tv Key Capitol Hill Hearings CSPAN January 10, 2014 6:00am-8:01am EST
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proper schooling and skills, there are many opportunities to raise, by one's own efforts, to places you hadn't even dreamed of. even if you don't have a lot of fancy degrees or rich relatives. if you've heard nothing else today that i've said on the subject of equality, think of that twentyone. please hear this. if our nation doesn't get damn serious about the millions of young people who drop out of school or who graduate unable to master the basic skills and work habits, nothing else we do is going to set this country on the right course. for their sake, and ours, we can't afford to fail. ladies and gentlemen, the chamber's job growth and opportunity agenda is built on
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the belief that our nation's best days are not over, they are still to come. no other country, no other people, no other society's starts from such a position of strength and advantage as we do. by making the right decisions and adopting the necessary reforms, we can usher in a new era of economic prosperity and extend its benefits to all americans. i think you can tell i'm basically an optimistic fellow. so let me tell you what i worry about most. i worry that for the first time in our history, we're in a situation where america is taking from the young in order to support the old. we're doing this by continuing to ignore the entitlement
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crisis. by piling up trillions and trillions of dollars of new debt. by trapping so many of our young people in failing schools, and therefore denying them the fair shot of the american dream. the promise of america has always been that the older generation will leave to the young a stronger, better and more hopeful country. this is a promise we can still keep. and we must keep. but it all comes down to leadership. leadership in our government. leadership in our business. and leadership in every sector of american life. leadership that puts our country and our future first. thank you very much. [ applause ] remarks
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state of american business address in the next room. and if you missed it, there's a copy of the speech on your place. joining me to answer questions today as a bit of a change is marty regalia, our senior vice president and chief economist. where is bruce johnston? well, bruce can't be with us this time. he was so engaged and busy in what he was doing, he ruptured his appendix. and he's doing very well. he's on the mend. you'll see him here next time, and you'll be able to talk to him in the next few days. but he sends his best and has challenged marty to do as well as he could. we'll see. there are also a number of our senior advisers here who can help us -- our staff guys -- can help us with any questions that
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get particularly complicated. you know, as i said in the speech, the chamber believes that the american economy is improving and that it's gaining momentum. we expect, as i said, growth to accelerate to about 3% by the end of this year. but doesn't mean at all that we're out of the woods. 21 million americans are still unemployed, underployed or stopped looking for work. american workers have not seen substantial increases in pay in recent years. obamacare, dodd-frank and other laws and regulations still creating a lot of uncertainty. our challenge now is to keep and expand the growth we have finally ae chiefed to create millions of jobs we still badly need and to extend those benefits and opportunities of the recovery to all americans. and, you know, the issue is how do you do this? first, by passing trade promotion authority and then moving forward on the free trade
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agreements that we have underway. second by accelerating the energy revolution with millions and millions of americans to work. and it's bringing manufacturing back to the u.s. and if you ask me some questions about that, we have a lot of things to tell you. and the passage of common sense immigration reform will clearly add jobs. it won't at all take away jobs. it'll provide a lot of innovation and investment. monetizing the regulatory system and informing government process, that's an ongoing issue, but i think we can make some progress there. and getting our fiscal house in order is absolutely critical to us. by the way, you heard me talk about all that entitlement stuff. there's a series of charts on your place that make it crystal clear. they're not our charts. they're charts provided by the
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government of the united states of america. we have to also address the flaws in obamacare. it's a mass itax bill, a massive rules and regulation system. a lot of people are wondering how to get the health care. we're going to talk about that. we're not going to get rid that have bill. so we have to devise ways to make it work. let me drive this point home. and i said this inside, there's a lot we can do to make a bigger pie and put more people to work. but if we don't get real serious about the millions of young people that we're leaving out of the system, if you can't read and you can't comprehend, if you can't write and you can't communicate, and if you can't count and you can't deal with some modest technology, you can't work. and we -- many of the jobs we had before are not available yet.
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now. we have taken 44% of the jobs out of manufacturing, and we'll get more. they're gone. we don't need them. we have computer technology and robotics and engineering and supply-chain management. all of that means you have to be educated if you want to go to work here. so before i take your questions, just one other point, you may have noticed there are going on some elections, and you may have noticed that we plan to be involved. we've started preparing for 2014 on election day 2012. and we strengthened this institution. we have put more people in the field, we have strengthened many, many of the visions of the chamber. we're prepared for this election. we're focusing intently on candidate selection.
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early involvement in the primaries is where we're going. early voting we're dealing, positively shaping races right from the begin. you know, we won in alabama, thank god, but there's a lot more to come. and our response to this will be very significant. and having said all of that, i'll be very happy to take all your questions -- whoops. remember, i told you a couple of times before i even knew the answer i made it up. i'll give it to the marty or one of the other. who's first. why don't we go right here on the aisle. yes. >> hi, this is jessica with modern health care. could you just be a little more specific about the fixes to the health care, the health care taxes, the medical device tax? the delay, it's already delayed
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for the mandate, how much longer? >> the issues here are in four or five buckets. the tax and expense issues are very significant. second, the questions of -- remember, everybody was going -- and by the way, i'm not playing a political game here. i'm talking about what we have to deal with. one of the reason all the costs are going up is all the requirements that must be in every plan. now if anybody ever thought that we could fundamentally tell the health insurance people, or whoever's running even the government, that you could provide all those things at the same cost, no way to do that. and the individual mandate and the -- and the corporate mandate, each one of them come with very significant challenges that we didn't know were going to be there. and so when you put all this together, people are now getting plans that say, hey, now you're
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deductible has got to be bigger, your co-pay has got to be bigger, and you're limited on which doctors you can go to and which hospitals and so on. and why is that? it's because of all the requirements. and so i'm not so sure it's a matter of taking a, you know, a sisser ises a si sor and cutting out whole segments of the obamacare process, it's what the requirements are, who's paying for it, how do i get my health care? i was talking to -- this is a bad idea to always go to personal things. i was talking to my daughter-in-law last night who was told -- they belong to kaiser -- they'll be at least -- she wanted to change an address -- it'll be at least a month before they can do that because they have so many backed up issues. and i think what we have to do is delay whatever we have to delay for short periods of time
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where we look these things over, go through all the stuff serve talking about, keep what works fix what we can fix and get rid of some things that might not fit. now i'm being a little broad in those comments, but you know exactly what i'm talking about. and we would be very happy afterwards to have all the people sit down and talk to you. the bottom line is the way the system is now, it's not the computers that are problems because you can fix problems in computers, it's what you're putting in it. okay. go ahead. >> hi, abc. you said 2014 is the year for immigration reform. can you outline what you plan to do either differently or the same from 2013 to actually get things done this year? >> 2013 we liked. you know, we made a deal in the senate. we did that with the cooperative basis with the afl-cio and lots of other people.
