philadelphia cleveland richmond atlanta chicago st. louis minneapolis kansas city dallas and san francisco. .. >> the closure of the stock market and the financial panic

that occurred in august 1914. each bank could conduct open-market organizations and later open market organizations consolidated. the board employed a 45 permanent staff and eight temporary staff. by year end of 1950, the system had 499 employees and 58 of who were on the board. operational responsibilities grew rapidly along the staffing, such that the system has 12,540 employees by year end in 1920. federal reserve did not gain a sense of permanence. not until 1927 when they eliminated the sunset provisions on the 20 are charters. during the great depression come in the banking act of 1933 known as glass people not only separated commercial and investment banking, but also created the federal open market

committee. and initially it comprised 12 members selected by the reserve bank's while the board of governors that regulations governing open-market regulations. the sase was constructed and then president roosevelt signed in the banking law. and it was on form with voting numbers consistent of the seven members of the board of governors and the bank reserve presidents. 1977, congress clarified the federal reserve mandate by establishing three key objectives were monetary policy and maximum employment and moderate long-term interest rates that are part of this. and this has played a crucial role in u.s. and global

economics and this includes maintaining stable price of goods and this can contribute to an effective payment system in this includes the geographical, educational, ethnical common objectives. please join me now in watching this video as we continue to and commemorate the certificates

around the table. >> they are some of the most competent people that i have ever meant. in any organization. and there is no institutional system than the federal reserve system. looking at cache operations in the research department, and you will all be working for the same goal. and i like it. it inspires me. >> before 1913, we have an economic system that have properties. and we also had a lot of recessions and financial

situations and it was very volatile and that affected everyone's lives and people didn't know it was coming. therefore the federal reserve was established and it has become a bellwether institution for the american public and also for the rest of the world. >> the fed has evolved a lot over the 100 year history and people may not realize that early on we really didn't have such a role in monetary situations and we had very little role in checks and balances. >> the main mission which was set by the law, part of stability and moderate military interest rates, those goals were probably going to stay the same. but the method that we used to meet those goals may change.

>> make mistakes and they made them in 1920 and 21 and they learned and then the great depression came and they really learned that and some people learn from his mistakes and it took them a while. and then mr. volcker came in and he really dead put the fed on a great track from the mid-1980s onwards and we had a big crisis that was going on. and this includes the federal reserve and it is part of this. but there will be a lot of learning as well. >> almost a century now, i think the federal reserve has created a tremendous amount of trust on the part of the american people. >> there is a sense of security that i think of stability which we do have personal banking for. we don't always think about if the check will clear or the doors will be open.

>> central banks understand that it is hidden from view. >> financial services are part of this. financial institutions as well. this includes regulatory supervisor oversight. >> this includes maximizing employment in the country. and if there are any special topics, this is part of the information that we get with people in the communities and that has been part of the transmission to our senior management and the president will take that information to washington. when the federal open market

community needs and the information ultimately affects monetary policy. >> i think there is a perception in this is a grassroots organization with a strong presence. and this includes setting up what the reserve ranks to bring together this in the points of view around the country to washington. >> they are not made in isolation. they are actually made with input from the american people. >> one of the things we are involved in is making sure that things have enough money, and we

are making sure that it is of good quality and on our financial institutions need that and this is touching the lives of every american every day. and we went around everyday collecting the tax and then i remember a few years ago and this includes that i have to be there today and it is all

electronic. >> the fed is important. he had a really deep knowledge and this is the way jobs were created. >> this is part of the department that does applied research and how it reaches on community development issues. this includes how this would affect people on the streets.

>> especially when i engage in my day-to-day job, i am looking at very specific situations and this is part of a as well. >> this is an important role in responding to crises for the american family.

and when everybody ran down into the vaults, the security certificates have been a part of it. and on 9/11, they have released this is part of the federal reserve system and we made sure that the bank had all of this that they need and we will take care whatever you need with the banks being open. >> and we have immediately had times of crisis and reacted and it's a very important thing.

>> there are only a couple alternatives to this effect with the most commonly spoken to. >> they were panics in the late 19th century that should've led to the creation of the federal reserve in the first place. >> and there is an institution that should be carefully watched that is in the nature of the government.

>> i would like to see a involving in the direction. and following a rule like behavior in this includes the mechanisms that can explain to the public. >> there is an incredible sense of duty and this is part of it. i've always been proud to have it be a superpower of the situation. but it is much more difficult when you are in the public eye and everyone showed up and did the same work and we were actually willing to say, look at us and evaluate us.

>> i think that we can continue to do this job, the country will be part of this. >> that sounds good. ♪ ♪ ♪ >> as we look to the future, i have introduced chairman ben bernanke.

>> even through the next few quarters, we have one important advantage. >> all right, our ability to make the forecast is part of this release. nevertheless, one prediction that i don't think it's too bold that are sustained and served as a federal reserve at its best. and this includes jacket and the ideal we seek is intellectual

rigor. >> of course, policy now says that we have a limitation of the highest quality and it cannot just happen. it requires a commitment to public service in this includes this by the staff would've been impossible to develop the innovative policies to meet the words of the federal reserve act. and the circumstances that we confronted during the financial crisis.

and this includes the federal reserve's willingness during its finest hours to stand up to political pressure and make tough but necessary decision. and this was critical for the nation's longer-term prosperity and require perseverance in the face of heavy criticism and i keep in my august 2 by fours. it is part of the unfavorable views of these interest rates and that effect.

and it is part of our institutional structure, including the board of governors and the diverse regional policymaking company. including what is part of the interest of the economy and this includes the regards to political pressure and we must

do all that we can to explain our actions the interest. and that is why we must welcome communication broadly defined and we continue to a talk to economists and ultimately that is part of the broader american interest that we are serving in this includes a high level of employment and the state of our financial system. we are continuing efforts to engage in two-way communication. and importantly listening to what our fellow citizens have as their owners continues to help us meet this milestone.

[applause] >> let us continue to reflect on the lessons of the past to deepen understanding of our economy. and this is part of the confidence and thank you to everyone in this includes those participating in the ceremony today. as we continue to commemorate the centennial, we would like to thank our derisory counsel. and those are whose names that are inserted in the program today and i would also like to thank the many others that are serving on various subcommittees and workgroups not listed, who have contributed to this and many other centennial initiatives. thank you again.

>> on the next "washington journal", we will take a look at u.s. trade policy a proposed trade agreements with european and and then the costs and benefits with federal regulations. and currently the president of public citizens. "washington journal" airs every morning at 7:00 a.m. on c-span. >> coming up next, health insurance exchange starting at 12:30 p.m. eastern on c-span3.

that is live at 2:15 p.m. eastern, also on c-span. >> this will be the world first practical airplane that was flown in less than six years time it flew three times and

they were very much the proof of concept of power of the flight. the airplane behind me, and this includes repeated flights, but upward for 1905. >> there is more from the wright brothers aviation center next weekend is booktv and american history tv look at the history and literary life.

