky has not had a lot of competition just to three companies and that is what we have now but. >> mother people refer to employers with the affordable care act that is a significant retrenchment in the ups announcement it would cover spouses but as

you talk to employers what does this mean for the future of of employer provided care would be a problem if they go to the exchange? >> most employers are like individuals they are not quite sure what is involved. we are having lots of small business coming on to the exchange to find out that the great saying is in spite of the misinformation that has been out there people don't have to do anything but if you of 25 or fewer, go check because there are tax credits if you want to provide insurance you may be able to do it at the affordable rate. >> ups announcement.

what they did was say that for the managerial restaurant and only for the spouses that can already be covered someplace else. those businesses those that want to do something for their folks most businesses understand it may cost me a dollar more to get the health coverage to my people >> so how many do expect to bring into medicaid? >> 308,000 with medicaid expansion in the other 322 with the exchange. >> what is the impact of the medical infrastructure fed is one of the questions people are asking our be equipped to handle this many

new people? civic i have that same concerned and tuesday building in they will come with a health care professional a gave people employment that is what will happen in with the affordable care active and you will see over the long term all the turf protection that health professionals have you woolsey's them be able to do more than what they did in the pas have you woolsey's them be able to do more than what they did in the past six. >> do you have that capacity to handle the big influx of people?

>> we will have the capacity because all 640,000 it will take years or even more and the system will adjust. >> but to talk about the opportunity to bring in so many people you said the affordable care act is a historic opportunity for those ranking near the bottom and it changed the course of the future of the commonwealth summit is a very broad and sweeping statement had to those individuals have better access? . .

in term of attracting new jobs to our face. let face it, the quality of life of people is something -- it's intangible, but it's something that is damn meaningful to most people, and i want to make sure that increases. i want everybody in our state to have the comfort and the confidence that they won't go bankrupt tomorrow if they get sick. they can take their kids to the

doctor and get the shot. they can take their kid to the dennist and get their teeth filled. for kentucky that's going to be a major change for us. i'm looking forward to us. >> let me ask about the state divergence. you've been in the political arena for awhile. sin the reagan years. >> i don't look like it. >> no. you were lieutenant governor, you were attorney general. what we're seeing now is pretty extraordinary. roughly half the states are embracing and trying to implement the law and the other half the states in a sit down strike kind of mode. they are not participating. have you ever seen a i divergence of the magnitude? how do you think it unfolding? can we sustain the house divided on health care. init endure for awhile? >> i think in the long haul every state is going to do inspect their people are going to demand it. particularly after they look at place like kentucky that do it

worked. the people over there have insurance and i think the pressure will wild in the states enthey'll be forced to do it. i've never seen the dysfunctionalty in government that we see right now particularly in washington. these folks up here act like a bunch of 9-year-olds in a food fight in a cafeteria. and we're paying them to this, that's the amazing thing. it's time they act like some adults. >> you know, it's -- i've been in this -- >> you've written a book on it. >> i have. but, you know, we often hear from governors that washington is much more partisan, but, you know, when you look at the states now it doesn't virtually every republican -- every state with republican attorney general sued to overturn the law. virtually every state with a republican governor, not all but the vast majority are not participating. is this so wrapped up in ideology that it will be

difficult for some of these state that night benefit substantially from expanding coverage to do so? >> unfortunately the washington dysfunctionalty has seeped down to some of the states. an, you know, we're not immune from it. we see it but we've been fortune in i have reached to both sides of the aisle and said, look, most of the stuff is more important than democrats or republicans. if we do this right, everybody is going to benefit as long as we're kentucky begans first and democrat and republicans second. soft of the states are not there yet. they're down to where the rubber meet the road. the people meet the friend and neighbors and --

i think we may have some symbolic vote. indian they have to try to satisfy their constituency. i'll tell you many of the republicans in our state, are beginning to come to the realization that these real right-wing wing nuts aren't a majority of their party. they aren't even a big minority of their party. and they're loud and they yell and scream every day. some of them have already run against some of these folks, and they lost. and so that realization is starting to come around that we don't have to play that game. indian -- -- i understand we have great

republican legislators. i get along with them. we are able to sit behind closed door and trust each other. i've the got the same democratic relationship with the house. at least in kentucky, while, you know, there may be some symbolic stuff done. for the most part, we're going to keep moving our state forward. because they love it just like i do. >> i'm going bring in the audience for questions. speaking of republican reaction. you had a rather remarkable encounter with senator mcconnell and paul in august the the kentucky country ham breakfast and oak. which is a long time political event, kind of like a required stop. you made the case for the law with them sitting there very directly and they made the case again it. do you think any mind were changed either in the audience

or on the stage? can you tell us about what happened and why you choose to confront them there and then? >> first of all, it was a lot of fun. [laughter] i did it for two reasons. one is that there's been a die luge of misinformation put out there by the folks that are again this. they don't want to talk about the facts. they want to keep saying it's horrible and nobody want it and all of this. these numbers, i've been telling you, what happens in kentucky tell me somebody want it. they're kentucky began. i want to get the facts throughout. number two, the people sit out audiences were from the farm communities. they're one of the biggest group that need this and they need to know about it. there's should thousand of farm families in kentucky that i'm sure have never had hurricane tbhais can't afford it and their kids had it.

i want to make sure they start thinking about this when the event happened on october 1 they would get online. they start checking it out. i'm sure it's happening now. so as i said, it was also fun. >> by the way, before going to the audience. is there any way for you to know -- are you see the early response. you mention the the deluge. it's too early to have any figures, obviously we're just, i mean, we are moving fast right now in keeping up with the number. but i've been on a call in show since we opened the exexchange. i've had calls from rural areas. one fellow said my pastor went on online and said he's excited because he and his family will be able to have health insurance for the first time.

so that's what this is all about. when you get down to it, that's what this is all about. folks like that out in our communities who have never had insurance that will be to be have it . they'll have a better quality of life for it. that's what excite me about this whole thing is that change we'll see. i hope you'll consider run for national office. i was impressed. [laughter] [applause] >> who would be want to be in this zoom. >> yeah. probably better off in kentucky. anyway what i wanted to ask i'm surprised no one mention the cost savings that come from having preventive care as opposed to people showing up in emergency rooms. i want to address this. >> this is a big part what it's about. for several years, for many years, we had, like, everybody did across the country in the medicaid program the

fee-for-service approach. that was great for the providers you know what we ended up in a sickle we'll do whatever we want. we'll send you the bill and we wrote them a check. and health care costs were going crazy. at the same time, a big number of kentucky people were using the emergency room as the primary care physician. that's the most expensive care that is out there as we all know. i took our system to manage care. i did it fast because otherwise i had to cut medicare benefits during the recession. we some bumps in the road. it's working. it will continue to work and get better. the same thing with the affordable care act. look at what are the certainly health benefits that will be in not only the insurance pots you can get through the exchange but every ?urn policy in this country from now on. and preventing care that preventive care in there, maternity and child care,

behavioral house, sexual abuse extreme -- substance abuse treatment. now they have and we'll have primary care physician and gate keeperses that will deal with folks. keep them out of the emergency room. treat them and teach them how to take care of themselves and take responsibility for their health. and to manage their diabetes and their heart condition and all of the things. keep them out of the that emergency room. they'll have a better quality of life and we'll start bending the health care cost curve going up by leaps and bound for years and years. >> an excellent preview for the panel on bending the curve. let's see. do we have another question? >> can you talk about how you see the affordable care act playing in to the criminal justice reforms you having in kentucky? >>. >> you know, in kentucky we have

had a tremendous prescription drug abuse problem, and it just has continued to grow by leaps and bounds. and so a couple of years ago i got my leadership in the senate that is republican and my leadership in the house that is democratic. we said we have to do something and do it fast and we have to be aggressive. and so we had, for instance, the casper system that monitoring system where the prescribers would put in to the system what they prescribed for folks, then you can check it if somebody walks in your office for a prescription. you can tell the guy has been around the corner for yesterday for three doctors and got the same bunch of pills. it was a voluntary system. we made it mandatory. we said everybody is going to be a part of it. we crack down on the pill mills that were growing in our state. we were running them out of the state. at the same time, we're well aware that the law enforcement part of this is one piece.

