case, decided by the prc on a two-year basis to make that the base, the new baseline, then after to provide on an annual basis starting in 2016 cpi plus one. what that does is a couple of things. one, mailers don't like it. i'm not going to suggest that they do. but in terms of better enabling the postal service to cover the cost of different products, it gives them some additional flexibility. number two, it provides some certainty for the mailers. it's not like our original bill, which is a crapshoot, in their words. ..

>> what -- dr. coburn's point is well taken. if we want to take a lot of revenue out of the system for the postal service, potential revenue out of the system, we've got to figure out how to pay for that. what are we going to cut? be what further are we going to cut in when i talk to my colleagues on our side of the aisle, i don't have people coming to me and saying i want you to take more money -- save more money on mail processing centers. i don't have people coming to me and saying we want to save more money on, you know, rural post offices. i don't have folks coming to me and saying we want to take money out of worker's comp costs. you know, i don't have any of

that. but what i'm hearing is we want to reduce revenues by billions of dollars a year, the potential for revenues of billions of dollars a year, but we're not sure how we're going to offset that cost. again, my democratic friends, we just can't have it both ways. we can't have it both ways. and what we've tried to strike here is a reasonable balance. and the, and when i look at the idea of -- i'll just think out loud here and, tom, correct me if i'm wrong. but if i, if i'm looking at a republican come promid here -- compromise here on this issue, set aside where we start off with the free market system, come back to where we are in our manager's amendment which says the new baseline is the rate case. and going forward it would be there now i until -- from now until someday down the line when there might be a negotiated change to the rate system. the increase could be, would be capping cpi plus one.

that's where we are. and maybe, maybe a principled compromise that moves toward the position of senator baldwin would be the rate case becomes the baseline where we don't go to cpi plus one for an indefinite period of time. maybe we go back to where we were and having for the last several years which is a cap on cpi. that would be the cap. one, it actually does provide the certainty. second thing, it gets us out of the courts. you know, we've got on the rate case we've got the mailers in the courts saying they want to knock out the interim two-year agreement or two-year increase, they want to get rid of it. and the postal service says they'd like to make that the next baseline. that's uncertainty. that doesn't help the postal service dealing with mailers. why don't we, why don't we make some tough decisions here and try to find a principled compromise, and maybe just and, tom, i would welcome your

thoughts on this, but maybe a principled compromise to strike some kind of balance would be the rate case out of the courts. let's get it out of the courts. and let's just say that's going to be the baseline. well, let's go back to where we've been more the a number of years on cpi. the cap would be on cpi. and by doing that, the postal service doesn't end up with a boatload of money, but they have the money they need to not have to close every mail processing center or every rural post office. there's money that would be available for pay raises for folks that haven't had a pay raise in quite a while. we'd be in a position to actually integrate medicare and kind of right-size the health care costs for the postal service. and we provide some certainty for the mailers going forward that they're not going to be looking at anything beyond cpi. going forward. too often we just, we kind of say, well, this'll be decided in the courts. we immediate to make some decisions here ourselves.

and i'm just thinking out loud, maybe an option for us to consider. dr. coburn, if you -- any comments that you have and, senator johnson, please? >> well, you know, a couple of points. the 40 to knoply's -- monopoly's not worth much when you have a no monopoly of a markettedly-declining market. one of the answers could be is eliminate the monopoly, you know? if we're worried about them -- they're not about to raise prices beyond -- they're not going to force themself into nonexistence by raising prices. nobody would do that. but, no sane person would do that. i'll come back to what senator carper said. we just, we just voted down five day which all our recommending bodies and research bodies say we should do. the president says we should do. the american public is agreeable

to do it in terms of the polling. we don't want to raise rates. that's appropriate for them. we don't want to do the things that are necessary to take the costs out of the system. where do we go? and so, you know, we have no bill. and i think you're proposed compromise is a good idea, because we will have a positive cash flow. it won't be negative. but it will probably put at risk some of the capital investment that the post office needs to make to be able to gain efficiencies. so i believe it's up to you, and i think we ought to vote. >> senator johnson. >> mr. chairman, again, i hate to be the green-eye shade number cruncher hire, but i want to actually understand this. senator baldwin, it's a 4.3%

exigent price increase plus a 1.7% cpi plus 1%, correct? >> yes. >> okay. so the first year we go from a hundred. again, this is pretty simple to do. so you've got a hundred times 7%, so you're up to 107. pardon? so you get an exigent of 4.3%, plus you tack on cpi plus 1%. 4.3 plus 2.7 is 7%. that'd be the fist year increase. you go from 100 to 107. >> let me just interrupt for just a second. i've got our tenty postmaster -- deputy postmaster general for some clarification if you would, please. go ahead, senator johnson. >> so, again, i just want to do this pretty simply. so you go -- so now you've got 107. so the next year it'd just be cpi plus 1%, correct? >> the next year -- >> make sure your mic's on, please. >> is it another 4.3%? >> 7% total the next year.

>> so it would be another 7%. >> so compounded that would be -- 114.49 -- >> that's so you get -- >> the next year another 7, compounded it's 123.5. >> so do we get 4.3% plus 2%, so it's 7% one year, 7% the next year, or is it 3.7% the -- 3.7% the next year? isn't the 4.3% the first year? so it goes up 4.3 plus 2.7 gives you 107, correct? the next year price increases cpi plus 1%, correct? >> i think you're -- >> so then finish enter you don't want to double count the exigent, and i think that's what's part of -- >> but it's being baked into the baseline, so you have to keep -- >> but when you increase the 4.3%, it goes from 100 to 107, nowst baked in. >> right. >> so you've gone from 100 to

107. >> right. >> the next year is plus 2.7% takes you to 109.9, correct? >> correct. >> the next year's another 2.7% which takes you to 112.9. so after three years you have a max -- well, with that inflation rate you're at 12.9%. >> correct. >> now, is there some proposal where the exigent, the 4.3%, falls away? >> [inaudible] >> so the 4.3 may go away. so we're looking at under 1.7% inflation rate is a maximum price increase of about 12.9%, not 22 president. is that -- am i getting that correct? >> no. first of all, you can't switch baselines in the middle of the calculation. >> no, you baked -- >> so compared to preexigency case, it's 23.5. and then the other question in termses of the exigency staying, you know, if we pass the bill as written, or we've written it

into law. we've baked into it the baseline. >> you only get a price increase once. so you start at 100, and then you get a 4.3% price increase plus 2.7, that's a 7% price increase, you're at 107. >> right. >> then the next year you're just getting inflation plus one. >> correct. >> and so you go, after three years you're at 112.9. >> correct. >> okay? so that's a 12.9% hacks mum price -- maximum price increase. again, i'm from wisconsin, i have the same concerns about our paper industry and our print industry. i come from business, and i was actually in the specialty business which, you know, i actually accepted higher prices from my supplier so that i could maintain a stable price. the worst thing for me was volatility. you know, i didn't like a commodity business. i preferred a specialty business where, yes, i paid higher prices, but i could offer my customers a stable price.

stability is by far the more important price consideration. now, obviously, total price does make a difference, and i would also challenge -- yes, the post office is a monopoly in a very narrow sense, but one of the reasons it's losing volume is it's not a monopoly because it's losing to e-mail and to other nonprint mediums. so, again, i reject the claim that this is a monopoly pricing scheme. it's not. i mean, you guys are subject, and you understand that. so, again, from the my standpoint we're looking at a maximum price increase of about 12.9% over three years. i think your proposal provides some price stability. i understand nobody wants a price increase, but everything's going up. and i think you could argue that certainly the postal rates probably have not kept pace, certainly not with their cost structure. and i think we have to give the post office the flexibility to be able to maneuver and, you

know, maintain a successful or get themselves in a position of a successful financial entity. that's what this compromise does. so, again, as much as i hate to see wisconsin businesses increase costs that could put jobs at risk, from my standpoint as a united states senator, my job is to protect the american taxpayer. and we cannot continue down this path of the postal system potentially being on the hook or making the american taxpayer on the hook for tens of billions of dollars over the new york stocks if we do nothing. that's why, mr. chairman and ranking member, i certainly appreciate what you've tried to do. and if this amendment causes this bill to fail, it's certainly not worth supporting. >> all right, thank you. dr. coburn. >> i'd just like to add one other thing, if i could. the mailers are going to be confronted in the declining industry with one of two things;

some increased pricing which is inevitable or going to another route to deliver their product. in other words, they're going to abandon the post alamo knoply and maybe come back and use it. because they'll deliver -- they'll bundle and deliver in a box. the other point i'd make and what you said is, remember, the post office on parcels is competing with fedex and ups. they have no limits on what their price increases are. and they both raised prices this last year. more than what the postal service got. and yet we're tying the postal service, who's not in a monopoly on parcel, to this same system that says you can only raise it as cpi plus one. when fedex, i think, last year did two or three times that. so again, it's not all as simple as it seems.