>> george washington university hosted a symposium on the history of the federal reserve. next, panelists discuss the relationship between the federal reserve and congress. this is about one hour. >> the bank of japan, the european central bank, all of them. to start, they all had to deal with the crisis and the recession and how struggling

affected them with a sluggish recovery in many of them know each other because they studied and worked together and they are just in some ways a special club right now and there are differences. and they obviously have very different politics at home. and this includes these policies and the different economies in the banking systems as well the present special challenges.

>> just to show how small this university is, all three of us and indicating this, and going back to a question, before the crisis, a consensus is global about how central banks would operate in particular about this design to be part of this with the globe. that consensus that i recognized as part of the price stability

of the lives that we have mentioned this morning. and the key of this is part of the long-term. and also the ability of to help economies grow as long as they can and have the focus on price stability because this was the consensus before the crisis and one that we arrived up both as a result of academic evolution and this before that. and this includes the central banks around the world. and this is where we have the federal reserve, for example, and the deal mandate that was developed in the 1970s as opposed to the mandate as well

essentially extracting the federal reserve to place attention and equal attention with a maximum employment mandate as well as price stability mandate and that is in contrast to what we see.

>> about the attention to employment. and here we have seen the federal reserve go closer to the legal text of having veering away from what the european banks are. [inaudible] >> these is a difference that has appeared during -- [inaudible] crisis. >> i was at the federal reserve bank at new york. they didn't get hired by the

board. but it's interesting there's a convergence. there's is ader -- i didderdivergence. to emphasize too much the mandates. if you go back through recent history. central bank man at a time did little predictive power for anything. the swies nationalback which was the oriented -- it had a mandate with about eight circht targets it in including agricultural milk prices. [laughter] if you go back. and right now, it's not that the fed is more literally interpreting the employment mandate, it's that the ecp is more ignoring the mandate. so right now -- [inaudible conversations]

the mandate he knows better than i. it's supposed to be pursuing price stability. an inflation rate close to 2%. measured in the particular way they specify. they are supposed to be having a monetary color. the monetary growth, and the area below the inflation target by a significant amount. and below the money growth target for a significant amount, by years. and they decided they're not going do anything about it. because they have other goals they want to pursue. the idea of the mandate is very misleading. >> does it not matter? >> always the law-abiding central bank. manmade for years. [inaudible] >> reallilet -- >> thank you. >> i appreciate that. i think adam is right in 99% of the cases. but i really do believe that in

recent years we have some 1% manifest itself. ting would have been harder for the federal reserve to justify the program. at that point, inflation was very close to 2%. it if that was the only objective of the federal reserve coming with the big guns. would have been very, very difficult. it was very much about helping the labor market and the mandate. and similarly, i think if the ecp had a dual mandate i think there would have been additional pressure to respond to the soft economic perform we have seen there over the last several years.

if there was another there there would have been additional constitutional pressures. >> just to be clear. the bank of england. i was there. we had an inflation target. but we interpreted the mandate to say we were not going to kill the economy. >> but the medium term inflation target. to look forward it's going to come down. we are satisfying the mandate. i agree with you. you can't sacrifice the price stability anchor. ho are to say we were -- >> that's my next question. >> i would like to respond. [laughter] at least a little bit to adam's suggestion. >> i should respond.

[laughter] it's not -- it's not true. central bank around the world right now are incredibly -- needs to -- [inaudible conversations] >> politicians need in different countries have different problem. we have a fiscal problem in the united states, for example. we have fiscal and many other problems in -- in the -- we have a major structure and flaw in the way the euro is structured. the government habit figured out how to help each other get out of the crisis. and even manage the four years of the crisis to set up that will take care of it. we need to realize that the ecp, the central bank in your area is asked to hold the euro

together. that is the i agree with you, adam. the ecp could have the higher inflation closer to 2%. i agree with that. that would be objective. i think trying to do it. it is policy -- very recently. the question is how much they can with a dysfunction of banking assessment. >> but that's not -- >> but that is not -- on the -- [inaudible] price stability. but they are ignoring -- [inaudible] of the union. >> let me jump in here on the overburden point. i think one of the upshots of global financial crisis is that

now central banks throughout the world recognize at least implicit additional mandate. that's a mandate for price stability. and now you have a federal reserve that is full employment, price stability, and financial stability. one you have toes choose which way do you go. and how much capital constitution you have. let me turn it to a question. some people argue in fact some do in washington that the fed should have a single mandate by giving them a dual mandate you set them up for failure. central banks can only control inflation. and they let the fiscal authorities off the honk. fed is overburdened by the mandate. or that the other banks are too restrictive by their single

mandate. if they took a -- >> i actually agree with the proponent of a single primary mandate for the reserve. for a simple reason, which is today how politics interferes with the central banking. and the purpose of central bank in the context of the dynamic of an economy. think about easing policy and tightening policy and how you need to be -- in order to be maintain price stability but the price is not -- t all -- always much harder when a central bank needs to tighten policy to. this is where the price stability comes. it comes from bank from being asymmetric in this way. and i think --

[inaudible] >> i'm not religious. i'm not -- but i actually believe in the policy we have seen. i believe in how -- yeah. >> [inaudible conversations] let be clear what is in there and how it totally is unrelated to reality. it was called the timing consistency model inflation. dominated academic discourse for the last 30 plus year. it's not true that or even the medium term. it's not true inflation shoots up as does the law once inflation goes high. t not true it's difficult to get it down. most importantly the political which is supposed to be the real basis for the asymmetric bio is not true either.

they are under attract right now from the -- have a single mandate and have stymied from doing things they other want to develop. have the powers con constrained because it's a huge political reaction. that is happening right now. you look at europe right now. as you agree it would be for aggressively expansion their. the political pressure all about making sure the german banks and the frenchback, and the dutchback don't get losses. you're saying things -- let me -- i think i agree with adam. i like the dual mandate and i think the justification is in reality central bank have to

trade-off. i think it makes sense to say it's equally weighted objective. two the mandate. i think it's management. what is three -- >> all right. since we agree on mandate. we're going move on. >> two is a company. three is a crowd. there are books written and more banks written about the response of the crisis. we'll try to keep it condensed. how you rate the central bank's response to the crisis collectively or individually. in retrospect if there's anything you could differently. tell me one thing you would recommend to make it dpirchtly. from here to there. they need to break up the crime system in two parts. the first is the severe seizing up of the financial system from say mid 2007 to the end of

2009. and on that one, i think the central banks were fabulous. i think they were innovative,ic they were creative. i think true of the major central bank. i think we give them an applies. where it gets more difficult how to judge and how to grade the 2010, 2012, 2013 period. and frankly, i think the u.s. history is very much out among this. we'll have to see, i think they will be writing their disser station for decades ahead.

