>> let me ask you. it's imperative that the agency use every tool at its disposal to address the budget shortfall to protect the taxpayers. you believe the agency has used every tool at its disposal to address the budget shortfall? if not, i guess i'd have to

raise the question of whether the fha is failing to properly manage its portfolio, which places the taxpayer at greater expense. >> i believe we've use every tool at our disposal, and we have made prudent and appropriate policy changes, whether that's increasing in premiums or the many other changes that i've talked about here today. we also have to do that in a way that does not do further damage to the economy. and we need to do that -- >> thank you. you do agree if you were in a business that cpb would put you out of business? >> no, i did not. >> the gentleman's time has expired. the chair now recognizes the gentleman from connecticut, mr. himes, for five minutes. >> thank you, mr. chairman. and ms. galante, thank you for being with us today. i've been doing this for about five years sitting on this committee, and i don't think i've ever been quite as impressed as i am today by the

tone and the substance of this hearing, or by the way you have been personally treated. you have been subjected to the entire repertoire to benghazi, personal inquiries about your health insurance. i think i heard you call the faceless bureaucrat. that kind of language and that kind of tone is beneath the dignity of this institution and arms as our single-digit approval ratings, and it is violative of any standard of gentlemanly miss that anyone sitting back here should aspire to. i used to work in affordable housing so i'm familiar with your work prior to taking this job. you do this job in december 2012 at the request of the president, did you not? >> yes. >> 2012, four years after the meltdown you cayman. you might say that you cayman really one of the most difficult times in this nation's housing and economic history because the president has to delete the good work you are doing in california with bridge and you chose to do

this. >> yes. i do want to, just for the record, declared. i started in multifamily in 2009, and i became acting in may 2011, and disposition. >> thank you. >> confirmed into one to. >> give advice the cities of richmond, philadelphia, santa barbara thing. you're also arrested brokers so it's very to say you could be doing plenty of other things. >> yes. >> let's talk about the people of fha because i want to transition to this question of accountability so fascinates the other side. without in any way minimizing the reform that we might ask fha to undertake, i didn't want to pull on this thread of accountability. i don't know the people of fha do what you do but i heard the chairman and others really demand personal accountability. asked again and again has anybody been fired, why has nobody been demoted. ms. galante, has the troubles of fha in your opinion, is in

anyway related to individual malfeasance to weeding or unwitting performance on the part of any of the people who work at fha? >> apps will not spank you think anybody that fha could've been anything different from could've worked harder or been more prudent or more thoughtful in a way that would've prevented you sitting here today and us talking about this $1.7 billion capital injection? >> no, i do not. i believe we've done everything asked of us spent sometimes congress imposes, on your agent see your closely constrained by law and regulation that congress has imposed. we were recently treated with the debt ceiling to an example of that where the congress was going to demand the president violate some law. we save taxpayers, spend this, math has been required for certain amount of borrowing but you may not be able to bore. congress was going to kill the president violate some law. is it fair to say that under the

structure, the congressionally imposed structures and regulations of fha that fha has performed as well as could under the circumstances? >> i believe within everything to perform as well as we can. >> that leaves the question of why are you here asking for a $1.7 billion as the other side puts it, bailout? let me read you the last line of the majority staff memo on this. the last line, just to be clear, this bailout is required because the mmif is that 16.3, negative 16.3 -- >> yes. >> the last one of the majority staff member reach, the mmif negative 16 with the economic pie represents a decrease of 17.49 billion from its 1.19 billion at the end of fiscal year 2011. here's the part of want to emphasize. which resulted from further declines in national home prices, more loans having elevated default potential and

uncertain economic conditions. this is the republican memo saying that you're sitting here today because of the decline in national home prices and uncertain economic conditions. is that there was republicans are saying in their own memo? do you agree with that? >> yes, as i've been saying, the value of the fund is greatly affected by economic conditions. >> great. >> do you think congress has done all it could in the last three years or so? i know this is beyond your beyoe purview but do you think we're done all he can in terms of the policies to promote growth in the country? >> so rather than answering that question i would say, i think there's more that congress could do for fha in terms of giving us some additional authorities that would help us do our job better. >> fair enough. thank you. i yield back. >> the gentleman's time has expired. the chair now recognizes the gentlemen from indian, mr. stutzman, for five minutes.