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and then we started working in the house where i believe we have received very positive response. 485 people, not just a hundred of them, and we brought in 600 people to one group, we brought in faith-based and -- and folks from all sorts of social activities, you know, people, community leaders. we're going to -- and we brought business people in who see opportunities to create jobs and to bring companies here. we may not be otherwise bringing here. and what we're going to do is a lot more of the same. and we're going to do it back home as well. and you see my own view, i think democrats and republicans alike would like to go home and run for office with something they got done that's significant. and i believe we're two-thirds of the way there. i've been encouraged by a lot of the noise and soundings out of
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the house. and i'm not discouraged -- every now and then wake up in the morning and see a story about some reason it's not going to work. 435 people have to go home and run for office, and i think we're going to get this done. yep? >> hi, andrew ackerman with the wall street journal. you said on the regulatory side that you wanted changes to the dodd-frank law, and i was wondering on what specific parts you don't think are workable and what might be changed or what you might push to be changed. >> i think there's a little history here. you had this dodd-frank legislation was written in a hurry and written by people that were mad. and written by people that didn't want to have responsibility for why it happened. and -- and so we have been at this now for almost three years. and we have been -- had made
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great success in negotiations with the sec and the other agencies. we have had great success in the courts. our real concern now is, you know, more than half of those rules three years into this deal haven't been done. so what we're trying to do is bring common sense to this. to -- we have all the issues on corporate governance, that's one bunch, we're working on those. we've had all the issues on the requirements on the financial institutions, and now we're in a sort of a difficult area. we're looking at insurance companies and other investment groups, by some of these regulators are being treated like banks when they don't do anything of the things that banks do. we have got -- we have got the volcker rule now. which bit way, remember what
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happened, five agencies collectively set up a whole series of questions and sent them out to everybody who is being affected or might be affected. they took back all the responses. they didn't send out a proposed rule then, they just sent a rule out and said this is what it's going to be. well, where we are there, because this -- this originally, the volcker rule was originally snended for the large financial institutions to raise the question about what investment they could do with their own funds and so on, and now it appears that it affects every small mid-size bank and financial institution in the country. i'll let marty talk to you about that in a second. but the bottom line is we have to sort our way threw this. some of the dodd-frank stuff's fine. some of it, as i said, was written in a hurry. and we're going to have to sort
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it out. the basic issue is you want to get a mortgage. and your brother-in-law who has a small company wants to be able to get a loan. and people want to be able to invest their funds and plan for their retirement. and if you go to every bank in this country and you have five regulatory agencies living there with one of them telling let's get the money back and lock it in the safe, and the other saying let's get the money out and lend it. this is a very complicated time. we'll be working on that. marty? >> the access to capital for small businesses is at primary concern. health care is there, they have to deal with it. but they don't know if they can get the capital to operate the business. the dodd-frank rules and the fed in the allocation in the system is a brand new ball game. we want clarification on where it's going, how to administer it. the fed is very good with banks and they're very good at kind of
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looking at the world through a central banker's eyes. but they really have to develop a different view to determine what is the best allocation, the best flow of capital. where should they intercede because there's an excessive risk, and where should they let the free market innovate and two in that direction? i think that's one area where we watch very closely on the implementati implementation. >> and we have a lot of new people at the fed. i worry that marty would go and run the fed. but we're glad to keep him. >> just aside from adjusting the contours of the volcker rule, is there specific legislation you are going to push for to eliminate portions of dodd-frank that haven't been implemented yet? >> i think i'd stay tuned on that. >> kevin hall. i'll try to get a question with a marty angle in there.
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you talked about income inequality, and it sounded like you were calling into question in your state of the business the concept. i think you said opportunity, not outcome, is what you're after. how would you assess outcome since the whole debate on income inequality is because it's skewed. you have several republican candidates, paul ryan, rand paul, pushing things, we're going to hear from marco rubio today. it's resonating with republicans as well. where would you see the areas you would focus on? >> i think you have the short-term issues and the long-term issues and they're both important. i really believe that there are great opportunities to drive this economy forward in the short-term. the energy revolution, which we all see and appreciate, the question that this
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administration in their second term has become very, very aggressive, and i congratulate them on the trade side, which will create a good deal of economic growth and opportunity. the reality that -- that we -- we are finally facing up to the fact that there are many, many job opportunities if -- if -- if we can get the government to -- to help make it happen. and that's, you know, as i said, energy, trade, the whole question of investment and where it's going. so i think we're going in the right direction, right? and now what's happening, and the reason you're going to see three speech this is week and what i said on the question of opportunity or inequality, is because the white house has chosen, it appears to us, to
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make this their approach over the next year. and i think the real problem, if there is an inequality, is the -- the economy has -- the recession was over in 2009, and we have been sitting on our heels since then because the view across the street is that more government programs are going to create more jobs. our view is more freedom for the job creators is going to create more jobs. and that means dealing with some of the regulation issues, clearly dealing with the questions of capital markets, and how can we get capital into the hands of the people that will create jobs using the energy situation to move forward capitalizing really big-time on the questions of what an immigration policy would do, and on and on.
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that's it. in the long run, though, in the long run, if we don't do something about the nation's education policy, if we don't do something about our job training after that, i -- i think we've got a real problem. you know, the core standards simply say three things, they say, okay, here's the deal. if you want to go to college, this is what you have to do. if you want to go into a community college and learn a skill, this is what you have to do, and if you want to just go get a job, this is what you have to do. and i'm telling you right now that we're leaving 30% of the people in a position, maybe more, where they just don't qualify for any of that, and if that keeps going for a long period of time, that is denying people opportunity. that is creating inequality, and that's something this country ought to do something about. oh, by the way, it all takes money, and we need to deal with entitlements, because
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entitlements are going to eat all the money. i'll listen to them, but i'll get them all. >> it was clear from your speech, mr. donahue that trade is important for the chamber this year. i was wondering what you think is the likelihood for the trade promotion authority, and signals from the white house that the president is willing to expend the kind of political capital that is going to be necessary to get it through congress. thanks. >> the trade promotion authority will pass. it will be introduced sometime in the near future. it will pass. take a while to do it. it will have a little debate. it's the one thing that puts the congress in the game. and they're going to want to do this. and by the way, why all this trade? 95% of the people you want to sell something to don't live in this country. next? right there. >> -- as a retirement crisis, and if so, what should the
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federal government and they do? >> the first retirement crisis is the entitlement programs are going to bankrupt this country if we don't do something about it. and i believe there are going to be so many people retiring, it will create lots of new industries, by the way, that's good, but we're going to have to look at the implications and what adjustments, not taking these things away, that we can make that'll make it palatable for those that are retiring and for those that have to pay. and you heard me at the end of the speech, this is the first time that we're basically calling on the young to pay for the old and we need to think our way through that. next. okay. >> thank you. ben with national journal. you mentioned the support for energy exports broadly. is the chamber looking to lift the ban of the export of crude
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oil and will that be a lobbying focus for the chamber this year? >> the re strikss we were put in on the oil crisis, when cars were lined up to get to gas stations around the block. marty and i are old enough to remember that, maybe he isn't. and we need to take another look at those restrictions. obviously we want to use the energy at home first, but, you know, we don't restrict people from exporting airplanes we make, or exporting food products we produce or exporting technology. there are a few things you can't export. but i think it's important to look at energy as the next great american revolution that has the potential to help us on national security, oil and energy independence. to do it in a way that has extraordinary environmental benefits. and i think you'll see us negotiating and working our way
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through that during this year. >> doesn't sound -- >> oh, i want to lift the ban. i just want to get it done in a reasonable sequence and i think everybody would be happy with getting the -- it's not going to happen overnight, but it's going to happen. all right, go ahead. >> rich with fox business network. a couple of questions, first, do you think congress should extend extended unemployment benefits, and be secondly, when you say you want to play in the primaries, how much do you want to play and pro-business candidate, is that anti-tea party? >> okay, let me start the first one. i think congress will extend it. they'll look for ways to pay for some of it. and even the president's chief economic -- the head of the council of economic advisers believes that the extended use of unemployment -- the kind of
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unemployment insurance we talk about does not help create jobs as well. and marty has a word on that. but my view is we'll pass -- find a way to keep it going for a while. you can't talk out of both sides of your mouth. keep it going until we start to create jobs. now starting to create jobs, so shouldn't be put in for a long time. you want to say something about that? >> just quickly, on the issue of urn employment insurance, minimum wage, we are seeing a more disparate income destruction, but not as bad as the statistics show. when you adjust and use the right statistics, you see a much less onerous shift. so there's something that has to be done. but use the right number if you're going to affect the right cause and fix. secondly, you can do short-term redistributions to affect the distribution after the fact, and
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if you're going to do that, then the earned income tax credit are the best way to go, not minimum wage. and extending unemployment insurance is not likely to help the distribution in any kind of long-term sense at all. and finally, if you want to fix the problem, virtually everybody that's studied it has come back to the education, training and skills and providing the opportunity for people to get on the band wagon and advance and move up. i think when you get into the whole distribution issue and the unemployment insurance, minimum wage and those kind of issues, you have to define the problem properly. decide if it's short-term, redistributive fixes, the symptomic relief, or cure the problem. we and thomas focused on trying to cure the problem. in order to do that, it is education, training and human capital. and virtually all the economic studies show that. >> with all the unemployment we
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have right now, we could hire a million and a half people in the manufacturing business if we have the people with skimlls. we have to get them. we will be involved in the election and the primaries. right now -- open seats or whatever they happen to be. for the fundamental reason, the people that run have a chance of winning. we should get the very best candidate representing both parties for the purpose of ending up with the best result. we -- we probably now have a good half a dozen places that we're looking at in open seats and in primaries where people are trying to challenge -- particular lly long-serving and smart-voting people. and we'll be there in both the house and the senate. now you asked about the tea
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party, let me make my -- if you're resting a minute, wake up. i have a very, very clear view about this. when the tea party first came out with who they were and what they believed, they talked about things that the chamber very much supports. sensible tax policy, they talked about reasonable -- reasonable control of federal costs, they talked about trade, the opportunity to create jobs and all of that stuff was pretty good. and then we had a lot of people that came along that had different views, and they tried to hitch their wagon to the tea party engine. and those were the people that wanted not to pay the federal debt and to shut down the government and to take more radical approaches to trying to get where we all to get where w wanted to get. i think they're well-intentioned people, except when they get to
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washington they won't believe what we believe they need do, so why should we help them get here and help protect the people who are here. don't line me up as attack the tea party, because i'm not. >> tom, it's brian with bloomberg news. can you say specifically what elections you'll be focusing on and will tea party candidates be among those that you just mentioned? >> the first answer is no because what am i sending a lot of announcements out for? stay tuned, news when you see it. will tea party candidates -- i just segmented between the original -- i'm not trying to be difficult. this is a place i got to be very careful. i want -- you know, if -- i know a whole lot of tea party folks. if a lot of them are running, i'm going to support them. the question is who are we talking about when we absolutely get there? and what do they want to do? people that walk into the -- announce i'm going to run for the house or senate, my idea is
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to burn down -- i'm hyperbolizing, my idea is to burn down the town, i won't support them. people who believe in the things we talked about will likely to get our support. one little refinement there, if we have somebody that is an 85%, 95% voter with the chamber, we're certainly going to support them over a challenger. >> sir, sir, this is kevin baum from cnn. following up on that point, you are also entertaining supporting challengers to incumbents who have not been supportive of the tea party versus just supporting people who have been supportive of the tea party? >> take the tea party out of that question, say will we support folks that challenge people we think vote wrong and have not been helpful? sounds like a good idea.