>> what would do differently? one thing. >> one glaring mistake i think the central bank made was the ecb lagging response to the financial crisis. the fiscal crisis that emerged in the spring of 2010. i think if they had gone in aggressively. it would have required support from governments as well. if they gone in early in 2010 and extinguished that. i don't think it was necessarily any predetermined mandate there would have been an enormous european crisis. i think the lagging slow response open the door and let some of those fumes that kind of put back -- back in 2009. we had another round of crisis. i think that was --

>> example in global corporation. we have a fiscal crisis, in my view in japan, for example. do we expect the bank of japan to fix that? and i'm -- a contain any hiccup in the late 2009.

even if you thought they had a problem it went to 50 percent of their gdp. that was still 1% of gdp of the area. and there it was mishandled. terribly, terribly mishandled. was it an issue for the central bank? the area or design for either one. you can't ask the central bank. should the central bank try to predict that the government mishandle the crisis so badly a year or two later and try to -- [inaudible]

typical me one thing you change and we'll go to adam. yes. she's impatient. >> i know. monetary policy -- i don't think that we saw the extension problem that we have in your area for the last three years. in term it the question is something that [inaudible]

should they have confronted your area of the government in 2010 and explained government's look. we can't help you. we will not even help temporarily interventions in the secretary foreign market or greece, for example. if you very controversial procedure. they start buying -- it would have been better for them not to do that. it allowed the government to get off the hook and keep doing. so i would have gone back.

[inaudible] >> okay. i basically agree. i think most writers at the period there is division between the immediate crisis response and the subsequent response. i think, like most people, i would emphasize there was a common response particularly in late 2008 through 2009. generally it was good. actually give them credit in that period. the ecb had a lot of facilities and think they were doing that the fed and the bank of england had to pay catchup and learn from in the course of 2008 and 2009. i would give ab a minus and c minus to the ecb now. one that is that, i think, the fed and particularly bank of

england really messed up in the first half 2008. then we knew from the time middle 2008. we knew from the time it went down. it's only a matter of time for things. particularly. and there's all kinds of debate about the record. my reading of the record there was no action taken by the authorities including the fed. i think there was a bad situation there. i just have to briefly disagree. he said that the choice of between should they have eased or not eased. it's actually the choice should they be tiny amount or more. what they could have done in 2010/2009 buy more government bonds.

terrible that everyone else and stepped in their agreement and just kept interest rates down. it would have been better off. >> wow. all right. let talk a little bit about the politics. because each of these central banks is operating in very different political environments. and we don't have go all of them. but how did that difference play out during the crisis in term of either limiting or pressuring them to do different things? let me use this structure to respond. precisely. if you compare the ecb report from the plain problems that the bank of england is facing or the from reserve is facing.

you would have wanted them to -- [inaudible] of the government of the country and their -- [inaudible] the question is whether this is legal. [inaudible conversations] there are actually varying interpretations of these for a simple reason that the european union treaty states that monetary financing is prohibiting. i know, the financing does not preclude -- [inaudible] >> right. >> but this is a problem that bank of england might have faced. but it doesn't. but there is another issue that it much more pressing for them. the assumption is prohibited by other countries. and the idea of the -- say all of the greek in order to want to greek crisis certainly

which -- the cost of the greek government to the other government. t something that -- would not have stopped the crisis. there is where -- it would not have stopped the crisis. frankly, you would have ran out of -- [inaudible] if you wanted to -- [inaudible] we have to look at the difference in the operating procedure. they could -- without the debt because of the broader collateral data. and the technical issue only get to. it's not a matter not easily monetary policy. this is a matter of could be -- could they pick a country.

it doesn't have to be greece. it could be portugal, could be ireland. without having the prior agreement of the other government they are willing to let the ecb impose the congress on them. frankly, i don't think they had either the legal or the political legitimacy to do this. this is something that -- [inaudible] have a power in italy. they had the political agenda. double youth unemployment in greece. >> and the government did not -- out of his job. >> no. >> even though so much going

back to the question. it's 30,000 foot statement. it's very much agreement that the institutional structure that the ecb faces is far more obligated that the bank of japan have. on the one hand, you have a german economy that is performing very well. and you have these preferable that are struggling intennively. how do you put together a monetary policy on one hand. and financial crisis response on the other hand? that is adequate and acceptable to everyone. and i think what is ended up happening to the ecb is the ecb has been a little bit like, you know, the thrrl is an optimal

currency. >> one more point. in response to what you folks have said. i've heard and i think adam and i have a somewhat different view on this. we argued our central banks the crisis fighters of last resort. last resort is the not being the crisis fire last resort. given the institutional structure and frame work we have now. it would be great if over time and the united and globally mechanism to fight crisis. that allowed central banks to step back and say say that's too dirty for us. we don't want to get our hand in to that gimmick comprise and

create some moral hazard. i don't think we are there. i think europe would have been better served if the ecb had been more aggressive. >> i'm going -- >> i won't agree with you. but even going back to the first question. what are central banks doing? what are they created for? they aren't created to preserve stability and help fight crisis. in the job. and i fully agree inspect is what they should be -- the question is how do you do this when you're being asked to shift resources to the one country and give it to another country? i don't think the ecb has either the legal or political legitimacy. this is like asking the federal reserve why don't you take some u.s. taxpayer money and shift it to bra still or argentina when they have crisis. this is really -- this is really -- [inaudible] >> okay.

okay. the citizens of the united states and citizen of argentina. if they agree to this, then the federal reserve would be able to do this. >> okay. let's get back to reality. first point, the ecb is the most central bank in the world. it has no [inaudible] they can ignore it. european parliament has no power to change the ecb mandate, rules, prerogative. anything that have to reopen international treaty. the ecb should be more -- not less. second, the ecb wanted to ignore politics, democratic accountability. so the idea that we would like that -- understanding politics is not -- third whenever central bankers tell you things are too complicated and hard for

technical reasons because they don't have pools. you should hear a warning sign go off in the head. that's what japan did throughout the 1990 in to 2001. we can't really do anything. inflation is -- deflation is -- we don't have any tools. the government changed the rule of the central bank and inflation is rising in japan. never trust a central bank about the committee. it's like the job. t like a military whining i can't go to war -- that's not the issue. it's not a fair statement to say it's transferred from u.s. to argentina. the members of the union and the -- and it's ridiculous to say that

ecb balance sheet is e qvc throant a transfer. because over time, they get paid off and not in trouble. and established true the ecb couldn't have the target balances that are always talked about which are balances between how much ecb money, how much german money in greece versus in spain. don't believe any of that. focus on the fact that central bank need to be held accountable in meeting their goals. ..