>> thank you, mr. chairman. and thank you for being here today and for your testimony. i want to follow-up on the comment you just made about what could congress do for fha. we are obviously very concerned about the numbers, in the direction. i know that back in 2009 you had mentioned that you would like to -- that the outlook for fha was a concern of yours but that the numbers today, i think as we look at them, do draw much more -- deserve more scrutiny and questions to be asked. you mentioned that if congress would give fha flexibility, i can remove the exact terms are used, do you think fha would be better served from the outside

of hud as a stand-alone agency rather than under hud, and under its pretty? >> so i don't think -- i think there are tools that fha needs. i don't think that those tools relate to whether we are inside or outside of hud. so there is no reason in order for my view, in order to access those tools, why we need to be outside of hud. we are closely aligned with hud and its mission. there's a reason why that we need to change in order to give us the kinds of tools that i talked about, including, you know, under authority to go after lenders and terminate lenders when they are not doing the right thing and following all rules to being able to make emergency decisions without going through the full rulemaking process. those are tools that could be given to us as examples, you

know, that would be very, very useful. >> could you describe that relationship with hud a little bit more and what's hud's involvement and how do they influence the decisions of fha? >> so company, the secretary of hud, fha, as commissioned a report to the secretary of hud. so it is part of hud. we have separate accounting for the federal housing administration. but our staff are all, you know, follow the same rules that are part of -- >> so would there be a problem, so if they were separated, what would change? >> you know, i think it depends on what people would impose or chain specifically, right? i mean, it's not just a -- your it in or you're out. you would have to say what else would you be talking about?

>> i guess i'm trying to find out, is head influenced fha judgment is hud influenced fha in certain decision-making or if you're stand-alone and could use some tools, some flexibility with other tools, how would that be? how would that change things or what to make things better? >> again, the main thing about being inside hud is that we report up to the hud secretary. >> what does that -- what does that matter? does that change the way that you handle your decision-making? i guess if fha were a stand-alone with tools, would we serve the housing industry better and would we serve the taxpayer better? >> so i would just say, i think within hud and working with the hud secretary, there is no reason to change that. we could have some of these

tools that would help us, you know, as the fund and as an agency do even better job. but i don't see any reason why it would be necessary to do that outside of hud. >> okay. thank you, mr. chairman. i yield back. >> would yield back to the german? in the second inning, and as a sign of respect to the gentlemen of connecticut i wanted to respond to something that he said. and that is the accusation that republicans were encouraging a violation of the law with respect to the debt ceiling. the debt ceiling is the law of the land until it is changed. and many of us believe that the specter of default on sovereign debt should never happen. it is unthinkable. and that is why house republicans have passed the full faith and credit act to make sure that this never happens. i don't recall having any

democrats support that, to take the nuclear option off the table. i felt perhaps one day they will support it. the gentleman's time has expired. the chair now recognizes the gentleman from illinois, mr. foster, for five minutes. >> thank you, mr. chairman. ms. galante, i want to echo the comment. i have profound respect for you and everyone of attempted people who choose to spend a fraction of your life in service to the people of the united states. it makes a big difference whether the housing operation in this country is well-run or not. we are having hearing about a $1.7 billion capital shortfall. in the financial collapse at the end of the bush administration, families in america lost $16 trillion of household net worth. two-thirds of which was the drop in the value of the house at the collapse o of the housing bubbl. that's a factor of 10,000. however many yankee things worth having on this subject now, we

should be having 10,000 times more hearings on the incompetent management of our economy that led to the $16 trillion drop in household net worth. we've heard also about your $150,000 a year salary. that's 10,000 times smaller than the subject of the hearing today. and so the difference that you make, whether you do your job well or not, is much larger than your direct compensation. i'd also remind members on both sides of the aisle that during the last republican default crisis, family net worth dropped by $2.4 trillion. that was the drop the last time we went up to the cliff. anyway, could you please hold up your page to grab again, please. i had a couple of questions on the. you have those colors. now, the red, some are read in summer blue. does that indicate the political party that was in charge when those mortgages were indicated?

