something we raise constantly to insure that they are getting as much protection as possible. .. thank you very much mr. secretary. thank you for your service and for being here today. just a few questions. imagine january 17200 trucks entered falluja and the mahdi.

was that a tactical surprise on the part of the sil or did we have intelligence that suggested they were mustering and were about to move or did the iraqis have that intelligence? and if we did what was wrong with that and secondly, you talked about how the suicide bombers turned and twisted logic has become the most precious resource, and in november of 2012, there were three suicide bombers and that has gone up to 50. what is the scope on that or is that continuously expanding? do we expect to be at 100 by next year or is that -- if you could speak to that issue. third, to point out that sis you quoted that on january 21 how

seriously is the threat to baghdad? fourth, if you could comment you point out the isil the maliki soldiers did not take the bait. is that something that is ongoing; are they executing prisoners in the center of falluja or the central part as yohe would say in falluja? and when it comes to the issue of christians, the report commission of religious freedom point out that the iraq he government continues to tolerate systematic ongoing and egregious violations and that is against a number of the smaller sectors going back 2,000 years including the syrians. what kind of pressure are we trying to put on the government to completely end the repression

of christians in iraq and finally you talked about the low boil type of insurgency that this represents. are we looking at the possibility of another syria and iraq? with me address these entering into falluja if we are moving around to the isil forces and trying to relocate it was a surprise. again i think it was a tactical mistake on their part this isn't going to turn overnight but as i described in my testimony the response developed rapidly to expel them from the streets in falluja is going to be harder. but one thing in the province they might not like the government, they might not even trust the army but they really don't like these foreign jihadis

fighters, so we are trying to gather a cause against them. the suicide bomber it's about 30 or 40 a week. i don't think this will be an exponential rise. i hope it might be a cap. we have seen this in the past and what we did in 2006-2008 was a regionwide effort. how do you get them with a one-way ticket to damascus off the airplane, and we were effective actually after draining the flow and one thing was increasing security in western iraq, so we are going to try to re-create that strategy throughout the region. isil attacked the south. they are trying to attack the south. you may render after the election of 2005 it was february that al qaeda had attacked the

mosque which kind of led to the violence for the next two years. they are going to try to attack the hope right -- high-profile targets. i hope and i don't think they will be successful. i think they have those areas protected but it's definitely part of their strategy. in terms of falluja we do believe they are being held in falluja. and as i said, these extremist fighters are trying to go in a direct urban confrontation. so far, despite some rhetoric yu might see about storming, they are working to secure and i think there will be fighting particularly in the outskirts and then later in the central city but we are going to tighten it sure it is as contained as possible. and non-christians come a very good question. in iraq and throughout the region. when prime minister maliki was here, he announced in the public

remarks taking care of a christian community. in october he met with the patriarch, the head of the church. when i'm in iraq i try to meet with christian leaders and i met with the archbishop of couple months ago and tried to focus on the motherland disputes they are happening. they talked about a christian province to allow them some autonomy and security. and again, this is something we continue to develop. i'm going to be meeting with an iraqi christian leader tomorrow. it is an extremely difficult issue. christians are threatened by these issues and sunnis and everybody. >> thank you mr. chairman for being here. >> you know, the ties between iraq and iran seems to be getting closer based on the

treaty that supposedly they put together. i am concerned that maybe the safety of people's liberty -- the iraqis aren't making the effort that we really need to secure these people. if i'm making an effort with iran, why would i be so intent on the safety of these people? it's addressed in december they keep firing rockets into this camp. how sure are you that they are bringing security into this camp? >> the issue remains very secure. there was a rocket at the camp that is near camp liberty that used to house the soldiers and we took casualties as late as the summer of 2011 and that's when we had them trying to stop

this kind of activity. as they did to her and wrote out a well-trained team with rockets, that is why we are trying to move as much protection into the camp as possible and that's why i find myself to try to assess the protection. it remains a difficult issue. they don't like the iraqi government and the iraqi government doesn't like the mek. we have to stay on the mek to move the president to a safe and secure location and stay in the government. every time i meet with the leaders of the government despite all the other issues, i mention every single time and as i read i received a report this morning they are moving into the camp and we are going to make sure they continue to live in the next day he ended the day after. >> how concerned are you about the treaty between the arms

going into iraq? >> they've been careful to draw the line in the security cooperation with iran and so far they've kept the flying fairly firm. i've seen reports like that but i wouldn't take it too seriously. the iraq ease have made it clear they want a long-term institutional relationship in the united states and that's why they want platforms like the helicopter system. when we sell a apache helicopter we are actually buying a 30 year relationship in training logistics maintenance and that's why we feel it's important. we want iraq to have a long-term relationship. general austin's visit he of course knows the commanders and they've worked together in the streets and fields all throughout iraq and they have deep relationships. you cannot get a deeper

relationship and the people that fought side-by-side. that is something we are going to continue to develop. he might be depending us are after the upcoming elections and he might not be. we are working on a relationship with the government and institutions from the military to parliament, something that's going to last for many, many years. >> in the sale of russia arms to iraq, are you concerned about that? >> i don't want the iraqis buying russian hardware, and i have to be honest, given security situations, there is a lot of strategic competitors in baghdad showing up blocking on the same doors we are knocking on saying we are here to sell you a helicopter just write a paycheck. we have a system through the foreign military sales system which is a good system that makes sure that the stuff arrives with a long-term institutional relationship as i discussed some of its slow and cumbersome. earlier this month i was in