and how effective do you think it is? let's start at this end and go that way. >> so, i think the framework for qe is that these major central banks and various paces took their policy rates to an effective lower value. you could argue as to whether that's absolutely zero or 25 or 50 basis points and the ecb seems to be reevaluating that in recent months but they took their policy rates to very low levels. and then the next question is well what do you do to take your economy from there? and in some sense following the lead of japan through its cue ep

period federal reserve in the bank of england went into very aggressive asset purchase programs. the fed has purchased various kinds of mortgages and government securities and so forth and its balance sheet as a result of this has grown from less than a trillion dollars before the crisis to almost four chilean dollars today. so i think that's the general framework. the underlying idea is the fact that those central banks go into the market and they take safe assets out of the hands and desire is the person that had that aspect goes a little bit further out the risk curve and a little bit further out of the maturity structure and so on and so forth and they take a little bit more risk. honestly it seems like it's been moderately effective in

stimulating economic activity. i think if the united states hadn't seen any qe from the federal reserve the level of gdp might be a couple of percentage points lower than it is today. so i think the qe has provided meaningful stimulus but it hasn't been the silver bullet. the qe by itself isn't going to fix things. it can provide support. it can provide stimulus and help at the end of the day we need to have consumers who are actually willing to consume and we need businesses who are willing to do play their balance sheets for investmeninvestmen t and hiring. so my feeling is that the policies that have been pursued are well advised, has been stimulative and helpful, have helped the economy through a very difficult time that ultimately we are waiting to see whether that next leg of recovery kicks in.

the final thought in the thing that makes me just a little bit nervous about where we are and a little bit more nervous about qe3 then qe one and qe two i do believe there are benefits up front that our experience but to the extent that their costs, those are things the financial market distortions and managing the large balance sheet the cost is something we will be struggling with in dealing with in evaluating. we are in uncharted territory that there will be factors we will be dealing with over the next decade or so so it's too early to say or each one of these programs where there was a good idea or a bad idea. >> let me first start i saying we were involved in status such a thing -- a job thing. then you have conventional measures.

this worked before the crisis cell unconventional measures involve expansion of the balance sheet and the composition of the balance sheet but how exactly you engineered the addition of easing. the unconventional measures are not as precisely calibrated as conventional policy easing and this is what creates some of the side effects and uncertainties and how much you are supposed do but clearly quantitative easing or expanding the balance sheet of the central bank have been very important in the crisis. how exactly do this depends on the framework so again basically it did not do the expansion of the balance sheet the same way as the fed or the bank of england. why? because they don't have a sovereign market as a whole so

when we criticize, some people are criticize basically for not buying greek debt for example and this would be like asking the federal reserve to use expansion of monetary policy in united states by buying detroit parts and puerto rico parts and i'm not sure how this policy would have gone if this is what you're suggesting to the central bank rate in the case of the acb, the acp used is broader collateral framework to essentially give cheap money, virtually sterile interest-rate money with long-term and they could have done more. i agree with adam that ecb policy could then more expansionary. one indicator of that is just looking at the balance sheet of the ecb that unfortunately in my view was allowed to decline over the past year. at the same time where it a

balance sheets have actually accelerated with the qe infinity as i understand what the problem going into the stratosphere. quantitative easing has been affected. it's not -- is more uncertain than conventional policy. i would agree also with you should never trust a central bank who tells you they cannot generate inflation over a very long period. this is indeed the issue with japan. you can have missed calibrations for one, two or three years but you can't have missed calibrations for 15 years. i think we are on the same page for what could've been done 15 years ago in 10 years that they're not doing and only history will tell. quantitative easing was extremely powerful in providing the additional combination that the u.s. economy needed as a

result of the crisis. i am not sure that the same reasoning applies for the qe infinity problem that started a year ago and actually i do have a deep concern about the current way of even communicating the policy. right now since a year ago if the fnc does nothing they keep expanding the balance sheet. i cannot recall in traditional times when if they did nothing it meant cutting further. this is really the equivalent and i think we have changed the definition of what a neutral is. this is of concern to me. >> how effective this qe? >> as on many of these things i met that of an outlier but you go back, if you were to go back to the jackson hole conference a year ago in august chairman

bernanke gave a speech about quantitative easing in which he clearly summarize the available literature in the empirical literature and to the best economist can do qed is actually affected. now, there's a bit of a sleight-of-hand there that we should be clear about. when you're trying to measure the impact of monetary money whether it's conventional monetary policy like cutting rates or purchasing assets, whatever it is it's always difficult to determine what the impact is because you have to take into account what people's expectations are and all the other factors like this go policy. this is like ken simpson tom sergeant won the nobel prize for their work. the thing is and i'm not by any means -- many people will tell you there is no proof. all you see a certain interest rates move in certain spreads move and you don't know what happens in the economy. the economy is not doing well so

there for qe can be effective. that is having a much too high a bar because if you look at whether the federal sure server the bank of england has cut interest rates in the past they have used the same methods and get the same results and sometimes the economy doesn't expand the way you hope it does because of the things are going on or because expectations are there. just to say i think it is a misnomer to get all wrapped up in the idea that qe didn't work. there are obvious terms that people use as headwinds. in this force gale-force had ones that were out there like balance sheets deleveraging, like the euro crisis, like fiscal policy being tightened in various places at various times so the idea that qe somehow is demonstrably not going to work is misguided. that again i agree with nathan. that doesn't mean if you take qe out infinitum everything would be solved but i think the discussion central bankers have allowed themselves to get into this rhetorical trap of

apologizing oh we are using uncommercial policy. i wish we weren't getting our hands at dirty that i'm with him on what he said about the crisis. there are better and worse ways of doing it and there are more careless way that a popular doing it to get the job done. q. qe roughly speaking it's getting it's part of the job done. >> i made continue asking questions. i think we have microphones around the room that can be passed and if you get one first of all please wait. raise your hand if you want to ask a question. right here. is there someone here? if you can identify who you are. we would all like to know and you are being videotaped for outside viewers. >> can you hear me. >> yes. >> my question is about simon johnson 13 bankers question.

