where can we buy one that doesn't cover substance abuse, mental health? >> assuming their policy is not going to be extended pursuant to the policy the president announced a few weeks ago, substance abuse coverage, mental health coverage are part of the essential health benefits included in what is required by the portable can act. those benefits determined on a state-by-state basis, they were not determined nationally that everybody have the same. they would determine donna state-by-state basis. in most states they chose to use the benefits afforded by most use small group plans. benefits required are very similar to the benefits

employers were choosing to buy up until now. >> when i was an employer, you said it was done on a state-by-state basis, they carry all of these outlying coverages. >> the essential health benefits. >> not a state by state requirement the national requirement. >> and what is offered? what is in each plan, was done on a state-by-state basis. categories of the essential health benefits are mandatory. >> some states don't have mental health coverage and some do. >> the particular benefits, fundamental health coverage. >> all right. you are telling me my old law

firm, 15 employees, they will not be able to find a plan that is offered, if required federal benefits. >> mental-health and substance abuse -- and maternity. -60-year-old carrying maternity coverage. >> spreading the cost of maternity coverage to women across the entire pool of people. that is how insurance works, you just paid for what you need, spread the costs across everyone. >> you choose to go by the coverage you need and spread the risk among the other people who

need that coverage. you are buying things they donor need and don't want. >> as we discussed, maternity and substance abuse and mental health coverage are among the essential health benefits. >> what would you force somebody to buy things they don't need and don't want? what is the purpose of requiring a 70-year-old woman to buy maternity? >> the purpose to the health care they need -- >> a 70-year-old does need maternity coverage. >> to spread the cost among americans. and i would submit to you, you may not want to hear this, the employers -- don't know whether they will need mental health coverage or not. they don't know if they will

need mental health coverage. >> i can promise you a 70-year-old woman will never need maternity. >> i understand that. >> i am over my time, thank you very much. >> mr. king? >> i am glad i am not sitting in that seat. the unpopularity of this law has to reflect in this discussion we are having today and i thank the chairman for holding this hearing. i think about some of the premises that have been made and i wonder if there isn't a committee in the white house to make sure they are all broken but i look at my own policy and i hadn't given it any thought until october. i spend the previous four years fighting on behalf of the american people against this so when i finally had note choice except to subject myself to this law of began to read through the

policies that were available and it was hard to get my hands on any policy. the most information i could find was verbally over the telephone but i remind you that 25% of the people in this country profess to be catholic. i am among them and the teachings of the catholic church are this. the catholic church opposes contraceptives in these forms, birth control pills in that form, sterilizations, abortion causing pills and abortion and the legislation requires at least a policy be required so everyone has an opportunity to print is a policy that doesn't fund abortions. i find it is almost impossible to find out whether that is the case or not and of those offered two members of congress according to those i trust above all others, 112 policies.

and nine don't cover abortions. and there's only one available that doesn't fund abortions. that -- one woman in a world of i would marry her sight unseen, that is essentially what happens with this policy, only one available to me and then i look at it and i see it is and spreading the cost, and cross the broader -- in the mandated contraceptives listed in the policy. and no out of pocket costs, i am pretty confident the gentleman's reference to maternity coverage to 70-year-old woman. how do you reconcile that.

and mandated contraceptives, three of them directly violate, the principal of the catholic church and it appears to me that it is impossible, a policy that doesn't violate their conviction? >> you asked me a number of different questions. with respect to the provision of contraception without cost sharing, there is part of the affordable care act that required a study to be done of preventive services for women and in independent study was done which found providing contraception to women without cost sharing had significant health benefits for women.

a number of preventive circuses -- >> i didn't see that here. >> a number of preventive services not just to women, but vaccinations and other things without cost sharing, there is robust literatures that shows -- >> leaving you to wallow in that, the policies, do the best you can to answer this. how does the facebook catholic not violate their convictions? >> i can't speak to the convictions -- >> they oppose contraceptives and sterilization and abortion this and the law says a policy shall be offered to anyone, at least one policy that doesn't fund abortions. how do i know that? i can't answer the question help people find out the answer. it is unfair question.

>> a mandate that the irs will come down and punish us, it is not a penalty. and so how does a person comply with the law when the federal government is not complying with the law. i am saying this, they are obligated under obamacare to make sure there's at least one policy available that does not fund abortion and i think it is important to the people on this panel and those listening in on this committee to know there are three of the basic principles year mandated violated by this legislation. that is the contraceptives, sterilizations, they are mandated to be paid for by everybody, even the people mr. rice is talking about without a deductible even though almost all the other services do have a deductible. looks to me like this is a direct assault on people that are pro-life. >> with respect to what you are calling--the fda has concluded

that those drugs do not cause abortions, they prevent pregnancy and we can debate that but i am not a scientist. i just know that is the conclusion the fda reached. >> the contraceptive pills, there may be an argument. i know the catholic church would not agree even if we are talking about that. the balance of these, i don't agree. so in the vernacular use to get around this sounds like much of have seen from this administration but the point is made that person is no longer free in this country -- i will yield in a moment. you can't be free to follow your conscience or your religious convictions because this law as an forced by this administration violates the deepest convictions of 25% of the people in this country and i yield back. >> let me see if i can get back

on track. what this hearing is all about is exchanges. i would like to ask you if viagra is prescribed is that covered? >> depends on what particular insurance policy whether it is included in the drugs in the policy or not. viagra is not a preventive service mandated by the affordable care act. >> let's talk about the state that have chosen to run exchanges while others have declined. we have seen some great results in the marketplace, especially in new york. numbers were given here.

i know that the only numbers coming out from new york is one provided by the insurance commissioner from the state of new york who said they have rates for 2014 that at least 50% lower than average than those that are currently available. but we do have some numbers coming out of some states that are related to small businesses. in the six states that made information available in the small group market, proposed premiums are estimated to be on average in 18% lower than the premium a small employer will pay for similar coverage without the affordable care act. would you say this is the type of trend that we will see coming out of other states? >> yes, i agree with that.

it is important to bear in mind insurance markets do very dramatically so we can't generalize from new york's experience to where there is a very competitive market. a lot of carriers offering coverage to other states where there's only one or two. over time, i would expect that the example of the states that have established their own markets and been successful will encourage and inspire other states to do the same and what they will find is the affordable care act and the way that we have implemented gives states a tremendous flexibility to operate the marketplace in a way that is best for the presidents of their state and give them the opportunity to >> reporter: control of regulation of the insurance market which traditionally has been a state function.

>> what role can you play to replicate the success we are seeing in europe, 300,000 have completed applications on 100,000 and rolled? >> great question. wheat work with all of the state's to help them if they are interested in moving towards becoming a state partnership marketplace where they operate some of the functions including the outrage and a review of plans to be offered on the marketplace. we receive and review and issue grants to the states to help them establish state based market places and work with them throughout the process of developing the marketplace so just as an example, in mississippi, the state decided

to operate the small business shop marketplace. and we worked closely with insurance commissioner of mississippi to help that happen and the state based shop marketplace will be opening for business very soon. >> in this committee we talk about the importance of having stability, uncertainty for small-business, that is all because when they put together a business model they need to know what they are confronting and what resources they will have available. my question to you is what effect the threat of cuts had in the implementation of the provision of the affordable care act? >> i would say as with any government agency we do the best

we can with what we have and while it would always be helpful to have more resources and especially the secretary has spoken very clearly about the benefit of having additional resources to do more outreach, to be able to do more education and make sure every single person in the country and every small-business owner in the country knows what the benefits of the law can provide to them and take advantage of them. that has been difficult given the funding levels that we have. >> thank you very much. >> last question. document service last week, you all knew as far back as july 26th, federal shops are going to function or the web site wasn't going to function, we had a g a o study requested

by this committee that determined there were significant challenges. but continued to promise the public and congress time and time again that exchanges would be ready for the october 1st launch, when did you find out that it was no longer operational? or you were not going to meet the deadline? >> it was in september, up when we knew that the shop functionality would not be available for october 1st. i would say none of us have been happy with the way at the website rolled out. the president is not happy, the secretary is not happy, and i certainly wasn't happy. we pledge to get everything up and running for october 1st and it became clear at some point

well into september with respect to the shop we were not going to make it and that is what we announced. >> when was the administrator in formed? >> when you say in formed it was the process of pushing and trying to see what we could get done and there came a point when a decision had to be made, all we going to do this or not? that was well into september when that decision was made. >> you don't know when the administrator was informed or new for a fact that this -- >> i don't have a specific case for you but at some point into the month of september. the frustrating part is it goes back to that predictability. with small businesses. is frustrating too that an administration that wants to talk about how small business is so important, why they wait until the day before

thanksgiving to announce online enrollment. >> there were two issues. we announced it wouldn't be ready for october. we announced it wouldn't be ready at all of this year and that decision wasn't made until close to the time it was announced. we continued to push and hope it would be ready, and be able to roll out, and sneer and time, given -- and an individual market. >> it makes the statement better than i could come in to testify before the committee. and the implementation of the

health care law is problematic and understatement and that is unfortunate. the shot exchanges, and affordable insurance options for small businesses, the implementation has become a game of hide and seek and no one has won with that. and we are active on this for oversight in these key issues and i ask unanimous consent. supporting materials for the record. this hearing is adjourned. [inaudible conversations]