saudi arabia and other countries and there was a lot of complaints about the foreign military sales system. we heard the same from the iraqis but i want them to bite the u.s. equipment because that buys a long-term strategic relationship. so yes, it's unfortunately that they thought the mia 35 from the russians did on the other hand they kept telling us they were going to do it if they couldn't get the apache fast enough. >> is this a consideration giving that they are selling drugs to iraqis? >> we are selling the unmanned uav's. >> i meant armed. >> armed drones is not under consideration. >> thank you. >> thank you. we will now turn to mr. rohrabacher for his questions. >> thank you very much. and we are all impressed with your knowledge level. you are able to do this from your memory, and we are

impressed by that. i am impressed by that. but that doesn't mean that i agree with your assessment. let me just say that the idea that we are talking about the camp ashraf seems fundamentally that you are suggesting that our approach to try to stop the massacre, the ongoing massacre at camp liberty that we have to go to the maliki government and ask them at the problem is they are not providing enough security the government is responsible for these deaths. i don't understand. the military -- the iraq he military invaded the camp ashraf and murdered people. these are the people under maliki's demand that did that.

they recently went into the 50 or so that were at the camp ashcroft can't tie their hands behind their back and shot him in the back of the head coming into this maliki's of government we know who did that. we know that the camp and these people were attacked numerous times by the iraqi military. this isn't whether maliki and his government are not protecting the mek. this is a crime against humanity. these are unarmed refugees in which maliki's troops are murdering. we are not talking about a rock if we don't know where they are coming from. we are talking about -- i would suggest they know those rockets as well. let's make it very clear as far as i am concerned and people in washington are concerned, maliki is an accomplice to the murders that are going on.

and as an accomplice, we shouldn't be treating him, begging him to have a residual force of u.s. troops in order to help his regime. i don't understand why the united states feels like we feel compelled to be part of all of this. why do we feel compelled that we have to go in and be in the middle of a fight between people who are murdering each other 30 to 40 suicide bombers among the? thousands of people are losing their lives to this insanity, which why should the united states -- tell me this is my question -- why should the united states feel that we need to become part of this insanity, and does that not instead kurd both of the parties against the? >> congressman commit a suicide bomber phenomenon is complete

insanity. i agree with you. when you look at iraq and the region and define our interests -- and i don't go to any leader and beg for anything that we protect u.s the u.s. interest ae find them. in iraq whether you like it or not, orioles, iran, al qaeda, the various interest are at stake in iraq do we need to do what we can -- >> let them kill each other, i'm sorry. if it means that we are going to end our treasure and more of our blood, we've already spent thousands of lives of american soldiers. we have done enough. and i'm so happy that you now can report to us that fewer negotiations to provide a residual american military force in iraq was not successful. i'm very happy that we don't have a bunch of american troops in that mess. we are holding him responsible

for the murders in his own ranks, for the military that he commands to go into the camp and camp liberty and murder unarmed refugees. this is a no-win situation for us. both sides seem to be evil and both sides are off. one must question. i have 30 seconds. who is financing? we talked about 100 trucks and all of this equipment costs money. the bullets even cost money. ak-47s cost money, rockets cost money. who is paying for that on both sides of this fight? >> i would refer to my intelligence colleagues for the specific funding but we believe it is a cool source of some in throughout the region on the global jihad this movement which is based in syria. i wouli would have to defer to y intelligence colleagues for that information but a lot of it is private funding.

>> private funds. thank you very much. >> while we are on the subject, did you want to share any details in terms of the attack on the camp and in your judgment who you believe was involved in the? since that was the question at hand. >> thank you mr. tremaine. last time i was here we discussed what we know. we believe it was a militia and it was also trained by iran. and that is the primary responsibility. we have this in a very horrific attack we worked together for survivors out of the camp, which is about 40 miles from the iranian order and onto camp liberty. camp liberty is not safe, but it's safer. in the camp we are monitoring every day. when i go i try to meet with the camp and the survivors and the resident there. >> and you are making efforts right now to update the

survivors? >> absolutely, yes. >> we are going to go now to gerry connolly of virginia. >> thank you mr. chairman. a couple questions first. the authorization of the use of military force, the administration has indicated that it would not oppose the repeal of that. is the issue on the timing with the pending elections in iraq might disrupt things that you are doing if we were to do that now? >> i don't think there is much focus so it wouldn't make much of a difference on the iraqi perspective. >> that's good to know. elections in april, still on schedule? >> our team at the embassy is talking every day to the united nations mission in iraq and the

electoral commission to plan for elections and the only information i have received is that they do remain on track. we have tens of thousands of displaced families from the island bar province. we have been assured by those planning that the people would still be able to vote and the vote would count as if they were in their home coffins. we are still confident that what it would be held in the very consistent position is that they have to be held on april 30 and there shouldn't be a delay. >> allowing people to vote remotely. fallujah. help us understand what happened. the united states has been involved now for 12 years. billions and billions of dollars. we have reconstituted the iraqi military. we have trained the law enforcement forces. we spend our military blood and treasure to gain a foothold, to