in the u.s., part of the strategy seems to include steps where tanks were allowed to consolidate and get larger. in europe, less so. is that a correct impression and if it is a correct impression to the united states make the mistake by allowing banks to get larger? >> why don't i go first this time. i will be quick. it is a natural and construct if immediate response to the crisis usually at least ideally what you are doing is you're trying to avoid systemic disruptions so what you are doing is you hope it's a weaker bank in there somebody stronger in the system that can quickly take it over and there's there are some value left. it would in some money to keep it operating. it's an understandable crisis response but even more so than what we are talking about in qe i think you and many other people have a point which is

over the long term you and up with a more concentrated banking system with large banks is a problem. there has been a great deal of variation across monetary zones and that's not all up to the central banks in many ways it's not mostly for the central banks. this is the base for other agencies get involved. let me be very clear. ms. henderson was asking us earlier to give grades. this is a place where the combined bank of england and the u.k. government including while i was there gets a very good grade. we ended up with four big banks running the entire financial system in the u.k. and it's been very problematic. whatever you say about your area and i will let athanasios are nathan speak about that, that is the most extreme consolidation.

even japan after the crisis did nothing like that and it has had a very real cost. i think the u.k. i fought against the tote of lee and effectively. i think the u.k. made a major mistake. >> so, if i were to add to that i agree with what adam just mentioned. if you have a weak bank, it's only natural to ask if a stronger bank would take it over and paper the problem and unfortunately it's true in europe as well. we ended up with larger banks. in terms of giving grades, frankly for the euro area i would have a hard time choosing between a d ended s on how the governments have handled the crisis posts lehman. this again goes back to the dysfunction of the euro area. you have banking interest that

are different in different countries and fighting with each other so it's a very different situation than you have in united states where you may have one banking lobby and one government. what has been very clear is banking lobby's in different states have been trying to shift losses and gains competitive advantage to banks and other member states and ending in disaster because the governments collectively have allowed these things do happen. going forward, we have larger tanks. the banking situation is terrible right now. we are asking the acp to take over the banking system. without having created an fdic, just to give you an idea of how dysfunctional -- dysfunctional ascendant is an what the central bank is king

asked to do, impossible things really, and frankly i don't think we know how the euro is going to get out of this mess that is there are at present. with the banking system. >> i very much agree with athanasios about the situation with european banks but i think the ongoing deleveraging of the banking system in the euro area on one hand because these banks have very large balance sheets and on the other hand capital injections have been forthcoming in these banks started shrinking their way to glory. they are bringing their balance sheets size down by reducing if a right of assets including lending and i think this is creating a credit crunch that is a powerful headwinds on euro area growth given the dependence

the euro economy has some bank credit. other than that i hear my compliance officer saying no comment. >> is there another question? here is one right here. >> i was just wondering if you guys can address especially in an age of unconventional monetary policies which is qe, you address the current debates going on which is saying a lot of the stuff the central bank is doing and also central banks around the world are helping but there are basically only helping the financial sectors of the economy and the asset sectors of the economy that are disproportionately going to a lot of the income inequality arguments you hear where the games have basically all gone to the top 10% because they are the only asset class and they are not really going to the rest of the economy. really i wanted to get your opinions on the philosophy of

the effectiveness of getting that banks to actually get the money up to the people to help the rest of the economy. i know that's more of a fiscal policy discussion obviously you have commented on how absent the governments have been from actually doing their job that they are supposed to be doing to complement monetary policy but i want to know if you guys could talk about that. >> i think you put your finger on it, facing fiscal and structural questions. when the economy is in a mess the central bank, the best they can do is try to fix the economy on their own. ordinarily with normal recessions there are some distributional considerations to any monetary as -- decision but they are fairly minor compared to the broad impact on the economy. in the situation we have with the crisis, many of the operations that central banks are doing are virtually

indistinguishable from fiscal operations. if you worry about the distributional consequences for central banks are the wrong agents in the economy to ask. this is a question i think people not only in the united states but everywhere should say, on we have the distributional problem here. >> now i think for the federal reserve, athanasios caveats are very well taken. there are plausible arguments about how far can the central bank go to solving these problems. i very much think that the fed used its mandate as in some sense unconditional, that at every point in time the fed feels a responsibility to pursue it policy that brings the economy closer to the dual mandate and they don't feel that there is even an option to say that's a structural problem, we

are going to pass that onto the fiscal authority and we are going to watch and wait. but the fed feels an obligation because of the dual mandate to be out this and to be engaged. specifically on your question, i really think if you were to put your finger on one sector of the economy that the fed has particularly focused on with its qe policies it's been the housing sector. i think housing is very much a main street issue that influences people right at the center of the income distribution. second i would say that the primary driver of defense policies in particular as i said earlier this qe3 has been labor market concerns and trying to meet the full employment dual mandate. i think that is very much a main street issue. and then the final point is for the fed, they would have been

happy if they would have had some other tool to work in complement with what they had and didn't necessarily work to the financial markets. i think the answer is absolutely they would have been happy if they have that tool but at the end of the day they felt as i have said, a responsibility to respond, to move the economy toward the dual mandate outcomes and they had to use the tools that they had. >> okay can i just ask a follow-up question? is the possible however that the nature of the crisis itself by credit markets exacerbated the distribution all effects, the distributional distortions that occurred through monetary policy that before the crisis generally lower rates would generate more growth and that benefits everybody wears because credit credit markets are so screwed up that qe did boost stock prices to benefit the upper tier and mostly people who are already affluent have great credit wreck

ritz and were able to finance or by worse a lot of the people who are in the water or would like to enter the housing market can't because they are credit impaired or they have extensive student debt or the banks have tightened our standards. >> it think that's right but it's also important to go back to the gym was questioned as he mentioned the term philosophy of money which is a simple term but a powerful one. essentially what you are saying is that we were not getting the kind of money multiplier and the credit into the real economy. and there i very much agree with some things that athanasios said which is if you had the proper proper -- to recapitalize banksy would have seen more of that in a bank policy so i agree it's the nature of the crisis exacerbates this individual event but another piece of that has to be recognized is yes, there are

some gains in the shares market but the alternative and this is making it a more extreme version as usual of nathan's point -- until at least this year or at least the 2011 and well into 201212, the alternative to the fed or the bank of england or whoever doing this was for attracting long-term unemployment for a lot of the people. it's very hard to compare apples and oranges but we know that long-term unemployment particular for young people but the long-term unemployment for anybody as permanently devastating. in a sense maybe it's a tools issue and maybe it's the nature of the crisis but the bottom line is if you are a central bank with any sort of broad mandate and a responsibility to the economy as a whole if your choice is well, we are going to

unfortunately make some people richer but prevent long-term unemployment from going up versus we are going to let long-term unemployment set the distribution impact is terrible so i think we have to allow for that. and this is why people debate the so-called qe3 or qe3 infinity i think they were calling it because the question is did it matter in this last term, in this last year, was there enough to justify it? >> another question? >> i would like you to help me please thank the panel for a terrific session. thank you adam and athanasios and nathan and nell. [applause]

c. i'm standing in front of the 1905 right back fire three the world's first practical airplane. this was the third and final experimental airplane that the wright brothers built and today survives is the second oldest of their airplanes today. this airplane which orville wright considered the world's first practical airplane was constructed and flown in less than six years time between the time that they have built their kite and the success of this particular airplane.