we've got to treat folks. we have to get them to rehab and rehabilitate them so they can have useful lives in the future. and we obviously didn't have enough money to do it all. and continue have enough money to do it all. but part of this affordable care act, as i mentioned a minute ago, says that every policy now is going to have a behavioral health segment. it's got to cover substance abuse treatment. that's a huge thing for in kentucky. i think you'll see significant improvement because of that part of the essential benefits. >> the next question. >> hello. we're waiting for you. is it on? go ahead. >> i like that kind of question. [laughter] >> let me ask you. a political question.

you potential will be at ground zero for this. there are wide spread expectationses in the flactd -- the democrats will be on the offensive again as 2010. because you have been so aggressive in embraces and implementing this law. because senator mcconnell has been aggressive in opposing it. kentucky seems like one of the places it will be litigated most directly. do you worry today in polling, most polling, the law is say underwater or upside down. do you worry it will be a liability in the senate race in 2014? in kentucky or do you can change by then? what would cause it do so? >> i agree with you it probably will be an issue in 2014. i'm not sure i agree with you it will be a liability in 2014. if things continue to go as they're going right now, and people kind of open up to this like they're doing and listen and educate themselves because they are interested in finding out with they can get something at an affordable cost.

the more people do that. the more people see oh my god, the world had come to an end like they told me it's going. i think it's going start to boomerang on the folks out there yelling and screaming right now and using misinformation to try to build opposition to the affordable care act. and so i think it will be -- i think it will be an issue. it may be an issue for us. but what we find in kentucky is polling i have seen, you know, if you say do you like obamacare the numbers are big. no, i don't like it. do you like the affordable care act or everybody ought to have ?urn? yes, yes, we do. we had one person that was at our boothe at the state fair in lieu ville. we had a boothe we were handing out stuff and telling people about the affordable care act. he came up and the lady gave him the pitch and said it's great. i like this a lot better than obamacare. [laughter] and the lady said, you know, i debated whether to tell him or

not. i decided not to. [laughter] so we're going to sign that guy up then we'll tell him. maybe that story answers my next question. i don't know if there -- i can't see if there are anymore out there. we'll go back in a minute. there's a lot of sin -- crin trip call force. there's an extraordinary effort to try to stop it before it goes in to effect. a reasonable possibility that the next republican presidential nominee for a second cycle might run on repealing. what do you think it will take for this law to ultimately put down roots and become fort fied in a way that would be difficult to undo? is it simply more people getting access to it? are there other things that have to happen like effect on people yunls for those with insurance. what do think it will take to settle the issue so we're not going through the sustained post passage struggle over it?

>> well, first of all, when you look at the next presidential election, i look at the last one. and president obama won bigger than any president running in some time. he had the act that he had to carry. i think he was proud of it. so he carried it. so i think overall it's a plus, because apercently a majority of the folk don't think it's a minus. i think long-term it is simply -- it's now happening. we have had a huge buildup to this and a huge bunch of you know what put out there just inaccuracy. anything they can come up with to say this is horrible. now people look at this going it's pretty good. you can get health insurance for this? you mean by maternity care will be covered by this? i can get substance abuse treatment? once more of this happens, it's going happen overt next few months, i think people are going

start looking at the folks and saying what are the in the wrorltd you talking about? >> what is their biggest fear? so you hear the concern about can we handle the influx of new patients. >> it seems to be a good problem to have. >> i would say it's a good problem to have. and, you know, the our hospitals and most of our providers support the idea of us doing our own exchange. they wanted us to design our own. that was an easy decision for us. i think the hospitals are grateful for the medicate expansion because they were going lose their payments anyway and be phased out on those. those i feel sorry for the hospitals in those states that aren't doing that. they're going to lose the energy care money and not get anything

to replace it. those are more people that will be calling the governor and legislators about, hey, how come you're doing this to us? so i think the finish will mount those states. sooner or later they'll be drug kicking and screaming to give insurance coverage to the people who need it. >> have any other governors called you to ask what is the secret to get them off smoothly? >> it seems like all of us are bragging about our exchange. i'm pleased things are going as well as they are going in kentucky. i keep telling people, today is not the last day. today is the first day. today is the second day and we're going have glitches and problems. we're going make it happen for you. >> i think we'll leave it there. governor, thank you so much. [applause] coming up next on c-span2,

the senate foreign relations committee exams iran's nuclear program. then from the u.n. general assembly speeches by iran's new president and israeli prime minister benjamin netanyahu. on the next "washington journal," we'll be joined by riders from national review magazine to discuss the publicly indication. and the latest on government shut down beginning with the magazine publisher.

she was the pow broker behind her husband's administration. after he died in news of corruption began to emerge, she burned his letters and documents in an attempt to preserve his legacy. watch our program on first lady florence harding. saturday at 7:00 p.m. on c span. he was a boarding house in the property. >> we're in grace's bedroom in her dormitory building inspect window here is where grace would have looked out and seen calvin across the courtyard at the next building. she would have put a candled in the window to signify that the par low -- parlor room was available for them to meet in. when they were courting they would meet up here.

they would sit and talk and have time together. despite him being in his 30 and her 20s they still to had abide by the rule of the school and needed to meet where where they were supervised and chap -- chap roned on campus. undersecretary of state said the obama administration would support additional pressure on iran if it does not reduce the nuclear program. also caught on congress not it pass new sanctions against iran until after the meetings with the iranian officials on october 15th in geneva. her remarks came during the senate foreign relations democratic national committee on iran's nuclear program. this is 2 hours and 45 minutes. >> good morning.

we're here today under unusual circumstance, but never the less ready to fulfill our constitutional duty to oversee national security policy, foreign policy, international economic policy, as it relates to safe guarding america's interest abroad. that is our fundamental duty. and we have convened today to ensure that the world understands that a shut down of government in the united states is not a shut down of american interests and obligations abroad. having said, we're pleased to have with us a particular face in the committee under secretary of state for political affairs, wendy sherman. she's help -- here to help shed light on u.s. policies in iran given the change in leadership and the recent statements to the president and provide her perspective on the behalf of the department on the way ahead on the nuclear issue. on the second panel we have three distinguished experts from the private sector.

dr. david albright a physicist. who has written on secret nuclear weapons program around the world. ambassador jim jeffrey distinguished visiting fellow where he's focused on iran's effort to expand the influence in the region. and dr. ray senior fellow at the counsel and foreign relations in a former senior adviser on iran of the state department. we look forward to all of your testimony and thoughts on the status of the future of u.s./iran policy. before we hear our panel is. let me restate concerns i have expressed publicly and again for the record. in my view, the sanctions have worked to bring us to this pivotal point and the fundamental question is whether the iranians iranians iranians are ready to actually conclude an agreement with the international community. whether they are prepared to turn rhetoric in to action. in the leadup to last week's

general assembly meeting i was cautiously hopeful about what we would hear, but in my personal view the new face of iran looked and sounded very much like the old face. with a softer tone, and a smoother edge. although iran's mess -- it the ease age seems to have remained the same. the questions are these. should we be cautiously hopeful for diplomatic solution given the new leadership and rhetoric coming from tehran? what are the administration'ser in-term diplomatic goal and the objective for the p5+1 negotiation? how do we test iranian intentions if they are negotiating in good faith. how do we get them to commit to transparency and allow for full verification it has been in pursuit of the nuclear weapon capability. until we have the answer to the question. it's my view we must sustain the

pressure on iran and maintain the credible military threat that has brought iran to the table. now it's clear that while we're talking about iran, it's centrifuges are still spinning. in the last two years, it has installed thousand of additional centrifuge. although it's not enriching in all of them. vast major try installed and under vacuum meaning it could quickly double the enrichment capacity. the sphact these expanded capabilities are reducing the time iran needs quickly produce a sufficient amount of weapons grade uranium. the fear is that iran will achieve a breakout capability. defined as a technical capability to produce sufficient weapon grade uranium for a nuclear device without being detected by the international community.