>> actually, that's not what it's supposed to indicate, no. >> so it's an accident that the party that normally thought of as the blue party was responsible for the blue ends the bar graph. that's interesting. and so is it fair to say, to think of the approximate $2 billion shortfall we are talking about as the difference between the $41 billion deficit that you are facing because of mortgages originated under republican appointed regulation and the roughly $37 billion that have been recovered since democrats have taken back control? is that a fair statement of the different? >> it is absolutely true that the legacy books that are causing us the substantial problems are from the 2006 to early 2009 period. >> there was also talk of accountability. if you look at the fact that the party that was responsible for running of all the red bar graphs was, in fact, removed from power. i think there is accountability

and the fact that you are a presidential is reflection of that accountability. now, i want to change subjects a little bit towards what rules could have been in place that might have prevented the disaster of the 2001-2009. there's a suggestion that's been made. there's some research papers on what are effectively countercyclical capital requirements for you. are you familiar with this general line of research at? >> a little bit, yes. >> so the idea would be that as a protection of the taxpayer against investing in the housing bubble effectively, that you would have some effort to estimate market conditions, and when the identified that you are investing into a bubble that you would hold more capital, hold more loss reserves and/or in the credit box, or some combination of both of these. effectively asking the homeowner to hold more capital reserves

against this. i'm wondering, first off, with this come had this role been in place with that mitigated your financial difficulties getting? >> i think the challenge with that is you could actually be worsening the crisis by making more difficult, you know, to increase down payment requirements on individuals, for example, in a crisis. >> these are requirements that would've tightened the credit box during the bubble years. for example, looking at the recent appreciation housing costs as one of the metrics for tightening the credit box. box. >> so when times are quote unquote good -- >> what we're talking isn't automatic -- >> i thought you're talking about the reverse. >> so it's the countercyclical principle on the upswing. it was an american enterprise institute conference on the subject is some which presented

a number of good ideas. i was just wondering if that was under serious consideration or if you might be willing to endorse some variant of the. >> i would certainly have to look into that more. >> okay. thank you again for your service. i yield back. >> the gentleman gives back to the chairman recognizes the chairman from california, mr. royce, for five minutes. >> yes, i'd like to go back to an issue that i think mr. sherman from california raise with you, and mr. mulvaney, to try to get your position actually nailed down on richmond california's proposed use of eminent domain to seize performing mortgages. a number of times over the last year i have sent letters, and i know mr. miller and mr. campbell, my colleagues in the senate as well, have tried to get the administration to come out, to state your position

on the proposed use of eminent domain to seize mortgages. and my question is, if you would make that statement? >> so i appreciate you asking this question again because i think it was the former times that i've gotten past it, it's the end of the question as opposed to beginning which makes it hard to give a full answer, but what i've been trying to say here is that we do believe that eminent domain authority in general is a local and state authority, and it needs to be -- >> will -- >> can i finish? they need to be able to make their decisions in this needs to be played out over time in terms of what impact, if any, it will ultimately have on lending. so i will -- >> hold on, hold on. the question that you need to answer, if you think it through

is, will the fha insurance fund, counted on or not, do we have a position where the fha insurance fund cannot be counted on by the investment fund mortgage resolution partners in richmond, or elsewhere, to help ensure refinanced mortgages that are seized through eminent domain? this is a question that pertains to your decision. >> yes. and what i was getting to is that when we see how this plays out, and we don't know exactly what fha would be asked to do in any particular given situation under the use of eminent domain, when did -- when we see that -- if we need to issue additional guidance, fha will do so. but we don't even up exactly what these various programs will look like at any given time. >> we know exactly what the programs look like. you know, exactly.

this isn't a hypothetical. we know what the plan is. mrp has made their presentation in california. they have made in nevada. yes, there could be legal challenges and they may or may not be successful, but why do we need to allow the process to reach that point? you can solve a lot of confusion by stating whether or not the fha will be available to refinance any mortgages seized under mrp's eminent domain plan. that's the question. >> so again, we do not believe we understand the exact contours of any of these. there are different proposals in different communities, and those proposals could be applied differently. >> all right. fhfa has made a very strong statement for a reason. they stated that they would

restrict or cease business activities within the jurisdiction of any local authority or any state employing eminent domain to restructure mortgage loan contracts. the question is, what fha won't do the same? why will you not stay without a doubt that fha will not be used to refinance these seize mortgages? >> so again, to be clear, we have made our statement, which is we will look at and see how these programs play out, whether or if there is a necessity for us to issue any -- >> fha refinance up on the screen there is clearly part of the program. that's what's in circulation. and getting back to an earlier point, because some of us were concerned about overleveraged as

we get back to the issue of the implosion of the economy, brought on by overleveraged. one of those issues was the role that congress played. and yes, the role that was played by this committee and on the senate side, in allowing the overleveraging, 100 to one, by fannie mae and freddie mac. and when legislation was brought by me and others to the floor to try to allow the regulatory committee to control it, it was supposed by that side of the aisle. so there's a little bit of revisionist history going on here. >> the gentleman's time has expired. the chair now recognizes the gentlelady from ohio for five minutes. >> thank you, mr. chairman. thank you, ranking member. and again, to our witness, thank you for coming. before i have a few questions,