gain fallujah. and the al qaeda successor organization manages to occupy it. if i understood the testimony correctly, we are now once again relying on tribal support to essentially dislodge the forces in falluja. how in the world of -- is that an indictment of the investments we have made in the iraqi military? and in its ability to hold its own territory secure? >> the iraqi military would have the numbers and equipment to go in tomorrow and clean out the street. we believe that when they do in a folks like that it would actually exacerbate the problem. >> before you get there how did

it happen in the first place? how is it that the iraqi government was not able to secure something as symbolically important i if not really important as falluja? >> as i tried to explain in my testimony, it's a series of events in 2013 including a protest movement which kind of added to the political instability in the region. and then fallujah in particular is an area that as we know, any outsiders coming in to fallujah are resisted, and that includes the iraqi army and included us and includes now we hope these al qaeda extremists. all i can say is where we are right now and we are helping the iraqis develop a plan. they are developing a plan that will lead ic tribal fighter figt i mean the local people, local population on the streets are able to identify the elements and push them out. right now in fallujah is a mix of al qaeda former insurgent

groups and baptist networks in control of the streets. it's always been a very difficult place, and so it's a very difficult territory to operate in. >> the tribal support we are relying on or cooperating with, what is their attitude towards the malachi government? doesn't that support cooperation -- is in some of that a function how they viewed the central government? >> certainly there is a tremendous mistrust in the area towards the center. >> does that impede our ability to dislodge the occupation forces in fallujah clacks >> it does. it makes it harder. some tribes are working with the extremists and others are on the fence. and that's why it's incumbent on the central republic through the resources and through dialogue and communication to mobilize the population against them.

when we worked in the awakening we did three things. we trusted them, we can do to them, but also significantly, we protected them and we thought they were going to win. he was the head of the awakening in part number two. it's a very tough area and these are tough folks come up with the tribal leaders need to know that they are going to be supported and i believe that they are going to win data that is why the commitment most recently to give the tribal fighters all of the benefits of an iraq soldier and to incorporate the fighters into the security structures of the state may have a livelihood going forward to protect their people at a very significant commitment is one that has never been made before and we need to make sure we hold the government tgovernmentto it and follow thr. >> the judge from texas. >> i want to talk about what you probably thought i would talk about today is the mek.

the last time you testified before my subcommittee and the chairwoman of the subcommittee i made the statement that there would probably be more attacks on camp liberty. there were four people killed and one young man lost both his legs. since 2009 there have been seven attacks on camp liberty or camp ashraf. 19 times members of the state department have testified. most of those or many of those were about camp liberty in addition to other things and all of those attacks to my knowledge as of today not one person has been captured or charged with any of those killings. not once. and they are still on the loose.

as i eluded to in my testimony, i personally believe that the government is in good with the iranian government to be subject to attacks. the rockets came in that for 3 meters long. 40 of them. it seems impossible to me that the iranian militia could fire them over a period of time and caused this chaos. and i bring this up for several reason. this has become personal to people that live in my district. i represent people that our americans. they know these people that are being killed. they are family and friends. they visit and they tell us it's

happened again, judge, with tears in their eyes. it's become personal. many of them are sitting behind you and they come up here wanting speed x. that's all they want is the united states said we would promise to help them. we no longer recognize them as a former terrorist organization. they just want their loved ones safe first from the constant attack by them working together. long term they want to leave. they want to be in a safe country. now i commend you two going to visit the camp. did you see bees were these are used for are the people at camp liberty are in such fear of their lives they no longer stay in these trailer houses here.

they dug themselves what looks like a grave to hide when the attacks come from the rockets and they put sandbags around them and then they are ready for the next attack and a jump in but they sleep in the things that migh night even in the raio try to be safe. literally digging their own graves. this is -- it seems to me this is a fairly tragic situation when people live like this and fear of where they are. whether it's the iraqis were the iranians or both. did you see any of this with what they use as foxholes to hide from the rockets? >> i didn't see that particular but i saw some of the bunkers. >> that is an international human rights concern. it should be.

they haven't gotten any of those today. 17,000 of them were removed in a short period of time and now they want to put them back in slowly. it's a safety hazard. they want them to be safe and then and now. the other concern i want to mention is the resettlement issue. we want them to leave. i'm not sure what the iranians want. but the west constantly says because the united states has not taken any of these people we aren't going to either. when the lead by example rather than removing these people, then maybe we will take them as well. why haven't these folks been sent to other countries, why haven't we taken some of them or all of them and the second question is when you visited

with the survivors of the camp attack, did theattacked, did tho they be believe was responsible for killing he the family and tt is the question that i have. >> let me first say a leader that took responsibility for the attack openly and was on television giving interviews taking responsibility for attacking the camp, we thought it was ridiculous that he was talking the streets inciting people to the camp. he was arrested by the forces and was detained and being investigated so that is something that happened in the last month. this is an international human rights can turn and that's why i mentioned earlier i find that encouraging there is now a focus with a resettlement fund at the united nations to focus on this

issue and ask you also correctly pointed out, very few countries around the world despite the international human rights concern have agreed to take the president into their own territory. albania, germany, a total of 350 so we still have almost 2900 people at the camp. this is a human rights concern and has to be treated with the utmost urgency. ..