i'll yield back. >> mr. chairman? >> senator levin. >> i have some questions. first, as i read the spread sheet that we got yesterday, i didn't see any dollar figure put in here for the postal rates. >> [inaudible] >> i'm sorry, say that again, senator levin? >> what do we assume here that -- and by the way, i don't know which proposal we're now talking about, whether it's the one in the substitute or the one you just outlined. >> uh-huh. >> so when we say "the proposal," there's now, i think, two -- there's three proposals now. senator baldwin's, but two of yours, and i don't know which one senator johnson was referring to when he said "the proposal." because the chairman, i think, has modified what the substitute called for. >> okay. if i understand your question, the you'll all look, you've got two handouts. look at the one that has a lot of yellow at the bottom, and that assumes the exigent rate

price increase becomes a baseline in going forward and that we have cpi increases beyond maximum cbi increases beyond 2015. that's -- >> what line is that? >> if you'll look at the top, just look at the top of the page. it says exigent price increase fy -- >> i got it. >> -- in fy-14s and so that becomes the baseline. and then beyond 2015, starting in 2016, we go back. we were to straight cpi cap for the postal service. >> what line are you looking at? the numbered line on the left? >> i'm looking at the red letters right at the top which tells you -- >> i know that, but i'm talking about dollars. what do you show for additional revenue from your cpi plus one? what linesome. >> go to total revenue. >> not -- okay. >> you don't have one with cpi plus, you have one only with cpi, carl. >> so detail we were given on the manager's amendment yesterday is no longer the one.

what it says here postal rates, line -- section 301, it doesn't show any dollars at all on the chart i've got. >> yeah. and the manager's amendment, again, assumes the exigent rate case as the baseline going forward and that we beyond 2015 we're back to -- we're at cpi plus one. >> what are the dollars shown on the spread sheet for that? you've got dollars shown for everything else. >> let me -- >> retiree health benefits. >> they're this the revenue, mr. chair. >> what chart would that be? >> it's top line -- no, behind you, carl. in the top line, and it's not, it's not divided out. >> well, what is the number? may not be divided on our top line, but what is the assumption if you go to cpi plus one? >> you mean what's the dollar -- >> yeah. >> yeah. >> -- number? >> while you're looking that up,

i understand that senator baldwin's approach also assumes as a new base the exigency. is that correct? >> no, i don't think so. i think the expectation is it goes away after two years. >> does your exigency go away after two years? >> correct. >> are okay. so it's in the base, it's in the base beyond that? or it dose away. >> no. >> okay. therefore, it goes away after two years, your exigency. >> it's sort of current law. they've done the exigency case, they expect to recoup the $2.8 billion and then it goes away. >> it goes away the way prc said it was going to go away. i think one of the key issues what the role of the prc's going to be and whether we're going to take that rate, that capability that they have now away from them and give it to the postal service. as i understand it, that's one of the big issues here. we haven't talked hutch about it. has the prc taken a position on

this issue? >> no. apparently not exicially. >> well, i'd like to know what it is. >> dr. coburn can tell you what it'll be. >> there's never been a federal government commission that wants to get rid of itself or limit its abilities, so -- >> well, there's never been a post office that isn't willing to raise rates in order to avoid making other tough decisions. >> come on -- >> they've made tough decisions -- >> carl. [inaudible conversations] >> maybe they do, but if we take the pressure off them by not having an outside group look at a rate increase, we're also doing something which will lead, probably, to greater postal rate increases. so that works both ways in terms of if we'd never had a federal agency. but my question is this, what is the position of the prc. i think it's important. we know what it is. did it come out at the hearing? if it did, i'd like to -- and i don't doubt that it did, but what is it? >> well, i think i have -- i'm

going to ask the deputy postmaster general to respond to that, but i think what the prc has said is they think there ought to be an exigent rate increase for two years. >> no, i mean in terms of their role beyond two years. you're shifting -- as i understand it, i'm trying to understand this, you're taking, you're shifting the role of rate increases from the prc to the postal service. >> yeahment -- yeah. >> can i explain to you, carl, how it's set up in the bill? >> and is there a change-- >> yes, there is a change. >> okay. shouldn't we hear from prc about this change? that's my question. i think we should. >> the change is the following. it does, as senator baldwin described, put it on the board. it has to go to the prc with a super majority of the board of governors. they can override a prc decision. >> so it's left up to board of government -- governors. >> right. only with a super majority. >> i understand. i still think we ought to hear from the prc officially,

unofficially, both. if there's a difference. i just think it's relevant. we're making major change this terms of oversight -- in terms of oversight of a rate increase. we're removing it from folks that have that oversight responsibility now and, apparently, we haven't heard from them. be we haven't heard from them, or if the we have, i stand corrected. i just want to know what it is and why. >> let me ask john. john has worked on this legislation along with a number of others on the majority side, along with chris barkley. of and, john, thank you. you and, certainly, or chris barkley and everyone else who's especially worked on this full time for months. can you just respond at least in part to the concern raised by senator levin? and, carl, just really succinctly in a sentence or two just say it again for john's benefit and for ours. >> what is the position of the prc on the question of changing their role in rate making? >> i'm unaware that they've a

come out with a position. we asked for the agency's comments on the bill as a whole, and i don't recall them commenting on this piece in particular. >> i'd like to ask them directly for their position. >> mr. chairman? >> i have an e-mail from them directly. we haven't taken an official position, but chairman goldway said during the hearing that the commission believes regulatory review of market-dominant rate changes is necessary as thermoknoply products -- they're monopoly products. >> well, i disagree with their reasoning, but i think we ought to hear in some detail from them officially. not just as modern as that communication method is -- [laughter] and we have heard a lot about that this morning. >> all right. let me, i think senator begich is -- >> for the gentlemen at the table, has the prc taken any position on this bill? >> i'm unaware that they've taken a position.

>> right. because i don't think they can. they're a regulatory body, so they wait for the response and the result. they haven't taken -- >> they provided technical comments. >> right. they haven't taken a position on this bill. >> no, no. >> and the odds that they will do it is about zero. >> we haven't asked for a formal position, but -- >> don't you think they'd be interested? okay. that's all, mr. chairman. >> i mean, yeah. >> well, have they been asked? >> they've just been asked to comment on the text and provide technical comments. and they did. >> this bill hasn't been around for a little while. i'm just, you know, you would think that a regulatory body, i, you know, i'll just go from my own perspective as a former mayor, i had regulatory bodies that gave lots of technical, but they were not allowed or not going to be a yes or no on a bill or a position because they became the end result of regulating based on the regulation of the law that you passed. so your question is a very

interesting one, but the odds of them doing it is about zero. >> we ask regulatory commissions all the time for their positions on bills. >> [inaudible] >> not technical, we ask for their positions all the time diswhrsm senator levin, if i could respond, this bill is not new. >> i agree with that. >> and they haven't done it on any section of the bill. >> my question is, have they been asked? >> we didn't ask for a formal position, again. we just asked for them to help us in drafting the language, correcting errors, things like that. [inaudible conversations] >> let me ask a question, if i could, of senator baldwin. you know, in football sometimes the quarterback comes up to line of scrimmage out of the huddle, looks at the defense and calls

an audible. and i don't know that that's what we want to do here, but i want us to at least talk about it. and the idea is for dr. coburn and i having moved a long way from where we were last august when we introduced the bill and have offered a manager's amendment that includes and makes the exigent rate case the baseline and then provides the flexibility of going to cp be i plus one therefore until there -- thereafter until there might be a negotiation on a new approach on rate setting. to move off of that further, to making the exigent rate case the baseline, but to limit increases going forward just to cpi until there is some additional change in the rate structure. to me, that seems like a principled compromise. it's consistent with our goal of making sure the postal service is viable, financially viable. not just for a couple of years, but ten years and, i think,