>> coming up on c-span2 treasury secretary jack lew testified about protecting u.s. interests and trade talks. at 9:00 eastern, the senate takes of the 2014 budget agreement passed last week in the house. >> the national academy for state health policy hosted a discussion on health care law. states with enrollment exchanges. you can see it live at 12:30 p.m. eastern on c-span3 and later the senate intelligence committee holds confirmation hearing for senior officials at the cia and the state department live at 2:15 eastern also on c-span3. >> what is going on today comes down to two words and they are

not my two words, fundamental transformation. those are obama's words. and i ask a couple of questions. when you look at the constitution, does the president have the power to fundamentally transform america? of course not. and why would you want to fundamentally transform america? that means you don't like america very much. that means you don't like capitalism, proper property rights, you don't like our constitutional system very much. when you keep hearing this transformation, change is hard, we need more time for change you need to understand this is a direct attack on our constitutional system. that is what he is talking about, that is what he means. >> january 5th, best-selling author, lawyer, reagan administration officials and radio personality mark levin will take your calls and questions in depth live for three hours starting at noon

eastern. booktv's index, the first sunday of every month on c-span2. on line for december's booktv book club we want to know what your favorite books were in 2013. another readers to discuss the notable books published this year. go to booktv.org and click on book club. >> i am standing in front of the right flyer iii the first practical airplane, the third and final experimental airplane ride brothers built and today it survives as the second oldest of their airplanes today. is airplane which or full right considered the first practical airplane was constructed and flown in less than 6 years time between the time they build their kite, and the success of this particular airplane. this is also a plane that was bill two years after their first

flight at kitty hawk on december 17th, 1903. what is interesting is the right flyer in kittyhawk. four times, just before times on one historic day, there were important flights and they were the proof of concept of power heavier than air flight. 1905 wright flyer iii, repeated takeoff and landing. not just a few seconds at a time but upwards of 40 minutes in 1905. this could fly graceful circles, could they can turn and fly like a modern airplane flies. this is a modern airplane capable of being controlled with three independent maxis of flight, pitch, roll and yaw. >> more for wright brothers aviation center next weekend as booktv and american history tv

look at the next history of literary life of dayton, ohio saturday at noon on c-span2 and sunday at 5:00 p.m. on c-span2. >> treasury secretary jack lew on the international finance system. he appeared before a house committee to discuss protecting your financial regulations during trade talks, iran sanctions and costly currency manipulation. this is 90 minutes. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> the committee will come to order without objection, the shares authorized to declare a recess at any time, statute for the required hearing for the purpose of receiving the testimony on the international

financial system. before we begin i would like to make a preliminary comment. i would like to thank members and staff for their flexibility in scheduling, due to the passing of the late nelson mandela in order to accommodate both a number of members and the secretary for nelson mandela's funeral and memorial services, we move this hearing to this warning and many members know today the committee will feature young double feature. we will see the rest of you at 2:00 for monetary policy hearing. members will have an opportunity for lots of quality bonding. i wish to also announce ahead of time at 11:00 a.m. i will declare a short recess of the committee. i now recognize myself for five

minutes, to give an opening statement. the committee meets today to receive the annual testimony of the secretary of treasury in reforming the international monetary fund and the international financial system. there are important questions that must be raised, hard-working americans from bailout fatigue having been forced out to pay for the bailout of aig, fannie mae, freddie mac, banks big, banks small, the federal housing administration. americans question supporting the imf and other multilateral financial institutions, and harder and dollars and use them to bailout. americans and not want, and at the outset, whether the

administration's credibility is compromised in the ability to reform multilateral financial institutions. the most awe inspiring our main not be the ability to launch a drone strike, at speeds the world, listens and the world listens, and moral authority of the united states of america. that moral authority, under questioning by the words of our president, whether it is a line in syria, deal with iran that dismantles numerous sanction that does not end the terrorist regime's march towards a nuclear bomb. revelations about spying on our allies, we did in a world where too many friends no longer trust us and too many adversaries no longer fear us. collapse in confidence and credibility is not confined to foreign lands. at home millions of americans took president obama at his word

when he promised no fewer than 36 times they could keep their health insurance if they liked it. they now know better. next, the last couple months brought some welcome news on the jobs front. americans continue to suffer through the slowest, weakest recovery in generations regardless of the wisdom many americans question our ability to continue supporting multilateral financial institutions like the imf. when president obama took office he was able to pass every major piece of legislation he wanted, stimulus, obamacare, the largest tax increase in our nation's history and the results speak for themselves. poverty is up, income inequality is up, the debt has never been higher, small-business is our drowning, the greatest sea of red tape incarnation's history, a number of americans in the labour force at its lowest level in 30 years. five years in to these policies, how japan they anxiety about the. listen to what i hear from my

constituents in the fifth congressional district of texas, people like nancy who writes to tell me, quote, i have been looking for a job for close to two years. god blessed me with many jobs on and off but that does not paid the bills. for marcia in texas, quote, i have spent more time unemployed in the last four years than i have employed. john in my district rights he has had to close his business and says, quote, i am 70 years old and tried to find a job but no one wants to hire a 70-year-old when so many younger people are out of work. these people deserve better than the results this administration's economic policies which brings us to the central truth. you cannot strengthen to reform the global economy without strengthening and reforming the american economy. with respect for the rule of law fundamental tax reform and tax relief, freezing federal red

tape hindering job creation and giving one sixth of the economy health care back to the american people. it also means ceasing to spend money we do not have. the greatest threat to a stronger economy is our growing national debt. witness the national debt clock to my left and right, it has mushroomed under this president. never in our history have so few indebted so many so quickly with such dangerous implications. we know the debt is unconscionable, unsustainable and i believe it to be immoral yet this president dismisses the threat every opportunity and i feel relieved a parade of washington debt deniers. under the current policies we have it is not a question of whether a debt crisis will come about a matter of when for the sake of our economy, for the

sake of our children, for the sake of our freedom i would call upon the president to work with congress now to avoid this catastrophe. our nation deserves better. at this time i now yield six minutes to the ranking member for her opening statement. >> i want to think chairman hensarling. and i welcome jack lew to this committee to testify on the state of the international financial system. i would like to discuss what i believe to be one of the biggest social, economic and political challenges we face today, domestically and internationally and that is the problem of growing inequality. over the past 30 years income inequality, in the united states, has been steadily increasing. this was the case even during periods of gross. before the financial crisis, levels of inequality in united states reached peaks not seen since the late 1920s. other advanced and emerging

market economies have experienced rising income inequality. and the most shocking shortcoming in the united states which has the highest level of inequality of any advanced industrial nation. today 20% of the income in our country goes to the top 1% of americans. if you look at any quality of wealth is even worse. the top 1% holds 40% of the country's wealth. the gap between the rich and poor in america, moreover, up in the recent recovery, have a crude overwhelmingly to the wealthiest people in society. almost 95% of the income gains since the recovery began have been captured by the top 1%. this means the most unequal advanced industrial economy in the world is becoming even more so. i recognize in a capitalist system some degree of inequality

is necessary, but the function of a market economy since it creates incentives to take risks, a market system will produce more inequality than economically necessary and in our country we have much more inequality than is necessary for efficiency. i believe this is the moral problem from the standpoint of social equity but excessive inequality not only undermined social and political cohesion, it has recently been shown to have negative impacts on growth and stability as well. recent research has shown at excessive inequality slows growth, caused depressed earnings, leads to weaker demand and lower consumption, reducing inequality is increasingly understood to contribute to economic growth. inequality is a political problem. we haven't increasing degree of