and that is why we have a full-time person working on it. we encourage the u.n. and they appointed a full-time person to work on the problem and we have a u.n. settlement fund to -- >> and now we go to mr. ted deutsch of florida. >> thank you, mr. chairman. mr. mcgurk, thank you for being here. thank you for thoughtful testimony. last year it the prime minister about the overflights iranian aircraft. there are reports that the number of overflights from iran has increased, that these are flights that iran sends to hezbollah for their influenced area to the assad regime either not very continues to slaughter his own people.

how do you characterize prime minister maliki's relationship with iran? >> let me say a couple words about iran's nefarious role in iraq. just like al qaeda has exploited the grievances of the sunni community, it ran is exploiting the fears and apprehensions of the shia community as they are attacked by these al qaeda extremists. so is a vicious cycle that arendt very much takes advantage of and the most extreme elements of that regime in the cards for us. maliki, and we discussed this with him all the time tries to balance all these pressures that, baghdad from the region and from internal. he is under great pressure from his constituency, particularly among the shia who get attacked by extremist groups. but so far we've seen the iraqi government resists.

the rainy after it has a direct role. we believe that controls troops in iraq and activities are not nearly the level they were four or five years ago. >> they've resisted arantxa bradford for a more significant role in iraq but they've resisted the authors of many of us either to commence them to play a more significant role in stopping these overflights. why don't they do it quite >> again, the oversight is something i can see as we continue to raise the oversight issue. we've allowed them to this material is coming on plates. we do have certain agreements with the iraqis, which we report to testing as soon as we have intelligence riddle to share with them in terms of catching a flight in the act. we've not been able to test baghdad. >> i'm sorry, say that again. >> it is very hard to get a

precise intelligence picture in terms of what is coming on a flight and when. it's very difficult. but when we do and we work with countries around the region in similar circumstances when we do, we hope to be able to work with iraqis and be able to make sure we are able to stop or deter them. >> here is what i am trying to get at. it is difficult to identify what is in place. i understand that. much of the frustration i have on this issue is frustration generally with what has been the area and the ongoing assertion by so many that it's hard. so much about syria is hard and it's difficult even as there's now more than 130,000 iranians who've been slaughtered. so this is one very small area where it is difficult, yet if

you believe that the maliki government that the prime minister discounts the suggestion that there are planes flying from iran full of weapons that are flying over iraq with those weapons to be delivered hezbollah used to prop up assad's regime and kill the iranian people. >> we believe that and he knows that it's actually happening. i think we've given enough information. >> and how do we test these? you said we need to start testing some of this? when are we going to start testing? how do we do that? again, this is one very discreet and i'm just bringing in everything out it goes into syria at the moment, which this committee has focused on extensively and will continue to focus on extensively. but with this one very discreet area, very discreet point, that his weapons from iran to

hezbollah the flyover rack. it is one discreet area where perhaps we can play some greater role in making it slightly more difficult for hezbollah to help assad and converters to help people. it slightly more difficult. if our ally in iraq is a more constructive role. so had we make that happen? >> verse, i would be happy to come discuss in a different setting specifically some of the issues related to this topic. but i can put you in the picture when we have these conversations with iraqi officials and leaders. as soon as you mention syria, what they talk about inferior is the threat coming from syria into iraq and is a very real threat. that is the primary threat perception coming from syria. we explained that the reason the terrorist groups are entrenching an area is partially due to a

assad, which the secretary said is a magnet. as long as the assad regime is able to be strengthened, and a vicious cycle is going to go on. the iraqis have signed up geneva to put pressure on a side and on the oversight issue, then iraq twice this month and briefed these issues to get inspection increased again in the next time i'm here i hope to report progress. >> thank you very much. mr. deutsch. >> we know go to mr. holding of north carolina. >> thank you, mr. chairman. mr. mcgurk, i appreciate your level of knowledge with the facts that your ability to communicate on the numerous answers he detailed the support that iran is giving to militias in iraq and to al qaeda or

related and al qaeda groups in iraq who are propagating this violence and i'm doing i think a lot of the good work we were able to do in iraq. in addition to that where the maliki government has been able to not supported by the ram is doing in iraq are not level, there are other areas of the sanctions are placed on iran. such as the energy area, energy sector. it is coming to a sharp robin iran and iraq are negotiating the building of a pipeline into new power plants there. this all in contravention of the

sanctions. are we putting iraq on notice that this is in contravention of the sanctions and is your what we perceive as our interest? >> very good question and this is also an ongoing topic of conversation. they share 3000-kilometer border, so there is trade. there's cultural ties. it's impossible to stop everything. iraqis have been conscious of trying to enforce, make sure they are working consistent with their sanctions. in fact, they have not paid the ran for certain electricity payments because they believe it might be sanctionable come even though the banks of much that they are not sanctionable banks. the iraqis have tried to go an extra mile in terms of sanctionable, making sure they are keeping when it -- >> with regard to financial institutions, there's a great deal of evidence the nature of the relationship between iraqi financial institutions in iranian financial seditions goes

on with what would be permitted in the sanctions. >> maybe i can follow-up with you specifically on this because it's a very detailed topic. iraqi banks have cut off simply due to reputational risk. iraqis also increased its oil output while iran has asked them not to do that because we've taken a million pairs of iranian oil market. so again, this is constant. the pipeline you mention this concerning is the pipeline is forward that could indeed thought of our sanctions. >> considering the extreme detriment to our interest for mr. rainey and support of militant groups in iraq, is there any part of the deal that the administration is currently negotiating that would address these issues? you know, put it as a condition. your income effect is that doing

this. >> congressman from the nuclear is focused on the nuclear proliferation issues. but that does not mean -- >> so we are not using any of our capital in lifting the sanctions for the nuclear enrichment part of it to try to solve some of the other problems are having in iraq? >> in an existential threat clear in iran with interest and specifically on the nuclear issue, as far as iranian supported hezbollah, which as you say pointed out that you've given maliki clear, clear evidence of what's going on as far as overflights go of the supply of hezbollah with iranian weapons. is there any part in the nuclear negotiations that we are doing now with the ran, which would address the rainey and supported hezbollah fighters in syria?