beyond gives them money they need for investments and also to provide some pay raises and to keep, to right size their distribution system. so i would, it's not something i've thought long and hard about, but i'd like to offer it just for a response and ask you what do you think? >> first of all, on the overall context of, you know, sort of negotiating language at the executive session, i have been offering compromise language for months including last week and in the wake of the exigency case moving a long way on this. and so it's been rejected, it's been rejected every time, and i said i'm going to press on with this amendment which i would

like to do. also i think that none of the discussion has really addressed the governance issue. i said i brought this forward for two reasons; rates and governance. and i have very strong concerns about the monopolistic aspects of the postal service and the postal service regulating itself, if you will. and i have not heard a willingness to back off, you know, to put that back on the table for discussion. so that causes me concern. i do want to express the fact that i have a fellow senator by the goodness of his heart who's taking my time in the chair right now, but i have to relieve him very shortly. so i'm wondering, i would love to be here while the vote is

taken, and i'm wondering if you would be willing to -- if the debate is concluded, i would certainly like to have the opportunity to be present for that vote. >> o.k.. okay. otherren comments, please? >> i think we should vote. >> let me just clarify what you are offering though. are you talking about just the exigent, the 4.3% the first year and then 1.7, 1.7 if we're talking about cpi at 1.7? what are we talking about here in terms of -- >> what we're talking about is what the postal service had sought with the prc in filing the exigent rate case was for the 4.3% increase and to that made be part of the baseline. not for two years, but for part of baseline going forward. >> so there would also be a cpi adjustment the first year? >> uh-huh, yes. >> i'm just saying a quick calculation over three years you'd end up with about a 9.6% total price. >> i believe that's correct. >> so i just wanted to make sure

that's what you were talking about. so your compromise is drop it from about a 12.9% increase to about 9.6. >> i think that's correct. let me ask our folks at the table. rather than just nod your heads, go ahead and make a statement, please. ron? >> yes, mr. chairman, that is correct. >> go ahead and make it a full sentence, if you would. >> [inaudible] >> well, i -- the calculation of senator johnson is correct. >> okay. all right. >> did we figure out the dollars? >> no, senator levin. we're going to have the staff go back and do that, which we will do. >> i don't know that the rules of committee allow us to vote on an audible. >> sure. you can modify your amendment.

>> counsel? where's our counsel? >> yes. you can offer a second-degree orally and at the table if you, if the chairman so desires j. okay. >> anybody else finish. >> or anybody else. >> so just to make sure that we're, i can legally do this, so if we wanted to ask for the option to vote on an approach that said that the exigent rate increase would become part of the baseline and is beyond that the increases would be restricted to nothing greater than cpi? >> mr. chairman, could i -- i'd like to request a vote on my amendment. >> please. >> a roll call vote on my amendment. >> [inaudible] >> i think a second-degree becomes first. i think a second-degree amendment becomes first. >> has there been a second-degree amendment distributed? >> he's modifying his own amendment, which i think he has the right to do. >> okay. >> and then you have a right to your amendment. that's what i would think is the logical way to go. because he's allowed to modify his amendment.

>> yeah. i want to make sure we have somebody, i want to make sure we have somebody at this table who can give us, legal counsel, that can give us the green light here. who's the right person to do that, please? >> are we going to see something in writing? is this going to be an oral or audible? >> well, we have something in writing already. >> but now your audible's in writing. >> well, what we have in writing is the, i think it's pretty much everything i've said except that the cpi plus one, which is in writing in our manager's amendment, would be cpi. >> may i offer a compromise to the senator from wisconsin? i take very sincerely your concerns about regulatory oversight, and i'm willing to budge on that. with the regulatory commission. if you're willing to budge on senator carper's option of the economy gent rate increase -- exigent rate increase at the

baseline and then cp be i only -- cpi only. so i would be willing to if you would modify your amendment to where you and i could have a discussion, and i would move toward your position, and i think senator carper would as well on the postal rate commission and modify your amendment to hold on that so we can work that out in good faith to restore what your desire is on postal rate commission and move to senator carper's baseline of the key gent price increase -- economy gent price increase plus cpi only. >> so just a general reaction to this negotiation when i'm about to have to dash out of the room -- >> i understand. >> and i want to just restate that i have been offering compromise language for months. >> well, my staff tells me we've not seen language. we've had conversations -- >> concepts, okay?

as a substitute to the amendment that i have introduced, and they've been rejected, and they've been rejected up til last friday. and i'm taking at good faith that you would like to see, you know, some potential modifications to this. what i would suggest is that we vote on the amendment, we get a sense of where the committee is on the substance of in this amendment -- of this amendment. i might have a little more negotiating power after that, and i'd certainly be willing to continue to talk about section 301 of the underlying bill. but i would like to get a roll call vote on the amendment before us and then take it from there because i think the governance issue in particular is causing a lot of members concern, and we'd be in a good position after getting a sense of this committee to be able to negotiate some clarity. >> mr. chairman? mr. chairman? >> [inaudible] >> yeah, sure.

[inaudible conversations] [inaudible conversations]

>> mr. chairman? [inaudible conversations] >> okay. time's up. [inaudible conversations] >> mr. chairman? i think there is a productive discussion going on right now. i would like to see in writing the roam that's being -- proposal that's being proffered, and i wonder if we can move this

to the end of the markup and return to this debate. i may still press for a vote on my amendment, but i would like to see what is being discussed in writing and evaluate it. and i apologize, but i am called to the floor to preside. so my staff is here, but -- >> we'll still be here when you're done. [laughter] >> so if that is acceptable -- >> all right. we'll just set the amendment aside for now. i think there's a good spirit of going on here. and i think i've tried to offer an audible approach, some compromise. i think dr. coburn in moving away from the cpi plus one and dr. coburn has, i think, offered some willingness to compromise on the role of the prc. so let's just build on that and see what we can come up with, all right?

thank you. and with that, this amendment is set aside for now. i think we come back to the republican side for amendments. >> mr. chairman, i wonder whether senator paul would just yield for a question of the chair, and that is whether or not the suggestion that that offer be put in writing, is that going to happen? >> yeah. i'd like for us to work on that even starting now. >> yeah. >> even starting now, please. i think that's a constructive proposal. okay. i think, senator paul, you're up, and then we'll come back to the democrat side. >> yes. this would be paul amendment 3, and this would be for allowing the carrying of guns within the post office consistent with state law, and this -- i guess i don't understand sort of a logical argument for, you know, why you wouldn't want self-defense in that particular venue. so i present amendment number 3.

>> would you just take a minute more us and just describe in greater detail your amendment, please? [inaudible conversations] >> senator paul, i'm -- >> did you ask me a question? >> i'm going to ask you for just a little more explanation of your amendment for us. this is not an insignificant amendment. >> right.

apparently, my understanding is there's a prohibition through federal law from carrying a firearm in a post office, and my amendment would allow the carrying consistent with state law. in post offices. >> okay. let's have some other discussion, if we could. senator begich? >> mr. chairman, i have a question for senator paul and, you know, i'm someone that has and continues to be a very strong supporter of gun rights, but let me ask you a simple question. let's assume for a moment you have a post office, which they're around, they're leased space, they're inside a mall, for example. maybe right next door is a daycare facility. what happens in that scenario with your legislation? does someone be able to carry a gun into that post office mall? >> it'd be consistent with state law, you know? and with local ordnance. there's also private ordnances

as well. when you go to a mall and you want to locate your store, when you sign your contract, there are private ordnances, for example, there are laws -- >> that's not what i'm asking. >> well, that would be -- >> so met me ask you and give you a scenario here. so a post office is in a mall, the mall says no guns on premise. your amendment recognizes that right? of that private property owner? yes or no in. >> this amendment would not contravene contracts on who locates in a mall and who -- >> i just need a yes or no. >> i think i explained it as best i can. if you locate in a mall and the mall says you can't have concealed carry in there, you voluntarily choose that contract, and nothing in this prevents you from having voluntary contracts. so you can have contracts that restrict, but there won't be a federal law any longer that