path way to nuclear weapons and enough plutonium each for one or two nuclear weapons. from my perspective, long iran is actively pursuing it nuclear program, there is no less than required by multiple u.n. security counsel resolutions. while we welcome iran's diplomatic oprah winfreytures, they cannot be used to buy time,

avoid sanctions and continue the mark toward a nuclear weapon capability. i welcome the president's announce apt the -- that iran's seeks a peaceful resolution to international concerns about iran's nuclear program. and committed to a peaceful nuclear program. but compline with the u.n. security counsel resolutions, in my view, would be the ultimate test of iran's intentions. let me conclude by restating my belief of the sanctions regime in place thus far has been critical in compelling the -- if the sameses were not hurting we would ?rot have heard so much about them in the speech bhap is important now what iron does not what it says. we do not need more words. what we would like to see the compliance of the four u.n. security counsel resolutions and suspension of uranium

enrichment. some of us are moving forward with a new round of sanctions that require further reduction in purchases of uranium petroleum. we're also serious about relief from sanctions if the government meets it security counsel responsibilities. with that, let me turn senator corker. >> thank you, mr. chairman. and i know some discussion about whether having a hearing today or not having a hearing today in light of the circumstances was the right thing to do. but i appreciate very much your focus on iran and some of the threats our nation faces. i want to say that. i appreciate the diligence being put forth. i want to thank you for the efforts you and mark kirk together have put forth relative

to sanctions. and just as in the syrian debate, you know, where we had people with differing viewpoints all of which i thought were respectful and thoughtful. i was proud of where people came out. i was proud of the way the committee handled it with humility and soberness. as we deal with this issue, i want to start by saying still the greatest threat to our nation, the greatest threat stale is ourselves. it's inability to deal with the fiscal matter in an appropriate way. i think the today's meeting in light of a government shut down still points to that. this, on the other hand, is a grave threat to world peace. again, i thank you for the way we are going about this. what i hope we'll do together as a testimony from the two panels

and potential activities that will take place in the banking committee is that we'll be prudent about how we go forth with these. i believe the sanctions that we put in place have created this moment. i know, they opposed some of the sanction. whether he to push the administration to the table. yet,ly say, the administration now is trying to take advantage of those. i hope that together through intelligent testimony and thoughtfulness i'll hope, we'll move it ahead in a fashion that shows a real strategy, that causes congress to help push these negotiations along, and push to ensure that what iran does is real. it's not just talk. i thank you very much for the sent want and your previous effort. i look forward to testimony today and the committee in the banking committee acting in unitson in a way that produces a result here.

which is what all of us want to see. thank you very much. >> thank you, senator corker. we appreciate your work and leadership with us. with that, we recognize secretary sherman. your full statement will be included in the record. >> thank you very much. chairman menendez, ranking member corker, distinguished members of the committee. thank you for inviting me to be here today even during the difficult times. it's always welcome to return to the senate and speak with you about an issue we both agree we all agree is one of our country's primary foreign policy and national security challenges. today i plan to speak with recent talk at the u.n. general assembly in new york which i was a part. the status of the negotiations, our continued effort to put pressure on the iranian government, and a potential path forward for diplomacy including the core actions need to reach a

verifiable agreement with iran. let me start with a very brief survey of our dual-track policy to show how we arrive at this point. as president obama has said many times, the united remains committed to preventing iran from obtaining a nuclear weapon. the strategy we have pursued and continued to pursue to fulfill this commitment is the dual track pots of engagement and pressure. while our preference has been diplomatic engagement. we concluded that such engagement would not work absent meaningful pressure. in response, we and our allies with the presidents and your crucial leadership establish one of the toughest sanction regime the world has ever seen. as a result, 23 economies have united in significantly reducing or eliminating purchases of iranian crude oil.

to the was devastating the ierp began economy. i would emphasize that it was the iranian government's choices that lead to these devastating sanctions. and it will be the iranian government's action in the month ahead that will be a key factor? terming whether we decide the sanctions should remain in place or whether we can begin to relieve some sanction pressure as iran dresses our concern. the montana said he has a mandate. both a popular mandate from the iranian people and a mandate from supreme leader to pursue an agreement that satisfies the international community's

concerns over iran's nuclear program. as the president reaffirmed last week, we are prepared to test that proposition in a serious way. in doing so, we must remain mindful of the long history of iranian deception regarding its nuclear program and insist that iran's new tone be met as soon as possible. by new and concrete and verifiable action. we must also do our part to ensure the success of the effort and avoid in measures that could prematurity inhibit our ability to secure a diplomatic solution. the process for testing iran's intentions began last week in new york. there on the mark of the u.n. general assembly we met. foreign minister and the foreign minister of the p5+1. in that meeting, as in all of our exchain with the iranian government including the bilateral environment we made

clear we seek an agreement that respect the right of the iranian people to access peaceful energy while ensuring to the world that iran needs it responsibility under the nuclear nonproliferation treaty and the u.n. security resolution. they gave a thought of the presentation. he told us that iran does not seek nuclear weapon and detailed the reason why it didn't make sense. we also made clear in return his word alone while welcome are not enough. in the coming weeks we'll look to the iranian government translate its word and transparent meaningful and verifiable action. we enter the period with the eyes wide open as secretary kerry has said no deal is better than a bad deal. now it is time to see if negotiations can begin in earnest.

let me give you an idea how we see moving forward. given the cope of iran's nuclear program and the history of noncompliance with the u.n. security counsel resolution as well as the deep mistrust between our two countries, any productive path forward must include confidence building through meaningful, transparent, and verifiable steps. we'll be looking for specific steps that address core issue backgrounded -- the transparency of its overall nuclear program and stockpile of enriched uranium. the iranians in return will be seeking some relief from comprehensive international sanctions now in place. we have been clear only concrete viable steps and verifiable steps can offer a path to sanction relief. we look forward to hearing foreign minister suggested plan which he says will bring to us when the p5+1 meet with the iranian delegation in geneva.

let me assure you that we will continue to vigorously enforce the sanctions in place as we explore a negotiated resolution and especially focused on sanction of asian and effort by iranian to relieve the pressure. i must note here, if i may, mr. chairman, to take an extra moment and note; however, our ability to do that to enforce sanctions, to stop sanctions innovate -- invaders is being hampered significantly by the shut town. i think many of you will have seen a article today that government shut down empties officers and forcing sanctions on iran. the treasury department whichover sees much of this along with our own sanctions monitoring group has been completely virtually utterly depleted in this time. in addition, the intelligence

community, which we rely on intelligence information to go after sanctions evaders and sageses -- sageses people not paying attention to the sanctions as the dni and said general clapper the other day has been devastating as well. more than 60% reduce during the shut down. we'll do our best to enforce these sanctions. to stop sanctions invaders. i hope the shut down ends soon so that we are truly able to do so in the run up and as these negotiations proceed. as we move forward it will be critical that we continue to move together and take no step that signal decision to iran that could and likely would exploit further as the effect out of sanctions on iran depends in part on the action of our partners, we must ensure that our sanctions do not place an undo bushed on those countries. it's not in our interest to create phis sure within the international coalition facing

iran as the impact of our pressure comes from the steps these countries take. we will also continue to raise our other concerns. human rights abuses and destabilizing activity across the region. we will remain absolutely dead candidated to the return of u.s. citizens robert lev stoun. every day their families wait for them to come home. so as we do, we remain in close consultation with our allies and partner in the region including israel whose security remains a paramount focus. we'll continue our consultation with you and other members of the congress as we have in the past so any congressional action is aligned with our negotiating strategy as we move forward. thank you, again, tbb the opportunity to discuss with the

committee the important development over the past week in new york. as always, i look forward to regular engagement with you in the week ahead and the questions and comments today. thank you. >> thank you, mam secretary. let me start off. there's so much here, i heard a someone in your statement, and i get a little concerned. let me make if very clear from my perspective. when we start talking about relieving sanction as the iranians begin to alleviate our concern, you know, i'm not sure exactly why what we mean to begin to alleviate our concern. there's a real legitimate concern here that the iranians will do a certain amount that ultimately begins to create some sanction rflt. but at the end of the day, that draws back the international community. that draws back the forces of

keeping the pressure that is brought us to this moment. then to gear that back up would be an incredibly difficult proposition. so i, you know, listen to the words, but iran has repeatedly said that they reject the development and use of nuclear weapons. that's been reintegrated now. how believable is that statement given what we know about the history. prior assessment by the committee and public swell in private that iran has previously at the government's direction sought a nuclear weapons program. so they still, as far as i know, i haven't admitted they were pursuing a nuclear program. they still say they reject that. unless it happened at p5+1 and we haven't heard about. what are we talking about here

if they begin to alleviate our concerns? and how do we reconcile what the iranians are saying now with what is a very fied history of moving forward a nuclear weapons program? so i get concerned about it. the final element of the so you can give me a response the president has been very clear and proud of the fact as is evidenced by his book last time he conducted negotiations over iran's nuclear program, he was able to use those negotiations as a stalling tactic while his government advance nuclear program. i look at all of those realities, and i get concerned sinned the need to test the diplomatic possibility but by the same token i get concerned about easing of sanctions to satisfy some of our concerns. >> mr. chairman, i think that's a legitimate concern and we have

