to shop in the private marketplace. >> so, i would need to check with colorado. >> let's do that. can we do that today? >> yes. the customer service issue is very important to us. as we stabilize the site, we will go back and deal with those individuals that we think may have had a bad experience am a such as a establishment of an e- mail account. --have individuals' in the information so we will reach out and invite them to come back. some may have gone ahead and created a separate account or maybe they were just on their out of curiosity. but at least we will make an effort to go back and get in touch with individuals and say if you had trouble in the first week am a leave, come back and try to establish your account again, because we solved the problem. that is the first step. the second step is how we handle it in the media and the market. -- what i was

talking about before -- a campaign to reach out to consumers, but we will not start us -- campaign until we stabilize the site the next few weeks. december, january, february, march, reaching out to individuals. if you are on a state-based exchange, they are responsible. if you are on a federal exchange, we have that opportunity. so, we identified key markets based on the number of young uninsured, the number of uninsured in general and the population. so, we do have a targeted campaign for the next four months. >> what are the implications for your timelines with respect to eligibility, sign up, and all the rest? if you don't get the website fully functional by the end of the month -- or by the end -- >> november. based on our analysis we will have it fully functioning by the end of november. there will always be people who don't want to use the website,

who want to do paper, who want to call in. that is fine. we will support that. but i think we always assumed that, based on massachusetts' experience, the initial sign up will be very slow. and in fact, no payments have to be made until december 15 for coverage on january 1. so, while we don't like the problems we had in october and fixing it in november, we do not think it will impact the timeline because we have a six- month enrollment, so we still have four months left and individuals can apply up until march. >> thank you. thank you, mr. chairman. >> now to senator robert. -- senator roberts. senator robert? >> thank you, mr. chairman. 'm going to focus, if i can, on the concerns raised by senator isakson, alexander, and the chairman, on security and privacy.

we have a law, the federal information security management .ct, his mother --fisma everything has to have an acronym. it requires each agency to a point a chief security officer to ensure americans private financial and identifying information is protected. and that is a big issue. secretary civilians revealed last week exchanges operating on temporary authority to operate. there is a 2012 12 memo from zyonts, the man appointed to fix the affordable care act. as head of omb he stated clearly omb does not recognize interim authority to operate for security authorizations. i first question is, why was the exchange allowed to go operational without the apparent parents required by the office of management and budget? on -- justto go

think about any minute. i don't like to do this, but time is limited. again, as part of the fisma assessment, an independent testing organization must perform a risk analysis of the security of the system. my second question -- did an independent testing organization ever test the whole integrated system end to end? ask you to bank questions. >> that's all right. the first question -- omb does approve of short-term authorization. we are following rules outlined by omb, and i double checked that. the second one is -- yes, we are nist compliant and we did use an independent security firm that did the work in testing. the only piece that was not --

what i talked about before, we could not test and a live environment until october 1. because the testing will continue this month and next the softwareo upgrades, and it will be tested in a live environment. >> without revealing publicly -- which obviously you cannot do -- will use them in confidentially the results of the independent testing? >> i will submit everything i can within the security guidelines. yes, sir. >> all right. a september 27 memo addressed to you state that due to system readiness issues, the required security assessment was only partly completed. notes that untested parts of the system pose a high security risk and the contractor was not able to test all parts of the system in one complete version of the system. cbs news analysis that i would like to include in the record. that found that the deadline for

final security land slipped three times from may 6 until july 16, security assessment to be completed in june was lit to august. the required top to bottom security test never got done. agency head marylin tavenner, according to this analysis, accepted the risk and mitigation measures like frequent testing and dedicated security team -- but three other officials signed a statement saying that it does not reduce the risk of launching as of october 1. that september 27 memo recommends a mitigation plan to address these risks and recommends a six-month authority to operate. that recommendation was signed by you. are you the official as cms responsible for making the security authorization decisions? the case, because of the visibility of the exchange, the chief information

officer wanted to make me aware of it, and i agreed to sign it with their recommendation to proceed. >> does anybody else approve that decision before it is final? >> no, sir. >> like secretary civilians? >> and no, sir, it is my decision. >> i appreciate that. thank you very much. >> i will take the remaining 30 seconds of the senators time and just say, again, i think -- as i talked to my fellow senators on both sides of the aisle, this is a paramount concern. consumers have to be absolutely certain that when they go on and fill out the application and give all of that information, that at a secure, that no one can hack into that and steal social security numbers or identity and other things. i just think this is an issue that really has to be focused on thoroughly so that there is absolute assurance that that is secured. thank you. mr. chairman, can i get my 30 seconds back?

>> you give it up already. >> you took it. i sort of given up. i just want to reflect on what you said, sir. there is a lady named margaret from kansas who i promised i would bring this issue up. exchange to get on the and then she tried to call the times.about 3, 6, 7, 8 finally got somebody and she said if i selected that plan, would it be secure? the answer was -- well, you know, pretty sure. that is a direct quote. she said, if you are pretty sure, i want to be sure. she hung up and call the office. that is an example a concern. >> appreciate that. i do share the concern. baldwin? >> thank you, mr. chairman. i want to thank you and the ranking member for convening us , and administrator

tavenner, thank you for being here. esther chairman, i appreciated your opening remarks and setting are with for where we real and significant challenges. of the earliery implementation of the affordable helpact that has proven to very many. ofhink about the parents children with pre-existing health conditions who can now secure insurance for their children, and the peace of mind that for wide. i think about the 6.6 million young adults covered on their parents' health insurance and i take personal pride on that because i worked on that amendment as a house member as we were marking the bill up in energy and commerce. i think about the $6 billion in prescription drug savings that seniors have the advantage of since the passage of this bill.

and then i think about the rough implementation of this next phase of the affordable care act. and even with the significant technical issues around the , i have healthcare.gov heard from families in wisconsin that are already recognizing some of the new insurance options that are available. as you said in context of your opening remarks, that is what this is about. and new marketplace especially for those who are shut out. karl and bonnie who own a farm in hayward, wisconsin, in the north woods of our state. struggleed about their to find health insurance prior to the passage of the affordable care act. they were both dropped from their plan after health tests risk ofarl was at prostate cancer.

they had to buy a new plan. they were lucky they could find one. $10,000 deductible and $800 premium, but it had a said it would not cover prostate cancer if karl ever got sick. due to the affordable care act, they are not comparing and shopping for new coverage in the marketplace. he contacted me to share that they are thankful and very findted to be able to health care plans that are not only affordable but actually cover cancer. quality health insurance options available in the marketplace, we need all of the doors to that marketplace to be wide open. and the ongoing technical andlems are unacceptable they must be fixed as soon as possible. and i am glad to hear your update on the progress. they should have been fixed yesterday.

but the need for a well functioning healthcare.gov is particularly acute in a state like the one i represent. because our governor chose not a wisconsin-made state- based arco place for individuals and small businesses. failed to seize the opportunity that the affordable care act presented to strengthen what we call badger care in wisconsin. to expandcided not medicaid under the affordable care act. walker decidedor to kick off as many as what we think would be around 90 -- 90,000-92,000 off their current medicaid coverage. i think of our discussion about, if you like your health care plan, you can keep it. well, there's tens of thousands like theirnites who

badger care and the reason why they can't keep it is because of our governor's decision. to ask you, administrator tavenner, to start off, can you confirm that wisconsin is one of the only states in the nation poised to a large number of individuals from the current medicaid coverage in 2014? -- right now,dwin and we are in discussion with the wisconsin. the two maine are states of looking at this idea. other states have talked about it, but these are the two who put the proposals forward. you are right, 92,000 people. and we are working with --consin, are medicaid and to make sure those individuals are aware of the marketplace. >> i want to ask you a little bit more about that. a significant number of

people in my state. and in order to avoid a lapse in coverage, individuals losing badger care must enroll by december 15 -- >> i am sorry, the senators time -- i am trying to hold to five minutes. everybody has been very good about this. senator scott? >> i want her to continue to talk so i would have more time. are tied to keep it at five that you will get a second round. are notlican jokes funny. i apologize. thank you, mr. chairman. [laughter] >> southern drawl. let's get back to the topic. ms. tavenner, thank you very much for being here. frome more than 30 days -- one of the greatest website disasters in history. after nearly 400 million dollars healthcare.gov is synonymous with failure.