this is also plain that was built less than two years after their first flight at kitty hawk north carolina on december 17, 1903. what's interesting to think about is that the wright flyer and kitty hawk flew four times, just four times on one very historic day. they were four very important flights and they very much for the proof of concept of heavier than air flight. the airplane behind me, the 1905 wright flyer three was capable of repeated takeoffs and landings, repeated flights of not just for a few seconds at a time but up words of 40 minutes by a cover of 1905. this airplane could fly in circles and fly figure eights. it could bank in turn and fly very much like a modern airplane flies. this is very much a modern airplane capable of being controlled through the three independent axes of flight, pitched role and y'all.

general motors chairman and chief a thicket of officer daniel ackerson announced last week even retired with next month. monday he spoke about his successor -- successor mary barra the first female leader of any automaker. you can see this and other events from the national press of any time at c-span.org. here is a look. >> looking to your successor some have downplayed the significance of mary barra being the first female ceo for of a major automaker but it's a big deal. what do you see is the significance of having a woman in that job? >> i haven't heard anyone

downplay it personally nor do i think it should be. i think it is noteworthy and i think it's a storied. i think mary barra was picked purely on her talents, hard work and her success and nothing else. not because of her gender. and i'm proud of the history that general motors has in terms of promoting qualified minority and female employees. we do that excess of stem, science technology engineering and math graduates coming out of colleges. 2225% of our plants in this country are owned by women. the young woman that runs are manufacturing engineering and folks that are in the plant, if you get into a land it is complex, a woman. a woman who runs our supply chain purchasing, global supply

chain management, a woman. our quality initiatives and customer experience, a woman. these are all ladies who serve on the executive committee. we are proud of that so i'm not surprised that mary rose to the top. she has been with the company for i believe 30 plus years graduated from gmi. think of gm might like you would west point or annapolis. general motors does not run it anymore. they have their own service academy if you will and she went to stanford to get her mba and came back in the company has performed exemplary. i think it's noteworthy and i think it should need. i think she was well deserving of the appointment. >> what is going on today comes down to two words and they are not my two words. fundamental transformation. those were obama's words and i

asked a couple of questions. when you look at the constitution and the power of the president does the president have the power to and mentally transform america? of course not. and why would you want to fundamentally transform america? that means you don't like america very much, do you? you don't like capitalism private property very much and that means you don't like our constitutional system very much. when you keep hearing this fundamental transformation change is hard and we need to understand this is a direct attack on our constitutional system. that is what he's talking about and that is what he means.

last week the house small business committee examined the health care law and insurance coverage for small businesses with 50 employees or less. centers deputy administrator gary cohen testified that this 90 minute hearing. [inaudible conversations] we will go ahead and call this meeting to order. appreciate you being here. small business health options

program or s.h.o.p. created by the presence health care law specifically for certain qualified small businesses to shop shop for compare and enroll in health insurance plan for their employees. the obama and his rations have his high expectations for the s.h.o.p. exchanges. an all-out media lives before and after the administration promise the shop exchanges would expand health insurance options for small businesses and the re-small business purchasing power lower cost and give consumers not insurance companies control over their health care. unfortunately to many the presence of the promises regarding the health care law the reality experienced by small businesses is far different. take for instance the promise that s.h.o.p. would expand health insurance options for small business that the administration announce only one option would be available. since enrollment and exchanges began millions of americans and thousands of small businesses that received cancellation notifications for their insurers.

nor does it simplify the process of obtaining health insurance first small businesses. on november 27 the day before thanksgiving the administration announce the shop portal would deflate until next year. press the greatest disappointment has been the impact of the health law on the cost of insurance. the administration anticipated the health law and s.h.o.p. would lower costs for small businesses benefit small businesses are recording small increases in the cost of provided health insurance. last week a witness from this committee described 4% increase in the cost of businesses health insurance plans. in other words access -- across multiple measures established by the administration s.h.o.p.'s have failed to reduce the cost of health insurance and feel to give consumers more control and choice over their care. in closing i want to thank mr. cohen very much for appearing before us today and i

would now yield to ranking member velazguez for an opening statement. >> thank you mr. chairman. just about every employer and employee knows there are few issues of greater importance than access to health care. before the affordable care act was enacted, the rising cost of health care were regularly cited by small firms as one of their weakest worries. health reform addressed to of the chief problems small as is his face and purchasing health coverage. lack of choice and skyrocketing costs. in fact hhs recently reported that in 11 states premiums were an average of 18% lower than the amount small firms paid prior to the law's enactment. much focus lately has evolves around the individual marketplace to help uninsured

individuals purchase qualified health plans. unfortunately less attention has been paid to the small business options program commonly referred to as bush s.h.o.p. exchange. this marketplace was designed to provide an array of affordable high-quality health insurance plans for small employers and their employees. business owners demand it more options in the health insurance marketplace and s.h.o.p. provides those options will driving competition. it's essential that competition remains vibrant and the health insurance marketplace because when it declined, rename costs generally go up. the s.h.o.p. marketplace addresses this issue by encouraging competition but also guaranteeing high-quality health insurance. this new exchange marketplace provides benefits to owners and employees alike.

subthirteen make it possible for eligible small businesses to provide qualified health plans to their employees and even take advantage of tax credits. employers have more control over the coverage they offer and how much they contribute to employee premiums. and employees get the peace of mind knowing that they are receiving the benefit of new market reforms that preventive care and not being excluded because of pre-existing conditions. one study recently found that employers like the s.h.o.p. exchanges including getting one bill, writing one insurance check and easily comparing plans. still the implementation of the s.h.o.p. has not been without its problems. employee choice and the web site have fled to some frustrations for all products involved although they have homes in the road optimism remains high because of the long-term

benefits that will bring. today's hearing will give us a chance to hear about how this market place is helping small firms and their continued implementation. we have already scene health care spending at its lowest rate on record for any three-year period and less than one third of the long-term historical average since 1965. this finding demonstrates just how critical it is to keep an open dialogue to ensure the success of the s.h.o.p.s for the sake of small firms and the entire health care market. our witness today would help us understand how s.h.o.p.s are working for small firms and how we can continue to move forward with many solutions that i would like to welcome director cohen for taking time out of his business schedule to join us. i'm sure he will provide the committee with valuable insight.