thought through very carefully as we move ahead to the negotiation. we quite agree with you. the fundment tal large sageses we have in place should not disappear any time soon unless all of our concerns are addressed by the iranians with that we agree with you. we do not want the sanction regime to follow part. at the same time, the reason we focus on confidence building some early test whether that is some degradation of their current posture, there are may ways to do this is because everyday their nuclear program goes forward. it will take more time to do so. sin we know they are continuing with their nuclear program and the history you point out when

the chief negotiator 2003 to 2005 we know that deception is part of the dna. we want to make sure that we can put some time on the clock for those comprehensive negotiations. what would give us confidence today, put the time on the clock, stop the nuclear program from moving forward while we get to the agreement that would allow the full sanctions relief they're looking for. there may be some elements that we can do initially if they take verifiable concrete action that will put time on the clock that are reversible or don't go to any of the key sanctions that have brought them to the table. let's talk about that. this is the issue. let talk about the time on the clock. >> david albright, who will follow you on the second panel provides some very detailed information about status of iran's nuclear program that is very concerning indicating that

iron will soon have the ability to break out in a time period as short of two weeks to several months. is that an assessment you concur with? i can give you, in this setting and we would be glad to have a classified briefing with our intelligence community and give your our detailed assessment. i'm not going do it publicly. quite frankly i would not want iran to know what our assessment is. let's asiewment the assessment is right if that is right, then your time frame for tenth annual fin sieve action is relatively short. we believe we have some time. we don't have a lot of time. i would agree with that statement. i would also say that want to

put the pieces in place that give him that option. it could take as much a year before he got there. there are many factors that change that clock. i have tremendous regard for dr. albright and so i would listen carefully to him for sure. i think if would be best to have that classified briefing with the committee. tell you the element that change it. last year the -- not the u.n. general assembly. a year ago the prime minister of israel put a key element on the substantial. that is how much quantity stockpile of enriched you uranium iran might have that they could easily convert to 90 percent in enriched uranium

would give them the material they need forked the nuclear weapon. what the iranians did is start to invert it in to oxide. even though it be changed back. that stakes time. they changed cat clues of the clock by converting that enriched uranium to oxide. calculating the time clock here is very complicated. which is why i wouldn't like to do it in a classified session. every single day our intelligence community at least when we have them full time, which we don't at the moment, but we're still focused on this even with the staff we have look at where they are on the factor. they change the clock. part of the equation here is our ability to detect a nuclear

breakout by iran. that is not with scientific precision here. that's part of our change how close to the line do you let them go? i don't think there's any question, but that the action that this committee and others have taking in congress in general toward iran have put us in the place we're in. i know, the administration touted the fact they authors for military force.

there have been discussions about things even more draconian that and certain to the future if nothing changes. what would you like to see us to do to support a successful conclusion for us. very much part of the discussion on the ub security counsel and resolution and looking ahead to the conference on sir imrapt a, by the committee to say there was a credible threat of force in syrian was absolutely critical to our ability to move

forward on cw. i thank you. they had to present a plan. i thank you for the opportunity because it's important for them to hear the messages you're delivering and the message i'm delivering in public that secretary kerry said in tokyo just today you saw in the morning news where he said, again, a no deal is better than

a bad deal. that we are doing this with our eyes open. this public discussion is important to the negotiation. secondly, on your encouraging us to enforce the sanctions to get all the assets in place to do so is equally critical and the oversight you provide is very helpful. in term of legislation, that is currently being discussed here on the hill within we believe it would be helpful for you all to at least allow the meeting to happen on the 15th and 16th of october before moving forward to consider the new sanction. the reason i say that is because i want to be able to say to this is -- i'm saying it. they'll listen. this is your opportunity. come on the 15th of october with concrete, substantiative actions you will take

commitments you will make in a verifiable way verification will you sign up to to create some faith there is real toy this. our congress will issue. i can assure you if you do not come on the 15th and 16 ted with that substantiative plan, that is real and verifiable. our congress will take action. we will sport them to do so. i hope you'll allow us to begin the negotiation and see if in fact there's anything real here. with my telling of the iranian's quite directly if there isn't, that everyone is ready to act. that's a clear signal. i think what you've said is that in iran doesn't come to the table in mid october in the way

they should, you would fully support the committee an the committee in general adding additional tough sanctions on iran. >> we would very much look forward to working with you on figuring out what those sanctions ought to be and how to proceed guard. so i cannot commit today for the administration. i agree with every line and legislation that is currently pending. but whether he certainly want to go back to looking at what pressure needs to be added, yes. >> and the interim to alleviate any concerns that my of us might have. we pass laws here, and it's up to the executive branch to implement those. and i think what i'm hearing you say is that throughout these negotiations, administration is absolutely going to continue to

exeep existing sanctions working in a better way each day. is that correct? >> that's correct. the shut down does make it more difficult for us to do so because we do 0 not have our full intelligence democratic national committee, the state department is putting restrictions on travel by state department employees and we use our sanctions team to travel the world to go after sanctions evaders and folks not following through. it will limit our ability to do that. so quite tankly, where iran is concerned. the sooner the shut down is over, the better we'll be able to do the job you were asking to do. and we want to do. i know you don't want to talk about where you think publicly where we think iran's capabilities are. i think most of us have a pretty

good idea based on the many classified meetings we've been involved in. but it's, my sense that the appropriate length of time to go give iran apt united to come to a conclusion is two to three months. let's move away from their capabilities are. just to give us a sense as far as how we might be most productive here. would you agree that's an appropriate time frame for us to allow negotiations to occur. it depend hotches they are ready to go. you have heard various things from the iranians in new york. we have heard them say they could complete an agreement.

implement the year. that's what they said to us. i think they can get to agreement when they said we want to go faster than that. he said we could get to an agreement faster than that. we couldn't implement in that period of time. they probably be implemented in that period of time because in three to six months because there a lot of highly technical things that have to be put in place. but i do think you are correct to say that we will know in the next short period of time whether there's any serious real or not.

the success of dealing iran and sinned your two tracks of pressure and diplomacy depends upon our ability to carry out what we say we're going to do. we have to understand what is doing on around the world. any diminishment of that capacity is having could have a major impact here. there's many reasons why we should resolve the issue today about the government remaining open. not tomorrow, today it should be done. you giving us one additional reason. i thank you for that. i want to underscore a point the chairman made.

it's what the position is the international community. i think we would like to see diplomacy work. we would like to see iran move in the right direction and monitor and occur. when we use language such as prepared to look at the caption. it it they make significant progress and do certain things. it seems it may interpret it differently than we do. the fact we're meeting today has put additional pressures on international capitols to look at -- capital to reduce some pressure on iran. many of our closest allies could more in reducing oil consumption from iran. they could do more. it seems to me, if we are to be successful in the pressure to get iran to give you not just

the offer we're looking for but we need to increase the pressure not reduce the pressure on iran at this point. yes, it means what we do. but what we do in working with our quo legislation to say now is the time to reduce your oil sales purchases from iran. it not to increase it. and -- i guess my point is that i would hope that our position is to strengthen the effect of the sanctions today so we have a best change to make diplomacy work. and we have an understanding with the international community. our partners in this. they will also move to strengthen the sanctions. and yes, we're prepared to give you additional tools here in congress. we would like to do that with

you. i think senator corker's point is clear. i think you had the support of congress. but i would hope that we could have a sen of urgency with our coalition partners on the sanctions to tighten the enforcement of these sanctions. how -- how is the -- how is our coalition responding to this? we making progress? ..