the public's trust has been broken in the report i am hearing reinforces why. one in particular we have already heard discussion on -- the south carolina man, it is so painful, that i want to dedicate my time in question to try to resolve his issues. fromase starts with justin north carolina attempting on october 1 to get obamacare through the health care.gov. by halloween, just four or five days ago, he was still unable to sign up for obamacare. however, mr. hadley from north twolina immediately saw download links. an eligibility notice from mr. dougal from south carolina, including his name, address, and eligibility for subsidies. dougal ise -- mr. requesting the personal information from all of his family be removed from healthcare.gov because he cannot remove it himself because there is no delte option for consumers. of course now mr. dougal nor mr.

hatley will use the website to purchase insurance. making matters worse, when my office was contacted with assistance we called the help healthcare.gov one 800 number and asked a specific question -- can you remove mr. dougal's personal information? the response was silence. not a yes, not a no, not a maybe, not let me check with my supervisor. they just simply refused to have an audible word in response to our question. it is hard to believe that your account managers really do not know if they can delete accounts internally, especially after such an egregious breach of trust. by the way, mr. dougal has called on several occasions but no one will call him back. not a single person has taken the time, after having his information exposed, to even call mr. dougal back. i tell you this story because it illustrates what happen as a

result of incompetence with this website and this program. the administration and hhs new that americans' personal information was at risk before the website went up. i think senator roberts just spoke about the and dr. general's report from august that warmth that obamacare's exchanges may end up here legally exposing americans' private records to hackers and criminals. the report noted cms is working with a very tight deadline to ensure that security measures for the hub are set, tested, and implement it. further, senator roberts alluded to an internal memo from september 27 of detained by "the washington post" and to quote the memo, it says inherent security risks exposes the level of uncertainty that can be deemed as a high risk to personal financial information being exposed. and you have taken responsibility, and we appreciate that -- was written

specifically to you from your administrator of health plan operations and deputy cio. you signed up and ready for healthcare.gov to operate for six months with a mitigation plan to be implemented. in other words, you authorized healthcare.gov to go forward realizing that the potential of exposing personal information was, and i quote from the memo, at high risk. my questions -- do you believe that six months is an acceptable amount of time for this website to operate in a manner that puts americans' financial information at risk for high risk of security breach? hasn't happened before? can you guarantee social security numbers are secure? will you shut down the website -- as my friends from them left have already suggested -- until security issues are fixed? i would also like to finish by get mr. dougal

and answer in deleting the information from the system and we get the answer today, if possible. i have a copy of the letter he is we question -- he is requesting. we can bring the information over to your staffer as well. i certainly realize at the beginning of the testimony, the answer was given that the theware fix has happened on information, but the software fix was simply to disable the goes, so when mr. hadley to the website, he still sees the link but he cannot click the link. so, the guarantee and the clarification that simply tells mr. dougal that he has complete confidence his information has been deleted from the system has yet not been achieved. >> first of all, senator scott, we have reached out to mr. dougal several times a week will follow. happy to give you numbers. he does not think so, actually, because no one has called him.

>> we have a disagreement there. >> yes, ma'am. >> the second question -- the hub --i keep trying to separate the two because they are two different systems. the hub was separately tested all the way through and there was a signoff from the chief information office. we should put that aside. what we are talking about is the ffm, the exchange peace, and that is the part i described herein in a six-month period, let me tell you what is going on. there is a dedicated security team working under the chief information officer. we do weekly testing of all devices, including internet facing web service, daily and weekly, 24/seven, continuous scans. we will have a full -- a stable environment with all security and controls on the software upgrade is done, and that is standard operating procedure. that will be within 60-90 days of us going live october 1. >> my time is up.

thank you very much for your answer. i was only suggesting whether the hub or other entity, that i think the consumer sees is not what is going wrong, is that own,r confidence is going d and we want to make sure we anyt y'all to the fact that aspect is of not work them the confidence is gone. but thank you, senator. -- >> senator god, i would like also if you could make -- senator scott, i would like also for you to make that information available to the -- >> welcome, mrs. tavenner. i would concede that when you reorder 16 of the american economy there will be some ofple who are unhappy -- 1/6 the american economy there will be some people are unhappy. and when you stand up a brand- new mechanism to give 30 million

people access to health care that they did not have, that there would also be some people who are unhappy with their experience. and i think at some level, this should be an exercise in setting the right expectations. that when you undergo this kind of effort to reorder a health- care system that everyone on this committee agrees is broken, there are going to be some and some will lose, and frankly, under any reform plan that has been debated in the last 20 years, that is true. what we are suggesting is that there are going to be far more people over the course of the rollout of this legislation who have a better experience than what is happening currently in the system the band have a worse experience. tole it is always risky legislate by anecdote, we are telling stories here today, so let me just add one to the mix. betty berger from connecticut. betty and her family had insurance.

jobs andnd switched during the several week period in between his first job and his second job, their son was diagnosed with cancer. guess what? his new employer would not pick up coverage for the son. betty's story is one that can be repeated 2 million times every single year across the country. they went bankrupt. they lost their house. they lost their car. they lost their savings simply because their son had the misfortune of being diagnosed during a two-week period in which they did not have insurance. was not that they got dropped from coverage, their problem is they could not find any coverage, and the story can be told millions of times over. and i guess my confidence that in the end --while this is a disruption to a large section of the economy, my confidence that in the end there are going to be far, far more winners than losers, is rooted in part in

connecticut by shakespeare and. we have an exchange that is up and working. in the first month of the exchange, we have hit 10% of our evenll enrollment goal, given the fact that the massachusetts connector, who is run by the same guy who was running connecticut's exchange in the first month only so 0.3% of total enrollment sign-up. so, i have confident that the rocket will fly off the shelves once people can get into the website -- this product will fly off of the sale -- shelves once people can get into the website because what we have seen in connecticut and also i am optimistic that once his site is up it will be up in time for the largest number of people to inoll, because what you said response to senator bennet's questions, the reality is that the vast majority of people are going to be looking for coverage as the enrollment date draws near. so, i guess that is the frame of

my question to you. from the experience of people who have been able to access these exchanges -- either at the national level or state level -- what do we know about the quality of the product and, two, what do we know about the timing of when people actually sign up for plans like this? we have the massachusetts experience, the experience of medicare part d. to the extent your timeline plays out and we have a fully functioning website within the next dirty-60 days, is that in time for what we expect to be the majority of people coming in and wanting to access the product? >> let me start with the product. i think that we are extremely pleased with the product. and i think it is important not to lose sight of that. as i said before, we had about 25% new entrants into the market, new issuers offering new plants. we had over 200 issuers and i

think) 3000 products. but i will get you that specific information. -- the insurance market wants us to succeed. they see it as a the business. so, we have been pleased with the states in the competition. there have been some exceptions as we talked about before, and we want to stimulate that as time goes on. the second piece -- we have always believed that the first enrollment surge would come mid- december and the second surge would come late february/early march. there would be people who want to sign up by january 1, but there would always be another group who would wait until the last minute to sign up. presumably the younger, healthier folks who would wait until it became an issue for them. so, that is what we believe. the product is very strong. we would like to see more competition. that will occur year to year. this is our first year in the market. but we have been pleased, and in fact, the pricing came in about

18% below what the cbo estimates were. and we would like more introduction in some markets, for sure. but a good start. >> thank you. >> thank you, senator. senator berger? >> welcome. last week in your time in the house, you noted that as insurance companies decided to cancel and stop plans, the aca did not force insurers to make such decisions. you stated -- and i quote -- the issuer has decided to change the plan. not have to. grandfathered in 2010 if it -- if they did not make significant changes. they could keep the plants they had. do you believe that that was an accurate statement you made? do you believe that was an accurate statement? >> yes, i do believe that.