welcome and thank you for being here. >> thank you. >> i see up that. >> today's witnesses mr. gary gary cohen adaptive manager and director for the center for consumer information and insurance oversight of the centers for medicaid and medicare services. this office is responsible for overseeing administrative health insurance exchanges and other aspects of the health care law. prior to services cms mr. is so they served as a chief counsel to the benefit exchange for. we very much appreciate you coming in before the committee today and your written statement will be entered into the record. you may now proceed with as much time as you need. >> thank you chairman graves ranking member velazguez and members of the committee. i am pleased to discuss the many benefits. the affordable care act is transforming the insurance market for small employers making it easier for them to find and purchase employee health coverage that serves the needs of their employees.

and it is affordable. it is important to remember that the reforms that are in the affordable care act some of which have gone into effect and the remainder will go into effect with plan years beginning january of 2014 are not limited to the s.h.o.p.. we have transformed the entire small group market for the products are purchased inside the s.h.o.p. are outside the s.h.o.p.. i want to talk about that because i think they're sometimes confusion that in order to benefit you have to buy a product from the s.h.o.p.. you do have to purchase through the sub 10 beginning in 2014 to be eligible for the tax credit that certain employers may benefit from but other than at the same reforms apply whether you're talking about products inside or outside. historically small businesses have been charged from 10 to 18% more for the same benefits compared to large employers. small businesses employ women or

people with pre-existing conditions have faced higher insurance rates in most states. because small firms that you were employees to pool than larger firms premiums can dramatic -- vary dramatically from year-to-year. when we hear about employers who are concerned because they are looking at rename increases one thing they need to bear in mind is although their premiums may be affordable this year if one employee gets sick and has a serious illness this premiums can skyrocket. there is nothing in the law before the affordable care act that prevented insurers from dramatically raising rates on employers based on the experience of their small pool of employees. one employee getting sick could cause the rates to increase dramatically. that can't happen anymore under the affordable care act because health status is not allowed to be taken into consideration when determining rates. that makes rates for small

employers much more predictable and stable than they have been in the past. now as i mentioned the affordable care act created the tax credit to help small employers of lower wage workers afford -- get a contribution to help them pay for workers premiums. employer may qualify for tax credit if it has fewer than 25 full-time equivalent employees to make an average of less than $50,000 a year. the tax credit has been available already since 2010 in the amount of 35% of the employer contribution goes up to 50% for policy years beginning in 2014. since the tax credit became available in 2010 it's been worth -- is provided and shipped thousands of small businesses more than $1 billion in total tax credits. so turning to the sub 10 because

the s.h.o.p. is a mention as a place where small employers with lower wage workers have to go to be eligible for the tax credit, there are a total in the federal states where they facilitated market is operating 56 qualified health care and 106 qualified dental plan issues of offering 511 plan options. in the state base shops as ranking member velazguez mention most of the shops are giving employers the option to offer more than and carrier to their employees or letting their employees choose from a number of plans from multiple insurance companies. and we have announced that although we have not provided that option for 2014 and 2015 the federally facilitated marketplaces will provide that option as well. beginning in august we have

launched a dedicated call-center form players to learn more about the s.h.o.p. and get answers to some of the basic questions on the affordable care act. since call center launched we have received more than 20,000 calls from employers and others interested in the s.h.o.p.. recently we have gotten a lot calls from agents or brokers as well wanting to know how to help their clients get enrolled in the s.h.o.p. so the s.h.o.p. call center also has people specifically trained to help agents and brokers with your questions and enable them to assist their clients. one of the most important tasks we have is to ensure small businesses understand the new options available to them so we work closely with the small business and which is leading outreach to small business and the departments of labor and treasury. we provide detailed explanations of the s.h.o.p. marketplace and answer questions on the sub 10 is part of weekly national

webinars that the sba conducts hosted by the small business majority and help to educate and increase awareness of the affordable care act and the s.h.o.p. in particular. we have been providing information on the weapon are since they began in july of this year. in addition, a lot of our outreach on the ground is done through the cms regional offices of the cms regional as has been working with s. e. a labor treasury and groups stakeholder groups in their communities. and just since september 1 regional offices have posted or participated in 20 different events in local communities throughout the country to provide information about the sub 10 in the small-business market in general. a now recently we made changes to ensure small businesses where the federal facilitated marketplaces working to take

advantage of the health care tax credits so we said we want to take advantage of the sales and distribution channels that exist in the market. most small-business owners work through an agent or broker to obtain coverage for their employees and to find out what sort of plan is going to be the best for them. i'm pleased to say that more than 70,000 agency brokers have been trained to assist consumers in the federal marketplace including many who have completed a course specific to the s.h.o.p.. at this point, as we have announced that the on line capability to shop and get enrolled for small businesses is not available until the fall of 2014 for the 2015 policy period. however that doesn't mean that there aren't resources available

to small-business owners on healthcare.gov and their art. small employers can go to health care.dowds and there is a greatly improved and expanded ability to see what plans are available in the show s.h.o.p. to get a premium estimate based on the cispa sipc number of employees who work for that employer and to get links to the issuer's information on the web site so they can get it premium estimate and see their car sharing factors deductible co-pay etc. and then they can get links to the issuer's web site to see more specific information, the plan brochure provider directory etc.. as i said they can then get enrolled in coverage either directly within issuer or

through the use of a broker. we have updated the materials we have available both on the web site and the materials we distribute through the various webinars that we have and so forth to announce those changes. we have been contacting directly by telephone and e-mail each and every small business that submitted an application to us and does contacts have been completed to let them know exactly what they need to do in order to get enrolled through s.h.o.p. and that they are opposable for the tax credit. in sum, for too long small-business owners have struggled to keep up with the rising cost of health insurance for their employees. it builds on the current employer-based insurance market. the shop combined with new insurance reforms in tax credits provided by the affordable care

act gives employers the option is to provide employees with high-quality affordable health care coverage. i looked forward to continuing to work with you to improve the health care options for america's small businesses and i will be happy to answer your questions. >> we will start with mr. hull's camp. huelskamp. >> thank you mr. chairman and appreciate you joining us today. it must be a tough job to answer these questions and i will start perhaps with a little bit of background. i understand correct you have testified four times earlier this year that the healthcare.gov web site which is s.h.o.p.s are our part would be up and running by october 1, 2013. can you let describe what you didn't know and why the s.h.o.p. enrollment has been delayed for an entire year? >> obviously everyone knows it's been well publicized that when october 1 game came we ran into a number of difficulties and problems that were unanticipated