and virtually everyone where it was relevant to that particular country whether that was china whether that was russia whether that was turkey whether that was india, whether it was to indonesia or anybody that is part of an international coalition because you are quite right. what matters here is that international group. >> china is still buying a significant amount of oil from iran and some of our closest allies in asia are buying oil from iran. it seems to me that we could be more effective in having greater help. >> i agree indeed. as you know secretary kerry is on his way to aipac in the east asia summit in thiessen talk yet today. iran is a big topic of

conversation in japan. if the president is able to go to aipac and the east asia summit, iran will be a big topic of conversation as well. their talking points that are part of any bilateral -- >> it is a to strengthen the enforcement? >> is to ensure the enforcement to strengthen enforcement to watch what iran does on the 15th and 16. many of these countries have a relationship with iran. we do not so whenever talking points us to save them here's a message we want you to deliver to iran. this is the opportunity on the 15th and a 16th to put in front of the international community not just united states in front of the international community specific concrete substantive and verifiable steps that will address the concerns of the interim community. take this opportunity or you will see that pressure continuing to increase. >> senator rich. >> thank you mr. chairman. first of all mr. chairman i'm

glad you included pastors said of bidany who is one of my constituents and the other two individuals and frankly without those people being freed there is no chance that iran is going to convince me that they have any willingness to participate in the national community and to do what is right there. secondly let me say that i associate myself with the remarks of the chairman and was senator cardin. we have had some discussions here about the shutdown and i think the world knows that we are having an intramural fight over internal policy. let there be no mistake when it comes to these kinds of issues we stand shoulder-to-shoulder on them and we are not divided on these issues. we will move forward together on these issues as americans and we will join the country. given that let me say that i

appreciate senator cardin's remarks and again i know this gets into the political weeds and i can't speak for all republicans but if a bill came to the floor in moments that relieved our intelligence services the state department enforcing the sanctions and all the problems you have described i would vote for it in a heartbeat and although i can't speak for any other republicans i can tell you i think probably we had a photo menu with pass the senate unanimously. but we are not going to get a vote on it for political reasons and it's unfortunate but i want you to know that i'm there and i think most every republican if not all republicans would be there to back the expenditure of those funds because we all agree on that and it's really unfortunate that those of us that have been elected to govern and want to govern can't govern because we can't get a vote on these things.

we are going to continue to work on it. we know what's right for the country and this is got to get resolved. let me move for a minute to the new president of iran. frankly i have been really dismayed by the embracement of this charm offensive that he brought to the united states. when you look at this man's history and indeed when you look at his abilities when we all know who is actually running that country we ought to flat ignore him. he has indicated that he has used this type of tactic in the past to achieve the policies of the goals that iran wants to achieve. so having said that what can we expect of him now? what we can expect is the front he is putting on, the façade he is putting on is to do exactly what he has been doing a'lafonte including informal meetings in

that he bamboozled us and he brags about bamboozling us. look, we are smarter than this. we should understand the disc i what he is saying now you can't put any weight on whatsoever when you look at what his history is. so i for one have been very disappointed that all of this. i think what we have to do is take a step back and say look we don't want to hear this stuff. we don't even want handshakes. we want to see some action and i look forward to october 15. i would like to say that i have cautious optimism. i have no optimism. i think what you're going to get is another dog and pony show. i think you will get another shuffle and i think it will be business as usual and we have seen a day after day month after month year after year. i think it's just going to go on

until they can achieve what they want to achieve. bless you for what you do. keep it up. you have a very difficult task and i think this committee and this congress is willing to help and willing to put our foot down firmly to proceed with the road we have gone down to try to bring these people to where they need to be. thank you mr. cherry. >> thank you. >> thank you mr. chairman and thank you to secretary sherman. we very much appreciate you being here. you talk to a few minutes ago in your testimony about meaningful transparent and verifiable steps that would address core issues. i want to ask you first if there is agreement within the administration about what those concrete verifiable steps would

look like in order for negotiations to continue and then secondly whether there is agreement with our international partners about what those steps should look like? >> thank you very much senator. we have extensive discussions about various scenarios before we go to a negotiation. both internally and with our p5 plus one partners because it is being united that really makes any negotiation effective and doing a negotiation with six partners is never an easy undertaking. it is the international unity of sanctions and the international unity of negotiations that makes us effective than if there are just divisions it makes it much harder. so yes we have gotten clear

about where we want to head at the end of the day, what might be an early test of whether there is anything real here and we are in fact have many mechanisms in advance of the negotiation to make sure that we are completely united in our approach. you know we may disagree with some of our partners in the five plus one on many things. russia and china don't always agree with us and my european partner sometimes want to go further than i've want to go but at the end of the day we all understand how important it is to be united in going forward. i appreciate as senator risch says the bipartisanship on this issue. i did if i may senator want to make one remark in response to senator risch which goes to this as well. the shutdown and putting a piece of legislation on the

intelligence community would indeed be helpful but it wouldn't be nearly enough. there are so many parts of this that are problematic. even in the state department indeed 2014 security funding for israel will be delayed until there's a cr or full-year appropriation. our ability to protect the sign-on is delayed. so no one piece of legislation is going to solve what is a very complex international issue that we face and we are beginning to see editorials which we understand they are political so we only take them so far but sarah longo where we have been pressing very hard on democracy governance for human rights they wrote a critical editorial today saying health care is a universal human rights get the united states can come to an

agreement on it so who are they to preach to us about accountability in governing? this is complicatcomplicat ed for us but i very much appreciate the bipartisan support on iran and our efforts in moving this forward. >> thank you. i would just have one disagreement with you and that is i think there is one piece of legislation to deal with this and all the speaker has to do is call it up and that would give a continuing resolution. but let me just go back to your statement because there are ongoing negotiations. it wasn't clear to me whether you were saying that there is agreement now on how those negotiations might go forward and what people are looking for. >> we are finalizing with the negotiations frame will look like. what i'm more will say is the p5+1 has agreed that the proposal we put on the table stays on the table and we will

not offer anything new in the first instance. the onus is on iran to put their response on the table to us so we are waiting to hear from foreign minister's who will head the delegation. we will not put new ideas on the table until we hear from iran. >> thank you. i only have a few seconds left but i was struck by the news accounts of rouhani's returned to iran and there were demonstrators there in opposition to him and to some of the statements. i wonder if you could speak to the internal situation in iran and to what extent he continues to have the support of the religious leaders in the country? >> well as many of your colleagues have pointed out rouhani is very much a part of the religious cleric class in iran. he has been a member of the

expediency discernment council. he has been on the supreme national security council said he is very close to the supreme leader. he is very tough. he is very conservative confident that he does have politics even in iran. he won as a moderate, moderate in their system but he won as a moderate in their system saying that i he would take a different approach to the west. but he does have to deal with people who are much more hardline than he is -- hard-liners that he is there are people who are more hardline. i would expect those protesters were approved by the regime so that we would see that there wasn't just support for what rouhani was doing. there were also some people who opposed what rouhani was doing and i think the supreme leader has given rouhani and zarif

enough rope to get this over the line and perhaps even enough rope for other purposes if they aren't successful. >> thank you very much. >> thank you mr. chairman. thank you for being here today madam secretary. this is not a new issue for us. as the country back in the 90s and i know you were involved with president clinton in the north korean experience heard at the time clinton was adamant that north korea would not retain there -- and let me preface it with us. they are five countries in the world that enrich uranium or reprocess plutonium but they don't have a weapon. those countries are germany brazil argentina and the netherlands in their two countries that have a weapon north korea and pakistan. i guess my first question is which one of these two types of

countries does iran look like the most? do they look like north korea and pakistan or germany and japan and brazil and argentina? who do they resemble the most? >> senator i would make a couple of comments. one, they resemble themselves. they are a sui generis case in many ways more dangerous than any country who has the ability to reprocess in rich or has nuclear weapons or seeks to get nuclear weapons. >> understand that they have a special case different in some ways the north korea and pakistan but i think you would agree they don't look anything like germany japan reseller argentina. here's why i'm asking. the present at the u.n. general assembly said we respect the right of the iranian people to quote texas nuclear energy and that sounds innocuous enough. the president of iran has said publicly he iran's right to

enrichment is nonnegotiable. so here's my question. what is her official position? does iran have a right to enrich uranium or reprocess plutonium? >> so the presidents full comment on the quote that you gave is i have made clear we respect the right of the iranian people to access peaceful nuclear energy in the context of iran meeting its obligations so the test will be meaningful transparent and verifiable actions which can also bring relief from the conference of international sanctions currently in place. the president has circumscribed what he needs by the iranian people having access and that word was as national security advisor rice said on fareed zakaria very carefully chosen access to peaceful nuclear

energy in the context of meeting its obligations. >> so is that our position that iran has the right to have access to uranium or plutonium for peaceful purposes but they don't have a right to enrich it or reprocess of themselves? >> it has always been the u.s. position and i said to my iranian interlocutor many times that article iv of the nuclear nonproliferation treaty does not speak about the right of enrichment at all. it doesn't speak to enrichment. math. it simply says you have a right to research and development in many countries including countries like japan and germany have taken that to be a right that the united states does not take that position. we take the position that we look at each one of these and more to the point the u.n. security council resolution has suspended iran's enrichment until they meet their international obligations.