force aca did not insurers to make such decisions. "the insurer decided to change the plan, they didn't have to." >> can i finish my sentence. >> this will not increase cost sharing. >> they were allowed to make modest changes to benefits modest increases in fixed dollar copayments and deductibles. if health care costs went up, they could move up. they can modify their provider network, they could change the plan structure to add features like health reimbursement accounts. >> for an insurance product that did not meet the minimum coverage benefits that was a .stablished under the aca

>> they could be grandfathered in under this, yes. >> but, the decisions that are made if they don't meet the minimum benefit that was established under the aca, that is an individual that will have the plan canceled, is that not correct? >> they can continue these plans, these plans could be grandfathered in it they made these kinds of changes, if they started to reduce benefits, then they fell under the requirements of the aca. share you personally with the secretary that there were problems with the exchange? >> i personally shared with the secretary in september that there was modest changes. >> we have had a lot of conversations on security. let me ask you very specifically, was there ever any and two and testing on the exchange?

>> there was and to and testing on the hub. there was individual modular testing and demonstration testing inside the exchange meaning that we had sample cases, sample situations that we tested all the way through. we could not test live until we went live, therefore the temporary authorization -- signed on september 27, the authority to operate the noted this.the memo from a security perspective, the aspects of the system that were not tested due to the ongoing development exposed the level of uncertainty that can be deemed as a high risk for federally facilitated marketplace systems. did you bring that security concern to the secretaries attention and the attention of the omb?

>> i did not. >> secretary stability us said that the implementation took place on october 1 because that was the law. have read the asked several times. my interpretation is that secretary stability us had the authority not to execute that on october 1. clearly, my interpretation, if you had not signed the authority to authorize the website, it would not have stood up on october 1. >> i don't know if your statements are accurate. law says that january 1 is when individuals have to have coverage. we put a recommendation in place that said that october 1 would be what we would put in so people had time to sign up. theo you think that secretary had the authority to

waive this? >> i do not know the answer to that question. >> is it true that individuals that were enrolled after march 23, 2000 10 are not eligible for grandfathered plans? that question again. >> is it true that individuals who enrolled in health care plans after march 23, 2010, they are not eligible for grandfathered plants? >> that is true. >> do you think that americans should have the ability to keep their plan? >> i think individuals that we talked about in the grandfathered plan should be allowed to have that happen and then large employer plans were grandfathered as well. i think we tried to look at the individuals and who to grandfather. >> thank you. -- tor franken

>> thank you for convening this hearing. like my colleagues, i am frustrated and disappointed that a month into the open enrollment, there's still problems with the federal marketplace. i appreciate your being here today. i think it is important that we understand what we're doing to to fix the problems that have hindered comparison-shopping and enrollment over the past month. my number one priority is to see to it that people of minnesota have access to our state run marketplace, that that access is protected. things seem to be going better. this is with the minnesota health insurance marketplace, then with healthcare.gov. it has been going better and a lot of states.

thousands of individuals and families are completing applications for comprehensive and affordable health coverage. it was developed and operated by minnesota, it does rely on the federal hub for its eligibility determinations and this was a problem that we had very early on. we were getting people to be verified. also, when the hub is taken off- also go off-st line. what are you doing to make sure that minnesotans can continue to enroll in the health plans through our state run marketplace while healthcare.gov is undergoing maintenance? >> in the case of the hub, there has been very little downtime of the hub itself.

we do have a window that we had agreed to prior to going live with the system. there are certain components such as social security which is during that time. the hub has worked flawlessly. andas not been the issue certainly the minnesota state- based exchanges doing well and they have access to the hub. when we are going to schedule down time, we let states know ahead of time. this is a that we can plan accordingly. .> the hub did not work this was the first week. >> this is not the problem. we had these been established at the federal level. i think that minnesota has more problems.

all behind us. they were not hub issues. >> these are almost separate from health care. it has been working a lot better. one of the critical elements of success to the state run market changes will be clear communications. do you have open lines of communications with the states, they are operating about the challenges that they are facing and interacting with healthcare.gov. >> yes, we have daily commute haitians and we have teams assigned to work with states. or two, we doek either a videoconference or we call the states. we have very open lines of communications with states.

>> there has been a number of andtions about security private information. i am chairman of the judiciary committee. i spent a lot of time working on protecting privacy. to me. very concerning can you tell me what you are doing now to make sure that issumers health information securely protected? >> we are meeting all of the standards, we do continuous security testing. i have kind of walk through those. we have a dedicated security team, we also do independent security analysis. this is continuous. we treat their marketplace, the same way we would treat any other system. these are inherently high risk.

, i am doingr reports about the high risk of these natures. high riskt as a system and we monitor it continuously. we have a team dedicated to report on it and make us aware of it right away. >> my time has expired, thank you. >> thank you, senator. >> i have two questions. we see a tale of two beltway bandits. who is the ceo of cgi? >> michael roach is the ceo of cgi global. >> my guess is from what information you have, you have

donated up to $140 million for him to do this work? >> current spending is 400 million including cgi. this includes qssi. in such a sneaky way? why refuse to provide the contract to congress? i am from chicago where we always kind of follow the money. if i cannot find out where it >> i am happy to go back and check. a lot of information has been provided to congress. >> so, you will be able to provide the contract to us? >> i will get you everything i can, yes. >> don't you have money missing that has not been paid? my understanding is that there's about 100 million to go.

after a disaster of this nature, is there a way to have accountability with the remaining funds? >> i will get back to you with that information. >> maybe he can skip a holiday in the bahamas. >> it appears you're going to inflict this on the people of illinois where media reports tell us of upwards of 30,000 residents might lose their health insurance because of this program. i think a story was just run, about 3.5 million americans will lose their health care because of this program. i'm not sure that is accurate. i think you're referring to cancel policies. >> i'm referring to the story. >> i don't know which. there are not 3 million people

losing coverage. >> are you accountable for the taxpayers funds? >> i think i am. >> hundreds of millions of dollars. for michael roach, i would think that you have provided a substantial wealth to him. that i just point out think we ought to know the full details of the contract that you have signed with him. i thinks i'm wrong, you have statements of worth, you have a lot of information already, but i will get you anything else. >> i would go to the other ceo of qs as i've. i which is to thinking about a phone call that might have happened when you were ready for this hearing.

tangois carol, whiskey fang f on my website. >> what? yeah., hundreds of millions of dollars, you should have something. mr. roachnder what is driving right now. probably something really nice. >> mr. chairman, i yield back. senator hagan.e, >> thank you, mr. chairman. thank you for being here.

let me just ask about the december contingency planning. at the end of this month, either one or two things will be true. either the website will be working smoothly for the vast majority of its users or it won't. in both cases, the administration will have to take quick action to ensure that individuals across the country are being treated fairly. i am sure that people are planning for this at the end of the month. if the site works, individuals enrollve two weeks to in up land that will take effect on january 1. is the administration planning and outreach strategy to match this surge that is currently underway? if the site is not working, then what steps is the administration going to take

including delaying the penalty or not buying insurance. and then what will they do to the individuals to make sure that there will not be a gap in their insurance coverage? a publicere is campaign that will match, the end of november and going into december, january, february, march. there are no plans to delay the individual mandate. what if the site is not working? >> the site will be working. the site is working now. we are making it performance improvements. >> are enough people able to get on the side? >> do you have numbers? >> we had over 700,000 who have completed applications. we will have mid november through october.

>> they are waiving penalties for two months to make up for the lost time that it is taking getting the site up and running. anhink that that will be issue. one of the things i was concerned about him leading the the contracts to award this site. was it really awarded to companies that had been on an i.t. contractor that was back in 2007? was it not open to other companies? >> it was a contract which back in 2007, there was a list of vendors to do this kind of work.