>> the nuclear negotiations are focused on the nuclear proliferation issue specifically. but that does not mean we don't do with other issues on parallel separate tracks. >> but he again, we're not using the leverage we have a nuclear negotiations to try to address a situation we have with hezbollah syria. >> we're not discussing us come in now. >> thank you, mr. chairman. i yield. >> the turnout recognizes mr. cecily for five minutes. >> thank you, mr. chairman. thank you, mr. mcgurk, for being here and insightful testimony this morning. you can imagine imagine in iraq it is particularly difficult to hear about sacrifices of the billions and billions of dollars of taxpayer money expended in this region in the world you acknowledge in your written testimony in a thank you for that. at to first speak to the different events in vermont in

falluja. they turned quick and fairly effective. that is not the case not the case of falluja. which you speak to buy the coordination between the tribal fighters in the iraqi government and resource allocation between these two cities and many other fact yours, which are contributing to different outcomes are different strategies? >> falluja has always just been the most hardened part of the insurgency when we are fighting and it's a different environment if you look at the protest movement over 2013, the protest remained generally of a moderate tone, focus on legitimate grievances of the community. the protest in falluja which also took place every friday for far more militant, far more extremist. so it is just a different environment, just like many cities in different countries have cultures and attitudes.

>> if i can follow-up on congressman deutsch's question, i think he said most of the foreign fighters were there in common is that right quick >> foreign fighters have come into serious. from the greater region and global jihad is minded people who came into syria to fight jihads. >> so would you speak more about the relationship between the maliki government and president maliki in particular and president assad and do they understand by allowing these flyovers and potentially strengthening or prolonging the assad regime, they are actually undermining their ability to take at their own country from the same extremists? do they make that connection or what is the relationship between the maliki administration regime and the assad regime? >> maliki in the top leaders of the iraqi government, there is no love lost with the charlotte

side. in 2009, maliki was calling to be brought to the criminal court with the bombings in august 2009 on the syrian regime. again, the sign-on to the cubes near the communiqué, which there is a transition to pass out -- bashar al-assad. when we explained to them that bashar al-assad remained in power as a magnet for jihad is in tears, that is a train of logic that many iraqi officials don't agree with frankly. they believe if assad last, the regime would collapse and make the problem worse. this is constant see the same picture we do, we believe very strongly as the secretary said a number of times that bashar al-assad in power is a magnet for foreign fighters coming into syria to fight the jihad. until he was removed from power, we'll continue to see this and this very vicious cycle, which is going to have pernicious

effects on serious neighbors, iraq, lebanon and jordan in particular. >> what other tools we have at our disposal to persuade the maliki government that that is the case? otherwise they are going to continue to implicitly or explicitly support the assad regime another effort. >> i think it has to be really candid. particularly of the next heading out to the election, there will be internal issues and internal politics and our hope is after those elections with the new government up, we will work with that government to really get at this problem. >> which leads to my final question. is it clear to president maliki in the iraqi theaters in general that the responsibility to defend their country is their responsibility and their expectations should not be that

the united states will fulfill that responsibility? they have to come after a very long commitment from this country, they have to take this responsibility to defend their country and doing the hard work of bringing stability and peace to their own country? >> absolutely. when general austin was in iraq last week and is in those meetings attended iraqi leaders, they'll stress for five points. first, they want to support to the end of the framework agreement for bush as a permanent foundation constitutional military to military. we are talking about doing some training in jordan or the region. they want intelligent support and they want to let us know when they feel they need weapons or system so we can help them supply. so that is what they want. they also wanted by some recommendations for how to actually plan and plan effectively. they do not want us to be in the lead in this fight. it's their fight. >> thank you. >> i yield back.

thank you, mr. chairman. >> the chair recognizes himself for five minutes. mr. mcgurk, thank you for coming in. i appreciate your service in dealing with these very tough issues. i am obviously not happy with what is happening in iraq and i've been very clear that the withdrawal from iraq was one of the biggest mistakes historically that will be shown that the united states has made in modern foreign policy. i'm going to express a lot of concern with that. it is not necessarily direct attack is directed at the decision. i am an air force pilot and i served in iraq and number of times. i remember specifically go in there in 2008 and still watch it hierophant seen people hunkered down. there is still a threat of terrorism, but they were starting to emerge. i remembered 2019 in iraq that are completely turned around and as somebody there thinking we are serving a purpose here, we brought freedom to people. kids are out playing soccer.