they can say they have suspected suspected -- suspended their enrichment so we did not believe there is an inherent right by anyone to enrichment. >> no one has an inherent right to enrichment of the u. have outlined these cases and they don't resemble iran at also my question is this because i understand their position is that i have a a right to but why isn't better starting point? why don't we make it clear because the president of iran has made it clear that in his opinion in richmond is nonnegotiable. why isn't our position -- why hasn't the president said as he is set on other issues that he will not negotiate until a certain condition is met? laying down those markets on this domestic's dispute so what is the interim with negotiate with iran by simply saying there is no negotiation till you give up your enrichment and you're reprocessing capability? >> it's very interesting

senator. i think it was today or yesterday the president rouhani actually qualified his own statement. he said we will not give up our capability to have enrichment but we can discuss the details. so you know a negotiation begins with everybody having their maximalists position and we have ours which is they have to give all of their positions on the mpt under the security council resolutions. then you begin a negotiation. >> would the united states ever -- here's my last question. will we ever -- will this president ever agree to the sanctions and any negotiation that does not require iran to abandon its richmond and reprocessing capabilities? >> i am not going to negotiate in public senator with all due respect. all i can do is repeat what the president of the united states has said which as we respect the

right of the remaining people to access peaceful nuke your energy in the context of iran meeting its obligations. the test will be meaningful transparent -- >> you are not able to say here today that it is impossible that there will never be a negotiation that there there will never be an agreement to lower sanctions so long as iran does not abandon its enrichment or reprocessing capabilities? >> what i can say to you today is that iran must meet the concerns of the international community including the united states and all of its obligations under the npt and the u.n. security council resolution which has suspended its enrichment. >> senator coons. >> thank you chairman for convening this critically important hearing and ensuring this committee continues to fulfill his constitutional duty even in the middle of a government shutdown. madam secretary thank you and to all the witnesses who are here today and thank you for the very

hard work that you and the secretary have been doing to continue to strengthen and sustain the sanctions regime which is critical to getting some chance of some progress in this. an engagement with iran to have to be clear-eyed and realistic about our goals and at the end of the day i think there is broad agreement. we must not allow iran to acquire nuclear weapons capabilities and any negotiations must demand a verifiable end to their uranium enrichment program. i support the president's assertion that all options are on the table and appreciate your opening comment about the actions of this committee and its role in progress with regards to syria and i strongly believe the credible threat of military force has tipped the maintained in order that there be any progress around the negotiating table. i'm encouraged frankly the sanctions are having similar impact both in terms of economic repercussions and hopefully forcing the regime in iran to change its calculus with regards to the nuclear program.

that has formed the basis for negotiations but i also think it's unclear whether hassan rouhani is genuine in his stated intentions and is capable of making a deal so i might also say at the outset i appreciate your continued to press several americans were iranian americans in my case i've been concerned about engagement with mr. hekmati. this charm offensive to me is so far not charming. the release of clinical dissidents and prisoners is a beginning and very modest step and could be advanced further by taking real steps to end the oppression within iran and the ongoing terrorist actions outside of iran to kill or take hostage iranian dissidents. so let's talk if you could first about whether or not iran's capable of making a deal. does he have the authority from the supreme leader khamenei and

his speech in september talked about her relic flexibility. i was pleased to hear you clear-eyed about the fact that deception as i think you said has long been part of the dna of their negotiating strategy. does rouhani have the authority to make the real deal and see it through? >> i see and we don't know senators to be perfectly honest. he says he has a mandate for the supreme leader testis foreign minister zarif to in fact come to an agreement with the international community but as i said we are ready to test that that we don't know. and he may not know. it maybe that the supreme leader has said to president rouhani and foreign minister zarif go give it a try. >> where you can go, see where you can get in they may not even know what the limitations are of their ability to negotiate. but we have to test this and we

have to test it as many of your colleagues have said in a short enough period of time in a way to ensure that their nuclear program can't just go on and on and on to a point where we wake up one day and find out they have the capability. we all don't want them to have. we will test this and do it in a relatively short period of time. we will see if there is anything real here and we will see whether a president rouhani foreign minister zarif can deliver on what they they have d to us which is they not not only have a mandate from the iranian people that a mandate from the supreme leader. >> we have short timelines i think both in terms of their steady progress and steady advancement towards nuclear capability and they shut down its maddening i think and unconstructive -- destructive shutdown of u.s. federal government is preventing the ofac from and effectively

enforcing sanctions. what is the plan forward for dealing with the shutdown should it continue for another couple of weeks and how do we make sure that the american people understand the real risk this is creating for the united states and for roles with regard to stopping iran's work with its nuclear weapons capabilities? >> i certainly think this hearing today in the statements from the members and the senators helps to convey that message. i think it is critical that we move forward in a bipartisan way that this committee has proceeded to deal with iran and to do so. we not only need all of the tools at our disposal to enforce the sanctions but we need all of the tools at our disposal for national security and foreign-policy including the lectures we give to countries all over the world of good governance. i've been in washington for a long time and once worked up here on capitol hill. i know members on both sides of the aisle can come to the right

decision and we are hopeful. i speak as an american citizen that happens quickly. >> lasted for my rouhani has made great promises both at the u.n. but also domestically. what if any evidence is there that the human rights situation within iran has improved or iran has in any way backed off their campaign against iranian dissidents outside of iran? what more could we be doing to advance human rights both within iran or to afford their efforts outside of iran that is making making -- taken many lives and threaten the stability of the region? >> thank you senator. human rights lawyer -- but we hope that iran will expeditiously freeze all of the 80 political prisoners whose

pardons were recently months many as we are trying to confirm it has released so indeed it would be very wise of iran to speak to the international community by making affirmation of all of those prisoners. in addition as you pointed out we have three americans that we are all quite concerned about. robert levinson hakmati and said albert dini. both mr. huck money end up with dini are in prison. it would be a grand humanitarian gesture since they did nothing wrong for them to be released and it would be very important if robert levinson who has not been known to his family since march 2007, almost seven years now. almost seven years for iran to cooperate and help us to find out where he is and get him back to his family.

finally we have sanctioned more than 30 iranian individuals and organizations for their involvement in the complicity in human rights. they continue to support human rights in iran and we also use our first role in the sea tehran platform and its associated u.s. facebook youtube twitter and google+ platforms to promote freedom of expression and respect for human rights and freedom with electoral processes. it's very interesting that allen ayer who is a fluent farsi speaker and really the voice of of our face to iranians an interview with him was put on the front page of the iranian pew paper for the first time including a very nice picture of

allen. he is part of our delegation and our team for negotiations because he is a fluent farsi speaker. he understands iran quite well and it helps to understand sometimes what's going on in the room so he is a great asset on all of these issues. >> thank you mr. chairman and i would like to thank the chairman for making the determination that this hearing was essential to our continuing the government here. i happen to think the national security is a top private government. it's actually essential part of government so i would also like to thank secretary sherman for coming here today and i'm thankful to the state department who has determined that you are essential as we are moving forward to making sure we enforce the sanctions against iran because that is essential to national security. let me start with a question. i appreciate the fact that in your testimony he said the shutdown is causing concern in

being able to force iran sanctions so doesn't the state department and the treasury department have the ability like we have in congress making a determination terms of what is essential activity? >> certainly and the head of ofac is doing work as well as a couple of staff but ofac's responsibilities are enormous and they have to determine given what they have in front of them who they can keep and who they can. >> we are here today in this hearing because we believe the actions of iran pose a serious national security threat to this nation so why would the state department and the treasury department not team the people in charge of enforcing sanctions against iran as essential services of the federal government? why wouldn't they do that? >> we only have limited budgets available to us so i know that you would believe there are many things the treasury must do to make sure u.s. currency u.s.