restricts it. doesn't mean there can't be private contracts to restrict it. >> let me, if i can, mr. chairman -- >> please, go ahead. >> this, and, again, i want to walk through this carefully because what i don't want to have of happen down the road is someone in my state start explaining to me because i'm a very strong supporter of private property rights, someone who comes from the real estate industry, and i want to make it very clear that if the post office is required in their facilities by this action, that where they locate in a private property leased space that the individual property rights of that individual is not being infringed on by a law that stipulates. so i just want to, you know, i pride myself many times not to be an attorney, no disrespect to

attorneys. but i'm not seeing that clarified in this written language. i agree with you that the property rights of individuals need to be protected for whoever leases space and the right they have in that property they own. but would this then prohibit because the law is in place from the post office to be located in locations that prohibit concealed weapon on the property. in other words finish. >> no. >> okay. and is that specified in the amendment in such a way? >> it's not specified affirmatively that you could not locate in a mall that has a prohibition on guns. so all it does is prevent the post office from its current rules which say you can't, you know, you can't carry a gun in a ohs office. so if a post office locates in a private entity and they have a contract, you know, they locate in a bar, you can't have a gun in a bar. >> senator paul, would you be

amenable to modify your amendment to be about what you've spoken of so that it's very clear? >> yes. >> so what i would ask is that you withdraw your amendment. when we we come back to this, that you have that clarification in there that might -- >> all right. we're going to continue, what, today or at another time or -- >> we're going to continue for a while today. >> okay. so we'll write it in and resubmit it later on and have discussion again. >> mr. coburn, thank you very much for that. because, you know, i know many of us have concerns about individual property rights and we want to make sure we're not infringing on those while we're protecting the second amendment rights. and i think there's a way to do that, and i just want it clear. thank you very much. >> mr. chairman? >> senator levin. >> has the postal service been asked for their view on this? >> i'd welcome -- >> no, but have they been asked up until now? >> i don't know. i think informally, yes. but i ask, mr. strohman, would

you go ahead and -- >> we haven't asked them for their views on the amendment. >> could we do that while we're rewriting it? >> ron -- >> also, i'd like to know whether this covers post offices in federal buildings which have courthouses. is this, is there a rule for federal courthouses about carrying guns? >> ron, these take, please -- please take, please come to the witness table. let's just go back to the original question. i think that senator levin raised. i don't think we've asked the postal service for their views. just explain current policy, please. >> well -- >> with respect to firearms in post offices, in postal processing plans. >> well, right now, mr. chairman, there is litigation surrounding the right to bring firearms on, in parking lots. so that's being litigated as we speak. i think as a policy matter the

board of governors has not made a decision with regard to current policy in terms of firearms, but it is being litigated as we speak. >> well, what is the policy that's being litigated with respect to the -- >> the policy would be the prohibition to bring firearms into a parking lot. postal facility. >> all right. and just so i understand, is there a postal policy now that does have -- putting your firearms into the parking lot of a postal facility? >> correct. >> so just to clarify, what that means is today if your in a state with concealed carry, you can't even park your weapon in your car and park on postal property. you have violated federal law. >> right. >> and i think that's part of what senator paul's trying to get at. >> right. so if i'm going hunting, say it's a saturday morning, and i have in my trunk my shotgun, i want to stop and drop off something at the post office, i currently could not do that, is

that right? >> right. >> all right, all right. >> mr. chairman? >> is that what you're trying to get at, senator paul? >> yes. >> well, you're going beyond parking lots, i assume. >> well, among others. the concept that you can take a gun into the post office if you have a concealed carry permit or if the state law permits. >> i don't think anyone has a problem with the parking lot. the federal government might, the marshals might, but i don't see a problem with that if state law allows it, but brings it into the post -- bringing it into the post office is a very different issue. ..

there are a number of u.s. attorneys offices collocated in courthouses and the introduction of fire arms into those facilities pose a serious threat to the u.s. attorneys. state courthouses, i don't know what that also means post offices. i think this is complex enough we ought to hear from the justice department, from the fbi, from u.s. attorneys on this kind of an issue if we're talking the post offices which could be collocated in -- >> i think we be glad to extend post offices. we'll be glad to and post offices in federal court houses. >> i think not to hear from the post offices themselves. could we hear from them? i guess an e-mail would do it these days. spent we would like them to mail it. [laughter] >> i'm unclear about whether now we just talking about the

parking lots, which has been subject to litigation, which you lost, right? you lost in addition court in colorado on this issue of parking lots. i think it's correct. and so, in the case called bondi. we have a district court decision that says that the ruling, but you can't have a concealed carry or a weapon in a parking lot is contrary to federal law. i think everyone here would agree a parking lot is different than a post office. so my question to senator paul is, are we talking about now just limiting this to not the post office itself, but the parking lot? >> no. >> okay. >> senator begich? >> as you are working this forward i just want to give an example. i don't necessarily need an answer now but as you workout the solution. in juneau, alaska, with a federal building courthouse, a

federal building. the post office is inside the federal building but its all kinds of federal offices plus to go through security to get through it. the va clinic is in there and several other things. i just need to understand how that would work in this scenario. >> we are happy to exclude federal courthouses. we have to redraw -- >> it's not a courthouse but it's a federal building. >> we will redraw a. i think we include a couple of those things. >> i hear you, great. thank you, mr. chairman. >> let's set this aside for now. senator tester, do you have an enema you want to offer? >> i do. hopefully this can be rather quick because we been here before. it strikes the federal employee compensation act provisions that are in this bill. as senator mccain said, this is probably something folks have got their minds made up on already, whether to keep it in or keep it out. something i've talked to the chairman about. i think that this cut affects

all federal workers, and quite frankly, almost 60% of the feca claims come from other agencies other than the post office. we haven't had any hearings on this. the last hearing was done on, reform was that the subcommittee last congress by our friend senator daniel akaka. yet i think we will apply these cuts across the board to every federal enterprise in this bill. i think it's a problem. i know it was done for the senator who was formerly on this committee, and i appreciate that, but i think if are going to put these cuts in and implement them, we got to know exactly what the impacts are going to be. i certainly don't. to offer this and admit up. like i said it's not the first time we've been here. hopefully we can get a vote on it and move on.

>> other comments on this particular amendment? dr. coburn? >> this amendment was included in the last bill which passed the senate with 62 votes i believe. this is a real problem, not just in the postal service, but across the federal government. in 2012, usps fadeout 3.7 billion in workers comp compared to 2.2 billion just three years prior. overall, 60% increase in three years. cbo estimates reforms reduce payments by all federal agencies for feca by 1 billion. 40% of those would go to the postal service. 40% of all the claims. overall, the reforms would say the entire government 1.2 billion in terms of -- 1 billion feca reimbursement, so

this is an important part of the bill in terms of reforming it. but i would acknowledge to my colleague, even if we keep again, we're probably not going to be able to keep it in when they go to conference. so i'm not -- i would urge opposition to your amendment, but i understand his thoughts. >> let me just say, i believe we had opportunities to talk about this before publicly and also privately. if you will, in a senator collins initial proposal, she proposed a number of steps that i would describe as program integrity. what her interest was was making sure when folks went on disability, whether folks were and what are others, the expectation would be that they go back to work and that we

would help make sure that they got the care they needed, the treatment he needed, and that they also give they weren't prepared to go back to their original job, they could be trained to do additional, a different job. people want to be self-sufficient. she also said, you'll recall her saying this in previous hearings here and marks a. no, the are a bunch of people in the postal service who have been injured and you are still at the age of 70, 80 years of age, still drawing workers comp. she argues i think logically that needs to change going forward. her original proposal in fixing that were very far-reaching. and some would argue not fair. and to her credit she has modified our initial position. i won't get into all the details but she backed off a whole lot in making significant changes to

her original legislation. that was what we included in the bipartisan bill. it was contested, mms offered and so forth. they were defeated. we included the earlier collins language as she amended, as we amended it in this bill, too. i would just ask to our colleagues from montana, for us tocome for now, i can't accept the amendment. i'd like to let the process play out, and not just in committee but on the floor and beyond before. and i thin think there's probaby reason caught my somewhere down the line but i don't know that we're going to get there today. i would just ask you, if it's not adopted today, i would ask, you're not going to weigh on this, i know. it's an important issue. we'll be addressing it again on the floor and maybe beyond the floor. >> mr. chairman, i certainly appreciate the work you and the ranking member have done on this bill, and i by no means want to

challenge anybody's integrity or their willingness to work on this bill. the ranking member is correct, this is the identical feca language that was in the bill from last congress. since been we received new information, including several gao reports that have been extensive studies. and if you add to this the fact with a federal work force that's been three shutdown, a sequestered, pay freeze, i think it's bad for them. if we are to do this without ever hearing to make sure we know will getting into. i appreciate going to conference. unfortunately, we haven't got the same report out of what's going to happen at this conference as you have. we've got a different report that the house is going to follow the senate's lead on this and i think that bodes against the way i would like things to go. look, if you want to keep again, i'm not okay with that but i can live with the vote. if you want to pull it out, i think it makes it a better built and i know senator coburn disagrees with me on that, but

that's okay. so i'd like to have a vote. >> all right. dr. coburn points out we do not have a quorum. what do we need for a vote? i'm sorry, for those on amendments, we need six. i think we're okay. we need nine to report the bill out, right? i think we're okay revote on the minute. any further discussion on the amendment? okey-doke. with that i'm going to ask the clerk to call the roll, please. [roll call]