let me just start by saying i think we have become all too comfortable with loudly interrupting and talking over our witnesses. and while that may sometimes be the way it appears that we operate, i think today we took it a little too far. faceless government worker, questioning their public service. so let me use two words that i was always taught that a very powerful words, and that's i'm sorry. i join my colleagues cleaver in times for extending their apologies. because sometimes i think we forget when we talk about challenging your commitment to public service and putting that in question today. i find it very ironic that some of my same colleagues who questioned your integrity are the same people who furloughed

some 800,000 federal employees the cause of the government some $24 billion, and certainly reduced job growth some 120,000 jobs because of our shut down. now, how does that tie in today? well, i think when we look at the housing market and we look at growth and would look at the economy and look at jobs, there's a direct linkage. but my memo said today that we were going to talk about and ask a question so we could share and learn more about the reason fha's announcement about the mmif. so something i read and i would like you to answer if this is factual and truth. because in hearings i think we have an obligation to the people who are here, and to america, to speak the facts and the truth. and then look at how we

dissected that to come to some end result. so what i have before me, and it says that the federal credit reform act of 1990, or the fcra, requires that at the end of each fiscal year and is part of the closing annual financial statement, every credit agency, including the fha, must have sufficient reserves to cover all anticipated loss. for fha this requirement means that the mnf-i must have sufficient reserves to cover the amount would be needed to meet all expected claims over the next 30 years. if fha closed its door tomorrow and that no new business to offset those claims, such an appropriation is not a bailout. would you agree to that statement? >> i agree. >> thank you. so we have heard it said loudly

that this would be a bailout. so thank you for clarifying that. i guess my next set of questions would be, would you say that there has been an economic shock this year and by the fiscal cliff or sequestration or the government shutdown or the threaten to the debt default? would you say that impacted the fund's performance in any way? >> so to be clear, the shutdown caused economic harm in general according to economist. i can also tell you that in a very short period of time while fha kept its doors open and continued to ensure mortgages, we did see a substantial drop in our application volume during that period of time. as did other partners or other

agencies given the lack of confidence in home buying, for example, during that period of time. >> lastly, let me just make a comment because we got so many comments that have attacked what we've done. i think also the megan people like to hear good or positive news, especially when we are talking about housing and putting a roof over their head. so let me just say i'm from the great state of ohio, and in my district through the american recovery and reinvestment act in 2009, through your operation, we were able to provide housing credit assistance. and that tax credit assistance and the tax credit change was a way to offset declining investors interested in housing tax credits. and that was done by some of my democratic colleagues, and i wanted to thank your office for working with us on that. >> thank you. >> thank you and they give back. >> that your number again is the

gentleman from wisconsin to mr. duffy, for five minutes. >> thank you, mr. chairman. i want to be clear at the outset that fha has been very helpful in a lot of -- from a lot of my constituents first-time homebuyers, low-income home buyers, to achieve the american dream of homeownership. it has been incredibly helpful for them, so i don't want to underestimate how important the program has been for people who live in central and northern wisconsin. it's been a very helpful program. i think you picked up a little bit of concern on our side of the aisle, and i think our frustration here is that, is that whenever we have testimony, we continually bring up concerns about the capital reserve ratio. it hasn't been met. we are concerned about bailouts. it seems that every time we get testimony from the agency, we

are told that it's sunshine and roses and tulips and unicorns, everything is great. and look at the numbers and say that's not true. we think it's far worse than you were telling us. and it's always no, no, no. it's all fine. and lo and behold we were right. our concern was well warranted because we now know that we are going to have almost $1.7 billion go from treasury to fha. and i know that you said it's not a bailout. first of all, you would agree it's out of money. this isn't again. we've actually had $1.7 billion go from treasury to fha, that's correct, right? >> et al. states and treasure counts, but yes. >> but it's been moved to fha, right? >> to our accounts that treasure, yes. >> right. the transfer has been made.