monetary and fiscal policy is protected. they have a variety of things that are essential to u.s. national security. >> as a matter of prioritizing spending. >> it's not just a matter of prioritizing spending. there are undermines your senator with all due respect and i think the fundamental point here is i truly believe every member of this committee wants us to keep iran front and center as we do. i know secretary lew, i know that dni clapper and director brennan all want to make sure that iran is front and center but there are realities to how much money we have available to us during the shutdown and it is limited. >> madams secretary as i said t. before the hearing i really would like to thank we can have politics and at the water's edge

i believe this committee has shown that capability during a very thoughtful debate on the syrian issue. i believe that is true. then you come before the committee and very appropriately and i appreciate the fact you're pointing out to us that we are concerned about her ability to enforce the sanctions against iran. i guess the question i would have is would have is isn't it appropriate for you to come before congress and before the house and say listen if you don't have the ability to team those sanction enforcement is essential and you need additional funding to ask the house to pass a measure quickly which i believe they would do probably today if you made the request and then ask senator harry reid to bring that up in front of the senate probably on the basis of unanimous consent. i think we could get that funding to in a matter of hours. would you be willing to work with congress to do just that?

because it's essential. >> as i said senator i believe that there are many essential pieces to what we do. >> have you made a point to the president how crucial it is to make sure we maintain the sanctions and can enforce them against iran? have you made a point to the president? >> i think everyone knows it's essential we enforce things with iran and i believe it's essential that we make sure israel's peace and security it is affirmed their budget. i also believe it's essential that we can in fact talk with countries around the world about good governance and have credibility when we do so because their own system is working. this is very complicated and i differ to the bipartisan -- bipartisanship appear to ultimately solve the problem. you know better how to get that that i do. >> obviously we are at an impasse and discussions are working well. i certainly didn't want to have

the government shutdown that we are now having the house making the attempt to start passing over the appropriation bills. it should have happened months ago but again i'm highly concerned about the national security this nation i would hope the president is equally concerned. that being the case why don't we at least allow the house to pass any appropriation bills or any continuing resolution so we can fund the essential parts of government so we are not concerned about the enforcement of the sanctions against iran? again i would really encourage you to the administration talking at a president and who of the need to talk to to make that request and allow that to come to the full senate and have president obama sign the funding so we can continue with the essential services of government. thank you. >> senator mccain. >> mr. charles not going to do this but i can't resist. it is not the department of

state's fault and it is not the administration's fault but congress hasn't passed a budget. it's not the department of state's fault and it's not the administration's fault that the house in this body have repeatedly blocked the budget conference from starting. everyone at this table messes but for the folks who are here the senate has not passed a budget in four years and we pass one on the 23rd of march this faith we at the house passed a budget and we have been making efforts decoded to a budget conference we can make these funding decisions since the 23rd of march and has been blocked 19 times. the attitude has been we will not have a budget conference because we are not interested in talking and we are not interested in listening. only after pushing the government to shut down at midnight monday to the house say now let's have a conference but not a conference about the budget. let's have a conference about whether or not the government of the united states should be open

or closed. i mean he should not the expecting the state department to help bail congress out of the dysfunction without being willing to sit down and compromise. please do all you can to stress the critical nature of your work but we know that and so does the president. this is up to congress to solve and it's only going to get solved if we sit down and have a conference about the budget which we have been trying to do since march. now my question that is really an observation is based upon some questions that i've heard senator risch ask before secretary sherman. the sanctions regime against iran in an area can i continue to be concerned about is the wafers to nations that continue to purchase iranian oil and senator risch and i were at a

hearing with ambassador to canada on who is going to deal with india. the nations and especially china which purchases such a large amount in continue to purchase iranian oil if we could get them to do more to scale back their energy purchases i think it would take the sanctions regime which are having an effect to make them even more effective and hopefully help us. we had a meeting in early july and i think senator mccain was at this meeting. senator -- i asked him this question. you have producer oil purchases from iran for a freight of reasons including to help the sanctions. could you reduce and dramatically further and then say but if you give up your nuclear program level by a lot more from you soon have a stick but then have the and fled india do the same thing. dramatically reduce the sanctions but with a carrot down

the road and japan could do the same thing in the response to the chinese official was very quick. he said we would be willing to consider cutting a purchase from iran further if you would sell us -- that was the issue we were talking about with our ambassadors and representatives to india. i would from a political affairs and point hope that the united states asset significant play of natural gas while the exportation of it has some other domestic and economic issues we have to balance i think that is a resource and asset that we could have that could even take the nations we are currently accepting from the sanctions and help them dramatically reduce their purchases in a short-term period is a way to enhance sanctions and i just want to encourage you to think about that asset in that way. >> thank you very much senator. indeed our energy bureau headed up by ambassador pascual has

looked carefully at this and i would be glad to ask him to come up and refute in brief the committee him what we are doing in this regard. it works in some countries as a substitute and another said doesn't and as you point out there are a lot of domestic as well as international issues involved in deciding whether we are owing to the exporter as in the tremendous asset we have discovered that we have. but i do think it is something worth pursuing. we are pursuing it and would be glad to arrange a briefing for the committee on what works about this and what doesn't work about this and how we can move it forward and what are the considerations for it. we also agree that we need to keep pressing china india turkey south korea japan and their small amounts of oil to go to taiwan and we need to keep pressing it.

all are for reductions but all 23 importers of iranian oil have either eliminated or significantly reduce purchases from iran and we are left with only five major customers. with your help -- >> just very quickly do you continue to believe that if those five major purchasers continued to scale back in significant ways that could be a very strong additional leverage point to increasing shins and help us with our diplomatic discussions surrounding it? >> without a doubt that i would not particularly for china and india becomes more and more difficult to do because their demands are growing exponentially even as they are reducing and i think i've use this statistic in front of the committee before but given percentage reduction from china was currently the largest purchaser of oil from iran would be approximately equal to a volume reduction twice as large

as the same percentage reduction from india three times as large as the percentage reduction from south korea and four times bigger than the percentage reduction from turkey. even a 1% decline in chinese purchases is double what anybody else's reduction is because their volumes are so great. >> senator mccain. >> thank you mr. chairman. thank you secretary sherman. thank you for being here. i think there's a question on the minds of many us -- many of us about credibility. back in mr. rouhani was one of the most trusted figure supreme leader. he has been the deputy speaker of parliament and as we know he also served as the negotiator.

then in a brief interview that he gave which is out there on the internet quote day we invited the three european ministers only 10 centrifuges were spinning at the iranian nuclear facility. rouhani posted on the tape we did not produce 1-gram of view for you six. we did did not have the heavy water production and we could not produce yellowcake. our total production was 150 but then number 18 made it in the video the purpose of prolonging negotiations quote we wanted to complete all of these and we needed time. he said three european ministers promised to block u.s. efforts to transfer iranian nuclear dossier to the united nations using veto power is necessary. iran's claim that stopped its nuclear program in 2000 3a statement for the uneducated and

admitted the program not only continued but with significantly expanded under his tenure. in the the interview rajon a senator took the nuclear project the country grew to 700,000 he made a bolder statement we did not stop them. we completed the program. we are supposed trust this guy? what possible confidence do you have in this individual? >> senator i don't trust the people who sit across the table from me in these negotiations and you are quite right that rouhani was the chief negotiator from 2003 to 2005. i'm well familiar with the interview with this book that has secretary kerry has said we must test the proposition that has been put before us but not forever and ever for the reasons

you pointed out. >> how long should the test take you think? >> i think we will know -- >> don't know how long the tests will take? >> we will know -- >> do you have a date? >> can i finish my sentence? we will know whether there is anything real here or not. we will know whether quickly whether we are beginning a serious negotiation or whether we are moving down one more road that leads nowhere. >> do we have evidence the iranian regime is training regular forces in the use of chemical weapons in syria? >> in this setting what i can say to you senators that we are quite well aware that iran is heavily engaged in syria both with advisers boots on the ground financing of lebanese hezbollah providing all kinds of strategic advice in ways that are quite destructive and

horrific. >> so you can't say in a public hearing whether we know whether the iranians are training syrians and the use of chemical weapons are not? >> i will be glad to have our intelligence community come back to a. >> i see. is kasim solo money playing a role in the assad regime assessment and what influence does he have over the regime regime's command-and-control? >> what i can say in the setting and i think we probably should make sure we get classified briefing for you on all of this cosmic solomonic is very critical to the irgc. he is engaged we believe in what is going on in syria in ways that obviously we wish he was not. >> in the situation to the camp ashraf people we know that they

were iranian dissidents and at one point they were designated as a terrorist organization but the united states of america gave them an assurance that if they moved that they would be good. we know that the iranian influence has dramatically increased in iraq. in fact we know now that al qaeda is alive and well and doing extremely well with moving back and forth across the two countries. now there was a murder of a belief 51 people who were members of this camp and many of them had in their position guarantees from the united states of america that they would not be harmed. first of all are those facts true and second of all if true