[roll call] >> on the vote of those present, -- [inaudible] >> can i change my vote?

i don't know. >> on the vote of those present, the ayes or four. the nays or four. on this vote the sahel r. six and the baldwin-mccaskill -- nays are seven. spin we will revisit this issue on the floor and beyond. thank you. other -- it's suggested we take a recess here for lunch, and let me ask dr. coburn, looks like we're losing our quorum, and we need want to do that. what do you think? >> i think we reached a good place to at least take a recess. senator begich, go ahead, please. just go ahead and nature mic

button. >> were just getting ready to get to amendments. if you want to take a break, take a break. mine is easy. >> go ahead. >> begich enemy number one which is basically this is a technical amendment. it codifies current law and want to thank the ranking member and the chairman for working with me on this and making sure the smith requirements of both sides. so this amendment clarifies existing law the changes helping benefits after a contract is dealt with. it's every simple technical amendment. >> okay. i understand it's acceptable to our side, and i think to -- with that, all in favor say aye. opposed? the ayes have it. >> the second one, mr. chair, if

i can offer, a name and number two. and this is just making sure that whatever we do on alcohol shipping, that it doesn't violate state, local, or tribal laws. we have some dry communities in alaska and i know other places do, too. i just want to make sure it doesn't supersede the. i want to thank both begin the chairmen and ranking member number for working with me on this. >> all right. all in favor -- >> i can do more. >> all in favor say aye. opposed? the ayes have it. >> thank you, mr. chairman. thank you, ranking member. >> at this point we were recess. and thanks, everybody, for your work and your spirit on this debate. [inaudible conversations]

[inaudible conversations] >> we are very focused on this which olympics and we have seen an uptick in the threat reporting regarding sochi and this was what we expected even with the olympics are located. there are a number of extremists

in the area, in particular a group which is probably the most prominent terrorist group in russia. the leader of the group last july announced in a public message that the group would intend to carry out attacks in sochi in connection with the olympics. and we've seen a number of attacks stemming from last fall, suicide bombings in volgograd, that took a number of lives. the tourists are becoming more sophisticated and they're going to school on the repeated disclosure and latest -- terrorists. it's made it much were difficult for us to find them and to address the threats that they pose. so when i look at the threat well to the 9/11, we as a country that i think a great job of addressing some of the form of those that exist in the system and putting together in this nation's sharing architecture that allows us to move information very quickly. i can never know what you don't know. >> the probability of attack now

compared to 2001 is, at least for me, a very hard question to answer because principally because of this very dispersion and diffusion of the threat. whereas we are very, very focused initially, particularly in that time period on al qaeda, al qaeda core. now we are facing a much more dispersed threat. >> this weekend on c-span the nation's top intelligence chiefs on worldwide security threats saturday morning at 10 eastern. live sunday on c-span2 your calls and comments are women's study professor bonnie morris. that's at noon on booktv's in depth. on c-span3's american history tv, to work the reconstructed 1854 confederate winter quarters of south carolina general, sunday evening at seven.

>> so many people are of the opinion that if the members of the supreme court don't like something that's happening in the country, that it just reaches out and brings that into the court and start arriving opinions on, which, of course, is contrary to the fact as anything could be. >> later today, c-span radio begins a series of oral history interviews with former supreme court justices. this week from 1971, former chief justice earl warren at for each and. in washington, online at c-span.org and nationwide on xm satellite radio channel 120. >> we are live this morning here in washington, d.c., the center for strategic and international studies where they're hosting a

discussion on security at the winter olympics in sochi, russia. the opening ceremony is every seventh, juan zarate, former deputy director national security advisor to george w. bush is among the panels who will review the security threats, including the tension between russia and the north caucasus region and he will discuss russia's anti-lgbt laws. this is expected to get underway in just a moment. live coverage on c-span2. >> [inaudible conversations]

>> [inaudible conversations] >> once again we are live at the center for strategic and international studies for discussion on security at the winter olympics in sochi, russia. this is the second of a series

of panels on security of the winter games hosted by csis. we covered a brief discussion about a week and half ago. if you would like to see that it's available on our website, c-span.org. president obama says he believes the winter olympics in russia would be safe and he is not discouraging americans from attending. the president says russian authorities understand the potential threats against the event. he says the as is gordon in with russia and officials have looked at the russian security plan. still there are always risks involved with large international gatherings like the olympics and he says he feels better when those types of events are held in the u.s. because american officials have full control over what will happen. the president speaking to reporters at cnn. while we wait for this discussion on security at the winter games, about 20% of the air force is nuclear weapons officers have been implicated in cheating on a proficiency test. yesterday at the pentagon the security of force and air force

strike command updater reporters on the investigation into the cheating. >> good morning. and if i may say, i don't know if your mother could've done a better job on the intro. when we met with all of you of a few weeks ago, i told you that jenna welch and i were going to visit our icbm bases as was the global strike command headquarters. many of you at the time indicated that you'd like to get together and here some impressions following the trip. so i'm here today to give you such an update come not only on my trip but on the investigation at hand. as you were previously briefed a couple of weeks ago, osi agents discovered answers for monthly proficiency tests on one crew member's cell phone. this test in question is a monthly validation of the ability to evaluate and execute the nuclear mission and it covers concept from recurring

training. we determined, again two weeks ago this was, that this individual had transmitted the answers to 16 additional crewmembers. and then subsequently, 17 more crewmembers were implicated by voluntary admission, and that's what gave us the number of 34 officers who were implicated in sharing a testament to. again, i am recapping for you what we said a couple weeks ago. now, as the investigation has moved forward, we can now report there is a total of 92 crewmembers that have been identified as having some level of involvement. that means either participating in the cheating or knowing something about it and not standing up and reporting it. in an abundance of caution as we fall these new leads, we have temporarily decertified these 92 crewmembers, and they're not any longer on alert at this time. lieutenant general wilson, in just a few minutes, will discuss

how it is that we are managing this impact from an operational standpoint. so we will get to that in just a bit but what i want to reassure you right now today is that i remain confident, confident and having gone to her basis lastly, even more confident in the safety, reliability and effectiveness of the nuclear mission. i remain this way are basically the same reasons as i report to all of the two weeks ago. the difference is i went out and saw it for myself one week ago. so just to recap why i'm confident, there are multiple checks and balances in this system and there are a variety of ways that we ensure its reliability and safety. not the least of which are the fact that we have dod inspections and outside groups recommend and evaluate our nuclear teams to ensure that they no how to perform and how to do their job. moreover, as you are aware we retested everybody recently in

the test in question where this cheating had occurred and that retested produced a 95.5% pass rate which again demonstrates to me that our people know, know what their jobs are. they know how to perform and again we have the outside nuclear inspections that are going forward and producing equally encouraging positive results. with all of that said, the situation remains completely unacceptable. i went on the road last week specifically because i wanted to see more. i wanted to see for myself and learn more directly from -- for myself. i did go to each of the nuclear missile bases and ended up at barksdale, the home of the global strike command. at each stop i received a briefing there is of course to get yours. i think most important i had sessions with him and. i did large town hall meetings, but i did small focus groups as well. and these focus groups were just

me and him and i asked everyone else to leave the room. i did this with enlisted airmen. i did it with officers, and i did it at a variety of levels. i thought to missile leaders, i talked to the defenders. i talked to maintenance people, support people, facilities personnel. i tried to run the gamut and get a good cross-section. what i learned in these rather confidential settings to me was very, very helpful and very enlightening. from all of those discussions in october of last week, i have come up with a list of what i call my seven observations. my seven focus areas you might say. all of these areas will be addressed in some fashion over the next 60 days as we prepare our plan now that we will be delivering and giving our set of recommendations on what to do with respect to the nuclear forces and some of these issues we have uncovered.