>> a lot has changed from 2007 until now. >> these are current vendors. the ir.ess was >> if you are not on that contract, would you not be eligible? >> that's right, you would not be eligible. this process was completed in 2007. it is been used for projects. it is a series of contractors who have been prescreened, prequalified. aey still are going through competitive bid process. this still is for the individuals that qualify in 2007. >> are those companies, would they be on that qualifying contractors? look at theave to individual side of this, certainly.

on september 30, the night before the site was set to launch, what were your expectations for the launch day? >> that is a great question. wefirst expectation is that would go live shortly after midnight because we were doing a soft launch at midnight. we had pretty much promoted that the site would go live at 8 a.m. the normal cost them morning of october 1. we went shortly after midnight. we had tremendous interest, even during the night. my expectation was that it would work, it would have the customary glitches. it is a complicated website. bugs.w that it would be we had to pull functionality out

to spend more time focusing on the application process. what i expected was a site that worked with some issues. more volumewas than we anticipated and we anticipated pretty high volume and then we ran into the issue with the establishment the e- mail accounts. to problem solve for that. those were two things we did not expect. >> it seems to the information i have been reading was that there was warning before the site went open. was a lot of concern that testing had not been done. in hindsight now, a lot of people are saying, why didn't the administration give the sitewarning about

not living up to the expectations that was being called for and many people understood that it would be up and running and being able to access it quite easily? >> i would say that the testing around the hub was complete and i think the testing that had not been finished was testing in a live environment. , in ourour analysis modular testing, we had done independent verification him if that had passed security checks. we were comfortable and we did not have any high risk recommendations. we cannot do the the live into and testing. we did case testing prior to that. >> thank you very much, senator. >> i wasn't watching my clock. i apologize.

>> the navigators are trying to help to facilitate alaska as well as enroll in alaska that has been set up for this. these are folks that want this to work. what i heard from them was stopped. it is not working. enroll29th of october, alaska confirmed that there was that hadhree alaskans successfully enrolled. there is nobody else that has confirmed that they have in thefully enrolled exchange from alaska. this is the fifth. he might have have somebody came in yesterday but as best as i can tell, it is three. in a letter that i received from enroll alaska, they confirm

this and they have specific have specifically asked about the administration pulled the website down. one thing that was very disconcerting was to learn that perhaps the three that have been enrolled has been given incorrect information. it has discovered that they were talking late in the subsidy for alaskans incorrectly. therefore, they have suspended all in romans until the issue is resolved. this was last week. this subsidy calculator has been resolved. are you aware of this? has it been resolved? are we working on it? the concern is that not only can people not get onto enroll but if they do, the subsidy

calculations are incorrect. >> so, we are aware, meaning the staff is aware of this issue and they are working on a fix to the system to correct the alaska issue. should alaskans do? should they stay off? >> i will get that information for you. >> what she did yesterday, i the exchanges will be 5f-line between 1 a.m. and a.m. eastern standard time until further notification. is that correct? is the window that we used to do software upgrades. that is why. >> ok. fair enough. might believe,e the son does not rise and set in washington, d.c. or on eastern standard time.

when a family finishes up dinner, was the kids to bed in alaska, 9 a.m. is 1:00 a.m.. you have the time that alaskans would be able to sit and move through any aspects of this exchange, you are shut down. can you give me some indicator as to when this might be available for all americans to take a look at. >> we're in a situation where we have concerned with with the subsidy calculations in the state, we have maybe three people enrolled correctly. we are not sure, yet. we cannot get onto the exchanges when most people would have an opportunity to do so. i am having alaskans coming to

me and saying, ok, it happens on january the fifth? i have an incident where i need my insurance. my insurance has been canceled. just about 60% of the folks who receive their insurance through our largest health insurance by a long margin have received their cancellation notices. so, you have that going on, you cannot get onto the exchanges. we are all saying that the exchange will get worked out. what they are coming to me and saying is if something happens to me and my family, that first week in january. if i had been able to apply for coverage, but for some reason, there is a glitch in the confirmation, getting my premium checked, if there is a health is at thejanuary, it

individual that is on the hook? it hhs? will i beto know, taking care of, i don't have an answer for them. >> this is four hours of the day. >> i understand. >> it is very significant. thendividuals can go to call center and get help. that is true in alaska as well. if they want to submit paper applications, they can be processed and returned to them. >> what happens on january 1? who was on the hook? beforeill be resolved january 1. >> thank you. >> thank you, mr. chairman.

thank you for holding this hearing. .hank you, administrator kavner i want to talk about massachusetts. everyone is frustrated by the first few weeks of healthcare.gov and everyone is looking for answers. last week, president obama came to boston where he said health reform in massachusetts, like the affordable care act is not website, it is a value statement. the president is right. leaders in massachusetts like generations of national leaders fought for reform and health care. not because it was easy but because we all knew that the old system was broken. for years, costs exploded. too many consumers, patients, including those with insurance. a were threatened with financial ruin if they got sick. there has been a lot of

comparisons between the aca rollout and our experience in massachusetts. what i can tell you all through the experience is that getting everyone into a new health care wasem wasn't easy and it not quick. in the first month, if people could sign up for subsidized coverage during our health reform launch in 2007, we got 123 people enrolled. because we were committing to making the law work into making sure that people have affordable health care, we kept working on it. we fixed the problems, we hit period lastedweour enrollment almost a full year. and yet it was only in the last total pool20% of the cut themselves and rolled. people signing up for nce had azed insura

shorter time, and over 1/4 of them waited until the last month to get enrolled. i understand that the beginning -- butrollment period what we've learned in massachusetts is when it comes to enrolling in health care, any of us wait until the end to get it done. what didator tavenner, the administration anticipates would be the pattern, of enrollment, prior, what were you thinking prior to the launch of thinkcare.gov, and do you the early problems you had are moing to affect the long-ter pattern in enrollment? >> we assumed we would be able to enroll folks throughout the six months, but that that

greatest surge would come in december, because we got there were people who wanted coverage on january 1 and the second search would come late february, early march, by the individuals who were not as motivated to get insurance. figures, butment they were lower for october him and i think they will be low, and it follows the massachusetts experience, and that was part of the reason for such a long and rome at period -- such a long enrollment period in the first year. >> and you have time to get these problems fixed? >> i think we have time. >> we agreed that the problems of the website are unacceptable, but our experience in massachusetts suggests it might be prudent for us to take a deep rest about this. -- a deep breath about this. the launch of our website was

not smooth, but we kept working on it. when we had data mapping and volume problems during our launch in 2007, we kept working on it, and when we needed our tech surge to work on it, we kept working on it. we kept working on it because we stayed focused on what mattered -- our conviction that no one deserved to be bankrupted or shut out of the health care system when they got sick. so thank you, mr. chairman. >> thank you very much, senator warren. >> thank you, chairman. i would like to talk about my home state's experience. governor chafee, a republican member of this body, decided that early on that he was going to do this and get it right. stake, but weall are a pretty smart state, and he put christy ferguson, who some of the people might remember as thischafee's staffer on

committee years ago, in charge of the project, and i want to say that in rhode island it has been a success. the first time that i went to tsit the first time that i went tohe i walked through the front door. it was five-time for 30 or 6:00 on aop weekend for time to maked suread people could come in and there was a family ,-com,-com ma mom and dad and three little kids. they were at the reception desk and they had come in. they had commented earlier in the day and they have been served and walked through the whole process and they were so thrilled with what they hadip, h heard that t they had gone out d this was their return trip with two big boxes of dunkin' donuts coffee and a stack of don box it because they wanted to give coffee and donuts to everyonepe who was working in a call center because they were so happy. an i walked around the call center and talk to people taking the