resistance on the part of many americans to trade agreement because they see themselves as victims of globalization rather than participants in its benefits. i believe our international economy policy has in fact been too 1-sided, too focus on elevating the interest and mobility of capital over all other considerations. this was based on the misguided belief that unfettered markets would not only create wealth and stability but also a trickle benefits down to others in society but this isn't what has happened. in fact one of the most important lessons we have learned from the recent financial crisis is markets must be deeply embedded in systems of governance. the ideas that markets are efficient and self correcting has received a mortal blow. i believe in capitalism and i believe the markets automated engines of wealth creation in our country and elsewhere but in order to be truly supportive of the free market, we must also be

supportive of government. this is because we need to have an appropriate set of public policies in place to rein in the excesses of the market, maintain stability and to ensure the benefits of capitalism and growth are broadly shared. we need to do a better job dealing with equity, questions at home for example, we should be increasing the minimum wage, extended unemployment insurance and providing trade adjustments and other systems. those in the low-skilled end who are disadvantaged by globalization, until we do that and people feel secure at home we will not have the political support we need for active engagement by the united states with the international economy. mr. chairman, thank you for holding this hearing today. some of what i alluded to in my statement are issues that are being dealt with as we consider

the budget today, these issues that i have alluded to include of course the unemployment benefits that i understand may not be in the budget agreement. also, providing trade adjustment and the other assistants for those i pointed to clustered in the low skill end are issues that we have not sufficiently dealt with and i am looking forward to engage you and others on these issues so that we can get at how we will deal with this income inequality that is a central theme of my testimony. >> the chair recognizes the gentleman from california, the chairman and monetary policy for three minutes.

>> thank you, welcome, secretary lew. your testimony is required by the international financial institutions, no shortage of international financial issues. i will let my written opening statements stand for itself but one thing you will be discussing that we need to talk about is the i m f and as a reminder in 2009 congress authorized $100 billion commitment to the imf in an account called new arrangements to borrow. now there is discussion of transferring $63 billion of that into permanent page capital. there's a lot of concern about this, secretary lew. a number of concerns about this. first thing is we don't believe it is just a bookkeeping entry. this could $63 billion significantly at risk whereas currently it is not. in this era of budget cuts,

whether we are cutting a lot of domestic issues as the ranking member mentioned is this a time we should be increasing funding for first world countries around the world and there is concern whether a lot of this could go to european countries and crises and problems but can't they deal with this? there is concern about moral hazards. and more loans to countries that deeply in debt be encouraging that kind of indebtedness. and not borrow so much. there are reforms with the imf, a lot of concern whether those reforms are enough to change the

government's. mr secretary, if the administration, if the president are committed to and lunch $63 billion transfer we need a couple things, we need to make a formal request that has not been received by this committee for this transfer. and if this is a priority, and we need you, mr. secretary, why this is a priority, why these concerns people have done this committee are not well-founded. i yield back. >> the gentleman from illinois, mr. foster for one minute.

>> thank you for joining us today. mr secretary, when you left your first tour of duty in the white house in 2001 we paid our debt to the tune of a couple hundred billion dollars a year and on track to pay our debt to zero by 2008. we saw the surplus running river stand structural deficit exceeding one trillion dollars a year in the next eight years. we are sitting on eight years of uninterrupted job growth, 22 million jobs in eight years and we saw in eight years following the first departure zero net job growth, people who entered the job market with zero jobs reduced for them centering the worst recessions since the great depression. we have seen 45 straight months of consecutive private sector job growth and much work left to be done and i thank you for

appearing today. >> the gentleman yields back, the gentleman from washington for one minute. >> secretary lew, thank you for appearing at this hearing today but the hearing i am most interested in is taking place at your treasury department as we speak. the bank secrecy act advisory group is meeting right now and it is confronting the question of how to allow legal marijuana businesses to access the banking system. as you know the voters in my state and colorado last year approved initiatives to make marijuana legal for adults. these policies go into effect in the new year but we need cooperation from the federal government to make it work. federal banking regulations continue to prohibit marijuana businesses from using the banking system, these all cash

businesses will be a magnet for robberies and organized crime. you will have the power to prevent that, secretary lew. i hope the advisory group agrees on a new workable guidance and i hope you swiftly approved it. >> the time of the gentleman has expired. the gentlelady from new york for thirty-second. >> my pleasure to welcome secretary lew from the great state of new york and new yorkers are proud of your service. my question concerns g s c reform. you mentioned in your testimony our growing economy and your main job is to create jobs. many economists have testified one of the most important things we could do is bring certainty to housing finance. i hope you will comment on the efforts of the administration to support housing finance reform and uncertainty in that area. i look forward to your testimony.

>> we welcome the testimony of the hon. jack lew, secretary of the treasury of the united states. secretary lew appeared before our committee earlier this year so needs no further introduction. without objection, secretary lew at statement will be part of the record. after his quarrel remarks, welcome to the committee. you are now recognized for your oral testimony. >> thank you, mr. chairman, ranking member waters, members of the committee. appreciate the opportunity to testify, thank you for the flexibility and courtesy in reschedulings a number of us could attend a memorial service for nelson mandela. there are signs the economic conditions are improving in countries led by the united states. despite political head winds our economy is steadily growing. over the last 45 months our businesses have created 8 million jobs. we are moving in the right direction but we have more to do to create jobs, accelerate

growth and go to upper foundation. economic progress depends on the global economy. the global economy faces many challenges. the long recession in the euro area is ending, significant progress being made in achieving financial stability. europe is in position to place greater priority on boosting demand and reducing unemployment which remains high in many countries. in japan the authorities have taken forceful action to begin ending deflationary but to achieve sustained success japan needs to undertake structural reforms to strengthen domestic demand growth. recently emerging markets followed as post crisis stimulus range. emerging markets need to make reforms that increase their resilience and address structural constraints to growth. china's new leadership announced commitment to reform. the pace and character of these reforms take china's economic transition for domestic consumption away from resource

intensive export growth. an important part of my job is to create the most favorable external environment for u.s. jobs and businesses. the international financial institution, international monetary fund, a multilateral development banks are indispensable in this effort and we must preserve our leadership in these institutions. that is why it is important congress act to improve governance reform. at the g 20 summit in 2010 we secured reforms that preserved the veto without increasing the u.s. financial commitment to the i am f. u.s. approval is the only remaining step needed for these important reforms to go into effect. if we fail to act we risk the loss of u.s. influence at the i m f. to implement the i m f quote reform the administration provided draft legislation to reduce u.s. participation in the new arrangements to borrow and increase the size of the u.s. quota in the imf by an equal

amount. investment in the imf is safe and sound. when the imf blend it does so subject to appropriate conditions with safeguards to assure is repaid. and the repayment record is outstanding. investments in the multilateral development banks provide substantial returns. these institutions leveraged limited contributions and multiplied our impact by attracting contributions from other nations and promote our national security and economic priorities including opening markets and lowering barriers for u.s. businesses abroad. it is important to note the u.s. will be making new commitments to the international development association of the world bank and the african development fund. these are the largest sources of finance for the world's poorest countries and their impact is enormous. as we maintain commitments to the international financial institution it is crucial we continue to strengthen the world's financial system. the united states has led a

global effort on international regulatory reform with many reforms of dodd-frank largely completed at home. on tuesday the volcker rule, centerpiece of these reforms was finalized. this is strong and comprehensive. it will change behavior and practice across the financial system to safeguard taxpayers' from risks created by proprietary trading and investment in private equity funds. fulfills the president's vision and the statute's intent by setting tough workable restrictions while continuing to allow banks to reform a central market functions. as we move forward with our international agenda in 2014 we will work with the g 20 and the financial stability board to promote consistent implementation of high quality education. we will focus on advancing vigorous implementation of basel iii an assessor across borders and high quality capital standards. we will also focus on

strengthening arrangements for cross border large complex tend institutions, promotes with the implementation of conversion requirements for over-the-counter derivatives markets and develop a road map to address risks posed by shadow banking. we also have been at the forefront of efforts to use financial measures to advance national security and foreign policy goals. nowhere have our efforts the more concentrated than using sanctions to advance our policy and prevent iran from obtaining a nuclear weapon. together with our international partners in close coordination with congress we build the most effective sanctions regime in history and even as we explore a long-term agreement with iran that would provide verifiable assurances that iran cannot obtain a nuclear weapon we will continue to enforce sanctions vigorously. action this morning imposing sanctions on a dozen entity's