even though most of our operations in some cases were directed against iranian assets. they ran is known to be responsible for directly or indirectly the death of half of the americans in iraq, including efp's. by the way, i might want to mention we are now negotiating with iran in terms of giving them their ability to enrich abraham. also you are not as i had. i was actually getting ready to fly a mission into afghanistan back a few years ago when i heard the senate majority leader from the other side of this building say that the war in iraq was lost. he still has his powerful position, but he very quickly said the war in iraq is lost and it's time to and of course great decision to not only withdraw, but to actually serve our troops and we saw great deal of success. the reason it is to revisit decisions is not beating a dead

horse, but the fact we're getting ready to face the same decision in afghanistan. are we a country tired of war that will have to pull out and took the same posting in falluja with the equivalent of that in afghanistan now or are we going to learn lessons from the past? is very important to learn those lessons. a couple of quick questions. they used to be a policy in this country that anywhere al qaeda exists, and they should know that there is no safe haven. president bush talked about there is no safe havens for terrorists anywhere in the country. we see in iraq right now it appears to be somewhat safe. hopefully the iraqi government can push against them. we see the same type situation in syria and i am for intervention in syria. i want to be clear about that. is this a change in the administration for the bush policy of no safe haven anywhere in the world and now we accept safe havens in iraq because we just lost the political will to do anything. or is it so the bush policy of

no safe haven for al qaeda? >> first congressman, thank you for your service. particularly not everybody served in iraq and has experienced. it is time for us to have a dialogue so we cannot bring her experience and relationships to bear with this very important moment. again, i could just these two are back. working with iraqis in terms of intelligence support and that they mention any testimony, we are confident iraq will deny al qaeda safe haven in western iraq. one of the reasons we believe we saw the convoys moving into falluja and the mahdi is because the iraqis started hitting their camps and safe havens in remote regions of western iraq. so i'm confident particularly to help our missiles and develop even more sophisticated ability to deploy them and also at the apache helicopters and the things were able to do with

iraqi partners that al qaeda will not have safe haven to plan implied in those areas. that is one reason they moved to urban areas because it's harder to get them out of those areas. >> thank you. i would like to say is called at the anesthesia help the iraqi government and limited way using air power, american air power to take it safe havens because this congress, this house has passed the use of force agreement that attacks basically al qaeda. we have the authority and the responsibility to do that. let me ask you one more brief question. israel fought and dismantled with israeli officials discuss in advance al qaeda plot within their borders. there is kind of days grand strategy with al qaeda and her work great strategy. in your war is the lobbying for an >> and all those places. the farmer would be a threat to the u.s. homeland. do you believe the situation we see and the goal of hq i to be part of a far worse strategy,

a.k.a. an act on the homeland eventually? >> again, my file is iraq are so focused on iraq. >> obviously iraq has huge implications. i think we are able to trench in the heart of the arab world. it will threaten vital u.s. interests throughout the region. >> thank you. again, thank you for your service. the chair now recognizes mr. vargas for five minutes. >> thank you very much, mr. chair. appreciate it. for most americans trying to keep score at home, it is becoming very difficult to understand the situation. a lot of the nations have become somewhat confused and complex in iraq and iran, syria is all kind of running together in the issue of the sunni shia discord and what is happening there. but what is very, very clear i think it's a terrible price that americans face, as you know,

thank you for your service, the amount of sons and daughters they didn't come home alive in the number of parents, mothers and fathers they didn't come home alive and those that day brought the demons come with them that will haunt them and their families for the rest of their lives. i mean, we paid a terrible price. today i heard from some on the other side the with it, let them kill themselves. let them fight it out. what should we be doing? i don't hold that same feeling. the price we pay it has to mean something in the sacrifice these people may come our brothers, our sisters, our country. the price they paid has to mean something at the end of the day we should do as much as we can. i personally very concerned about the christian community. the christian community has been slaughtered. the christians we saw killed, very unified attacks against christians, 37 murdered.

chaldean community before the war was about a million chaldean christians. now i think it is less than half or a third of that. we are thanks in san diego that many chaldeans have been able to come to san diego and create the community forming there and continues to form. but i would like to hear from you what we can do with what we should do with what we are not doing to help not only the christian community -- especially the christian community, but other communities as well. what else should we be doing? >> congressman, thank you. i visited the community in michigan. i was welcoming the opportunity to come to your district to visit the community there. >> you're invited. >> the extremist groups have i mentioned are threatening christians, muslims, everybody in the region. it's a phenomenon throughout the region that is a regional problem. the one thing we're trying to do is work with christian leaders in iraq to make sure they have the resources they need from the central government and the kurdish regional government and

making sure that their areas are secure as possible. in iraq, the chaldeans another christian minority groups are located in the noaa planes. there is an al qaeda extremists presents out that. we are working to try to make sure that local people, christians in that community have the resources to protect themselves and police their own communities and the made some progress in that area over the last six months. in the north, in the kurdish region, when i was in iraq a few months ago and as mentioned earlier earlier with archbishop warda, head of the community they are linked him up with the prime minister of the kurdish region to talk about schools for the community and making sure they are getting resources they need from the kurdish regional government. so what we can do as a neutral player in iraq with the relationships between everybody because we've been there for 10 years and are seen as a neutral player, one of the very few of his strategy make sure the connections are made the train

the government's provincial, regional and national so the christian minority communities have the resources to protect themselves in the schools and children and everything else. >> i do have to say i've heard from many that the central government is not doing much at all to help the christians. in fact, just the opposite. we've been exposed, but their churches are exposed, the schools are exposed. i mean, could you comment on that, they haven't been doing enough to protect the christian community, especially the churches. >> the church bombings if i recall correctly in 2009 or 2010, iraqis have really buttressed the protection of christians rights in iraq. but as you mentioned, there are still attacks on the side. >> the christmas attacks they believe killed 37 christians? >> i have found the prime minister, when he discussed this issue with him, fairly emotional