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>> so are you committing to do that or are you looking at it. >> sounds like a good idea. yeah? >> jim with a.p.. >> nice to see you. >> regarding the upcoming debt ceiling debate, you said the nation cannot default on its debts, you also said there's a demand to address entitlements, do you see dealing with entitlements as a precondition of that debt ceiling debate, or do you see it moving on a separate track? i had a follow up. >> that was a good question. we'll have a debate on the debt. so we did a little research. and round numbers, you know, in the last 30 years, we had 50 -- over 50 deals where they had go out and fix the debt. and in more -- more than half of those it became a debate among the house and the senate and the
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administration. and, they ended up more than half of those deals where they made some accommodation on spending or taxing, or other issues. even the president of the united states who doesn't believe there should be any discussion about it voted against the debt ceiling increase about something he felt very strongly about when he was a senator, dealt with iraq war, i think. but the point is, you have to start out -- there is going to be a discussion on this issue, and the implications of spending, taxing, budgeting, expanding the economy and all of that as a part of what are we going to do about the debt? i do not believe we will default on the debt. i do not believe we will close the government. i believe we will move forward on this deal and find an amicable way to get it done. >> as you know -- >> he -- >> entitlement reform is a difficult thing to accomplish. do you think it -- they can come
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to some time of agreement? >> i will tell you where i am on entitlement reform. they may put a couple of dollars in there to say they're doing it entitlement reform will not get done in a serious way for a couple of years yet. we have to own up to this. we have go and have a conversation with the american people. we don't want to scare them. we want to explain to them what the reality is. what it means to them and their children. find a way do it energy is part of that. the one thing i say is that sometime between now and we make a deal somebody will make a decision. are we going to use the energy or are we not going use it? if we're not going to use it, you have a real problem. i don't think in the next deal that we'll have great debate about entitlements. so maybe a little fix there, but when you look at the total numbers, it will be very small. >> thank you. >> hi, katie o'donnell, cq.
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do you think tax reform is at all possible this year? would you support what some lawmakers have said which is the only feasible option, to separate out corporate reform? or do you think that punishes small business owners? >> what happened the last tax deal, which was at the end of 2012, is we -- we came up with an agreement to go forward -- the congress did. but the sub-s and llc folks got hurt. and i don't think anybody's of the mood to go do that again. would you think? >> no. in fact, we have tax principles that our board has adopted that call for comprehensive reform. so -- >> now, can i answer your first question? the answer is no. i don't think -- i think -- by the way, there could be -- they could be this tax or that tax or something dealing with issues that come up.
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i don't think you'll get comprehensive tax reform in this election year. >> hi, doug palmer with politico. you just said you were confident that trade promotion authority would pass this year. i wondered are you at all concerned that some tea party conservative republicans might be inclined to vote against the legislation because they would want to deny president obama a victory? do you see that as a big impediment to its passage? and should it fail, are you worried that that would have a chilling effect on the trade agreements that the administration is trying to conclude? essentially making it impossible to conclude those agreements? >> well, the last part was exactly right. if you don't have at some point tpa, the people we're negotiating with are not going to agree to a deal without the
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understanding of how the congress will participate. by the way, you mentioned am i worried about others going against it. not particularly because i have been astounded to hear my colleagues tell me there are a whole lot of people in that category that are coming out very much in support of it. look, it's going to -- you know, when will they send it up? send it up today? tomorrow? next week? how long we discuss it. it will take a little while. but we'll get it. the votes are there. we'll get that done. i'm doing this one right here. go ahead. what's the point in being up here if i can't -- >> i'm from the business times. [inaudible question] as you know many foreign countries come to america to seek u.s. investment, but now that the time that come that you
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want to show that the u.s. its n attractive investment destination. in south asia they are interested in investing into america. can you shed some light on how america is, despite national debt, despite deficits, that america is still a safe investment heaven? >> the question is basically why is america still the safe investment, the favorable investment place it is despite our economic circumstances. i thought about that a lot and i talked to people around the world on it. if you just open the paper, any day you turn through it, there are a lot of problems around the world. very concerning, and if you want
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to put your money someplace, you would probably put them in some of those places. probably want to put it someplace where it's safe, where it can be profitable, and where it will be protected. i think america meets that point. >> you got strong growth. you got a stable currency. a strong currency. your investment is going to retain if it's a good investment. it's going to retain its value. it's not going to lose it returning it to the home currency. you have a situation, we have a strong court system. we protect property rights, and we protect the right to earn a legitimate profit. that makes the u.s. the primary destination for capital in the world today. >> see why he probably should have run the fed? where we going? i'll do this. go ahead. i'll get you if you speak up. >> my name is karen thurmur with
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the financial times publication foreign direct investment. my question actually is similar to his, but a little different. i knows there a lot of promotion for fdi both here and abroad. i'm wondering if you can tell me what the appetite u.s. companies have for foreign expansion? i'm not just talking about the big mega companies, but mid size and such. >> first of all, marty might have a word on this, too. first of all, the -- 95% of the people we want to sell something to, as i said before, don't live in the united states. so there is a lot of appetite in small, medium-size and large companies who sell abroad. and therefore that includes some investment abroad because in a lot of places to sell it behooves you to make investments there, open plants do that sort of thing.
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and i think -- i think the appetite is strong, but there's one issue -- they're getting much more selective. if you sit down at a board meeting or in a senior staff meeting or you sit down with the two partners in a small company and you say we have x dollars to invest, this product or this service to sell, where will we do that? you draw a line don't middle of the page, you say the ones on the left side look like places we ought to think about. all the ones on the right side, let's not go there. let's not go there because they may take our intellectual capital and not treat us well. let's not go there because our currency won't be safe, whatever it happens to be. so i believe we have the same excitement and even more attitude for trade and investment around the world, but in a much more selective basis. >> the big companies have always understood the value of selling abroad and feeding the markets
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abroad. we're finding the smaller companies, it's a more daunting task. it's complicated. it's complex. and many of them have done it, in the past. chamber has had a program here for years called trade routes where we go into the smaller companies in areas around the country and try to help them with their trade issues. so they become more involved. i think one of the areas in our tax reform principles is clearly that we have to have international competitiveness in the tax code in order to foster more of that. because it creates good jobs at home. it creates income flow at home. it makes for more stable corporations, it makes for stronger economic growth in general. so we espouse it. we push it. we try to help those not now doing it get into it in a bigger wa way. >> john with cq. how would you like to see
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medicare changed to ease burdens on the young? >> that is a -- something we're talking a great deal about. talking a lot of people about it. think there are three or four issues. first of all, medicare costs are unbelievable for a lot of reasons. we have to find ways to provide the services that medicare provides with three or four changes. you're probably going to have to do something a little more on the copays. you have to look very carefully, you know. we had a great program that helped us on the pharmaceuticals, which is a huge issue. how are you going to do that? it's about costs and delivery systems. and it's really about intelligent use by the medicare participants of the system.