calls and dealing with people over the computer. something one woman was just beaming. i asked her you look like something just wonderful happened. you have got quite a smile. somebodyust talked to who was paying i want to say $800 a month into cobra and it just sounded better plan for $500 a month. $300 a month was a pretty big deal in that family slave so she had a wonderful exchange with that person who had called then. we have people when they come in life, they are taken in private rooms to discuss it and when people find out what the deal is a lot of people are getting hugs. there's a story in "the new york times" today about a woman who burst into tears of joy when she found out she could get coverage and i would like to ask unanimous consent to have it put into the record. there is more than one story

about this. like i said rhode island isn't a very big state and we made this work. it has worked pretty well. we had a glitch recently been the hub was down and a couple hundred people didn't get current resolve that and we were working through that but when i see these much much bigger states he didn't even try, didn't even try and now everyone is complaining to the federal government who didn't do it for them well enough? there is a part of me that says next time stand up and give it a try yourself, you know? you don't have to be a recipient we are up nearly 4000 people enrolled but not paid. we are 10,000 counts about a people working through the process but they have their account established and we have all these wonderful stories. there is another path and we are all very sorry that you guys had this botch of the health care

web site rollout but it shouldn't mask that underneath it there's a plan that is making a lot of families really really happy, really really happy and if you go to the front lines and go to your state exchange and see what people are seeing, you will see a lot of those stories. they are happening really across-the-board so there is more to this and if you didn't want to take the trouble to bother to set one up yourself it's a little nervy to be complaining that the federal government didn't do it for you well enough when you perfectly well could have by bye bye yourself is to stay settled up and done it. also there at these letters people talking about the people who have gotten -- when we got this started do you remember we have are dealing the health insurance industry that was so cold hearted that when it took a client who had been paying a premium for years and suddenly came in with a big claim their first reaction

wasn't, how do we help this family? it was let's look back in the records and see if we can find a way to do some roll them and get rid of this liability. they had acne. is that a pre-existing condition that they didn't disclose to us? can we throw them off? that was the attitude so there were some pretty nasty stuff happening to these letters. i want to use the example of rhode island blue cross-blue shield. i would like to put their letter the record. it's a wonderful and terrific letter. it's very clear. it lays out where your choices are. it's as if you like what you have got you can keep it and here's how and it says if you don't like it and you want to use the exchange here is how. it's three steps to stay at blue cross-blue shield two steps to get onto the exchange. there's another way to do this and i think rhode island has done it right and as a result we are seeing low drama. so good luck getting through

this mess. has been frustrating for all of us but i think it's pretty safe to see that across the river there some broad and sunlit lamps for us to go to to quote winston churchill. cease thank you. senator whitehouse i know ms. tavvener you have a time you have to be out of here also. i want to make it so people can have five minutes and have a chance to ask another round. i would just say first of all i think senator whitehouse for mentioning rhode islander that will be put into the record and also senator isaacs announced earlier for an ig report to be made part of the record and i want to say that will also be made a part of the record. i didn't mention that at the time.

again, i like what senator oren said or what president obama said this new affordable care act or obama cares want to call it that is not a web site. it's not about a web site or a technical fix. it's a value system. do we like the old value system where people couldn't get coverage? where someone got sick they would drop their policy and cancellations? i hear so much talk on my friends from the republican side about cancellations and i didn't hear much in the past when an insurance company could automatically cancel you if you got sick or wouldn't renew your policy if you had cancer or breast cancer or something like that. didn't hear much about that but what we are saying is that a poker with. that whole value system is not good for this country. they are too many people like mr. streeter that i mentioned

and mr. kristof or i could mention kathleen ferguson from des moines. eight years ago her son died at age 33 and she said my son died needlessly because he had a pre-existing condition and could not get the medication he needed. i want us to take better care of each other and i'm grateful people with pre-existing conditions can now get coverage. that's the old value system. mary lamb is from swisher iowa told me about her brother. trying to find insurance coverage for his wife for years and tried to buy coverage with a 50,000-dollar deductible but no one would sell her policy. they log on to the federal exchange and rove himself federal exchange and rove himself and his wife saving $700 a month from what he was paying before. mary writes the aca gives folks with chronic conditions is chance to avoid bankruptcy, a new value system.

i guess they're going to be disruptions when you move from an old system to an new system. and certainly we have to make sure we fix these problems and the web site and other things. i will refer again to what i said earlier about security, paramount i think. that's one thing that we all agree on here is that security is paramount in this system. but in terms of the system itself, in terms of the system itself it's going to work and it's going to be better for this country. i might say in terms of these cancellations, i love the rhode island letter. it's just very clear. blue cross-blue shield of rhode island sent a letter out and said don't worry you still have choices and another page says

you can either stay with us or you can go on the exchange. they said don't worry, you have plenty of time. that's the cancellation notices. in in the past you you know whaa cancellation notice was? you are no longer eligible for insurance. good luck. that was fueled cancellation notices and now you have choices and options. so again i say to people to take a deep breath and wait for more people to understand what's going on. i must say that there was a story the other day in a paper about somebody who said well chico now i have to take this policy that covers maternity care but my wife and i aren't having any more children. i don't know they were old or something like that. why should i have to have a policy that covers maternity care? i got to thinking about that. i thought well if you know what? may be because my wife and i don't have any more children and

they are grown up, maybe i shouldn't have to pay property taxes to pay for my local schools. my kids aren't there anymore. why should i worry about it. maybe the kids who go to public schools ought to pay for it. we are better than that in this country. we are talking about being a part of our society. it's to our benefit. my wife and i pay her property taxes to support our local schools because that's our next generation we want them well taught and we want good paid teachers -- well-paid teachers. the same thing with health care ,-com,-com ma it is a value system and i'd end data to senator warren ford tensioning that the value is no one is going to be left behind. no one is going to go without insurance. no one is going to have to wait until they get advanced colon cancer or breast cancer before they can go to the emergency room and get help when it's too late. that's the new value system.

and we are not turning back. fix the problems, move ahead and let's aggressively get people enrolled in the system and have a new value system of health care for america. i have used up my time senator alexander. >> thanks mr. chairman and thanks ms. tavvener for being here today. the chairman is describing the fundamental difference of opinion that we have had for about four years here because the value system that he likes i believe it's a value system that transforms are health care system in the wrong direction by increasing, by expanding a system that we are ready no-cost to much and the result is increasing premiums for millions in canceling insurance plans for millions, destroyindestroyin g relationships with doctors for millions, raising taxes by 8 trillion, forcing people into medicaid, spending a half a

trillion medicare doctors on new programs instead of investing in medicare to make it more solvent and encouraging employers to work to have their employers -- employees work 30 years and -- 30 hours instead of 40. we have a different approach which is to say vets and courage competition and encourage choices and let's try to make health care cheaper so people can actually afford it. but that's our fundamental difference. may i ask you ms. tavvener, don't you know now with the improvements on the web site in how many people are trying to sign up every day for obamacare and how many are succeeding in what the level of insurance they are pioneers and what's ago they live in? don't you actually know that now? >> that's the information senator alexander that we are putting together and we will have it available next week. >> next week.