as you know, the secretary of defense has launched a 60 day review and so we will be of course participating in that fully along with the navy and osd. how precisely were going to put the plan together is also part of what jenna wilson will cover shortly. so let me now give you my seven observations, my seven focus areas. the first one goes to what may be the heart of the question on many people's minds, and that is, is there some sort of a cultural issue that is going on in the force? so having done the conversations that i've done, having looked at it very closely now and created my own impression, i guess i believe now that we do have systemic problems within the force. i heard repeatedly from teammates that the need for perfection has created a climate of undue stress and fear, fear of at the future, fear about promotions, fear about what will

happen to them in their careers. i heard repeatedly that the system can be very punitive, come down hard in the case that even small, minor issues that crop up, but not equally rewarding or incentivized for excellent behavior and good work. i also heard that there is a level of micromanagement out there, which needs to be turned into more of a climate of empowerment. and i also heard that although we as senior leaders talk about the importance of the mission, that the team in the field doesn't always see that talk backed up by concrete action. so again i'm sharing with you some of the themes that i picked up, and my first observation is we do have systemic issues out there and we need to address this holistically, not just one piece part at a time. my second observation is that we have lost the distinction over

time in his career area between what i call training and testing. so in the current environment, there is no room for error ever. that is the way people feel. and yet of course those of us who work with the military, we know that in a training environment, this is an environment of learning, and if i'm what if you make mistakes that's okay because the idea is to learn and to bed. eventually you go on and get tested and evaluated. that's when the rubber meets the road, can you or can you not do your job? but in this environment those two elements have come together in a way which i don't think has turned out to be healthy. so what i mean by that is, although the standard on our test, a passing grade on these tests is 90%, the missile leaders feel driven to score 100% all of the time. this is because their commanders are using these test scores to

be a top different year. if not the sole differentiator on who gets promoted. so i believe that a very terrible irony in this whole situation is that these missileers didn't cheat to pass. they cheated because they felt driven to get 100% are getting 90% or 95% was considered a failure in their eyes. so again i think this is not a healthy economy. i think we need to we look the way we do these tests and we very much need to move towards a whole person concept when we are evaluating our airmen. not just look at test scores. my third observation comes back to the issue of accountability we talked about this two weeks ago, and there is going to be accountability at all levels. and leaders will be assessed for this as well as the people who were directly involved. so there will be accountability, i commit to you on that score.

the fourth observation has to do with professional and leadership development, and i think we have some work to do here. so there's all kinds of questions now that i've walked away with. rds enemy and in this career field getting the right kind of leadership training? are they being professionally mentor in the way that our young leaders are men toward elsewhere in the air force by mid-level leaders, by senior ncos? what is their career path in the air force? do they view this as a career field that has promised and where they can see a path for advancement in the top? i'm not sure they do it that way today, and i believe that we need to fix it so that it is viewed this way. more so in the future. fifth, we need to reinvigorate a campaign on core values. i also believe that there are instances where are the culture of taking care of one another can sometimes lead to people

making bad choices. so we have to reinvigorate what integrity means, integrity means you act with integrity as an individual right it is also your duty to report something wrong if you see something wrong happening. we are going to go back to basics and remind people what that means. we're going to do this across the air force. and remind people that there are ways to report directly and there are ways to report anonymous such as going to the ig. we have to give some reminders at this point in time. sex is what i call nuclear incentives, accolades and recognition. so again we say this is an important mission. are we rewarding people properly and correctly? by the way, part of the directed review has a sitting down across the table from the navy and we are sharing us practices, learning from each other. so we're taking a close look at the way the navy handles this area. this is such issues, should we or should we not consider

incentive pay. should we or should we not award ribbons and medals -- >> wait a second. this is csis the center for strategic and international studies. no, it's -- my name is andrew touching, director of the erasure program. welcome to our version of friday morning life. we're going to be discussing that sochi olympics, domestic regional and security challenges and i apologize for the late start. i am completely responsible for the late start. and let me just say for the record, it is not cool to be late to your own event, okay? i don't condone this kind of behavior, and i think later on in the day i will be tarred and feathered outside of the building here in the center of washington, d.c. all right, brief introduction.

this is the first time that the center for strategic and in his studies has actually published a report about an olympic games. this is done by our former visiting scholar, brin analyst of asians of caucasian affairs and security issues come islam, extremism, et cetera, et cetera. and it's got a really cool cover i think. terrific report, for my money the best thing you can read about some of the challenges and issues around these games. so that's one unique aspect about these games. never before has a winter olympic games been held in a subtropical climate but the fact that the subtropical climate happens to be in the country that actually occupies the most territory in the arctic region is rather an almost as we'll. never before has olympic games been held in the region in such

close proximity to a conflict zone. never before, although more about this conflict zone, never before has olympic games been held na conflict, in such close proximity to conflict zone in which was, in fact, the site effectively to civil wars in the country that is holding the games. one of which effectively russia lost in the mid 1990s with chechnya and one of which was one, the zone in the northern caucasus they are referring to where my esteemed colleagues will talk at greater length about the challenges, you know, when mr. putin went down to guatemala city in 2007, it was a period of relative, relative quiet since i would say in the area. chechnya have been somewhat

stabilized, and the frequency of violence in the other republics, the northern caucasus, had not begun to escalate perhaps to the degree that it did shortly thereafter. nevertheless, it was a very, very risky decision i think for the international olympic committee to do so. never before, more on the conflict zone, never before has olympic games been held in even closer proximity to a country which the host country fought a war with after the olympic committee awarded russia the games. referring of course to the russian georgian war. sochi, if anyone, depend on where you are in sochi, is 10, 15 kilometers away from the region of georgia which the russian federation acknowledges independent after the

august 2008 war. another pretty unique aspect about these games. never before in my lifetime, my lifetime, i was born february 13, 1959, be clear about this, never before in my lifetime has olympic games been so politically controversial, and so identified with the leader of the host country. that, of course, being vladimir putin. so no, we're not going to talk today about -- well, let me just say one more thing. because we are in washington, d.c. i don't think ever before has a sports icon from washington, d.c. been so close is associated with the foreign

host, the leader of the country, vladimir putin, of these games are obviously i'm talking about alexander ovechkin, the russian hockey team and is a friend of putin. very close friend i believe. so an interesting aspect of the washington, d.c. angle. so i've already said too much because we have a really terrific set of panelists. in which i will give brief introduction for all of them in the order in which they speak. the first speaker will be jeffrey mankoff, to my left, as the deputy director and fellow here at csis of the russia and eurasia program. speaking after jeff will be orden on, analysts and advisory board member of the geostrategic forecasting corporation and

gordon has been a visiting fellow here at csis. and i would point to in particular a report that he wrote on getting the caucasus emirate right, and he is one of the world's leading authorities on the extremist groups terrorist groups individuals who are, in fact, threatening these games. gordon has a new book coming out very shortly. gordon, the title of the book is -- yes. global jihadism in russia's north caucasus and beyond. you know, it would've been good for your publishers to think of it more about targeting have this book out before the games. but so be it. he will be speaking next, focusing on that topic. jeff is going to focus more i

think on really in the russian angle, but these games mean for russia, what they mean for putin. and that angle. and i'm very, very pleased and happy to welcome from the carnegie endowment for international peace, tom de waal who is senior associate their, and one of the world's leading authorities on the caucasus more broadly. and tom also has a reasonably new book out that's -- okay, sorry, c-span. why isn't the name of your newest book easier to find? give us the title spent actually i just did a new version of mine over. spent a new version of your old book. you've got to work on the marketing a little bit about that. >> of course you all have to read it.