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by the way, it's also about -- i hate to say this, because this is always everybody's argument how you fix government spending. they say get rid of the waste, afraid and abuse. there is a good deal of fraud in the medicare system. not by our every-day retirees. there are a whole series of things to work on. the real thing that will be looked at is medicaid. that's growing faster than others. i will tell everybody and take the last question. over against that wall on this side there are a whole lot of really smart people that know about trade, know about energy, know about medicare, medicaid, health care, they know about legal reform, they know it all. and i told them to come down here, they would learn something from you. after we finish, if you want to ask them what our views are, they're a lot smarter than i am. it's one of our rules around here is we don't hire people who don't know it better than marty and i know it. the last question is --
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>> tom, andy sullivan with voters. you mentioned education reform. i'd like to hear more about what specifically you think needs to happen. do state and local governments need to spend more? do we need to make it easier for charter schools to open up should there be vouchers to allow public school students to attend private schools? what other things need to happen? >> first of all, we paint or k through 12 schools through the same brush when we talk about it. you know, there are a lot of k through 12 schools in this country where our kids get great educations. tremendous educations. and they come out and they go to good colleges, or they come out and they go to good crafts, service industries, or they come out and just get a job. but they can read, right, calculate, think about things, know something about the world. they got a great education.
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the real question -- i'd like to change your question is what will we do about that 30%, whatever the number, 40% that are disadvantaged? that are -- they lack equal opportunity because of those schools. and when you look at those schools, it's sort of like anything else we do. it's like running your business. it's leadership. it's quality people. it's a clear set of objectives. it's a way of measuring what we're doing. you know, the question about money, we spend more money on education than we ever did and more anybody ever did. we need to spend it smartly. i think charter schools bring something to the party. i think, you know, having some sets of standards. look, the core standards don't tell you how you have to teach people. they tell you what these kids have to come out of your school
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learning. i think the how is there. whether it was the republican education department or whether it's democrats or whether it's -- though the union issues are a little different amongst those what we have to do are pretty clear. what i'd like people to focus ia black and white deal. we have a lot of good ones, let's see what they're doing. we're anxious on working on that. if we can get everybody first mad and then concerned about this on a specific number -- not only the whole system, that we can begin to make progress. look, thank you very much for your patience. thanks for coming to do this all the time. we appreciate your coverage during the year. those folks will be happy to talk to you. if you really want to know what's going to go on in the fed, ask marty.
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that is precarious, a great effect on mr. mayorkas as well as the reputation of the ig's office. i welcome you to our hearing. i look forward to your statement and i look forward to supporting you, not only in the nomination and vote on the senate floor, but in supporting you as you go about doing the very important work that you have agreed to take on. i yield back. >> thanks, dr. coburn. doctor testa, do you want to say anything? >> thank you, mr. chairman and ranking member coburn. i would just say this first of all. welcome, i appreciate our opportunity to visit. as has been said earlier, i think you are ultimately qualified to do this job and do it very well. this is going to be a challenging position, as we talked yesterday. the ig's office and dhs is,
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well, let's just say it needs some leadership, and the fact that we've gone as long as we have without a senate confirmed leader is a travesty. that being said, hopefully he will be out of this committee said in an off the senate floor soon, confirmed in this position. because i think you have an incredible skill set for this job, and dhs is again will the fda's laws. i just want to thank you for being willing to serve. i appreciate your excellent credentials and i look forward to having a qualified individual in the ig's office of the department of homeland security. thank you, mr. chairman. >> again, i want to welcome our witness, john roth, today. in fact, i think we have two john roth in the audience today. one at the table in one covering his back right behind us, son john who is also forging and michael is back there, michael is 12. when my kids were 12 important thing you could not have taken
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to come to end like this. great testimony by the presence to the dedication and affection for the dead. we thank them for being here, for joining us. and monique, how many years, 20? i don't need to put you on the spot. >> sixteen years. >> best answer i ever heard one as someone how long they've been married, a woman at the gm plant in delaware, how long did you has been been married, she was a supervisor and she said 13 years. not long enough. i thought, boy, i can learn from her. 16 years, not long enough but congratulations. monique, thank you for sharing your husband, and to your sons, for sharing your dad with the country for all these years. i know it's a heavy lift but we're going to do our best. as i've mentioned in my opening statement, mr. roe has served in the right of roles over more than 20 years at the department of justice. is also worked in his attorneys
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office as chief of the fraud and public corruption section and executive u.s. attorney for operations. mr. rob served as special counsel team therefore terrorist financing team of the 9/11 commission. our nominee currently works as director of the office of criminal investigations the use of food and drug administration. mr. roth, before you proceed with your statement this morning, committee rules require all witnesses give their testimony under oath, and am going to ask you if you could stand and please raise your right hand. john roth, do you swear the testimony you give before this committee will be the truth, the whole truth, and nothing but the truth so help you got? god? >> i do. >> you may be seated. >> you're welcome to proceed. sometimes we ask witnesses to limit their statements to five minutes. feel free to go beyond that. if you would like to introduce
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your family again and any other gases that are here today, please feel free. please proceed. >> thank you, chairman carper, ranking member coburn, and members of this committee. it is an honor to be considered by this committee as the president's nominee for inspector general of the department of homeland security. i would like to recognize and thank my very supportive family. my wife monique is here. as well as my two sons, john and michael. i've learned more about integrity in leadership from my family and from raising the children that i could possibly have imagined before i begin the journey. they have kept me grounded and they serve as an important reminders, the importance of what we do here today. i would also like to take this time to acknowledge contribution of my parents, my parents, richard and corinne roth, who have been married to each other for over 60 years, could not make the trip from colorado to be here today, but i know that they are watching, and i am grateful for the qualities
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they instilled in me, honesty, perseverance, and a strong work ethic. i would also like to thank members and committee of the staff are taking to meet with me. i found that productive, if confirmed i look forward to continued in that dialogue. i'm under no illusions about the challenges of the next inspector general will face. 10 years after its creation, dhs is still finding its way. i have reviewed the gao report, dhs inspector general report, at the congressional hearings including hearings of this committee that layout many of the issues that need to be addressed. if confirmed i welcome that challenge. i have a quarter-century of experience as a prosecutor and imager at the department of justice and as a leader of fda's criminal enforcement arms. this does give me an analytical mind, a nose for fox, and the judgment tempered by years of expense to be up to draw solid conclusions from those facts.
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i also have what i think is unique experience in examining and assessing government programs. i led the team of the 9/11 nine1 commission looking into the government's preparedness and response to the 9/11 attacks as it relates to terrorist financing. in the end, our team produced a specialized analytical report. that report was universally acclaimed for its accuracy, it's conciseness and its utility by several committees of congress, by the administration at the time, and by members of the public and outside experts. moreover, i have experience and insight into financial audits that every inspector general's office conducts. both at the fda and that doj, we employed auditors and forensic accountants to help us unravel significantly complex financial schemes. i have long involvement with inspector general community as well. as chief of the fraud and public
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corruption section just blocks from you, our office was ig central. we had active investigations with an entire range of inspector general's office is including those that stayed, labor, interior, justice, education, homeland security, usaid, defense, transportation, health and human services, housing and urban development, general services administration's and a host of others. the matters were investigated included program fraud involving millions of dollars and corruption and ethical lapses by individuals within those agencies, including agency heads. in my current position at the fda, we conduct numerous joint investigations with our partners at the hhs, inspector general's office. finally, as part of the senior management team in a number of roles with the department of justice i had the opportunity to observe firsthand a very well respected and effective inspector general's office.