demonstrates. chairman hensarling, members of the committee, across the global landscape there is much work ahead. with your ongoing support i am confident we can protect america's vital interests abroad and at home. i look forward to your questions. >> thank you, mr. secretary. we yield five minute for the purpose of questioning. mr secretary commack as omb director in february of 2011 you were quoted as saying, quote, is an accurate statement that current spending will not be increasing the debt. we stopped spending money we don't have. you said that while introducing the president's f y 12 but which according to cbo added $12.5 trillion to the gross national debt over ten year budget window and in your watch, $1.4 trillion was added to the gross national debt so i am trying to get some insight into

administration's few of the national debt. do you stand by those comments? is there some context for those comments? >> at the time i was trying to explain the difference between a primary balance, primary surplus and spending, new spending, new commitments that are being made. the definition of primary balance is when the only deficits are related to paying interest on the national debt and other than that we are covering our expenses. >> let me move on to a statement the president made fairly recently about six weeks ago, quote, don't pretend america is going bankrupt at a time when deficits have been cut in half. isn't it true these deficits have only been cut relative to the largest deficit in our nation's history since world war ii? >> if you look at the reduction of the deficit since 2009, we

have seen the most rapid reduction in the deficit as percentage of gdp. >> weren't these the largest deficits in our nation's history since world war ii? >> we inherited a large deficit. we bring in a financial crisis and economic crisis. >> if you are aware, i would have your aides take a look and you will find that probably is true. cbo recently released their latest long-term outlook. have you had a chance to look at it? came out six weeks ago. >> i am aware of it. >> under current law or current policy, baseline deficit come down temporarily until 2015 and rise thereafter with no end in sight. isn't that true, mr. secretary? >> mr. chairman, i came here prepared to discuss a wide range of issues. i have not reviewed the cbo report, i can speak generally about this issue and i would be

happy to. >> isn't it true the administration never submitted a budget that balances in five years, 10 years, 50 years or at any time? >> the administration submitted budgets that took a fiscal situation that was out of control and brought it under control. we achieve more progress reducing the deficit -- >> has the administration never submitted a budget that balances over any time? >> i don't believe the measure of an effective but it is -- >> that is fine, mr. secretary but i get to ask the questions. you don't know. >> there is a point where it balances in the far distant future if it is not in the ten year. >> not according to the congressional budget office. >> according to whose analysis? treasury's analysis? whose analysis? >> mr. chairman, i am happy to look at the projections of the budget. i did come to testify on a wide

range -- >> in the time i have remaining, please move on to the debt ceiling. every major deficit reduction package of the generation has been attached to a debt ceiling. budget enforcement even today's budget control act, every president in your lifetime and my lifetime has negotiated on a debt ceiling, capable staff research the issue. the debt ceiling tends to be the early warning system that spending is out of control yet on september 15th the president took the unprecedented and radical action of stating, quote, i will not negotiate on the debt ceiling. is it the position of this administration that if congress does not repeal the debt ceiling that -- and allow the president to spend what he wishes, he is

threatening default on the sovereign debt? >> mr. chairman, i disagree with your characterization of the debt ceiling as an early-warning. it is at the very end. all the decisions congress makes in the budget is making today, all the decisions congress makes on entitlement programs and tax policies determines -- >> my time is almost. are you aware of any other president in our lifetime who has taken the radical position of stating that he will not negotiate deficit-reduction on the debt ceiling? >> i think we learned in 2011, we learned this past october that treating the debt limit the way congress did put the economy in great danger. every president of my lifetime said the same thing. it is imperative to raise the debt ceiling, congress at unique and exclusive responsibility. >> the time of the chairman has expired and i would also say every president in your lifetime has negotiated on the debt ceiling. the chair recognizes the ranking

member for five minutes. >> thank you very much, mr. chairman. i would like to see if i can data clearer understanding about where we are in relationship to finance discussions and trade talks with europe. i sent a letter to i think you and the president, basically stating my position on whether or not we would be including financial services provisions in a trade agreement and indicated it may undermine broader efforts by regulators in the u.s. and elsewhere in the world to address cross border oversight and unnoticed in a wall street journal report it indicated u.s.

treasury secretary jacob lew poured cold water on a push by the european union's after regulators to include negotiations of financial service regulation and e.u. trade talks but i also note there is another article that talks about the possibility that we are softening our position so i would like some clarification about where we are in those discussions. >> congresswoman waters, the issue of working on international -- race to the top, the highest standards possible, financial stability. we are active in financial stability. to try to drive that process, i am of the believe and proud the united states is a leader that we have taken decisive action, the most decisive action in the

world after the deep recession and economic crisis in 2008-2009. i said on many occasions i do not believe the trade agreements were an appropriate place for us to dilute the impact of the steps we have taken to safeguard the u.s. economy and i think we should make a call to the world community in the appropriate forum like the g 20 to friday to drive the race to the top. i set it in private conversation with the europeans. a trade agreement is very important. ..

>> the issue has come up really for the entire time that i've been secretary, since february, march. it has been an issue that europeans have raised. i have responded as adjusted in response to your question. i made some pretty public remarks last week where i called on our international partners to work through the g20 two tightened standards. so i tried to be very clear in what our policy is. >> of course you are aware, you understand that efforts already underway to do with cross-border financial regulations including the g20 and the financial stability board. some of the criticisms from other lawmakers are that other

administrative, administration trade initiative would effectively sidetracked domestic regulation in favor of international laws are some of our members are saying that they fear the ambitious trans-pacific partnership could create rules affecting technology, as the surplus u.s. domestic regulations. >> well, congresswoman, on the financial issues i'm quite familiar with the. on the technology issues that's an issue the u.s. trade representative would be more appropriate to address. on the financial issues, i've been clear in every conversation that i've had that we're going to -- in the text agreements promote opening markets for u.s. access, having standards consistent with our own, and i have been very clear that watering down in any way u.s.

regulatory standards is not appropriate in trade agreements in terms of protecting our financial markets, our financial system and our economy. i do think separately we have to discuss what does it mean to harmonize across international boundaries? i think we've seen very constructive developments, say in the derivatives area, where we took an initial action. the international community responded and there's now a reconcilireconcili ation so that we can have the world community reach the u.s. high standard. we may have to sometimes go back and make conforming changes for that to work but if it's our high standard that's a real -- >> time potential it has expired. the chair now recognizes mr. campbell. >> thank you, mr. chairman. let me jog back to the imf for a minute. one thing, i know an e-mail from a staff member with th language does not constitute a formal request. if congress is to consider imf

money, we need a formal request from you according to the law. i don't want to get into too much minutiae that. one thing is what this thing costs. we get agree if you move the 63 billion that is not without risk? >> congressman, i think if you look at the history of the imf, it supports the statement he made there is very little risk. >> but it's not zero. >> i believe it's all the close to zero. >> shouldn't we have cbo tell us what they think? >> they have look at this in the context of appropriations. if i could go back, because i think the question of request is tied to the fact we've been trying to be flexible in responding to what we've heard from congress. anin our budget last year, we proposed this is something than in operation as a mandatory provision. we heard back from congress there was a preference to deal with it. we responded and provided language that we do it as an appropriations med. at the time cbo --

>> if i can stop you. authorizing committees like this don't like things that go direct with your appropriations without the people who are actually -- >> we are happy to duty the way. >> on a bipartisan basis we would probably prefer it be done that way. we think cbo should score this at risk. is the president personally supportive of this transfer? >> yes. the president is very much supportive of the. he has told me it's a high priority in terms of its a strong point where we're at. i think on the cost side cbo has courted but it's not an enormous score. cbo score was in the neighborhood of $300 million. not in the $63 billion. >> there's different ways cbo scores things and if they scored on a wrist basis with a look at that but let me get into the issue of trade and so forth that we talked with your. i hear you that you say that you think the g20 is a better venue

for negotiating financial services. let's say, harmonization. than with european trade agreement that's being worked on. won't the europeans make the same argument at the g20 that they will hear? why is it any better or different than trying to harmonize these financial relations as best we can through a trade agreement, particularly given how the borders in financial matters have dropped so much? >> i think if you look at the progress we've made internationally since 2009, the g20 and the fsb have been quite effective places to work for very complex financial regulatory matters. i don't think the trade context is the ideal place for that to be done to the people of the table are not necessary for people and the mechanisms already exist in the g20, and the real point i was making

regardless of where we do it is the core issue. when we enter into a trade agreement -- >> let me just -- you at a meeting i think in brussels on november 27. >> i don't remember the date but it was in brussels. >> what was the outcome? this was with the europeans. >> as i acknowledged in my response to congresswoman waters, i discussed this a number of times with the europeans. they do make the argument it should be in the trade agreement. we make the our committee should be in the g20 and the fsb. but the court issued and whatever we do it we can't delude our protection of u.s. financial system, the u.s. economy. that's the core principle that applies whatever we are doing business. >> is our position that we have the perfect financial regulations worldwide and everybody else in the world should copy of the? i fail to understand why talking with the europeans about this, understand better what they want to do, why that's a problem. what's the risk to the is financial system?