and at the time that i gave that testimony i was provided the best information that i had based on. >> i appreciate that information but what is confusing to me mr. deputy administrator is that when i listen to secretary sebelius she blamed it on the contractors and folks not in her erect supervision and that somehow she was shielded from being able to make those decisions. were you involved personally or your office and making those decisions? just trying to figure out where the mess up is so we can get that they s.h.o.p. on line and can we do it quickly? >> i would characterize it as the business owner of the marketplaces including the s.h.o.p. and we have been instrumental honestly and providing the regulations in the

guidance in setting forth the rules essentially for how the exchanges are to operate and the s.h.o.p.s to operate. i hope you won't take this to be be -- the question the people who do the web site don't report to me. >> who did they report to? >> obviously we had contracts in the contracts were supervised by people in cms office of information services and those people were poured up to the chief operating officer of cms and ultimately the administrator if they are outside of my organization. >> how many deputy administrators are there? >> i want to say six or seven. >> it goes directly to the administrative. when did the folks in your line find out about the shops and the fact that they were going to

make it by the deadline? >> i know and i was involved in conversations as far as what the functionality of the web site was going to be into september and we were pushing very hard to get as much of the functionality to be available for october 1 and we stood obviously that was the target and the deadline and it was some time into september when a decision was made that it wasn't going to be ready for october 1. we announced at that time that it wasn't going to be ready for october 1 and hope thing to get it implemented in november at that point. >> with that failure how many small businesses to you now project will receive the tax credits for 2014? >> i actually don't have an estimate of that number. >> does anybody over at cms? >> i'm not certain. i can look to see whether we have come up with that estimate that i'm actually not aware that we have at this point.

>> we urlacher discussion on the committee about how helpful" credits will be and i'm trying to get a sense of how many would even qualify for that. the purpose of this committee is to promote small businesses in and this hopefully was going to provide an opportunity for comparison shopping and more access for small businesses but as of now we have really no idea on how many would be taking advantage of this. >> i would say it would be a difficult, just thinking it would be a difficult number to come up with. i don't know myself how many employers would he eligible for it having 25 or fewer employees, 50,000 average wage. and then you would have to make exceptions for how many of those employers who don't want to offer health care at all because many don't.

>> i understand that and it's difficult trying to predict that. everything is changed with missing the deadlines and i'm trying to get a sense with how those numbers at changed as well >> as i've said we have tried recognizing we are not able to provide the on line experience we have tried to do everything we can to make sure that employers will have access to those tax credits. the good thing about it is if there is a silver lining unlike on the individual side were it's an advance payment of the tax credit for employers it's a claim with their tax return at the end of their tax year. >> in a state with no state exchange the word left for so many paper applications. >> that's correct. >> thank you mr. chairman and i yield back. >> ranking member velazguez. >> thank you mr. chairman. mr. cohen the on line experience

is lacking, we know that that also we know that a survey and i don't know if you are aware that a survey found that 80% of all firms use a broker with 25 to 50 employees more likely to use one. so the fact that we don't have the web site doesn't mean that it will hinder the opportunity of small businesses to get into the health care marketplace. >> yes, i agree. that's right. >> last week we had a hearing here with the panel of small businesses and some of them claimed that their rates were going up dramatically. i would like to get your sense as to why this -- these increases are happening? could it be because they are receiving better coverage than they used to or two you have any other explanation?

>> so, i would first out a couple of things about what has happened to rates because i think it's important to keep in mind that since the affordable care act has been in effect premium rates for health insurance have been rising at the slowest rate literally in decades. and that is true for a number of reasons. one reason is an increased focus on rate review and we have done a lot in the affordable care act already both to enhance their rate review programs and also to provide any rate increase of over 10% has to be justified by the insurance company and that justification is made public on our web site. or on the state's web site at the state is doing interviews. based on our report that we put

out this year for 2012, the average premium increase for small business and 2012 was only 4.7%. they have been going up at the rate of 18% a year or more and in addition that 4.7% was almost 20% lower than what the insurance company asked for in its initial filing. that shows the focus on rate review has had a direct impact on the extent to which the rates are going up. so if the employees are facing increases this year it's from a lower place than they would have been without that. in addition i'm sure you're familiar with the medical loss ratio provision of the law. what we sometimes call the 80/20 rule. that says that insurers have to spend at least 80 cents of every premium dollar a small business on actual health care and only 20% on administrative costs and other.

that provision has resulted in substantial rebates to small businesses across the country that in effect reduce their premium. they are getting a refund because the insurer did not need that 80% standard. so looking at the change and then you know a national survey of employer-sponsored health plans done by mercer for years that the growth in total health benefit costs per employee was only 2.1% in 2013 so we are seeing cross the board dramatic reductions in the rate of growth that historically has been seen in the health insurance market in general and for small businesses. so looking at the increases they are seeing as a result of just a the change from 2013 to 2014 and i would make a couple of comments on that. as everyone knows the president announced recently a policy that

said that issuers could continue to offer the 2013 plans for another year, and that number of states have adopted that her-gram and a number of issuers have so a change from the noncompliant plants of the plans that will comply with the eca will have an opportunity to keep their existing plan. to some degree it's a change in benefits although i would point out that the essential help benefits that are required in the small group market were based on the most prevalent benefits that exists in the market as of 2013. so there is not a dramatic shift in the benefits available. it's different than the individual market where many people were not provided a lot of coverage. maybe they just covered hospital but didn't cover doctor visits in that sort of thing so in a

small group that benefits haven't changed that much but we have made some changes that as i said will result in greater stability over time for rates. so i think that it's going to be somewhat misleading to look at just 2013 to 2014. i think you really need to look at the trend of what is going to happen going forward because rather than an employer facing large increases as i mentioned just because one employee to get sick that isn't going to happen anymore so an employer what i hear from many small businesses is what we need is predictability and stability in that is what the affordable care act is going to provide. it will provide its ability and stability over time without these jumps. >> thank you very much. mr. cohen we have seen in roman numbers regarding the marketplace and even with problems the amount of people enrolling and just visiting the

site remains promising, however i haven't heard much about enrollment figures in the s.h.o.p.s. is the state of being tracked by hhs and do you have access to the state run s.h.o.p. data? >> so as you might expect because we have not been taking enrollments on line we don't have those figures in the small business market the way we do on the individual side where we know because the enrollments are coming through us, so we are going to be receiving enrollment data from the insurance companies, and so i don't have that today. we will be getting enrollment data from the insurance companies for the federal marketplace and we will be able to report that out. the state-based marketplaces, some of them have been been reporting small-group enrollments and that information should be available.

>> when do you anticipate that being reported to you by the insurance companies? >> that date it's reported to us by the insurance companies you know all on a regular basis as they are signing people up and then we will have to weed that together and come out with a report and we will do that. >> thank you mr. chairman. >> mr. tett din. ..