>> mid-november and that's what i said all along. >> your going to release it -- why don't you release a daily? c. we had said all along, we would do it somewhere to how we do medicaid and medicare. speak that this is a little different. this is people are making decisions and people are going to lose their insurance and people have to sign up by december 15. >> i would say that's all the more reason to do it monthly because the fact is this is early on and people can decide to go in or out and don't have to make payments until december. >> the people the need to know about it are members of congress to appropriate $400 million through that same governor of one of the states who hasn't decided whether to expand medicaid. i would like to know whether it's 90% of people signing up or whether it's 80 or 70. if we knew how many hamburgers and cars and records are sold each day why can't we know how many people are growing and obamacare? wouldn't that promote the

success of the company. >> we will have that information next week. >> but that's once. why do we know it every day? you know it now, right. >> we are in the process of gathering that information. >> we are the united states congress elected to represent the people and we are entitled to know the answers to these questions so we can make our judgments about what to do. so are the governors and the consumers across america. as far as the example i used for coverage and and tennessee business venture that covered tennessee program was simply canceled by obamacare and in the case of washington saying that insurance is a good enough for you so you can't fight any more? the first of all i don't think it was canceled by obamacare. i think the insurance company made a decision to cancel the policy move on to something else. speakers a letter from a state

of tennessee which has now disappeared. which as i push the wrong thing but i know what it says. it's a letter from the state that says covered tennessee won't be available beginning january 1. this covers all 10 members for new federal 10 members for new federal health care law will bring many changes including new health options for tennessee. obamacare said if the law had maximum limits, if you didn't meet the standard for maximum limits you couldn't offer that insurance anymore. that's the law so in this case for the 16,000 tennesseans obamacare said that insurance is in good enough for you so emily can't fight anymore and just to pay $6000 more. isn't that true? >> i think we have been down this issue before. they could have been grandfathered in. >> no, maam. the law says if the state program doesn't make the maximum limits its outlawed.

does the law not say that? >> for new plants. speakspeak now, the deal plans. >> there was an opportunity for old plants to be grandfathered in. >> ms. tavvener there are provisions in the law passed in 2000 that say if the plan does not need the maximum limits the plan can't be offered. >> you are talking about lifetime limits. i will be glad to get you that information. >> the fact is obamacare outlaw out loud that plan and millions of americans are having their plans canceled. why don't we put the president's words into lot and say if you like your plan you can keep it. my time is up. thank you mr. chair. >> thank you mr. chairman and i thank you for staying around for a second round of questions. when i had my first opportunity we were talking a little bit about the situation in the state of wisconsin.

we hear a lot of people reference this idea, if you like your insurance plan you can keep it. in the state of wisconsin a lot of people like badger care but because of the decision of our government having nothing to do with what congress did years ago , 92,000 people who made really like their health healthh care plan are being cut off. because of this i really think it is a shared responsibility to figure out how to most effectively help these 92,000 people transition from badger care to participate and enroll in a federal exchange. i want to ask the companion question. what specific steps can the administration take to ensure these individuals are in robeson is possible but also what

options are available to the state of wisconsin to eliminate the risk of losing this badger care coverage january first? the lucky take that in reverse order. obviously wisconsin like every state have the ability to have expanded medicaid. 25 states wanted to do medicaid expansion including many republican states but obviously wisconsin was not one of those. what we were trying to do is we are working on part of the process working with the state of wisconsin and with the medicaid office to identify those individuals that make sure they are aware of what is available on the exchange. obviously there's a cost to that with the issues of subsidies. we will try to work with the state closely to help these people are identify with them. >> earlier u.s. questions about

how do you target young people? you have young healthy people. how do you target the 92,000 people and what is the state role in the administration rolled? >> these individuals will be able to send them information. what we are doing is asking wisconsin to give us a plan so it's a shared responsibility. >> i just have have to say is commentary before the exchange marketplace opened a letter went out from the state and you are mentioning that the state is aware of who these people are. someone in their household may be on badger care it losing it. that type of information in my mind is not adequate to ensure

that people don't have a lapse or gap in their health coverage. i guess the other question in my remaining time relates to the experiences in those states in the country in the early phases of this marketplace. what is their experience versus the states in the federal exchange like wisconsin and enrolling people and what comparisons can we make at this point and canvas 36 states that rely on healthcare.gov and the federal exchange expects ourselves when the technical issues on the web site are fully worked out? >> so yes i think we would obviously expect similar results from what the states are saying. we need information around applications. some states and because about

that publicly will be released next week. there are large states with large numbers of uninsured so that will be part of our target campaign december and beyond. >> with regard to the state-based marketplaces can you talk about any of the successes that they have had or challenges in the early phases of enrollment? >> a think many of you have read about kentucky and kentucky has certainly been a successful state on the medicaid and exchange site. their governor is 100%% behind this and this the effort. they have released numbers publicly and we can get those to you. washington state was another and new york and california. there states in varying process but this is part of what will be reported out next week. >> thank you senator.

senator burr. >> mr. chairman center and with the story let me talk about mr. hood lived lives close to me in north carolina. he now pays $324 a month for a plan with a $10,000 deductible. under the new love compare for compare the plan suggests for next year he will pay $895.27 per month with an $11,000 family deductible. their annual health care payment would almost double from 14,000 to 24,000. he is unlikely to be eligible for a subsidy. let me just suggest the reason that congress has covered this is thoroughly is this could be a lot easier. i'm not even sure when dr. coburn and i came up with an alternate bill. we were denied the ability to amend on the floor of the united states senate and to offer an alternative. that alternative took care of

pre-existing conditions. it cap children on their insurance longer of their parents. it actually accomplished many things republicans in democrats highlighted about the portable care acts but it didn't get into a large top-down government designed program that picks winners and losers. when you can have stories that are as passionate as yours and i can have -- you can have stories as passionate of mine clearly we have a system that is designed winners and losers. they get to choose how much they want and how much much exposure of benefit. in other words their health care coverage matches their age, their health condition and their pocketbook. that is not what this does. let me ask you tavvener what is the target role for the end of november for the exchange? >> for the end of november at? >> yes, maam. >> we were looking at between october and november.

i think that number was i want to say around 800,000. >> on april 1, 2014 insurers are required to begin submitting bids for the 2015 plans. an extension was granted on enrollment for march 31. for many americans they are not going to sign up until next year. considering that insurers will have no experience or very little to the one which is to base their quotes on 2015 what accommodations will you make to ensure insurers make informed decisions? >> i think the open enrollment, we worked in cooperation with insurers so they will have information necessary. >> between april 1 of 2014 and april 272014 we will have to submit the cost for their plans

for the 2015 plan near? >> the second quarter of 2015, yes. screw without much experience up much experience of what much experience up with a plan mix is? >> a think they will have the experience they get for the first four or five months, yes. >> again there many people that are required to sign up until march 31 of that statement right before april one day before they start submitting. he said earlier in your testimony that all the fix is done by cgi would be required without additional fees and that's in a cost plus contract. can you ensure the committee that there will be nothing on the plus side of that the federal government pays to cgi for their repairs on a web web e web site contract? >> served at the cost plus contract is already planned for payment through march of 2014 so

i am assuring you that is the contract, yes. >> i. >> i'm asking a very specific question. there is a plus base part of the contract and i'm sure that the plus based deals with additional work done over the scope, over the stated scope of the contract. clearly fixing this exchange was not part of the scope of the contract i don't think. >> it's required that there were it's an existing contract that they have to fix those problems. >> let me say this. do note that many of us are going to be looking at the payment is made on the plus side to see if in fact we are paying cgi for their individuals to six a web site that they were contracted to produce for the federal government. again i thank you for the thank you for the working of the mamas and i know this is not fun to come up and answer questions. i would say that the more we

share up front which we haven't on the affordable care act the more informed all members are. thank you mr. chairman. >> thank you very much senator burr. ms. tavvener thank you very much for being here and being forthright and answers. i thought this was a good session. i think you and your staff understand some concerns of both sides have on this and i think they were legitimately good questions pertaining to that aspect of it and of course as my friend from tennessee points out we still have philosophical differences on this issue and that's fine, but there some points. those sides agree i think we need to fix going going forward and i think we expounded expounded on this quite forthrightly. thank you very much and the record will stay open for 10 days for other statements and questions. thank you ms. tavvener. the committee will stand adjourned.