what lesson does that send to people who we say will be under our protection? >> senator, i share your deep concern about what happened at camp ashraf. this was a vicious attack on september 1 and many lives were lost. the u.s. continues to press the government iraq at every opportunity at the most senior levels to ensure the safety and security of residents at camp hurry up where many of the mek were moved for better safety. we strongly condemn the attack. we of course extend our condolences to the victim's family who are working with the government iraq and the united states to voluntarily transfer the surviving residents to safety at the camp on

september 12. we are working for the protection of people in camp or you because we do not want a repeat of this so today the government of iraq has moved in over 700 large t-walls and five under bunkers and over 600 small t-walls and 50,000 sandbags. u.n. monitors visited camp daily to assess human rights and humanitarian conditions but i must say senator the real answer to this safety and security of all of the people in the camps camps -- who wants to live in the camp in resettlement to third countries to get out of iraq and get out of harm's way. i would call on all of the people who are here today representing the rights and interests of the mek and the leaders of the mek in the camps and in paris to allow this resettlement to go forward this until the resettlement happens safety and security is going to

be at risk. we will do everything in our power to keep people safe in these camps but as you point out the al qaeda threat is increasing in iraq and it is difficult. [inaudible] i hope that this issue will be raised with the iraqi government and we in congress may have to look at the kind of age and how we are extending that to iraq at this kind of thing is going to be countenanced by the iraqi government. i have used up all my time and i thank you for your response. >> before i turn to senator -- let me echo what senator mccain has said in this regard. i put out a statement talk to this department. america went and said disarm and we will protect you.

and then we ultimately ultimately left in that protection has not been there. you can put up i don't care how many tons of sandbags but when elements of the iranian -- excuse me of the iraqi forces actually may very well be complicit in what took place sandbags aren't going to take care of the problem. i agree with you that resettlement is a critical part. maybe the united states could be part of leading the way in saying to a universe of these individuals that in fact you can be resettled to the united states and that would get the rest of the world to offer further resettlement but it is unacceptable to lose one more life when american commanders gave these individuals a written guarantee towards their safety. it sends a message to others that when we say we are going to do that and we did not that they should not trust us. and for one thing this they can

do since this has jurisdictions over weapons sales is i doubt very much we are going to see any approval of any weapons sales to iraq until we get the situation to a place in which people's lives are saved. senator martin. >> thank you mr. chairman. >> the sanctions have squeezed the regime of iran but we cannot let the iranians wiggle out of the impacts of the sanctions through a mirage of cooperation. we should not relax the sanctions one inch while iran's intentions are still unknown and as you have noted madam undersecretary we are not in a trust that verified situation with iran here. we don't trust the iranian

regime and we should not trust the iranian regime and that is where we are going to be. i think we all agree on that. there has been a very high historical verification coefficient coming out of iran on this program. and by the way they are no different than the north koreans and they are no different than the iraqis. they are no different than the syrians. they were all using what each of these countries says is an interest in electricity wattage in order to get access to a civilian nuke their electricity program to compromise it for the uranium and the plutonium. they all lied. it's all about the nuclear weapons beach. each country does it and in general the world keeps falling for it. we keep trusting them to not compromise and all you need is a slight change in the government and all of a sudden these materials are going into the

hands of those that want a weapons program. by the way that is my concern saying we would consider giving a nuclear program to saudi arabia. or for that matter to the united arab emirates. when the government changes so can the program as they vote out all the people that were inspecting a civilian program. it's just an ongoing storyline that never changes and we wind up getting deeper and deeper which is why we have to be thankful for the israelis in 1981 in bombing the iraq nuclear plant in iraq. when they on the syrian nuclear plant they did the world a favor because again this whole safeguard regime question is completely dependent upon how intrusive, how continuous the

inspections regime is in guaranteeing the program is not compromise. i don't think it should take a long time to determine whether or not they are going to allow the inspectors in to go to those sites to begin their preliminary work. we all know that is what happened and iran. they let the inspectors and when they thought there is going to be a war and we couldn't find a nuclear weapon program. we should've never started the war because we couldn't find the program. that was the ostensible justification to make sure the next attack could not come and we could not find it. that is what they have to expect it's going to compromise this program as other countries have compromised their nuclear programs and that is why we have to be careful in the middle east as we talk about saudi arabia having a civilian nuclear program. whenever we are talking about

nuclear electricity in countries that have enough oil and gas -- it's very likely that 10 years from now 20 or 30 it will turn on us again and we will be talking about american young men and women being put at risk. i guess my question came in the form of that comment. i would like to move if i could very briefly over to the cyberissue. we know there are iranian extremists that have been attacking sites in the united states in saudi arabia. what role is their capacity to launch cyberattacks on the west and on other countries in the middle east playing in these negotiations to make sure they know that we want that shut down as well and we don't want them playing games in this ever increasingly dangerous area of international conflict? >> sanitary thank you and thank

you for your comments. you have long been a leader and a champion and a speaker about nuclear energy nuclear power and nuclear weapons. you and i have had these conversations for many years. where cyberis concerned we are of course concerned about the capability of iran and we are concerned about the capability of many countries in the world to use cyber. where iran is specifically concerned i think that discussion would undertake place in a classified setting and i would be glad to arrange for that briefing. >> well, again i just want to say that is a big part of the storyline. >> absolutely. >> they use it again in a regional context that drives these other countries towards their own sense that they have to increase their own protection. i think it's absolutely critical that we play the lead role here.

stuxnet played a big role in buying us more time. we know that a counter capacity also exists in iran and other countries to attack us and to attack the west and those regional neighbors. i just want to highlight that issue. thank you for your work on it. and i wish you good luck. i think we are at a critical point and i would just say this mr. chairman. back in the cold war bridge naf genin diet andropov died three leaders in three years and gorbachev took over april of 85. he said he wanted to end nuclear arms it wanted to reduce nuclear arms. we had a moral responsibility to

trust but verify as ronald reagan said. we have a lot of reason to put iran in the same category that with put the former soviet union but rouhani shows up potentially and i think it's exact to what you said. we don't know how long his leash is that the supreme leader is giving him. if it is one than he can test it quickly because they can let those inspectors in and we can get the preliminary guarantee that those sites are going to be made accessible to the world and i think there will be a sigh of relief that will be briefed as there was in the mid-80s when reagan was able to extract that same kind of inspection regime and i think you mr. chairman. >> thank you. madam secretary before we let it go i have two final questions. one is last week pakistan's prime minister said he intended to move forward with a natural gas pipeline deal with iran that

was agreed to by the previous government with pakistan if that were to take place. it would be in clear violation of our iran sanctions regime and not to mention it would provide critical revenue stream to iran and it would create challenges globally with our other partners in terms of saying we are following you on the sanctions but we can't allow anybody to get away with this. all of this would be ultimately subject to the sanctions. is the administration having discussions with pakistan on this issue? are we ready to proceed with sanctions if they continue on the deal? >> thank you mr. chairman. a couple of pointed points if i may. on pakistan we have had those discussions and we will continue with the pakistani government. my own assessment is it's not going anywhere anytime soon but they certainly understand where we are and what our sanctions

require should it proceed so we will keep vigilant about not only what pakistan made to put any country that is going to have to confront the sanctions of the united states and the international community has at its disposal. if i'm a senator i would also like to take the opportunity to comment on what you said about iraq and we quite agree with senator mccain. we quite agree that we need to do everything we can to resettle people to get them out of harm's way to make good on the word that we gave to the npk. i know there are strong feelings appear and i understand why about arms sales to iraq but i do want to put on the record that u.s. security assistance and foreign military sales in particular are tools that we use for building and shaping iraq's defense capabilities and integrating iraqi security forces without security forces

and regional partners. i just want to caution that withholding security assistance may well serve to decrease their influence in baghdad and leverage the strategic competitors who will fill the vacuum and could conceivably damage their long-term interests so i would just as we talked carefully as we go forward. >> let me caution you about the overflights that iraq has permitted from iran into syria largely with impunity and let me also caution the seven hostages which we believe the iraqi government knows where they are should they die would be complicating matters for all of that so i hope that we have both cautioned each other. >> i agree with you on both issues. >> let me close by asking you one final question. what is it that we will accept

less than what the world has said is necessary through the security council resolutions?