>> correct. >> right. and these are real dollars, yes the? >> yes. >> okay. i just want to be clear on the bailout fund. if this isn't a bailout, what do you consider a bailout? >> so, congressman, let me say two things. because i do think this whole conversation about bailout-no bailout is really beyond the point. i want to go to the fact that your earlier statement about, you know, we have said it's roses and then it's not. what we've been saying all along is that we have independent actuary and we have indeed been the budget rate estimate that is made -- we estimate that is made by the budget process and as a result the changes in condition and changes in portfolio, those numbers change. we've always been honest about that. and, in fact, the conversation

we are having here today, you know, we had this conversation with the president's budget came out and said that we were looking at $943 million shortfall. i really just want to get this on the record because the only difference between then and today is that our volume was a little bit less in the last quarter than we had anticipated as part of the presidents budget. i admit that. circumstances changed and that's because the additional -- >> but it underscores the point of the testament that we always get. it's a bailout. it looks like a bailout. it walks, it quacks. it's a bailout. just call it a bailout. let me ask you this. what are the terms of repayment of the $1.7 billion? >> this is exactly why it's not a bailout because again, this is all within the government agency -- >> what -- a minute left. one of the terms of the

repayment of taxpayer money of the $1.7 billion? >> the terms are every nickel we ever earn goes back to the federal government. >> no, no. either terms of repayment? no. you don't have to repay it, do you? it's a bailout. you might say there might be some point in the future roommate called it of money and we will turn it over, but there is no requirement that you pay the $1.7 billion back to the american taxpayer. not at all. and so i think the transparency and honesty -- stops placing words. this is a bailout. call it what it is. you don't have to repay it to the taxpayer. >> we have prepaid on this, pay every year on an ongoing basis. >> only 15 seconds left. in the path, we discussed risk-sharing pilot program. is that something you would consider at fha a risk-sharing pilot program? >> i would just say i think it's

worthy of looking at risk-sharing. how it's structured, counterparty risk. there's a lot of challenges in risk-sharing, but we certainly are willing to look at the parameters. >> i yield back. >> the gentleman's time has expired. and to notify a very patient witness, we anticipate two more members the question. the chair now recognizes the gentleman from washington, mr. heck, for five minutes. >> thank you, mr. chairman. ms. galante, thank you very much for your presence here today. thanks to the fha for i believe 40 years ago this very month enabling me to buy my first own. thank you as well for your kind comments about both my roll and that of congressman fitzpatrick's, and the earlier effort to reform the reverse mortgage market. indeed, i'd like to flip that around a little bit and take this opportunity to express my gratitude to congressman fitzpatrick for his advocacy and for the members of the industry,

reverse mortgage industry. and to you personally as well. i don't happen to think your reputation as a public servant needs a whole lot of events because i think it speaks for itself. and if my experience working with you on the reverse mortgage reform act is any indication, it is beyond reproach an exception and i thank you for it. i thank you as well for the speedy way in which the agency moved to implement the reverse mortgage reform act. i think it helped a lot and speaks volume about the fha. i think sometimes here we -- to going up for -- complex things. let me see that reduce this to its basic elements. do i understand correctly, ms. galante, debt in the table on page eight as congressman sherman was getting at, we could

say that the accounting transfer was triggered and/or required almost entirely as result of the performance in the heck am program? >> that's correct. >> and is it also true that the accounting transfer of $1.7 billion was connected based on data part to the enactment of the reverse mortgage reform stabilization act and its implications? >> that's all more difficult because i would just say that the 1.7 -- there's an element of the receipts that are a little less as i was saying to an earlier question. >> and when will an actuarial projection be predicated on a full recognition of the

implementation of the reverse mortgage stabilization reform act -- i'm getting that are all screwed up but i think you know what i'm referring to. >> is to be clear, the next time you see numbers like this is when the president does every estimate that will be probably the data should look at, again partly because of the government shutdown but i would expect those to be available in february or so up next year? >> and to what degree what that reflect any experience. for implementation? >> it would reflect the projections of what the future experience will be, yes. >> so do i also understand correctly that when you all make money, you transfer back to the treasury? does that -- >> that's correct. >> have you done that in the years leading up to the great recession?

>> yes. >> andy gave me some kind of a range of estimate about how much money? >> i don't have that. we keep it all in the capital reserve. the capital reserve went well above the 2%, up to i think 8% in earlier years. >> it does not literally get transferred to other -- >> again, they are all sitting at treasury, all these accounts are at treasury. >> so just to summarize, and please do correct me if i'm oversimplifying. the requirement for the accounting transfer was triggered in large part by the experience in the home equity conversion mortgage program. a problem you identified sought legislation from this congress, which responded with your able assistance, in which he immediately implemented and projections about how fha's balance sheet will be affected by all that are not going to be