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> i think regardless of where you are on the political spectrum we all feel very fortunate and grateful that we live in the united states of america. it's a very unique place and if america was considered to be a product -- we to try to sell our products overseas what is their brand? and i think our brand is the constitution rule of law and our value system. under that brand and under that value system there is that notion of equal under the eyes

of the law. under that brand and value system is the ada and trained to elevate the rights of americans with disabilities. >> this is a treaty. a treaty is a law. it's the emotional and political arguments in a treaty. no one can disagree with these arguments but the question is will the treaty actually have a legal effect that is being proffered by the proposal of the trading? we don't hear citations to articles of the treaty. we don't hear consideration of the reports, the concluding operations. we don't get the kind of legal analysis that will be appropriate for analyzing the legal impact of this treaty. the "washington journal"

broadcast from cushing oklahoma to talk about the current state of the oil industry. considered by some as the capital of the american auto

kingdom cushing oklahoma houses the world's biggest oil supply with 80 million barrels of oil capacity. next are about the operation how it works. this is to an after-hours. >> host: where are we standing right now in oklahoma? fisc of this is the site of dealer number one. it was the discovery well from the cushing oilfield drill than 1912. the sexual well is a retrial of the original well because the other original oil would have had certain problems over the years. this would be a rotary hole here. talks about her discovery well.

>> host: after the cushing well was discovered with this place look like? >> guest: cushing was the only one in existence. right now there shamrock that sprang up overnight because of this well discovered here. it was as you drove through you noticed all the hills. it's very hilly and would have been a nightmare tried to plan the city but it was like gold fever here. the black gold rush was on and off these things sprung up overnight. >> host: how much was the cushing well producing in his haiti. >> guest: in 1950 was the largest oilfield in the world and produced 350 barrels out of a five by 15-mile area which is

75 square miles and the whole state of oklahoma does about between 20300 so it produced more than a whole state does. >> host: back in the early 1900s were rolled to cushing played overall in the country's economy when it came to oil? >> guest: cushing was -- maki and no facts and figures that i get out of these books that i have read all my life. it was between $1.150 a barrel and they drove the price down to 50 cents a barrel because there was such a let. they stored the oil and urban pets and gushers were real things. the environmentalists would go crazy back then but no one knew quite have to do that. i understand they had five

commercial skimmers that skimmed the oil of the rivers back then. they didn't know how to contain it. so they built all those because cushing was an existing tom and they shipped a lot of oil over there during world war i with the east coast to help our ships >> host: how has cushing changed over the years? >> guest: well, cushing, there is still a lot of production. there used to be a lot of people that made a lot of money because back in the early day you would get one barrel out of every egg eggs of people would make a lot of money on the rights. now cushing has tended to evolve

a lot for right now there is an incredible pipeline industry in cushing. they have 10 cranks south of town. it's like a little city south of town with pipelines through here and it's still a major hub of storage with all those tanks. a lot of tank farms and a lot of tank farm companies drilling oil of the time. that aspect of it has changed but still has a lot of viability. >> host: cushing oklahoma has dubbed itself the pipeline crossroads of the world. that's the sign that you see when you enter and exit the town of cushing. it does so so because they're a 13 crude oil storage companies that operate water known as tank farms and with the capacity to store oil has reached 80 million barrels in that city. our cameras there this morning

stationed at one of those tank farms owned by ambridge and we are joined by mike mueller the company's director and general manager there. mr. mueller lets begin with what is a tank farm? >> guest: greta a tank farm is a complex that has multiple tanks. the facility where we are sitting today has various tanks and piping that will bring the oil into the various tanks stage them store them and transfer them to a third party terminal. >> what happens there on a daily basis? >> guest: on a daily basis we have about 13 pipelines and seven that come into cushing and six or seven that go out so our customers that we call shippers nominate or tell us what crude oils they want shift and where to and we provide that service simply shipping a batch of crude oil to point a 2. b or storing

it in a tank if you will as well as blending operations for our customers. >> host: by cushing oklahoma than? >> guest: greta cushing has an interesting history as you well know with the wildcatter subnineteen 12 who started some production and frankly outproduce the refinery capacity so they had to build the storage tanks and type -- pipes with the last refinery shuddering at stores in 1982 the infrastructure in place cushing as a clearinghouse for all future contracts and with that us and 12 other companies have invested heavily into the cushing complex and now restore 80 million barrels of crude oil. >> host: it's an important place specifically to ambridge right there and for wall street on a daily basis. explain. >> guest: shirt, greta. deny max where individuals can

trade a clear here in cushing and one of our tanks across the street in an enterprise tank and without the oil trade has a liquid market in cushing. >> there are 13 companies and birds, magellan. are you one of the largest and how big are the other companies? >> guest: we are one of the largest. we have 20 million barrels of storage. there are others that are about the same size and there are 10 or so better in varying sizes one 25 million barrels each. >> guest: . >> host: the largest facility of storage. what is your capacity right now in cushing? >> guest: we have about 80 million barrels of storage from a show capacity and 65 million up what they call usable or working volumes so in their at any one time we might

have that 65 million barrels of working stock in the cushing complex and as we have seen of late some of those volumes, those barrels are shipped out and the volume is not full. it's not toward the 65 million that may be around 35 million barrels of storage. >> host: fire the storage tanks even necessary? >> guest: again with the pipeline operation you bring it from point a 2. b and when you want to do that denotes to stage that barrel because crude comes in varying slates so if you have a west texas intermediate ari heavy sours you will need to keep those separated into different tanks. these tanks allow us to not only store crude for a given period of time based on customer's desires but also to keep that crude separated so when they were fiery orders a west texas intermediate they get a west texas intermediate crude and

when they order order heavy sour they would get heavy sour. >> host: why fire they aboveground? >> guest: i think greta the use of construction and the environments are concerned that her first and foremost and everyone of our operating companies here. enbridge takes that very seriously. there is a ton of design safety built into the design as well as a long-term operations of these facilities and we were able to very much keep the monitor on every tank that we have. >> host: explain to viewers how they are built. >> guest: shirt. we typically start with what we call a ringwald which is like the foundation of your house. it's a concrete ring to support the massive weight of the structures and then the steel is built similar to a can of tuna fish. inside that it actually has a roof that floats up and down on top of the oil so as oil comes

than the the ref was so then this oil floats out the roof was down. >> host: what is used to build them and how often do you build a new one? >> guest: we have several contractors that can build those types of facilities and of late here we have built a significant amount of tanks. in 2004 when enbridge brought -- bought the facility from shell there were 84 tanks, 7.000000 barrels capacity and today 20 million barrels of storage so in essence we have taken down several of the smaller older version vintage tanks and replace them with brand-new and much larger tanks. >> host: when do you say we are going to build a new tank texas at based on the clients needs over on production in the country? >> guest: absolutely. we worked with her customer base

and they come to us and competing terminals. we will build that tank and be held to service when they need that service. >> host: how much does one of the storage tanks and how long does it take to build one pics. >> guest: the costs cost very onsides greta but anywhere from three to four, five, 6 million bucks and beyond. in timeframes they are probably six to nine months to build a tank. with the groundwork and you build the floor and and take this deal up and install the ref. >> host:>> host: how do. >> host: howdy address environmental concerns and risks with storing crude oil? >> guest: certainly protecting the environment where we operate it's important to our stakeholders and the landowners and communities and all that. we have several monitoring devices and level indicators and

video cameras and surveillance cameras to keep an eye on the terminal as a well and we do a material balance where the computer watches all all of the insurance nation insurers its imbalance and we are not losing any product. >> host: what about weather concerns? oklahoma is known as tornado alley. how secure are these structures? >> guest: again in the design phase phase safety as built-in including traumatic activity. we build all of our tanks to withstand traumatic activity. fortunately cushing has never had a direct hit by a tornado but the tragic events earlier this year they do exist in the general region here. i can design and efforts and

safety is built-in for those types of events. >> host: what about national security because there is a lot of oil that could be stored at those tank farms in cushing. >> guest: security is paramount to our sister solid in every facility round here. we want to make sure that the product is kept away from anybody that has ill intent i guess. we do have security guards and surveillance cameras and we have people on this site 24 hours a day, 365 days watching. >> host: you have a 20% and control center and we visited that when we were there in september. we can show that viewers the screens for proprietary reasons that explain what happens at the control center and what are they looking for? >> guest: the day-to-day life of our operators we have pumped orders which are directed from our customers.