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each of these positions has given me insight into effective management leadership. i faced a variety of leadership challenges in which i was called on to turn organizations around. each time, i was able to create a cohesive, high-functioning team, focused on the mission at hand. as you know the office of inspector general has endured a tough couple of years. i've read the media reports, the publicly available corresponds regarding the issues surrounding the office. i want to men and women who work in that office to be proud of where they work. if i'm confirmed i will work to ensure that the office of inspector general is viewed as the independent credible voice that it was designed to be. if i'm confirmed i will work to ensure that the employees within the organization are empowered to succeed and will focus on things that matter. if confirmed, i will listen to those inside and outside the organization who are working to make the office better we can
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make the government more effective, more efficient, and more responsive to the american taxpayer. if confirmed, i will ensure that it becomes more transparent place, a better place to work and one to provide real value to the dhs mission. and, finally, and most importantly, and in which i will never compromise, i will ensure that we are objective independent and everything we do. that conclude concludes my stat. unhappy ditch any questions the committee may have. >> thank you for an excellent statement. let's start off by going back and looking back before we look forward. you mention in your testimony some of the values that you learn from your parents. if you could mention three of those, integrity, perseverance, and work ethic. talk to us about how you learned those values from your mom and dad, and how they pertain to the job that you're now being considered for.
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>> certainly. that was one of the fundamental lessons i learned from my parents. i am the last of five children and i would be remiss if i didn't mention -- >> before you answer, i usually manage to screw this up. i need to ask you three questions and then we'll go back to what i just asked you. is there anything you're aware of in your background that might present a conflict of interest with the duties of the office to which are denominated? >> no. >> do know of anything personal or otherwise that with any would prevent you from fully and honorably discharging the responsibility of the office to which are denominated? >> no, sir. >> do you agree without reservation to respond to any reasonable someone's to appear and testify before any duly committees of congress if your confirmed? >> yes. >> thank you. let's go back to the question i asked. integrity, perseverance, work ethic. >> and i'm the last of five children. i would be remiss not to mention my brothers and sisters, tom,
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tim, michael and mary catherine. we are all insta with a very hard work ethic, starting, we all caddied at a local golf club, starting at the age of 14. you know, hard work was important. working hard at school but working hard outside of school was very important. those kind of qualities extended on. as a trial lawyer -- >> where did you go, wayne straight? undergrad and law school? >> yes, i did. >> did you help pay your way through school? >> yes, i did. in undergrad i did a variety of jobs. the most prominent one was i worked in the library, not at the library or anything academic, but more unloading boxes of books from the loading docks. as well as work at the university bookstore. a variety of odd jobs. i was fortunate enough that wednesday was able to give me a scholarship for law school, so that was the way i was able to make that.
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but as i was indicating, hard work was important, and as a trial or in the department of justice, i got by, not my sort of good looks are being flashy in the courtroom but by doing the hard work and industry investigation, and eating the streets in making sure that i had, you know, my evidence in order to be able to make the case. again, it's hard work, sweating the details, getting it right. those are the kind of values that my parents have instilled in me. >> relate themselves, if you will, to the job that lies ahead. >> i think it's important for an inspector general to pay attention to details. to work hard, to ensure that his staff works hard, to produce reports that are timely, that are accurate, and our helpful both to the gym and into the administration. >> all right. you had a lot of jobs.
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why have you had so many different jobs? >> i like to say that award for the department of justice for 25 years, and each of the times that i moved, it was as result of a promotion or gaining more responsibility, a better contribution to the goals of the department of justice. so when an alice fisher, for example, as you to come and serve over during a time of great chaos, for example, i wouldn't say chaos but a time of great uncertainty in the change of administration, likewise in the deputy attorney general asked you to be his chief of staff, a career chief of staff in what is normally apolitical position, because of the changes that were going on and the uncertainty, it's hard certainly to say no to the. >> he had a short stint, a two-year stint over in paris. how did you end up over there? >> two and a half years. my wife was the justice department attaché in paris.
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her father is a foreign service officer, and she grew up in europe and we wanted to give the same kinds of experience that she received to our children, so we were fortunate enough to be able to get to jobs over in paris to be able to do that. >> it's pretty good duty spent it's good to marry well. >> let's talk about maybe the first 30 days, 60 days, first 90 days, if your confirmed. dr. coburn said to me, is before we're getting into the q&a, he thought maybe this nomination we could mark up off the floor and that would be great if we do that, even this week, that would be great. but talk about the next 30, 60 days after your confirmed, if your confirmed, hopefully. >> server. it's been my experience when you go into any job, you need to do some diagnostics. you need to understand what the situation is before you can make any significant changes. i think a good leader needs to
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listen. he needs to listen to the people who work for him. he needs to listen to his management team. he needs to listen to stakeholders, both within dhs and outside of dhs to understand exactly what the situation is. so i intend if i am fortunate enough to be confirmed to spend that first, i don't know how long it will take, some of it will depend on what it is that i find, the first period of time doing some analysis and understand exactly what the situation is. there are certain issues of course that will come up immediately, and we will soon have to deal with those as i find them. >> one, in looking at your background, one of the folks you work for along the way was former congressman lee hamilton who i think was co-chair of the 9/11 committee's. one of my mentors and this house of representatives the i served and dr. coburn and others on this committee should. talk to us about the mentors you would like to to help guide you and help you prepare for the new
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responsibility. maybe you've already met with, talked with and who you expect to look to for guidance and counsel in the days ahead. >> certainly one of the things i've done is in the job that i've had in the justice department, i've been able to be fortunate enough to meet with a number of inspectors general in preparation for this hearing, and this hopeful confirmation, i have met with a number of them, michael horowitz, for example, at the department of justice is somebody i worked for one of us in the criminal division. there are a number of others that i've met with, including rick skinner, the former inspector general in the department of homeland security who i knew, again, when i was at the u.s. attorney's office in d.c., and we worked together. the are a number of people and a reservoir of expertise that i can draw on to move forward on this. >> out ask you this last related question and then turned to dr. coburn. of the folks you've already met with or talked with, including
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some of the folks you just men, what are some things you learned from those conversations? >> that job of inspector general is a very difficult one to get right. but it is a very important job to get right. and as i said, i'm going to move with due care, deliberate speed, talking to the folks who have done this before to understand the best way to move forward. >> thanks very much. dr. coburn. >> well, thank you again. one of your statements in your opening, made in your opening statement, that you would work to avoid any undue influence. how do you do that when you have a member of congress or a significant management officer at homeland security trying to influence you. how do you put that often? >> right. well, one thing is an understanding of the inspector general act.
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congress passed the inspector general act another recent amendments to inspector general's act to insulate the inspector general him exactly that. so i take great comfort in the fact that if i am confirmed the our statutory protections that are there. i would also say that the ethos of at least online prosecutor and the department of justice is that you follow the facts wherever they go, whether the heavens fall or not can you go and you find the truth. so that has been my credo throughout my career. no reason it should change if i'm fortunate enough to be confirmed. >> how do you imagine you will handle inquiries from congress about investigations or audits? >> that is something certainly that we'll have to take a look at. in speaking, for example, to form inspector general skinner as well as current inspectors general, there is a fairly firm rule that we don't disclose results of investigations until the investigation is final. there's a number of good reasons why that's the case.
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particularly because you don't want to get it wrong. the inspector will -- it does the inspector general good, does congress no good if we put a piecemeal information that lacks context that may be enacted. that would be one of the roles that the former inspector general conveyed to me which i think is very wise counsel, which i'm going to follow if i'm confirmed. >> one of my concerns, and it's not just with the ig at homeland security, is oftentimes the findings of igs on very good work is criticized by members of congress because they disagree with the outcome. one of the things that concerns me is that those igs don't come and defend their product. which also leads to poor morale because if you have a group of people to work for a year, year and a half on a project, and it's factually based, and cogently deduced, the outcomes, and then it's put out, they
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receive criticism because it's not the expected outcome, and then the ig does not vigorously defend the work product, that undermines morale. it's my hope that when y'all put out a product and its criticized for political reasons, not factual reasons, that you in fact will defend that. do you have any comments about that? >> i take your advice to heart. i believe that it's good advice and that's something i would do. i'm a trial lawyer by heart, or by profession so i'm pretty standby art. >> yes, exactly. song used to defend myself and the more than happy -- facts are what facts are and we will let facts speak for themselves. >> one of the things you did when you worked at doj was to facilitate agency review process for ig report. you noted the importance of agency component being given sufficient time to comment prior to issuing the report.