made available in till sometime in the winter or spring reflecting the corrections to the single program that was tracking you down. do i have all that all correct? >> yes, you do spent i think that about says it all. thank you again for your service. with that i yield back the bounce of my time. >> the chair not recognize the gentleman from ohio for five minutes. >> ms. galante, i appreciate your willingness to be here today and appreciate what you do on behalf of the federal government at fha. what i want to look at is how fha might be able to improve its performance so any additional infusion of capital, taxpayer capital, whether you want to call it a bailout or accounting transfer, doesn't matter what you call it, i want to do to get how we can improve your performance to avoid any future. you said during your testimony you got fha had taken every reasonable action to improve its risk management or someone to look at, as you talked about our

retail real estate that you own, are you the money with the gao report from june of 2013? >> sim. reviewed your practices and on page, the page number is not your. in one of the highlights here, it said that if you have dealt with your dispositions on timelines, the same way as the government sponsored enterprises, both fannie and freddie, that you would've been able to save as much as $600 million a year in your cost such as taxes, homeowner association fees, maintenance these and others, and would've increased your proceeds by up to $409. it's taken you about a year, takintaken in about 200 days to dispose of their reo real estate. tell me what you done with the temperature performance going forward. i'm not here to blame you. i want to see how we're going to fix it. >> yes. so just to be clear, we changed

how we do government contracting for those who take responsibility be happy recent results from that it speak with yes, but let me give you one example. we now do a reo alternate disposition. so not requiring the property, all the way back to us, and enabling -- >> can ask instead just one example but have you seen your average length of disposition shortened in any significant way? or do we not know yet? >> so again, in this tidal -- >> i'm looking for how it makes your average fell. >> yes. again, our recoveries have improved i more than 10% on power, by the recovery strategies that we been going through, both reo and alternates to reo disposition. >> i guess i would just ask you

to continue to monitor that. >> absolutely. >> i would like you to look up at the slide of their that shows recover ratio that is continued to worsen come and get to talk about premiums and somethings you again. let's move to the next slide really quickly. next slide. so were some things that you could have done to change your premiums, both your up front premiums and annual premiums and let's go to one more slide. look at what's happened to interest rates over time. we are at, still with the update over the last few months, prehistoric lilo interest rates. you have the ability if you want to go back one slide, to increase your annual fees by another 25 basic -- basis points which would be a rounding error on the amount that interest rates have come down over the last years. why he chose not to go ahead and max that out and require less

taxpayer indeed what you call a bailout or you call it something else? >> so, we have spent an enormous amount of time balancing, bringing the fund back as quick as possible within shoring continued access to credit, and you know, by the way, just when you take a look at what happened when made our latest increases in june, not just premium increases but our policy changes, you saw a huge amount, i mean, our application bomb dropped off -- >> my time is limited. let's go back to that again. forget how much interest rates have come down and we're talking about rounding errors for the 20 oh basis points in the could have helped you significantly and i would ask you to look at that again. this is a this kind of come to testify before the committee in my three years and every time i ask you so i will ask you again, what fha has not instituted risk based pricing yet? he had the authority since 2010. >> so, again, i believe i've

said this before that fha believes that the way we do pricing and awaiting we do risk based underwriting but not risk based pricing, and we did it because we think that is in the best interest of the borrowers and access to credit. and again, we are always -- >> i have limited time. i argued you should devote. thank you for their time spent time to the are no other members indicate i want to thank ms. galante, participations today. without objection all members will have five legislative days in which is an additional written questions to the witness, to the chair which will be forwarded to the witness, ms. galante. i would ask that you respond as probably as you're able. without objection members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. this hearing stands adjourned. [inaudible conversations]

[inaudible conversations] >> the centers for medicare and medicaid is a federal agency in charge of setting up healthcare.gov website. cms administrator marilyn

tavenner apb for the house ways and means committee to discuss problems with the website and the rollout of the affordable care act. here's part of the hearing. i would like to welcome marilyn d like t -- marilyn tavenner. welcome to the committee today. i look forward to your testimony and other for to the hearing to testim really get an honest, straightforward assessment of the status of health care law. six months ago, health and humaw services secretary sebelius told stra this committee a dozen times that the administration will be law. ready october 1. we no w know the administrationus tolo was not ready and, just last t week, secretary sebelius read suggested they could have used e years to get the exchanges updm and running. week despite having three years totev get the system up and running, e years to get the system up and