[inaudible] an updated version. >> okay. still, i didn't hear the title but, okay. sorry. all right, and then finally batting cleanup for very, very good reasons is our colleague here at csis in the transnational threats program, senior advisor juan zarate, and juan will be talking i think more about kind of a broader terrorist threat and it's in particular, how the u.s. is looking at this. he will be speaking from his direct experience in serving in the bush administration with responsibilities for monitoring and dealing with these kinds of threats. so thank you very much for being here this morning, and let me turn the floor over to jeff. >> thank you. thanks to all of you for coming out this morning. i'm going to talk all of it

about the decision to build and fix in sochi, the role of putin and the significance of the games for putin and for the russians political elite more broadly. as andy alluded to, the decision told the olympics in sochi was an exporter one. this is one of the few cities in russia but doesn't actually have a serious got to know climate. it's incredible that they are worried there may not be snow at ski resorts and are stockpiling it. so given all that, given the proximity to the conflict zone, given the weather challenges, why on earth would you hold the olympics in sochi? and here i think it comes back in a lot of ways to the personality of vladimir putin into the russian political elite more broadly. sochi has been a kind of summer capital for the russian elite going back at least to the soviet period. this was a resort town where a lot of the elite, they would take their families in the summer to go to the beach is,

where putin and a number of his close associates also own property. and as far as the proximity to the caucasus, i think there's an important note here as well. you have to remember that the instability that we see just down the road from sochi today was very different from how the region looked in 2007 when the games were awarded. at that point the second war in chechnya had largely ground to a close and the wider insurgency across the north caucasus hadn't really taken off yet. so it was a moment when it looked like this area was being stabilize when the worst of the excesses of the previous decade had finally come to an end. and so for that reason i think there is an important element of trying to use the olympics as a way of showing the stability have returned to this region, and more broadly, using it as an avenue for economic development that within like a foundation for more durable version of

stability to break out across the wider region. now, of course, russia and the caucasus in 2007 i think look a lot better than they do today. in a lot of ways, the sochi games looked kind of like a soviet era, not only project but also something on this idea of megalomania, that we often associate with soviet infrastructure -- infrastructure projects like the red rose or the dams, the reversal of rivers that were being contemplated at one point for sudbury. this is a very top gun operation. it was an opportunity to channel back some of the money in destruction of new venues. it was an opportunity for large amounts of that money to then be siphoned off. at the same time though, because so much emphasis is being placed on this, because so much of the proceeds of putin and the broader elite is tied up in it there's been a lot of attention to what's going on inside so she. and actually the picture has

been not a particularly pretty one. .. vladimir putin said russia would spend $12 billion on running, preparing for these olympics. that would make them the most expensive winter games in history. the actual figure it looks like is going to be above

$50 billion, somewhere around $51 billion disclosed by the anti correction of volume which has been batted around. that is not surprising because of the lack of interest, the need to build up new venues to build transportation corridors to put the things in place, you are going to need for the olympics. but at the same time a third of that money was out writesstolen. the story of the construction of the road between sochi, a very short road, the cost of building it was estimated to be $8.7 billion. one journalist pointed out you

could pay the entire road in caviar. most of the funding for this are coming from public coffers in one way or another. the government keeps emphasizing a lot of this is private, some of the oligarchs i being asked out of their own pockets to pay for different kinds of olympic venues, different construction projects and that is true but at the same time this investment is being underwritten by loan guarantees from public banks which means ultimately at the end of the day it will be the taxpayers who are on the hook. few if any of these projects look like they are going to make money. at the same time olympic construction has been a huge boom for organized crime resulting in kickbacks, shake downs, the whole litany of activities that one would expect from the russian underworld. given all of this, the heightened attention to security

challenges, the fact that russia faces a whole host of broader difficulties that have been spreading over the last couple years it is not surprising there doesn't seem to be a lot of enthusiasm inside russia or out for the olympics. we had a speaker a week ago who is a leading russian opposition politician and we were discussing this and he said he remembered the contrast, pointing out the contrast between attitudes in russia today and attitudes in moscow in 1980 when the summer games were being held in the soviet union for the first time. in 1980 there was the probable cents there was a sense of pride hosting the olympics, and a sense of defiance, there is much more apathy, people are aware of the corruption, aware that none of this will benefit them once

the olympics question the expenditures on and they are worried about security. it seems according to the most recent estimates that only 70% of the tickets have been sold for most of the olympic events which given a week out from the opening ceremonies is a pretty extraordinary vote of no-confidence. at the same time, holding the olympics in russia in sochi has put russia and vladimir putin the global media spotlight at a time when the country is facing a number of challenges and the global spotlight has emphasized where russia seems to be going off track. a lot of problems accumulating in that country. there is a lot of global mia attention on russia's gay-rights challenges and i don't think it is surprising that the u.s. delegation is headed by billie jean king. with you haven't seen a look at

the uniforms, the german team participating in the olympics, rainbow flags. it has become an opportunity for the outside world which is increasingly frustrated with vladimir putin's russia to make a point about all of the things they are struggling with. i think the government recognized some of the problems and the run-up to the olympics try to take some limited steps to address what they expected would be the most salient forces so russia's most prominent political person was released shortly before the olympics. the punk band close the riots was released and in part this seems to be an effort on the part of the authorities to put things in a good lag before the global media, to change the narrative ahead of the olympics but i don't think they have succeeded. if you look at the list of who is not going to the opening ceremonies among international

leaders, i think that does say a lot about how the rest of the world views these games and views current political developments in russia. president obama is not going, vice president joe biden is not going, angela merkel is not going, shinto at the end tei n ping are going. shaping the narrative for international audience, hard to say that so far at least the olympics have been a success and if there's a problem with one of the venues that failed, a terrorist attack, that narrative will get more negative but at the end is important to remember who the main audience is. it is important for vladimir putin to emphasize that russia is back, can hold an event on the scale of these games but the most important audience is domestic. how this plays in russia is in a lot of ways more important and

so far we haven't seen an upsurge in enthusiasm. of the russian team does well and win gold medals and if the olympics got off without a hitch once the games are over after the closing ceremonies happen, we will evaluate them and right now it is a questionable proposition to think these olympics will function in the way vladimir putin and the russian police intended them to function when he went to guatemala city in 2007 and was given a right to host the olympics here. >> thank you very much, very comprehensive, might also note in the bond is not going though i don't think that is a political statement. it reminds me of estimating what the soviet military budget was

and i don't think we will ever find out. >> picking up where jeff left off this is potentially a very important turning point in post soviet russian history depending on the outcome of the games. we are very likely to see if we see some kind of catastrophic terrorist attack, complete reversal of what has been left of what i consider to have been a thaw under president medvedyev and a sharp turn to more hardline policies under vladimir putin. very important moment. turning to a more hard-line would be based on a major attack, a hard turn clamping down and rolling back of democracy in russia. to the threat, 7 months ago, a paper for the jewish forecasting corp. and the sochi threat i

outlined six features i thought were important. first, i am talking about potential perpetrators in the caucasus, the mujahedin, potential tactics and targets. first is suicide bombings run by the north caucuses which could be either dakhastani converts to islam which they specialize in recruiting, for suicide bombings. attacks perpetrated by foreign groups, independently or in league with the caucuses in the mujahedin, possible chemical attack involving groups from the caucasus who returned from syria and may have chemical weapons and two attempts inside russia that appear to be focused on

perhaps targeting chemical weapons. suicide bombings run by caucuses dhuman maro and the brigade that he revised in 2009 and there have been since the formation of the caucuses 154 suicide bombings carried out since october of 2007, nine per year. and finally, next to last, attacks possibly involving ch a chenadegi or ethnic turks given the location of the olympics and the massacre that occurred in the late nineteenth century, there is an interest in the mood had been to participate so there

is a wing in the caucus, might want to take apart, and it may take sochi, it would not take a major attack in moscow or coordinated attacks in each of the villas on major attack or event would be enough to spoil the olympics. so let me let each of those briefly in more detail. the dakhanistan threat using dakhanistani suicide bombers or ethnic russian suicide bombers. is largely comes from a group led by aby mohammed, a pakistan viliat and shake mohammad boren

sumanov and head of the central sector, abu tahir qadari and there are two key sub sectors. and turns out to have been the place where according to the national anti-terrorist committee reported yesterday that the two suicide bombers who attacked on december 29th and december thirtyth were from -- were suleman magadedov. has several hundred and one of those is an ethnic russian ge t gemot. previous reports about a group

called volusia had been --muj a --mujahadeen the pakistan viliot used suicide bombings in february of 2011 in dagestan, a colleague of theirs was apprehended by russian forces but not before he detonated and blew off his hand and was a would-be suicide bomber. the august 12th assassination of the most popular sheik in pakistan was carried out by an ethnic russian convert and her handler was ethnic russian move ahead dean dmitri sakharov in october. he was killed a week after that attack.