>> to be fair, none at all. we talked to the europeans and asians -- our asian partners in the g20 and the fsb. we learn from each other. we take best practices from each other. we are very open. in trade agreements, whether it's a question of financial regulation or and environmental regulation or labor rules, is a trade agreement the appropriate place to do it? normally in a trade agreement the pressure is to lower standards on things like that, and that something which is think is not acceptable. >> if i can stop because i only have a few seconds. chairman and i've written several letters to you about this. we think and urge you to try at the european level, because the purpose of a trade agreement is to facilitate trade that benefits both economies. we can do that in the financial services area and we should do it. i yield back. >> our core goal is very a consistent. we think we can achieve a trade agreement that opens up financial markets for even more

robust cross-border trade and relations. that's our goal. our issue is not that we don't want to courtney buck financial regulation. we very much do. it's critically important and one of the biggest priority's we have. >> the gentleman's time has expired. the chair now recognizes the children from missouri, mr. clay, the ranking member of the monetary policy for five minutes. >> thank you, mr. chairman. secretary lew, as you know, an earthquake devastated haiti on january 12, 2010, leaving millions homeless in the wake of the disaster. the american people and the global community rallied to provide relief to the haitian people. as the center for economic and policy research points out in a recent report, despite billions of dollars pledged to build back a better haiti, more than 350,000 haitians remain internally displaced, and it is unclear what sustainable impact

our funds have had. secretary, can you give members of this committee a progress report of the post-earthquake humanitarian reconstruction and development efforts in haiti? >> i would have to get back to you on an update. i was deeply involved in putting together the haitian relief package when i was deputy secretary of state, and i have not had the opportunity in the last few months to become familiar with a detailed up-to-date assessment, but i'm happy to do so and get back to you. >> this is the second time i've inquired about this, and one of your deputy secretaries was supposed to get back to me a couple of months ago, and i haven't heard anything. >> i'm happy to get -- we'll get back to you. i was not aware of that. if you look at the relief response in haiti, we responded quickly with the emergency assistance. we responded generously with economic assistance.

i knowthe question you're asking is the efficacy of that effort. i share the concern that when we go in we have to be successful and i'm happy to go back and look into it and get back to you. i personally was very committed to putting the package together, and i would like to be able to get back to you. >> i look forward to your response. on the euro zone, economic growth is still a continued challenge with annual gdp growth now forecast at minus 0.1% in the eu, and minus 0.4% in the euro area. for 2014. european commission president owes a man while barroso stated that the economic austerity policies in europe have reached the limits and they should receive minimum political and social support. he also pointed out that eu should focus on growth measures

in the shorter term as reforms in the public finances sector should take time to have any effect. additionally, a recent report by the imf states that too much austerity is self-defeating. that means that the continued fiscal austerity for some countries in the eurozone, especially in the south, leads to an even deeper recession. in most cases deeper than projected. in this vein, how do you think the u.s. come and more particularly through its participation in the imf, to channel its efforts in alleviating the harsh consequences of this continuous crisis that has brought severe economic and social traumas to these countries? >> congressman, we have been deeply involved in multilateral and bilateral discussions on the response to europe's economic challenges. i know in my own conversations with finance ministers around

europe, i've made the case very strongly that europe needs to worry about growth, that as it looks at the weakest economies in europe it needs to stay focused on the reforms and the structural changes, but as they look at the base of fiscal consolidation they also have to look at the enormous unemployment and economic effect and the social effect that that has. i think we've made some progress in these conversations, and i don't want to exaggerate at the same time how much progress we've made. i think you are seeing more flexibly in terms of the timetables for fiscal consolidation. you are sitting recognition that the structural changes are very hard and that as countries may continue to have some breathing room. but you've also seen the same pressure to stay on the path. i don't disagree with that general direction because it's not sustainable for europe's economies, or their national finances to be in a place that's unsustainable. but i think when you're looking at a 20 or 30% plus an opponent

rate that is a very precise impact on domestic demand, the potential for economic growth and ultimately political stability. i do believe we're making progress. i think that the imf is sensitive to the trade off. i think you look at the g20 communiqués over the last year they the last year they've increasingly move towards a decision that reflects the view on expressing. >> the gentleman's time has expired. the china recognizes the gentlelady from west virginia, ms. capito, for five minutes. >> thank you, mr. chairman. thank you, mr. secretary, for joining us today. the treasury department recently announced guidelines on how the mlb's will be financing coal-fired power plants in emerging markets. as you can imagine a rep in a state that exports 30% of the total coal export because we can't burn them at home and writing difficulty with the presidents were on call and now it seems like it's an international war on call.

explained to me this policy, and all you really -- part of your stated goals were supposed to be fast-growing african countries present new opportunities for u.s. businesses. what kind of energy development is going on if we can't help them with the cheapest, most affordable and reliable baseload energy production that we have around the world? >> our policy on call and the climate impact is one that i know we have some differences on but we believe very strongly domestically and internationally that we need to drive towards developing technologies that have a less adversarial back on the climate situation. so we have taken the view that we need to, at home, use fuel more efficiently. we need to develop renewable energy technologies. we very much believe we have a lot of potential to export technology overseas.

you look at most of the developing countries. in some cases hydroelectric power is an abundant source of power but in many cases highly distributed, renewable energy is a very efficient form of technology. >> are you talking like wind here and solar? >> wind and solar. >> you're aware of how much we have to subsidize that you to make any kind of cost-benefit? >> the challenge to develop cost competitive renewable technology is something we dedicate a lot of energy to. we believe we are getting there and we believe in order to meet our international objectives on climate, it's important with a consistent approach domestically and internationally. >> my concern on the innovation, and i don't disagree on the ultimate goal to make it cleaner, more efficient and less emissions. i'm all for that, but i feel like if you're cutting off the emerging markets which are the fastest growing markets from

development, to be able to finance these kinds of facilities, you're going to stifle innovation in this country. because universities and such are going to devote the resources to it when i think they're looking at a dead-end. and so not only from the human element of these folks in africa who can't even access just baseline power generation, i'm very concerned about. another thing i'd like to say is i also represent a lot of natural gas. it creates jobs all down, all down the spectrum and you know this, i'm certain, in your position. but were not embarking on should we be exporting our natural gas. my question to you would be, is part of this global initiative natural gas is a carbon filtered is that next? iis that the next thing to not have any kind of financing opportunities for the mlbs? >> we've obviously been very aggressively developing natural

gas resources in this country, and other less the knitting fossil fuels. so we have been encouraging the development. i think the export question is a different. the department of energy has responsible for been natural gas export license proposals. it's been a source of enormous strength to our economy that we vetted energy revolution with the cost of energy as an input into production has made the united states a much more attractive place to invest. that's something we are very anxious to continue. i would defer to the department of energy review these export licenses and would be happy to follow up with you on that. on the question of kind of the need for power in the third world, we totally agree. one of the presidents of major initiatives, what he calls powers africa, which we need to make sure the african continent has access to electricity to fuel economic growth. we are working side by side in

the international team unity to be very strong partners in that, because -- >> many of these countries that you working with, germany, for instance, is building, are building themselves more coal-fired power plants in their own country because they've had to shut down their nuclear is because of the potential negatives. i'm just very concerned about this because i think it hurts the american innovative. i think it hurts american jobs, and certainly picks winners and losers in this country. and, unfortunately, i love living in west virginia but this administration has picked us as one of the ones to lose and i deeply resent that. >> the chair now recognizes the gentleman from texas, mr. hinojosa, for five minutes. >> thank you, mr. chairman. secretary lew, thank you for your testimony and thanks for being with us here today. i'm going to ask the question outside the realm of international finance. i would like to first ask about an issue i have great interest in.