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i think that's important because igs don't always get it exactly right. how do you view the current commentary at dhs, oig, and do you think dhs has enough time right now? how much time should they had to comment? would you recommend any changes to the process? >> mind again is that the internal deadline is a 30 day deadline for comments. and again, it's going to be a balancing act, depending -- you certainly want to get a product out in time for it to be relevant to the committee go to the public, or to the administration. as you indicate it's important to get it absolutely right. my understanding is that the 30 day time 30 can be waived under certain circumstances i really think it would depend on the complexity of the report, this recent of it and whether not there's controversy attached to it. >> okay, thank you.
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in november i sent a letter to acting deputy secretary boris asking about the status of dhs's open recommendations. and according to the ig's office, department has 1239 open and i'm implemented recommendations as of march 13, 2013. they couldn't tell us as of november, which is concerning in and of itself. some of those recommendations are over 10 years old. what is your feeling about that, and how do you plan to follow up and effectively move on those recommendations? whether you utilize us as a kid billy of trying to get that done are internal to your office. >> i share your concern, center, with regard to that. makes no sense to spend the resources and time to write reports and make recommendations if they're not going to be followed or not even agreed to. if i'm confirmed, i think the
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first thing i need to take a look at in a long list, one, this is the capacity problem, is this a political will problem? because each of those problems are different. so my contention would be, if i am confirmed, take it with a senior leadership within dhs, to try to do some triage on those recommendations, to understand what it is that needs to be done. i also think that if i am confirmed, that the ig's office needs to pay a little bit more attention to follow-up, have some sort of feedback loop in which we have ticklers where if things are not progressing as they are supposed to, we can write reports or notify the committee will bring it to the attention of the senior leadership within the department. >> okay. there's a large backlog of cases. with the dhs oig. i won't go into details because some of these are law enforcement sensitive.
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one of the challenges you're going to face is this backlog on open corruption investigations. have any thoughts about how to handle the workload? >> certainly if i'm confirmed, one of things i would like to go in and have a good talk with the assistant ig for investigations, to understand do you have the resources? are we overloaded in certain ways? is a better way we can do this? this is a continual problem for investigative agencies as well as prosecutors offices. i'm well familiar with having a significant case backlog when i was the u.s. chief narcotics in miami. it was the busiest narcotics office in the country. so managing caseloads is a constant problem, requires just constant attention. >> and priority setting. >> exactly. >> i have two more small questions if i might and then i can be finished. in october, the u.s. office of
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special counsel released a report that indicated a large amount of administrative the uncontrolled overtime fraud by the department employees at dhs. this is about $1.9 billion since 2010. it's unknown how prevalent this fraud is within the rest of the department. are you aware of this issue, and if confirmed, with your office investigate his? >> i have read the media reports with regard to that so i'm aware the issue is out there. i'm certain happy to take a look at it if i'm confirmed to see what it is that the ig's office can do. >> my final comment, as you know there's an ongoing investigation by the ig's office on the deputy secretary. it's important that that be completed, one, that it be accurate for the benefit of mr. mayorkas, that it is completed in a prompt manner, and in a way that nobody can attest or challenge its scholarly basis.
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what i would like is a commitment from you publicly today that that would be a priority. because it's unfair for him to be in this position and that investigation to continue. >> yes. if i'm confirmed that will be a top priority. >> thank you. >> as we say in political campaigns, i'm tom carper, i approved that message. all right. senator mccain has joined us, in the order, senator tester, senator enzi, senator johnson and last but not least, senator mccain. >> thank you, mr. chairman. once again, thank you for being here today, john. you have talked about your expertise in criminal investigations, and i think it's solid. in your opening statement you talked about your experience with audits, particularly financial audits. could you elaborate some more on
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your expertise in audits and investigations, or inspections i mean, as it applies to this job? >> certainly. i think probably the best analogous experience i can give you is my work on the 9/11 commission where we ran the team that looked at the terrorist financing. it really was a governmentwide audit but it wasn't of a single agency or a single component within an agency, but it was of the entire u.s. government structure, how it worked, how terrorist finest work in the intelligence community, how it worked in law enforcement, and diplomacy, how will work as a policymaking apparatus, how it worked as a regulatory effort as well. so we stand dozens of different agencies looking at this. we wrote a report. it's very analogous to criminal investigation in many ways. you review documents. you interview individuals. so if the product happens to be
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different, the standards are not beyond a reasonable doubt but whether or not you are well-founded in your conclusions. and, of course, it's important to get the report right. make it readable, make it understandable not only to the intended audience of experts, but as well as the general public. and if you look at the kinds of things i would do if i was confirmed, you can look at that as an example. >> how long did that governmentwide audit take? >> it took approximately 14 months. at least my part of it took approximately 14 months. >> then that's when they put out the result was -- do you remember to? >> i don't want to be precise exactly, approximate 14 to 18 months. >> from a time limit stempel, and we hate to put timelines around investigations, but the fact is what kind of standard do you said as far as ig work? i mean, when do you like to have it done? i know the complexity, but what's the extent of the?
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>> senator, i wish i could give you an answer that says an investigation should take six months. the difficult is it just depends on the investigation. >> how about fda? what's been the longest? what's been the shortest? >> we resolve an investigation it was out there for six years a couple of months ago. we have quick and investigations that take a matter of months. some of it depends on are you trying to get evidence from somebody who takes the time giving evidence, for example. having trouble gathering documents? are witnesses available to you? unfortunately i wish i could give you an answer but i can't. >> that's fine. i appreciate the ranking member talking about the overtime issue because it is a big issue, and i appreciate your willingness to look into it. i think we have potential to a legislative fix setting and homeland security, and omb right now and hopefully we can get their perspective out sooner
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rather than later because it is a big issue and i'm glad you're willing to deal with it. i want to talk about cybersecurity for a second, because there's huge investments being made in dhs in technology. billions of dollars, back in 2011, the dhs ig released a report saying that theme is i.t. infrastructure management were not sufficient to support their mission. we wrote a letter on this committee to secretary napolitano saying that if fema could not continue to manage its i.t. systems in future investments with a butcher own way approach, which is spot on, this isn't the first time that we talked about i.t. problems, systems that are not compatible with the greater goal of the department. what kind of emphasis, or have you or will you place on i.t. when it comes to dhs? have you applied for fda?
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as far as waste, overlap on these programs that literally cost billions and billions of dollars. >> sure. in the office of criminal investigations we run our own i.t. shop, both the i.t. that we need to do our daily job which includes some specialized databases and the like, as well as doing the forensic i.t. in an investigation, for example, with these computers or internet investigations. i know that the office of inspector general has done quite a bit of work in this area. i know that there's a report that was recently released with regard to the efforts in the department with regard to this. it was a mixed scorecard, progress made but significant progress to be done. and certainly if unconfirmed apple continue that work. >> what kind of work to do in i.t. with the fda? that had to be a very large component in fda, i would imagine. >> it was. because the office of criminal investigation is sort of a
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subunit, we ran our own i.t. shop it i would not call it extensive. >> once again i want to thank you for your willingness to serve and i thank you for being here today, and hopefully we can both hope for a quick confirmation. thank you. >> senator enzi. >> thank you, mr. chairman. thank you, mr. roth, for being here. i'm pleased to see that you have experience with several financial investigations like 9/11 that go beyond the usual audience that an inspector general make. i'm an accountant by training as is my colleague, senator johnson, and one of the things being an accountant will teach is that members don't live. -- don't live. you can use money longer-term financial corruption and inefficiency, duplication and wasteful spending of taxpayers dollars at the department of homeland security. in november about the time you were nominated the government accountability office reported
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that the tsa's program for screening passengers by behavior detection techniques costs $900 million since 2007. but was ineffective at improving safety. would you agree this is an example a kind of program that you could be proactively looking at? >> yes, as senator spent how would you do at? >> you are referring to the stop program i believe an inspector general's office in fact will report with regard to the, actually several reports regarding the fact that currently at tsa does not have any measures of effectiveness. they don't know exactly whether or not the program works as intended. i also have reviewed some gao audits with regard to that which essentially come to the same conclusion. so you are correct to be concerned, and if unconfirmed i certainly will continue to work in coordination with gao that inspector general has already done. >> thank you. so whistleblowers can also play an important role in identifying
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waste, fraud, duplication, unnecessary programs. so in addition to reporting potential illegal activities, i'm glad you've indicated that you want to take whistleblowers seriously. what do you think is the best way to encourage the dhs employees and members of that community to come forward with ways to help the organization run more efficien efficiently? >> i know that the inspector general community has standards by which they encourage whistleblowers to come in, for example, tip lines, 1-800 numbers, things that they can do on the website to encourage people to come in. is also a publicity campaign within the agency, within the department to ensure people understand what their rights are as whistleblowers. and ultimately i think what people see is that if we treat whistleblowers seriously, we treat them with a kind of sensitivity that is necessary when you're given with a whistleblower, then they will come in.