and the emir of that group, when a deterrent in boca grande there were reports that the perpetrator was pablo pachokin , an ethnic russian convert who was part of this russian jemot and there were several others. on january 19th there was a videotape on the dagestan web site, two mujahadin claiming to be from the answar al sureman group, one of those names, corresponds with national anti-terrorist committee's claim of suleyman magomedov having taken --

okay, so this means that the -- the ethnic russians are still out there and may still be heard from. in fact the dagestan has been publishing all sorts of reasons material encouraging russians to rise up and talking about the ethnic russian. one of the key factors of the m amswar al sunna has done a lot of attention, the day before there was a text announcement of the emir of this group who threaten the chemical weapons attack and to the order was on

the table to be signed and russian troops had withdrawn and there would be an attack up to and including chemical attacks. a direct quote. the other potential is the potential of a foreign group joining in league with the caucuses, and an italian with the possibility of chemical weapons attack, hundreds of caucuses and mujahadin and would be replacements to cover the attrition that occurs among mujahadin fighting in syria. some could have gotten their hands upon other chemical weapons, and reports of people trying to come into turkey with certain elements. and there was a journalist who claimed the cia was reporting in spring to the obama

administration the rebels had chemical weapons, and there was a possibility the rebels do have weapons. there are two groups of mujahadin in syria, one is fighting under -- and the oth j otherjaich snwar is, the military leader of the northern front of the islamic state in syria. and in fact he is now a high-ranking figure. the possibility that al qaeda and to get chemical weapons into north caucasus for attack on sochi excluded. in terms of the chaqasi threat, how much time do i have? the network of the caucusus, sub

network, what we call the -- partially chaqasi populated groups have a direct interest in taking part. this network is much weaker than the dagestani network as is the chechen network but it is the second most powerful network and it is possible they would assign several mujahadin to make part, with the caveat that in february of 2011 they carried out a practice run for an attack on sochi, carried out an attack on the ski resort district, multi pronged attack involving destroying ski lift, truck bomb in front of a hotel killing four tourists from moscow and several other small-scale attacks on police virtually simultaneously within 48 hours. most of them within a 24-hour

period. and alarm raised in connection with the foreign element is on january 13th for the russian national anti-terrorism committee claimed they had arrested five terrorists were part of, quote, and international terrorist organization in the capital of chaqasi. i would not expect the chaqasi operation to be led. one detail on the foreign element and the possibility of a chemical attack is a fought what --fatwa was issued, and it was requested by d 0 b k b. kay, from the web site sharia committee of one of the leading jihad operators in the world he is in prison and his sharia

committee are working and issued fatwa in which they justified the suicide bombings and called for more especially against sochi and asked a group inside russia to make conflict with the caucus -- with the caucusus and cooperating carrying out any attacks. the fact that they put videos on their web site was a signal they had contacted the caucusus. finally in terms of operations other than attacking sochi i want to talk -- time is up. we can do that in questions. belmar could be running of the four suicide bombers, three from dagestan and he is very close to the mujahadin and may be running that female suicide bomber. in terms of tactics there is

little likelihood they would pick a target outside sochi, attacked moscow or a major attack in malchick, i expect there will be multiple teams, the dagestani mujahadin, the epic russian mujahadin, perhaps the chaqasi group being deployed simultaneously and so much the better if one or two get through or just one that is just the way the cookie crumbles. i am not optimistic about -- at a minimum we will see a major uptick in jihad operation during the games, i think they're holding back resources. whether we will see a catastrophic attack, and clear. the caucusus are good at using

various tactics, determined and resourceful and innovative. we are going to have to be ready for almost anything. >> that is a very sobering presentation but it is the reality. one of the other unique aspects of these games, we have not mentioned the leader of the caucusus emirates' whether that he is dead or alive, he directly threatened the games back in july, effectively calling for those that are in his network or those and/or those that support the ideology and goals he is supporting to effectively take off the handcuffs, civilians are fair game, everybody is fair game. my own personal view about doku umarov is it doesn't matter

whether he is dead or alive for the sochi games themselves because unlike the most infamous and effective terrorist from the north caucusus who was killed in 2006 finally, he was hands-on in carrying out operations. doku umarov not so much, certainly for the future of the caucusus after the sochi games, whether he is dead or alive. at any rate, thanks very much. it was terrific. tom, the floor is yours. >> thank you for the invitation. it is great to be here. my only regret is sergei is in moscow. he has written a great report. two presentations from my

colleagues to take us back to july of 2007, a reminder that that was a point in which when the games were awarded to sochi this was the moment in which vladimir putin looked on these games with great ambition that this would be a turning point for north caucusus. he probably envisioned this would be the moment the world came back to the north caucusus, discovered that the caucusus were not as bad as the media portrayed it to be. this would be a kind of vladimir putin managed event of multiculturalism and it would be a kind of local event in which his vision was vindicated. unfortunately as we know, that is not what it turned out to be breaking out a year later.

in a georgia he would have predicted in july of 2007 when the games were given to sochi that a year later russia would be recognizing -- this wave of enthusiasm has fallen, last year, there was a bit more enthusiasm with the election of a new government in a georgia, departure -- that this could be an opportunity. i remember the georgian foreign minister saying to me just about a month after it they came into office maybe i am being idealistic but i would like to get in my car and drive and attend the sochi games, it might be in great. that also proved to be an

illusion, the georgian olympic games will be going to sochi but no politicians. they decided not to do that which is the right decision. there is an opinion poll that 66% of georgians approve of the decision to go to the games and 17% oppose it but it is clearly not going to be a kind of event of great coming together and reconciliation. and the ambition for this game was that it would be a way to leverage these games to be put on the map. suddenly there would be if not a delegation that somehow they would be inserted some out into the games and that hasn't happened. vladimir putin's ambition was scaled way down to the point where the ambition is to get

through these games unscathed and for people to talk about skiing and skating rather than terrorism which is what we all want to see but clearly the fact the we are here today still talking about terrorism and security threats a week before the games shows where the reality is. in that regard vladimir putin has shed some of his more ambitious goals for the caucusus and focused on caucusus lockdown so the georgians are welcome to come but this is not a time -- other than the things already going on in georgia/russia relations with trade. the out side being left out of the picture is this a huge security event around sochi, no longer able to cross the border. the rest of the north caucusus

vehicles are no longer allowed to come into sochi and there is this a 11 kilometer security zone south of the so river. which is basically an extra security threats. this is being portrayed in the media inaccurately as a moving of the border. the georgian foreign ministry complained naturally they would. this is not any territory georgia has controlled for 20 years in soviet time. the abkhaz are being restricted. a friend who i corresponded about this with said we can make it across the border as pedestrians but we can't drive across.

this is really going to be the lockdown games, and the objective clearly is that there is going to be note terrorist incidents within the greater sochi area and no spectators or athletes suffer and maybe they will pull that off. as borden was saying that increases the risk of being in a different part ofgordon was say increases the risk of being in a different part of russia during the games. i think this has been a bit overblown. the previous georgian government tried to instrumental lies the chaqasi to pass a resolution, recognizing a genocide but that was treated with some skepticism by lot of sarkhasians as part -- they are many different ethnic

groups, and the ones who were from the sochi area, indigenous people before the russians arrived, people who really no longer are on the ground, maybe a few thousand shops, 3,000 or 4,000 but most of those if they are anywhere their descendants living in turkey or gordon, all they really wanted was to be acknowledged that they existed, that they are indigenous people from this kerri and by coincidence or black coincidence the 150th anniversary of the massacre and deportation in 1864 happened on this precise spot where the games are being held. little more sensitivity from the