wanting to protect christians to second on us in this country and looking for ways to do that. but it is something i think one has to keep focusing on. the more communication do better from the christian community, iraqi christian community here in the u.s. with deep ties in iraq and with us. there's a lot of your constituents he tells you something i seen you let us know, we can work those problems. >> thank you. i yield back. thank you, sir. >> the chair recognizes mr. yoho for five minutes. >> thank you, mr. chairman. mr. mcgurk, thank you for your testimony. if you like you've been sitting there a long time. you might need to get up and stretch. i appreciate your endurance. what are our military assets in iraq and are they purely advisory? and if so, how many? immutable style? >> we have under our embassy, under the chief of mission and ambassador beecroft, the office of security cooperation, which works very closely with the

iraqi military. the numbers have been slow, but it is about 100 personnel and they do everything from advising to running sms programs to make sure that his running efficiently and a small contingent of half a dozen or so a special operators to train some of the higher-end special operators at a training component is all done under the embassy chief admission. >> albright. so we have a very small footprint is for us americans there. what can we learn from how we left to rack and apply to the job done in afghanistan so we don't make the same mistakes and repeat what we've done or so we've got the benefit of the effort we put in there, both sides benefit from this. what do you see winning to do different? if you could we write a post of troops in iraq, especially with the announcement, which i think was wrong at the end it amounts, what would you do differently so we don't repeat that

afghanistan? >> i think congressman, you have to forgive me, when i'm out of government i might look back at the history or also make comparisons to afghanistan, but right now i'm focused on the situation at hand and trying to protect our interests we face right now. >> let me switch over to a different topic. i've talked to many veterans that i thought in iraq and afghanistan and we've talked to members of the iraqi government. what they have said is we have come to this deal made between the iraqi military, and the iraqi men and our military in a standoff. in the meantime, countries like japan, china and south korea go in and build infrastructures of trading. that fact. do not -- ..

in a very long-term five to ten year project and go through a number of companies doing very well in iraq but we need to get the public sector involved and there are a lot of opportunities in parts of the country that are very secure. >> that's why i was asking you if you could rewrite it. with falluja do you think the

government can control falluja and defeat the isil, do you think they have the willpower and the assets to do that? >> without the support of the local population and will be extremely difficult. that's a lesson that we've learned. >> you were talking about the backbone of the iraq he military, remaining with our military asset. >> with equipment and training, the iraq he is consistently look to us to be the primary supplier and primary supporter. >> the chair man was asking about where the fighters were coming from and they know a lot of them were coming from europe. is there any estimate how many come from syria and go over to iraq? >> i don't have those numbers. i would have to go to the intelligence committee and get

back with those numbers. >> i yield back. >> thank you. we now go to mr. collins of georgia. >> i appreciate the opportunity in a multitude of questions. i want to turn back about the elections. from serving in iraq back in the 08 between the sunni and the shia i think there is a mistrust from generations and it looks like the current government has done very little to relate with that or work on that relationship. experts have talked about the state of iraq and building the alliances with the tribal leaders to try to win more political support. how would that translate into the next round and can we see the move from shia sunni and

what does that mean for the region and then i will talk about iran's possible influence as well. and i want to speak to the elections at this point. >> congressman, thank you for your support. it's a very insightful question. this election coming up is going to be pivotal and also extremely interesting. the first national election of 2005 there are three main people that go, there is the sunni, shia and kurdish bloc. there was more choice. there were two shia blocs and they were under one list as a kind of cross sectarian list and event occurred. in this election, everything is fractured so you have the three list and events occurred are running on four different list. what's going to happen is there's going to be a number of different permutations of governance forming coalition.

so, the hope is that this will give rise to the more possibility of the cross sectarian issue-based politics emerging. as difficult as that is going to be if you look there is a possibility there. as i mentioned earlier what al qaeda does very effectively is targets the fault line which has existed for 1400 years targeting symbolic areas to increase the population which rises the sectarian discourse in the country. so it is shaping up with a number of different choices into different place that allow for the cost security in and on the other side you have extremists and the sectarian development in the country. >> in the influence there's also

reports that i've read and others that are dealing with the rest of the world having to deal with this fame dynamic. is there more push in that influence there and especially with everything we talked about. >> it's a low boil stage of insurgency. they were unable to gain much traction because the violence at this low boil. we have seen an increase in the activity which has also given in and rode to the most nefarious iranian activities of this is ts something that we continue to have to work with not only the political leaders that every one to try to isolate the most

extreme groups. >> what has been mentioned several times is the world of iraq right now in the issues of falluja that we paid and those that are continuing. we've got to maintain pressure on the administration in iraq whether it be the protection of those in camp liberty it's not something the congressman is going to let go and we have to continue this process in a large sense to what happened so that is the concern that i would express in the process of working to stay in your country without the division and i think that's what when we see stuff like have been in fallujah it tells me maybe we are not doing the things that will keep that country on a path towards sustainable future. i appreciate that and yield back. >> thank you.