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>> thank you. now, the transportation administration is also expanding prescreening of passengers before they arrive at the airport. that's supposed to streamline the security for many passengers. but there are concerns that it includes a wide array of personal information, including financial information, tax information, property records, all sorts of things. a lot of people are telling me that they wonder what is being done with all that information that is collected on the passengers. what do you see as the limits of the kind of intelligence gathering on u.s. citizens by the tsa, or other agencies in the department of homeland security? >> i'm not familiar with the specifics that you are referring to, center, but certainly privacy is important but we need to balance individual liberties with the safety of the traveling public. i'm more than happy to take a look at this and explore that with the committee if you so choose. >> said he would work proactively to identify any of
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the data collection that's not necessary for passenger safety? >> yes. >> thank you. i don't have any other questio questions. >> thank you, senator enzi. >> just one note for the record. there are three accounts sitting here. just want to be sure i was recognized. >> i was either going to point that out, senator coburn. >> all right, senator johnson. >> family. mr. roth, thank you for taking time to come in and see me in the office. i'm very pleased with this nomination. i think about grand is going to suit you well for the challenge ahead. i thought it was interesting you said you read an awful lot of the report and you understand the challenges, and god bless you for still being willing to serve here. senator coburn started talking about how you're going to prioritize your activities here. can you just talk about the criteria you are going to use in organizing the caseload?
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>> i have a deep background. there's always more cases than our resources in the department of justice. so it's second nature to have to prioritize things. typically the way we prioritize them is by risk. not only sort of public safety risk, but i think the department is facing to challenges. one is, of course the fight terrorism which is an existential threat that we can never disregard or minimize. but there's also the threat the faces of with regard to the financial situation that we find ourselves. so the other way i would prioritize it is a threat to the taxpayer, the kinds of money that are going out and the potential savings that an investigation could have. >> some level threatened in dollar value? >> correct. >> talk to me about, obviously, the report to the secretary of the department. who do you think you work for? can you just kind of, just in general, what you're feeling is.
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>> this is something i've had conversations with a number of inspectors general about. because that is the fundamental challenge of a position like this, is that you report that not only do you report to the secretary of the agency in which you were, but you also report to congress. a dual reporting requirement by statute. ultimately, for me, i have to report to myself that i have to do the job that i believed i was hired to do by the american people. and it's going to have to happen on a case-by-case basis. i'll try to figure these things out as we come. >> we were talking earlier about how you handle reports and have the agencies, you know, the time they're allowed to review reports. i would like you to address how they should this agencies -- how should that be included in those final reports. was the appropriate way for that to be incorporated? >> my understanding is that the
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general way it is done in the inspector general community as well as the gao, is that you can touch her investigation, you write your report and then you get the agency the opportunity to comment on it. and the reason you do that is its grittily important that you get your facts right. so to the extent they want to change facts are argued about facts, perfectly happy to do that if unconfirmed. obviously, conclusions have to be the inspector general's conclusions and no one else's. >> with those facts be changed in the report, or does the reports 10 as published by the ig's office and then those comments or the change facts would be an addendum? >> they would be changed within. my dealings, for example, with glenn fine, the inspector general in the department of justice was we could actually do a line edit of the report itself, change those -- you are not changing facts which are changing language within the report. and then if you argument as to the conclusions of those facts
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reasonably lead you to come that would be an attachment to the inspector general's report. report. >> you're aware of the problems within the i use office, tennessee the subcommittee chairman, we will be publishing a report. i don't want to talk about specifics and to actually publish. it would be your intentions in terms of how we can handle a report? maybe that's not a particularly fair question, but there are some real problems of independence, some in proper behavior. is that something you're going to be dealing with or is that something you push off? >> with regard to the previous management, within the office, i think i need to take a look at exactly what the situation is. i look forward to the report that your subcommittee will produce, and i'll take a look at the facts and determine whether or not it's appropriate for me, appropriate for sigi, appropriate for someone else. >> but you will work closely with our subcommittee them to try and get some fair resolution to the?
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>> absolutely. >> you said you have read a number of reports. have you reviewed the culture report from the ig's office on the secret service? >> i have. >> what was your conclusion reading that? >> to be fair, i would really like to talk to the people who wrote the report and understand exactly what was going on before i comment on it. >> it did conclude that they did not find any evidence that misconduct is widespread in the u.s. secret service. is that kind of feeling you got from that report, that the report was substantive enough, rigorous enough to be able to draw that conclusion? >> it's a long report and i think there are facts on both sides of that conclusion as you read that report, for example, the individuals who, for example, had witnessed solicitation of prostitution, none of them reported to the supervisors. and the reason the vast majority of them did not report it is they believed they would be retaliated against or that
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nothing would occur, but again, i don't want to get into the substance of the report until it actually talked to the authors. >> let me go over a couple of numbers. i'm an accountant. i do like numbers. sort of the basis of conclusion was a voluntary survey, and 83% -- or 41% of the personal secret service respond to the. to 41%. of that, 83% said they want the money with that kind of behavior which means 17% were familiar with that kind of behavior. so the survey was answered by 2500 -- 2575 employees, 2144 study were not familiar with that behavior, but that means 431 members of the secret service personnel actually were familiar with that kind of behavior. so i guess my point would be, i'm not sure i would draw the same conclusion. i'm still concerned. i remain unconvinced as i was
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unconvinced during the hearing we had in may of 2012 that this may not be a bigger problem, i think it's incredibly important we restore critical to the agency. i hope you work with us in terms of getting to the bottom of that situation as well. >> i'm happy to. >> thank you, mr. chairman. >> before i turn to senator mccain, we had a hearing here, gosh, about a year ago and the director of the secret service was here to testify with respect -- at the end of my conversation, my question to him, i recounted the story of the terrible in the new testament where a woman was about to be stoned and cheeses said to those -- and jesus said to her, let those without sin cast the first to everybody eventually dropped their stoned and walked away. and then he turned to the woman who is about to be stoned and he said to her, go and sin no more. my admonition to the secret
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service was, go and sin no more. and the interesting thing for me is looking ahead, not just what happened but in terms of the behavior, the change of the year that is flowed from that incident. and interested in learning with senator johnson, senator mccaskill about the changes in behavior and may be changes in culture that have flowed from the investigation, all the attention, change in management in the agency. all right, senator mccain, good to see you. >> thank you, mr. roth. and to bring i think great credentials to your position, and i was reading your opening statement. you said you led the team in the 9/11 commission looking into u.s. government preparedness and reaction to the 9/11 attacks as it related to the financing of terrorism. how are we doing since then? >> unfortunately, senator, i
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haven't been close to the data or the intelligence since i wrote that report, so it's difficult for me to include one way or the other. >> dhs has experienced a number of serious acquisition failures, the most egregious in my view was the failed sbinet project, a virtual fence that was supposed to encompass the entire border, cost the taxpayers a billion dollars and covers only 53 miles. i would hope and i admit we speak in a very parochial viewpoint, i hope you look at the measures that are being taken and expenditure of tax dollars on border security. the border in my state is still not secure. we have spent billions of dollars on border security, and
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i believe that the sbinet is a scandal, was a scandal when you spend over a billion dollars and end up with 53 miles of surveillance capability. i hope that one of your priorities would be to look at the whole issue of what we are doing on the issue of border security. there's still an enormous flow of drugs across our southern border. there's still problems, serious problems with human smuggling and all of the terrible aspects of that. the mistreatment of these people by the coyotes, the violence in mexico continues. as a result of that. and i know of no one who has intimate knowledge of our southern border that would agree that we have increased