as coach of the financial and economic university caucus with mr. stivers, i'm interested in the progress of the financial literacy and education commission which you are chair and also the upcoming presidents advisory council on the financial capability for you, which the treasury will coordinate. as you know, flec was greeted by congress to coordinate the federal financial letters in strategy. what is your personal philosophy on financial literacy and what do you hope to achieve in 2014? >> congressman, i am a strong believer in financial literacy and have been for a long time. i think that people have to make informed decisions when they make financial decisions in your life. and for all too many americans, it's in history when they make those decisions. i've taken flec very seriously. i've gone to several meetings, i've worked with director cordray on these issues. we have made it clear that it's

a matter of importance to us personally that we continue to make progress in this area. i actually think if you look at the work that the cfpb has done, they've actually made a lot of progress creating the tools for financial literacy. part of the challenge is that people have to understand the documents that they end up looking at when into into transactions. part of the challenge is to make sure that the documents are understandable. i think if you look at the simplified mortgage disclosure forms that the cfpb has recently issued, it is approaching a level where people who are not financial professionals actually can understand the documents they are about to sign. i think we have to remember you have to work in both directions. you have to increase the awareness and education of people in the economy, but you also have to make sure that the transactions are not so masked in language that's not come

principle, and in pages and pages of detail that hide the key points. everything they've made significant progress in that area. >> i look forward to working with you these next two years in trying to take it to a much higher level. i'm going to move into international situation that we're discussing. in your testimony that i read, you state that europe has made great gains towards financial stability. like you, i am cautiously optimistic about the improving economies of the united states and europe. secretary, how confident are you in the health of the economies of the eurozone? what are the indicators you're watching the closest? >> congressman, i look at the progress of the eurozone and think about watching on a daily basis in the spring and summer of 2012 when there was a real fear that any day could bring a crisis, and we've made a lot of progress from there.

there's still a lot of problems, difficult situations that need to be worked through. and risks that are still there. but it's not in the same place of fear that is going to be an immediate crisis that it was just a year, 18 months ago. i think i have made a lot of progress. they have a lot more progress to me. i think the gdp measures are significant. they were negative broadly, and now they're positive broadly. it's not equally distributed. some of the economies, particularly and northern europe are doing much better. i think you look at the economies of europe is a correlation between how well they are recovering and how much they have embraced the need to make tough structural changes. i think one of the things we continue to do is try to be very understanding of how hard that is an impact it has in the short term, but to keep the pressure on because that's the path they need to follow. >> i've read that some of the countries like greece and italy

and spain and portugal, and others, have very high unemployment rate in the group from 18-25 years of age. very similar to the problems we have in the united states. how are they addressing the? >> they do have very high unemployment rates in europe, and the youth unemployment rate is very high. i think one of the reasons i mentioned earlier that we are seeing some additional flexibility on timetables is recognition of that. excuse me, pakistan, i'm getting over a cold. -- xdb, congressman. i think if you look at -- >> there's been a challenge all week. >> take your time, mr.

secretary. >> my problem is my voice is not coming back. >> thank you you will give me one more minute, won't you? >> sorry, can't, but i've been losing my voice all week and this was a longer stretch than it had for much of the week. if you'll just bear with me. the economy, the economy in europe is i think moving in the right direction. some of the structural changes are significant in terms of opening opportunity to young workers. one of the key, opening up the channels of credit so the small and medium-size enterprises have

access to capital. that's where the opportunities for young workers will come from. >> the gentleman's time has expired. >> i apologize for coughing through part of it in a chair now recognizes the gentleman from new jersey, mr. garrett, for five minutes. >> thank you, mr. chairman. so mr. clay's question precedes my. today i want to focus on accountability and transparency to the american people. i've been quite disturbed at this administration's clear pattern of stonewalling. anyone who dares shine the light of day into the inner workings of this administration, whether it's a terrorist attack on u.s. embassy in benghazi, attorney general eric holder's refusal to turn over key documents, to the lack of cooperation regarding obama cares failed implementation requests for simple information has either been met with silence or outright refusal by this administration. the pattern has continued at the

department of treasury under your leadership. mr. clay had a very simple question and answer to him was don't blame me, i didn't know, it was my staff. in my case it was back on june 7, 6 months ago i sent a letter as king for details on three simple and straightforward questions regarding the irs scandal. first i asked when was the first time that you became aware of the irs targeting groups including of targeting independent of knowledge of the igc investigation. curiously, the answer came not from you but from some assistant secretary a month and a half later, basically refusing to answer the questions. the second question i asked was whether you attended any meetings within commissioner shulman and whether there was any discussions at the time regarding the iran's conservative leading organizations or their tax exempt status. and a couple other simple yes or no questions. again, a refusal from you to answer yes or no questions.

i simply called her office and said would you mr. secretary give me five minutes on the phone to talk with and your answer was no, i cannot talk to you, too busy. so the offer to action have been meeting with you. not in my office. i agree to go down to your office at your convenience at anytime just for five minutes to discuss this, and your answer was no, you were too busy. for the last six months to meet with a member of congress. so my first question, is it appropriate for you and your staff to deny even a five minute focal or a five minute discussion with a member of congress on important issues will get to them? >> congressman, first of all -- >> that's a yes or no question. >> i answered congressman clay's question quite directly. i demonstrated my knowledge -- >> can you answer mine them? >> i will follow up and get back to them. you and i went back and forth at the hearing i. at this committee before and i gave you all the information i had, and that remains the case

now. >> you never add the three questions in the letter. so you do this they have not. do you think it's appropriate that you would not pick up the phone and talk to a member of congress? >> i have responded to your question on multiple occasions. >> you did not. this letter is not from the. six months i've not gotten an answer [talking over each other] >> i think it is deplorable you would not answer a member of congress and we have to raise these issues over and over again but let me get on -- >> on the question of the letter, it is for generations traditional or legislative affairs to respond to when i was omb director -- >> your insisted that not answer the question but when i found of innocent as to speak to you, you would not answer so let's move on because obviously your continuing and the pattern of this administration of not answering a simple yes or no question. i know i'm wasting my time because you are wasting the american public's time when you're not simply answer to me

with someone. that's a simple yes or no question. let's look at on the focus situation and the rules that are just come out of this. if you believe there's a negative impact on the corporate bond market on the rolls there, out of? >> i think the rules as come out of the five agencies reflect an important balance between maintaining -- >> will there be any -- >> and protecting the economy from the risked -- >> will there be any negative impact on the corporate bond market and liquidity? >> i think the financial sector will be able to manage and limiting -- >> will there be any negative impact on the corporate bond market? that's a yes or no, will there be a negative -- >> it's not yes or no. it's a very complicated issue and i'm happy to respond to you but it's not a yes or no question. it's an important balance that we make sure that firms do not take on risks that the taxpayers, their place, taking on risk if they fail, so what -- >> let's stop there then. let's stop there, mr. secretary.

let's stop there, mr. secretary. you are saying it is looking for them to take on risk such as the muni market and on sovereign debt so it is okay for them -- you created extensions so they could invest in detroit for example, which is a bankrupt city. they could invest in foreign spanish banks charge exempted as well so they can gamble in those markets? >> i think if you look -- >> that's a yes or no question. >> i think the agencies did an excellent job of striking that balance to keep economic growth going into protect the economy and the taxpayer. >> the gentleman's time has expired. the chair now recognizes the gentleman from missouri, for five minutes. >> thank you, mr. chairman. thank you, mr. secretary, for being here today. i just have a couple of questions. we learned early on that there something in every state, a

vacuum, and so this is a question asking just for your opinion. what do you think -- who do you think or what would happen if there is a void left as a result of the united states non-leadership in imf? >> congressman, i think that u.s. leadership in the world is important for the united states and it's important for the world. as i talk with my counterparts in asia, in europe, i hear over and over again we need the united states to be the strong leader that you were. so any imf what we see is with our contribution, which is less than 20% of the entirety of the imf, we have enormous influence. we have veto over some important decisions and we have the influence that goes with that to help drive decision-making in a way that serve u.s. interests and a sounder global economy.