they want a batch of crude taken from a third-party terminal brought into our terminal and stored or they want it brought in a third party terminal through our terminal to a pipeline that we feed and we feed intake do we feed and take to market whether that be chicago or the the gulf coast or wherever that market may be. >> host: mike mohler and want to end our conversation before we go into other folks there. talk about how specifically at the enbridge terminal your business has changed with the rise of oil production and natural gas production in this country. >> guest: there's a dynamic shift in the crude oil markets here in north america. we have got pipes today the seaway pipeline that used to bring offshore crude from tankers into cushing and distributed to the markets. with the shale and the oil sands of canada that domestic production comes down to cushing and now we can bring that down

to the gulf coast theory were first seaway pipeline. >> host: mike moeller is the director and general manager at enbridge and talking about pipelines there. we are going to talk with other enbridge executives as well as transcanada about the pipelines in how they work specifically coming up next. mike moeller thank you this morning for joining us the very early morning there in cushing oklahoma. >> guest: thanks greta. it was great to be with you. >> host: our next guests coming up from enbridge's terminal is russell evans with the oklahoma city school of business. we will be talking with him about the role that is played throughout the history and the oil industry and the overall energy sector but first here's president obama from last week. he was pitching the u.s. economy to foreign investors and he who highlighted the energy sector of the u.s. economy is one of the bright spots.

>> be pursued in all of the above energy strategy and we are producing more traditional energy, more renewable energy than ever before, more natural gas than anyone in the world and we have cut our carbon pollution in the process. so while the case for doing business in america has ice been strong we have made it stronger. of course you will find no better workers than american workers. our productivity is rising. three of the world's best universities. the most innovative entrepreneurs. we have the strongest intellectual-property protections to go along with a rule of law that matches up with equity. and thanks in part to a new initiative focused on exports and the new trade agreements that i have signed we have sent more products made in america than ever before.

so as you have heard repeatedly today and he was here undoubtedly after he leaves the stage of america is open for business. and businesses have responded. after a decade in which many jobs left the united states to go overseas now we are seeing company starting to bring jobs back because they are seeing the advantages of being located here. caterpilcaterpil lar is bringing jobs back from japan. ford is bringing jobs back from mexico. after locating plans and other countries like china and like china intel is opening its most advanced plant here in the united states. and they're a whole range of factors involved. people are looking at lower energy costs and looking at stability. they are looking at increase productivity and our workers and all workers and all these things are adding up.

and people are saying why wouldn't we want to be outside the world's largest market when we can get her products made effectively here and it's a great platform for which we can export all around the world. >> host: welcome welcome back in their life in cushing oklahoma this morning for today's "washington journal." they have dug themselves the pipeline crossroads of the world and others have called it the capital of the american oil kingdom. they are more than 300 storage tanks there that dot the land to store oil reaching 80 million barrels. we are live from enbridge's tank farm in cushing joins fight russell lessons. let's begin with the history of cushing in the oil industry. how did it all start? >> guest: going over the concern of cushing we are sitting here this morning in the

middle of indian territory and at the time the territory was opened for homesteaders a gentleman named william -- establish his homestead in the cushing area and recognize his home state was sufficiently far from the nearest big city and petitioned to have 80 acres set aside to develop a town. the petition was granted and day after the private assistant to the postmaster general of the time so was the start of cushing oklahoma in 1891. it was a few years later that cushing's oil history went from there. >> host: that began in 1912 with the discovery of oil at the cushing oilfield. what happened then? >> guest: that is correct. it's tied to the early oil exploration in pennsylvania. a lot of formidable characters

transition to oklahoma to the cushing oilfield when thomas slick appropriately named perhaps drilled in a wildcat well here to our north and east this morning and opened up a gusher that was the first of what would become one of the largest oilfields at the time. it was the first in a series of wells. 45 of the next 46 wells drilled were successful. the field really became prominent in 1914 and 1917 colon siding with the large energy event of world war i. >> host: then you saw the race of refineries in the area. why is that? >> guest: so really because the production was so great relative to what was to be used. you have the oilfield is blossomed in 1814 period at its

peak producing 300,000 barrels a day almost one in every eyes barrels produced in oklahoma in total u.s. market production. he was just a significant booming oil filled. you often think about it and i think about it sometimes as i hear modern accounts of what north dakota's experience in places like wilson north dakota and you think about this film in cushing oklahoma. we have previous successful exploration to our north and east between cushing and tulsa and so as the boehm move this way it really became a drilling exploration focus in this town. the production far outpaced what we consumed and it became a natural spot to begin building storage facilities pipeline gathering facilities and it was

in the nascent stages of the modern infrastructure that sits behind us this morning. >> host: what part is a play in the oil industry today? >> guest: the cushing hub is vitally important. if you think about all the things that the hub does and the things that have been discussed previously already it is a marketplace. it is the market place the price-setting place for intermediate crude. it is a blending station where operators like enbridge and others can meet the demands of their downstream users, the refiners that are refining crude oil of jet fuel diesel asphalt and other products. they demanded very specific blend of crude into the production process. cushing serves as a critical blending station to get those crude inputs measured just right and sent downstream to downstream consumers and that

it's an important storage facility. as facility. as you noted affairs 80 billion barrels of storage capacity. if you think about that in relation to the petroleum reserve has a capacity of 725 million barrels and the cushing storage facility stands out as one of the largest storage facilities and operations in the united states, the largest. >> host: what is west texas intermediate and is not the only type of oil we are seeing in cushing? would have a type of crude oil is coming into that area? >> guest: i'm going to embarrass myself in front of your geologist viewers at this point. there are a couple of fridays here. heavy and light. referring to its ability to flow flow -- it's a measured density. heavy oil is darker and sort of molasses color.

a light oil is yellowish in color and last dance. different viscosity measures and it would float on the water. we have a sour and sweet which is the sole for the oil. sweeter has a lower sulfur content and this hour has a higher sulfur content. west texas intermediate is just a particular benchmark of crude oil that has particular characteristics in terms of its viscosity and sulfur content. the west texas intermediate is one type. we think about the fuels in canada. these are much heavier fuels, tar sand fuels in the think about louisiana light sweet crude and we have other markets further types of crudes. west texas intermediate serves as the u.s. focal point benchmark price of what a barrel of west texas crude sells for in cushing oklahoma is the

grandmother for u.s. oil markets and helps influence the prices of those other types of crude as well. >> host: is west texas intermediate coming from the western part of a stage? the viewers have heard about the shale and north dakota. what's happening in our country on the production side? >> guest: it's been incredibly dynamic on the production side. i think we will see a dynamic response on the infrastructure side. to really connect fields of production to the users. what we have got right now is historically cushing, gulf coast refiners would get their crude inputs from offshore production and a little bit from southern onshore production but for the most part production from west texan intermediate and other forms of crude would come into cushing oklahoma be blended and distributed north from the

midcontinent which is texas oklahoma louisiana and north in the upper midwest in chicago in the refineries there. the fuel would be pumped there for the refining process. there's production in north dakota and production and north in canada. big fields of production now in western nebraska in the rockies and look at these big fields of production having to adjust how we distribute fuel from production to consumers. so we are turning some of these these -- go ahead. >> host: what you mean by infrastructure needs are changing? you are sitting at one of those infrastructure hubs in our country. what needs to happen flex. >> guest: we have on the order of 125,000 miles of pipeline and 55 or 60,000 miles would be

lines with a diameter of eight to 24 inches that will move high-volume soup crude oil. it's by far the most efficient way and most cost-effective way to transport crude. but we have now are places like north dakota circumventing the traditional pipeline transportation structure and they are taking fuel directly to refineries in the upper midwest. by truck, by trained anyway they can get it there. this places the demand for fuel coming from cushing reversing some of the pipelines and build new infrastructure to get crude oil from cushing south to gulf coast refineries which will display some of the imported crude typically used on the golf course -- gulf coast and those have begun to export refined