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sufficiently border security for us to tell the american people that we are at least within range of compliance with the comprehensive immigration bill, which we passed, which requires 90% effective control of our border. we don't have that. another aspect is, i would like for you to look at is the metrics with which we measure border security. before this committee, the former chairperson -- secretary of homeland security testified that because apprehensions were down, that meant that our border was more secure. well, we know now because of the economic recovery primary, apprehensions are out. does that mean, therefore, that our border is less secure? obviously we do not have metrics to determine the degree of
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border security that we had. and i think that it's pretty logical to argue that if we do not have a secure border, that sooner or later, someone who wants to commit an act of terrorism will come across a border that is not secure. i think that it falls directly into the issue of national security, the issue of security of our border. and by the way, our commerce and our trade with mexico is dramatically increased. we've got a good government in mexico now, in my view, but we still haven't come any asthma and other people that i know who are living and working on the border, anywhere near the adequate security of our border that would be necessary to be able to ensure to our citizens that they have a sense of security and stability to prevent another attack on a
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united states of america. i would like to hear your response to that. >> i share your view that an insecure border is pernicious for a number of reasons. i'm a former narcotics prosecutor, investigator, and i'm well familiar with the challenges on the southwest border with regard to narcotics trafficking. as you indicated, a magnet for organized crime, for human trafficking, for all sorts of criminal behavior. dhs, from my view and my review of materials, spends a lot of money attempting to secure the southwest border. i think it's important to be able to have metrics to understand whether or not we're getting what we asked for our what we're spending our money on. some happy to take a look at that issue and see if the office of inspector general, if i'm confirmed, can add to that analysis. >> well, i hope you will because a rather extraordinary thing
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happened in the confirmation of the new secretary of homeland security, and that is he refused to give this committee or me or members of this committee the metrics that are required to comply with the law that we passed of 90% effective control of our border. probably one of the first outcomes, so-called nuclear option, because under previous situation i would have insisted on receiving that information, which i think is a legitimate request by members of congress. which leads me almost to have not come to this hearing today, or any other hearing before the second of homeland security is present. because if he refuses to give fundamental information that is necessary for me to represent the people of my state, as far
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as a border security is concerned, we have made a mockery of the advice and consent. and i say to my good friend, the chairman, again, i'm deeply, deeply disappointed that she would not insist that i received that fundamental information. and it will affect the degree of cooperation or the ability to work together. i thank you, mr. roth. >> thank you. >> let me just say in response to senator mccain's last comments, i'm eager to see the department and the sector provide the information you requested. i expect you'll hear from them shortly, as the secretary, with an offer to discuss with you just have to go about providing that information. and when he makes that overture, i just would encourage you to be
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receptive. thanks. next, send it out, and followed by senator mccaskill. >> -- senator ayotte. spent i'm very impressed with the qualifications for this position. let me just add, ago what my colleague senator mccain just said. one of the things that really troubles me as well in terms of the recent change in rules, not only that my colleague couldn't get a fair answer to his question to the secretary pomata and security, but also that i know you've already been asked about it by senator coburn, but that we took the unprecedented step of concerning -- confirming a deputy secretary to department of homeland security who was under active investigation by the oig. and i don't think we would have previously done that but for the change in these roles. and so let me just add to what senator mccain said, that i very much hope that we can get
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answers to legitimate questions that our constituents have. and i hope in your new position you will take very seriously that this investigation, despite confirmation, should not be swept under the rug or not follow through. i hope you will give us that commitment. >> yes, i will. >> appreciated. thank you. i wanted to ask you about the relationship the oig has with the gao and how you anticipate that relationship would be in this new position when you're confirmed, and how important do you think gao is to get work. and also whether you've had an opportunity to look at some of the work that's being done on data consolidation weather is tremendous number of data center -- data centers across government that are being consolidated and that dhs is doing a tremendous amount of work on that, taking 101 of
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those and working to consolidate those to 37. what position do you think you could help in terms of ig in terms of helping us manage the data more efficiently? in a particular, focusing on saving money for taxpayers. >> senator, to answer the gao question first, if i may, during the perforation for the sharing as well as the nomination, i was able to read a number of gao reports with regard to homeland security. they've done an enormous body of work including the work that they've done on the high-risk list, and i was fortunate enough to meet with members of the gao prior to this hearing, including the comptroller general, and i'm confident we can work with each other, not to get each other's efforts but, in fact, leverage off each other's reports anyway to make sense for dhs for this committee and for the american people. with regard to the data centers, i will confess not to have any background on the. i've not reviewed and two on the bottom have you take a look at
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that shouldn't be confirmed. >> i appreciate it. other members of this committee, most of the committee we worked on this issue to introduce legislation to improve the consolidation efforts of the data centers, but this is an area where it is just frankly a mess. and we could save a tremendous about of taxpayer dollars and, frankly, i think do a better job on this issue so i hope you will focus on it in your new role. i also wanted to ask as well about the issue, i know senator tester touched upon it, but in october of 2013, the office of special counsel investigation revealed that some department of homeland security employers were abusing administratively uncontrolled over time pay system, and amassing millions of dollars in unearned pay. the report found that the problem was profound and entrenched. this is just one example of
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obviously waste, fraud, and abuse that you're going to have incredibly important role in reviewing. have had a chance to review that particular report or investigation? and what's your view on it? and what do you think you can do in terms of, when something is described as entrenched, of changing the system? >> certainly. and i have read the report. i'vi have not spoken with anyon, for example, with the expertise or backup documents was difficult for me to opine on a stock of what's going on. my sense is that it's a statutory problem that probably lends itself to a statutory text, but this is something certainly i would be happy to take a look at, if i'm confirmed. >> that would be great, and i know that i, for one, would look forward to working with you on whatever statutory fix needs to be made to ensure that this doesn't happen in the future. and then finally as a follow-up, you're asked by senator mccain about your experience on the 9/11 commission, and you said
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that you haven't obviously been privy to the information posted 9/11 commission and all the. i would hope in this new position, i would be very interested in hearing your impressions once you are able to begin us to where we are on a reassessment of how much progress we've made and what else we need to do. and one of those issues that i think is important is the boston marathon bombing. and i know that the ig from the department of justice is looking at the information sharing that went on in advance of the bombing with regard to contacts that areas federal agencies had with the tsarnaev brothers. i think in this new position you could play a very important role in terms of the information that may have come for dhs's attention and how we can ensure that that information goes all the way down to the ground level
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so that from the officer on the street to our fbi agents to our counterterrorism task force, that we are aware of prior contacts like that. so i don't know if you've had a chance to review any of that, or to any interaction on this issue involving the boston marathon bombing, but i believe this is an important issue as well for your new position. >> yes. i'm aware that there is a pending investigation. my understanding is this is a joint investigation between a number of igs, including the dhs ig. >> great. well, i look forward to you putting a very strong very honest and i think you bring a special expertise to it, given your expense on the 9/11 nine 91 commission to put in perspective. >> thank you. >> thank you. >> senator mccaskill, welcome. >> thank you, good to be. here. first let me address your family for a moment. your dad and your husband has a
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great deal of talent and capability him and he has chosen in his life to not go out and make huge money, but rather to toil away in office buildings in very, very dangerous work for most of his career. and i want to thank you all but i know that i know how proud you are of him and i want you to know we appreciate the sacrifices you make everyday so he can continue to serve the public. i'm glad you're going to be here. this is a really important ig job. you got a real morale problem on your hands, mr. roth. you've got a staff that is divided between those who are making the accusations against mr. edwards and those who were hired and remain loyal to mr. edwards. and that is a very difficult management challenge. i'm sure that all of them, regardless of whether they were the whistleblowers on the inappropriate conduct of your predecessor, or whether they are
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