i think that's important for the united states. i also think it's important for the world. we are already seeing if the united states in anyway steps back, there's a rush to come in and kind of starts to function, break apart some of that influence. i don't think we should let that happen. it's just too important. >> i think in some ways we are wanting to become isolate in the world, and i've got some problems with a lot of expansions things we do. i'm concerned with the imf and our leadership and economic, financial participation. my other question though, i represent kansas city, missouri. missouri, not kansas. and that's important. >> that's right. >> i'm just getting an amen from

my colleague -- >> i started out working here for someone who's at all politics is local. i did get. >> kansas city used to be the second largest manufacturer of automobiles in the world, behind detroit and kansas city is falling but i think we are fifth now. but in recent times we've been dealing up again. when i speak with the automobile manufacturers and the workers, the unions, their biggest concern is currency manipulation. and i was part of the group that sent a letter to the president asking for currency manipulation discipline in the tpp here is that possible? what is your position on that, or what is the administration's position on that? >> we have worked hard and focus hard on currency issues are a

long time. from the moment i stepped in at treasury it's been issued that's been very much on my agenda. if you look at the progress we've made, working in the g20 and the g7, we've gotten the leading economies of the world to agree to principles that reflect our own, which is that currencies should be market determined, exchange rates should be market determined at the tools the government's use should be domestic tools for domestic purposes. we've maintain our focus on that and our bilateral conversation. we've seen progress in the conversation. any trade agreement that we reached has to be built on the principles that we have worked to reach in places like fiji 20. those are principles that undergird everything that we do. so without addressing the specifics of any other negotiations is a core underlying bedrock principle that we're going to be driving from market determined exchange rate. we believe the g20 is an appropriate place to do that,

and we have made great progress there. >> thank you for that, because it would be difficult for a lot of people to support it. in light of the current him in english and that's going particularly with china. and as you know, that creates an imbalance to the sale of automobiles. >> i've engage directly with the chinese on a regular basis on this, and we've seen real progress in terms of the exchange rate approaching, not reaching but approaching the point that we are pressing them to get you. i think that they understand they have to get to a market determined exchange rate. in our exchange report we tried to focus in great detail on the progress made and where there are still concerns, where interventions are troubling. we have to keep pressing on it and that's what we're doing. >> thank you, mr. chairman.

>> the gentleman's time has expired. the chair recognizes the gentleman from texas, mr. naca bauer, for five minutes. >> thank you, mr. chairman. thank you, mr. secretary for being here this point. on october 7 i wrote a letter to director of the federal pensions office inquiring about three reports that were required by law to be submitted to this committee. one of those reports is report on insurance modernization, nearly three years overdue. not surprisingly i have not received any response to my letter. do you find it acceptable that these reports have not been submitted to this committee? and in some cases are over three years past-due? >> congressman, i know that there is a report that is virtually complete and will be here very shortly, i hope even before you leave for your break. >> mr. secretary, i appreciate that but on a number of occasions, that's the same store that i've gotten from

mr. mcbride, that we'll have the shortly, we will have the shortly. that dialogue began last year. it's not like these are a little bit late. some of these reports are three years late. you know, i think we're talking about this administration talks a lot about transparency, but, you know, as i think you've heard some of my colleagues say, we are concerned it's hard to have transparency when you're not hearing from the administration. >> they modernization report is a very important piece of work. they have virtually complete it. it's in the stages of kind of final production, which is why i can say with some confidence that it will be here very shortly. >> when you say shortly, is that shortly next year or the year after? >> no, no. i'm hoping, as i say, before you leave. phone hoping it's days, not weeks. the work that filed has been a very important.

they brought a knowledge of insurance in the treasury. a time when no the insurance industry is highly interconnected with other aspects of the financial system. it's a complicated system where we have a lot of respect for state regulation, but there are issues of national importance as well. and i think this report, when it's issued, it won't resolve these issues but it will queue up forces discussion some very important policy questions. i look forward to engaging with you on those because, frankly, the report will not be the final word. it's going to be opening the conversation so that we can work together on this. >> that segues into my next question. the g20 leaders declaration coming out of the st. petersburg meeting in september stated that the g20 leaders, and i quote, look forward to the international association of insurance supervisors for the work to develop a comprehensive

groupwide, supervisory and regulatory framework for international acted insurance groups, including quantitative capital standards. were you personally consulted about that statement? did have input into that statement? >> in it, i'm aware of it. it's not -- it's something that was part of the discussions that -- >> did you support the inclusion of that language in the report? >> i very much support the fio being part of the international conversation and asking these questions so that as we inquire domestically as to what the right steps today, we do it in concert with our international partners. and the statement doesn't prescribe the end result. it's a process that they think we should be engaged in. >> as you know, the european model is more bank like, the way they regulate their insurance industry over there. do you support that same kind of regulatory framework for u.s. domestic companies that have a much different regulatory

structure? >> i think that raises some very important and pretty complicated issues. i think that where there is an appropriate need for regulation, we ought to be sensitive to the differences between insurance companies and other financial institutions. i know the regulators have looked at this and they are looking at being flexible as they use the tools they have, and if they don't have all the tools they needed something we should talk about. because to the extent there is a need for regulation of insurance companies, it to reflect the characteristics of insurance companies. >> i think one of the things that we have from the industry though, as this dialogue is going on, that there's not a lot of transparency again in this process and that, you know, the industry, particularly the u.s. domestic insurance he industry feels like they're being kind of left out of this debate and discussion. and i think there may be concerned that there's some movement within treasury and others to move to a european

model for regulating u.s. insurance companies that many people feel like -- tiny, when you go back and look at the crisis, the insurance industry fared extra me favorably. >> the inquiries that have taken place with regard to the financial for the oversight council have been questioned determine whether there is systemic risk that are presented by any individual insurance companies. the question of how to regulate is a totally different question. the fsoc standard is to make the determination on risk. and i think that we are very much interested as regulators follow through that they think this through very carefully and not a conclusion this is banks and insurance company are exactly the same. >> the gentleman's time has expired. the chair now recognizes the gentleman from illinois, mr. foster, for five minutes. >> thank you, mr. chairman. i would like to switch the moment to the question of the

iran sanctions and first off, congratulate you on the recent -- this morning's designation. it seems to me the rate at which these up and coming out is sort of erratic. in the six weeks prior to the iranian elections in june, the treasury department issued seven notices of designations of sanction violators that includes more than 100 new people, companies, aircraft and sea vessels. since june 14 when rouhani was elected the treasury department issued only to designation notices that identified only six people and for companies as violating the sanctions. and now we get a new batch for which i commend you. so my question is, to what do you attribute this sort of erratic batch by batch in nature of these designations? start without. >> the work of enforcing sanctions is painstaking work that we have extraordinarily talented team at treasure

working on. the are dedicated to it, committed to it, and to make progress. i think the designations today reflect the fine work that they've done and the determination that we have to be true to what he said in my opening remarks and what i've said over and over again, that we will contain to investigate for violations of sanctions and take action where we find them. it is important to the sanctions being effective that they be implement it. >> in light of his six-month freeze in negotiating window, many people including myself have the concern that congress will say, oh, boy, the sanctions will go away in six months and you will see massive cheating on the sanctions for companies that are trying to gain a commercial advantage with anticipating the easing of the sanctions. i was wondering, do you feel like you all of the authority you need to make sure that any company that is caught cheating on the sanctions gains no commercial advantage from that?

>> enforcement is the answer, and i said in every meeting i've had with ceos since the interim agreement that there should be no uncertainty, we are continuing to enforce sanctions. no one should think that having iran on a bill of lading or a financial record is going to go unnoticed. we're going to stay on this and that it is not in opening up of any door to relax in our core banking and oil sanctions. i said it in a public speech again last night. i probably have talked to several hundred ceos in one group or another and delivered the message personally. so i don't have to be more clear than that. it's not like with some other mechanism other than enforcement but we are very clear that any ceo, any business that steps into a space that violates sanctions is doing it at the risk of having an enforcement action. >> you anticipate, for example, a company that is caught cheating on this will have sanctions that extend past the time that normal sanctions would

be released the? >> the duration of sanctions is something that is a technical matter, depending on the violation, is a provision. rather than give you an off-the-cuff answer i would rather follow up and do it on a more detailed basis based on which provision you are referring to. >> i would like to change to a moment to a couple things i would like to your position on fsoc and some important issues there. one is the application of basically banking capital standards to insurance companies. i wonder if you have any reaction to the appropriateness of that? >> well, to be clear, the only action taken at fsoc regarding insurance companies were to designate the institutions that met the standard of financial, presenting that degree of financial risk. the question of how they regulate is something each of the regulars will now be dealing with. they've made it clear that look at how to do this in a way that