running, officials at the center of medicare and medicaid services, who are charged with implementing the exchanges added, and i quote, "due to a compressed time frame, the system wasn't tested enough." and frankly, three years should have been enough, and should the administration provided more transparent answers the reality of the challenges it was encountering in the implementation process, i suspect many of these glitches could have been avoided. while the website can eventually be fixed, the widespread problems with obama care cannot. almost daily we hear of reports of obama care increasing costs, harming job creation, and forcing americans off their current plan. these problems can't be fixed through a technical surge or tech surge, and they are not just a glitch in someone's health care coverage or job. not a week goes by that i don't hear examples from the people i represent in michigan and job creators about the increasing costs and how obama care is

making it harder for businesses to invest, grow, and hire people. just last month, meridian public schools in my district announced it would be cutting the schedules of hourly workers to fewer than 30 hours per week as a result of obama care. and this month, the detroit free press reported that at least 146,000 michiganens have received cancellation notices from their current health program due to obama care. based on the little add information the administration has disclosed, more have cancelled than enrolled in the exchanges. the widespread acknowledgments the health care exchanges was not tested months in advance is cause for concern. the concern doesn't stop there. the treasury inspector general said in august it was not confident about the irs's ability to protect taxpayer information or prevent fraud, and neither am i. on top of that, the exchange

does not give individuals the information they need to make an informed health care decision. when going through the options, how are americans able to see if they are even eligible to be in the exchange, if their current doctor is in the plan, what the real costs of their premiums will be, and what their copay will be? no amount of website fixes can make right the promises that health care costs will be lowered by $2,500 or that americans will be able to keep the plan they have and like. those are worthy goals, reducing costs and maintaining coverage, and they are ones that we should all work together to accomplish. i'd be remiss if i didn't remind my colleagues the alternative put forward by republicans at the time was the only plan scored by the nonpartisan congressional budget office as actually reducing premiums. democrats chose to go down another path, and that's where it's led us. instead of plowing forward with this unworkable law, the administration should at a minimum seriously consider

delaying the law for families and individuals, just as it has done for big business. if they fail to do so, i fear we could see a fundamental breakdown of the insurance market, where premiums will skyrocket, pricing millions of americans out of health care, yet still be forced to pay the individual mandate tax. administrator tavenner, we cannot solve a problem until we realize the full extent of the problem. your answers today and in the future will be critical to this committee's oversight of the health care law and more importantly, to our work to ensure americans have access to affordable health care. before i recognize ranking member levin for the purpose of an opening statement, i ask unanimous consent all members' statements be submitted into the record. i now recognize mr. levin for his opening statement. >> thank you, mr. chairman, and colleagues and marilyn tavenner, a warm welcome. we start this hearing facing a

basic reality, democrats want to make the affordable care act work. congressional republicans don't. that reality has been reflected in 40-plus efforts by republicans to repeal, dismantle, or defund the affordable care act. that reality was reflected in their zeal, shutting down the government and jeopardizing the full faith and credit of our nation, damaging our nation's global standing, and leading to enduring harm, costing our economy $24 billion, tens of thousands of jobs, a dramatic drop in consumer confidence. now, having still failed to derail the aca, the republican focus of attack has shifted. the new front relates to healthcare.gov.

there are very clearly challenges to implementing new, pioneering access to health care. consider these headlines, you can see them there. for example, "problems plague rollout," npr reported. "plagued by delays and confusion over coverage," said "the san francisco chronicle." these headlines are from 2005, as medicare part d was launched. that year, in dramatic contrast to the republican conduct to date, democrats who had opposed that law, worked to make it a success. working with republicans on a bipartisan basis, republicans who had passed that law to address many problems, and most importantly, we work with our constituents to ensure they could sign up.

the reality is that the affordable care act, which republicans are failing to work on with democrats, is working quite effectively in states running the marketplaces. you can see from that slide. in kentucky, more than 26,000 people have enrolled for coverage. in new york, more than 37,000 have signed up. in washington state, more than 35,000 people had enrolled as of a week ago. and the irony is that republicans have erected hurdles to states throughout the nation, ta taking responsibility for implementing the law. the website for the federal insurance marketplace must be fixed, and it is being fixed. this gentleman from salt lake city, mr. cherbin, is among

those who have enrolled. a self employed father of three, he has been uninsured for years, paying cash for doctor visits and the occasional trip to the emergency room, he told his local newspaper. once he got into the marketplace website, he compared 38 plans and got coverage for his family for $123 a month. and i quote, "once they get the bugs worked out, it will work well and bring peace of mind to a lot of people." and he added, "i'm thrilled to have coverage." prior to this year, mr. cherbin and tens of thousands of americans who don't get health insurance through their employer, but rather had to sign up on their own was a maze of invasive personal medical

history questions within applications that seemed to never end. when individuals did get through the process, too often a preexisting condition, no matter how minor, was used to deny coverage, to charge exorbitantly high premiums, or to exclude needed benefits. thankfully, these days are behind us. they are behind us. this hearing provides a chance for every member of this committee to proceed in a constructive, nona destructive manner. and for the administrator to lay out the website being fixed, as it must be. and for everyone on this committee to join in this effort to make available, not to prevent access to, quality, affordable coverage for every american.