works. the charge under fsoc is not to implement. it's to make the determination as to whether on not there's that kind of systemic risk. then the tools of each of the regulators will be used as appropriate. as i tried to indicate in my response, we understand banks and insurance companies are not identical. >> another issue related to this, in a few seconds left, is the issue of collateralized loan obligation's and risk retention. which is obviously a ceos were not involved in our financial collapse and the specter of risk retention is something, makes a lot of people uncomfortable. i was wondering if you have a reaction to that? >> look, i think in general the idea that firms should internalize the risk is a very important principle. there are many ways to achieve that. we've tried as we've laid out the actions in response to

finance reform to make it clear. the test is, our firms putting themselves at risk rather than taxpayers at risk or the business decisions that they're making? capital is part of it and restrictions, like some of the things the volcker rule is part of it, and leverage as well. >> the gentleman's time has expired. the chair now recognizes the gentleman from north carolina, mr. mckendree, for five minutes. >> mr. chairman, i request five minutes -- to the treasury secretary and to response from treasury to those letters. >> without objection. >> secretary lew, thank you for being here. i want to take this for the record. article i section -- article one of the u.s. constitution establishes and making vital oversight authority of the congress vis-à-vis the executive branch, and i'm sure you agree with that notion. on your treasury department has

stiff armed this committee in its oversight capacity. and it's unsupported refusal to provide complete responses to this committee. chairman garrett already covered is concerned the ice and children on august 22 requesting documents that were the subject of a foia request made by a public interest group. the treasures position to the department would provide this to me with only redacted documents that that group already received. this implies that foia is applicable to congress. i hope that you would understand foia does not apply to congress and federal director legislative affairs staff, that they will provide those documents probably. furthermore, in addition on november 6, 2013, chairman hensarling sent a letter to the new york fed requesting information regarding contingency planning related to u.s. debt limit. the new york fed pointed the finger at trish department

claiming that they needed the treasury's permission to produce the requested information. although we have rejected the feds claim that it needs treasury's permission, i ask that you commit to resolving this issue and ensuring that the committee receives the requested documents by the requested production date of december 18. you can respond in writing. we will move forward. additionally, this question of prioritization of debt. mr. secretary, you mentioned in the past that you are unsure of your departments, whether or not has the legal authority to prioritize debt payments in event of a failure to raise the debt ceiling. i voted to raise the debt ceiling. i think we have an obligation to pay our obligations. but have you requested, or your department, requested from the office of legal counsel, the department of justice, in answer

to this question? >> congressman, on the question of responsiveness to oversight, i very much except -- >> i just asked for you to respond in writing to the. if you would address this prioritization question. have you asked or your department asked whether or not you could prioritize debt from the office of legal counsel of the department of justice is because the question of prioritization is fundamentally a policy question. as your comments reflected, i do not believe, nor has any president, nor any treasury secretary -- >> i understand that. let me ask you to answer my question. >> i've also said publicly that ultimately -- >> i appreciate that but i have one minute and 54 seconds left. had asked the department of justice's office of legal counsel whether or not you have the authority in the event of not raising the debt ceiling to prioritize debt payments? >> the issue of whether or not that decision can be made is fundamental to a presidential decision. >> i know, but have you as treasury secretary, your

department requested from the office of legal counsel whether or not you can prioritize the? >> i've answered your question. it would be a question between the white house counsel and the justice department because the president -- >> let me point you to the fact that "huffington post" article from last week said the obama a decision to the platinum coin option more seriously than it led on. this idea you have a $1 trillion coin minted and deposited at the federal, at the fed, then draw upon that, it is, according to the "huffington post," the administration did ask the office of legal counsel for this absurd idea to actually be judged whether not it's legal. yet at the same time you will not say that you have asked whether or not you can prioritize payment. that is deeply concerning to me. >> i'm prepared to discuss the possible those issues. i don't disagree that the platinum coin is not an option. >> i'm glad we agree on the.

let me ask one final question on boulder. who is the primary enforcer of the volcker rule speaks if i could just go back, pakistan, on the question of the debt limit, the real issue is we must keep all of our obligations spent i agree. let me ask it is the primary enforcer of volcker rule. it is rolled in a five different agencies. as you know -- >> so there are five different primary enforcer's? >> the aspects of the volcker rule depend on what kind of financial institution you are, you are regulated speech will you submit inviting your view of this as chairman of fsoc the? >> i'm happy to respond to question in writing. >> the gentleman's time has expired. as previously announced, the chair now declares the committee in a brief recess. brief is going to be defined for a proximate less than five minutes. the committee stands in recess. >> the shooting at the

washington navy yard in october revealed holes in security at federal buildings. today, the senate homeland security committee examines the shooting and the security issues. live coverage at 10:30 a.m. eastern on c-span. the state run health exchange is hosted a discussion today on health of all and lessons learned from states that there own state to change. you can see live starting at 12:30 p.m. eastern on c-span3. later, the senate intelligence community holds a confirmation hearing for senior officials at the cia and the state department. that's live at 2:15 p.m. eastern also on c-span3. >> so i'm standing in front of the 1905 right flecha, the world's first practical airplane. this was the third and final

extreme of the airplane the wright brothers build and today survives at the second oldest of the airplanes today. this airplane which warble right considered the world's first article airplane was constructed and flown in less than six years time between the time they built their tight and -- their tight and the success of this airplane. this is a plan that was built less than two years after the first flight at kitty hawk, north carolina, on december 17, 1903. what's interesting to think about is the wright flyer in kitty hawk flew four times, just four times on one very historic day. they were very important lights and they were the proof of concept of power have given airplay. but the airplane behind it, the 1905 wright flyer 3 was capable of repeated takeoffs and landings, repeated flights of not just for a few seconds at a time that upwards of 40 minutes by october 1905.

this airplane to fly graceful circles, figure eights, it could bank and turn and fly very much like a modern airplane flies. this is very much a modern airplane capable of being controlled by three axes of like. >> there's more from wright brothers aviation center next weekend as booktv and american history tv look at the history and literary life of dayton, ohio. saturday at noon on c-span2 and sunday at 5 p.m. on c-span3. >> general motors chairman and chief executive officer daniel akerson announced last week he would retire next month. monday and he spoke about his successor, mary barra it would be the first female leader of any global automaker.

here's a look. >> looking to successor, some have downplayed the significance of mary bauer being the first ceo of a major automaker but it's video. what do you see as the significance of having a woman in that job? >> i haven't read anything person, nor do i think it should be. i think it is noteworthy. i think it's historic. i think mary barra was picked purely on her talents, hard work and her success. nothing else. not because of her gender, and i'm proud of history that general motors has in terms of promoting qualified minority and female employees. we do that because of stem, science, technology, engineering and math graduates coming out of

colleges, about 20-25% of our plants in this country are run by women. the young woman -- i don't know exactly how old she is, once are manufactured in jenin, the folks in the plants that -- to get into a plant is complex. one woman who runs our supply, supply chain, purchasing, global purchasing supply chain manager, a woman. our quality initiatives and customer, woman, these are all places serve on the executive setting the i'm not surprised mary rose to the top. she has been with the company for i believe 30 plus years, graduated from gmi. think that you might as you would west point and annapolis the general motors doesn't run anymore, had their own service academy if you will. she went to stanford, got her mba and came back to the company

and performed exemplary. so i think it's noteworthy. i think it should be, and i think she is well deserving of the appointment. >> what's going on today comes down to two words. and they are not my keywords. on fundamental transmission of those are 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 fundamentally 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? that means you don't like capitalism, private property rights very much. that means you don't like our constitutional system very much. when you keep hearing this fundamental transformation, change is hard, we need more time for change, you need to understand this is a direct attack on our constitutional system. that's what he's talking about,

that's what he means. >> sunday, january 5, best selling author, lawyer, reagan administration official and radio personality mark levin will take your calls and questions on in depth life for three hours starting at noon eastern. booktv's "in depth" the first sunday of every month on c-span2. spent and online for december's booktv bookclub we want to know what your favorite books were in 2013. throughout the month join other readers to discuss the notable books published this you. go to booktv.org and click on bookclub to enter the chat room. >> live now to the senate floor of the u.s. senate where lawmakers are about to start their day. the 2014 federal budget takes center stage. a key test vote to limit debate and set a final vote is set for 10 a.m. today. i require a 60 vote majority. new support indicates several republican senators across the

aisle to join the democrats to support the measure. you may also see work on the defense programs bill and executive nominations remain. now live to the senate floor here on c-span2. the president pro tempore: the senate will come to order. the chaplain, retired admiral dr. barry black, will lead the senate in prayer. the chaplain: let us pray. god of peace, in whom are hidden all the treasures of wisdom and knowledge, thank you for coming to our world with