i yield back. >> thank you. today we'll hear from the administrator for the centers for medicare and medicaid services at the u.s. department of health, marilyn tavenner. your written statement will be made part of the record and members have received it, but you'll be recognized for oral testimony for five minutes. welcome. >> thank you, chairman camp, ranking member levin, and members of the committee. on october 1st, we launched one of the key provisions of the affordable care act, the new marketplace, where people without health insurance, including those who could not afford it, and those who were not part of a group plan could go to get affordable coverage. we know that consumers are having difficulty enrolling via the marketplace website. it is important to note that the affordable care act, however, is more than just a website. it creates a new market, which allows people to access quality, affordable health care. it allows them to have insurance

options. it creates a pulling of consumers into statewide group plans that can spread the risk between sick people and healthy people, between young and old, and then bargains on their behalf to get them the best deal on health insurance. by creating competition where there wasn't competition before, insurers are now eager for new business and have created new health care plans with more choices. the premiums for coverage were lower than expected and millions of americans will also qualify for tax credits to make the coverage even more affordable. we know that consumers are eager to purchase this coverage, and to the millions of americans who have attempted to use healthcare.gov to shop and enroll in health care coverage, i want to apologize to you that the website has not worked as well as it should. we know how desperately you need affordable coverage. i want to ensure you that healthcare.gov can and will be fixed, and we are working around the clock to deliver the shopping experience that you deserve. we are seeing improvements each

week, and as we said publicly, by the end of november, the experience on the site will be smooth for the vast majority of users. over the past month, millions have visited healthcare.gov to take a look at new health care coverage under the affordable care act, and in that time, nearly 700,000 applications for coverage have been submitted across the nation. more than half of those are in the federal marketplace alone. this tremendous interest confirms that american people are looking for quality, affordable health care coverage. we know that the consumer experience has been frustrating for many americans. some have had trouble creating accounts and logging into the site, while others received confusing error messages or had to wait for slow response times. this initial experience has not lived up to our expectations or the expectations of the american people, and it is not acceptable. we are committed to improving the performance and have already made progress. in the first few days when the site went live, few customers could create an account.

now over 90% can. we've updated the site several times, fixing bugs and improving the healthcare.gov experience. and we've added more capacity in order to meet demand. we are pleased with these quick improvements and parts of the system are already working well. for example, the data hub, the routing tool that provides an efficient and secure way to verify information submitted by consumers is sending determinations to the marketplace in less than 1.2 seconds. social security has reported 4.2 million transactions with the hub, and the irs has responded to more than 1.3 million requests. even with the success, we know there's still significant work to do, and we've called in a team of experts, led by jeff science, to analyze the site, identify and prioritize fixes. we've spent the last few weeks going over that, and while these problems will require a lot of hard work, the bottom line conclusion is this healthcare.gov site is fixable. to get the job done, we've

identified a clear path forward, a lot of fixes that will be undertaken one by one, to ensure the work is done as quickly and efficiently as possible, we've enlisted the help of qssi to serve as general contractor for this project. they are familiar with the complexity of the system and the work they provided for healthcare.gov, the federal data hub, is working well and performing as it should. qssi has the skills and expertise to help us address these problems. they will work with leadership and contractors to prioritize the needed fixes and make sure they get done. we are committed to improving the consumer experience with healthcare.gov. while we continue this work, i encourage people to continue to apply by phone, by mail, or by finding local help in their community. the fact is, the product of the affordable care act, the marketplace, will work. the product is not going away, and the people are not going to continue to wait.

you can join in the conversation on social media sites. >> and now to london for prime minister's question time live from the british house of commons. every wednesday while parliament

is in session prime minister david cameron takes questions from members of the house of commons. wire to question time the house is wrapping up other business. this is like coverage on c-span2. >> when my friend came into office in 2010 what has been done to tackle air and that? .. -- to tackle air and financial data? ..