we now go back to mr. randy weber of texas. >> and you were here i think it's been 78 days and with iran fostering all of the unrest over in iraq, there i there's been 32 executions if you divide that it is for 120 a mont month hence oe 312 in the 78 days. it's been 78 days since you were here. we have a regime that is built on sending terror throughout its citizenry and exporting it into iraq. how many more executions do you think is acceptable before we take the regime to task over there executing their own citizens? >> i can address that from the iran standpoint. standpoint. again the human rights situation

in iran is quite despicable. we have seen president rouhani wanting to make inroads into improving the situation but quite frankly we have yet to see them making inroads in that area. >> we need to be -- we need to really be focused on this even in our negotiations with i should say the administration's negotiations over the relaxing the sanctions because we are getting played for fools quite frankly. i know that you were here to testify about al qaeda in iraq and the residents of camp liberty. are they as dangerous as al qaeda? >> no, certainly not. have we promised them that we would protect them and take care of them when they were repatriated so to speak?

>> there were agreements between the commanders at the time when we moved into the camp. >> and you are aware of how many of them have paid a terrific price in their lives to live there under the agreement that we need. >> you are aware that they are having to live in graves now and the protection installed but they used to have and the attacks that are coming from side, you are aware of that? >> i was at the camp this month and talked about what it's like to live in a trailer when colleagues are being killed by rockets and trailers, something many of us can recall. many of them are not living in trailers that they have had to dig out a 3-foot wide graves basically and lived in it to avoid the rocket attacks.

how long does that have to go on and should we not be pressing to get them out of the country and while we are working diligently on that should we not be getting them protection? how much longer do you estimate that going on? >> we need to do everything we can to get them out of the country. >> you were here 78 days ago. has that been proved? >> we have to thank them for being gracious for taking the 210 presidents in which there were more countries willing to do the same. >> i was late from another hearing and you made comments that they were currently being installed? >> that is the information that i received this morning that they would be moving again today or tomorrow. >> would you be interested to know that we have had a cell phone communication and that is not the case?

>> there was a decision made up this morning to begin moving them back into the camp. whether or not this started i cannot help but i can assure you based upon the information that we will follow up if you in fact i will follow-up with you as soon as i receive the information. you mac i can follow-up with you in the next 48 hours to make sure that they are moving back. >> is there a third party verification? >> surely you are not saying you are going to call them and they are going to say of course. >> we will talk to our colleagues at the mission in iraq at the camp regularly and he will be able to verify.

>> i hope you make it a priority to get them out. >> let me start by thanking you not just for your time this morning but for your work on this issue you know as you can tell the committee is concerned about the resurgence of al qaeda. the impact it's going to have there in iraq and the impact it is going to have on the region, and of course even here to us in the united states. so we thank you for that and we look forward to continuing to work with you on the concerns we have in the house. house. there's one other issue that i meant to raise with you and that is just turning for a moment to discuss the inclusion of the democratic party and the patriotic union of kurdistan and the patriot act tier three

designation terrorist designation. my understanding is that this is becoming a sort of catchall designation that has inadvertently mislabeled even though they have been a stabilizing force in the region and consistently loyal to the united states for decades. across the middle east and beyond it seems like a good count of the remaining friends in the region and maybe take a look at this and appropriate designation into the relationship with the kurdish people, so would the administration be supportive of a legislative solution to this issue that would exclude the kurdish groups from the tier three designation?

>> thank you for allowing that question to put the response on the record. the kurdish people, the tdp have been among the closest friends in the region going back for decades. we think they should be removed from the list as soon possible. we think it is an imperative and we understand that it requires a legislative fix and it's nothing we can do by executive action alone and therefore we are 100% supportive of the immediate legislative fixing the problem and we look forward working with you in congress to get that done. >> we have to get you on the record for that and the senate is working on this with the house and we very much appreciate once more your testimony here today. >> thank you members, we stand adjourned.

[inaudible conversations] [inaudible conversations]th

put another way with theon of d, creation of the dhs a terrorist searching for weaknesses on the air, land and sea borders or ports of entry is now met with one federal response from me. preventing terrorist attacks on the homeland is and should remain the cornerstone of homeland security.rt in through the government's counterterrorism efforts in both the bush and obama administration, we have put alal qaeda's core leadership on these pathrs to defeat that the threat has evolved we saw the al qaeda affiliates in the peninsula that

has made repeated experts debate co- efforts to the homeland. our government, working with others must continually deny these affiliates a place to hide the traihide, train and from who launch terrorist attacks. we are very focused on the foreign fighters heading to syria right now. based on the work of the international partners, we know individuals in the u.s., canada and europe are traveling to fight in the conflict. at the same time the extremists are trying to recruit westerners and indoctrinate them and see them return to their home countries within extremist mission. the attorney general and i met with the six counterparts from the uk, france, germany, italy and poland. serious was the number one topic of conversation for them and for

us. syria has become a matter of homeland security. the dhs, the fbi works closely to identify the foreign fighters that represent a threat to the homeland. we face threats from those who self radicalized to the so-called lone wolf who didn't train at an al qaeda camp were overseas or became part of an enemy force, but who may be inspired by radical violent ideology to do harm to americans. in many respects this is a threat to the homeland of a straight up last year by the boston marathon bombing that i worry about the most. it may be the hardest to detect and it involves independent actors living within our midst with easy access to things that in the wrong hands become tools of mass violence.

we must remain vigilant in encountering all these threats. at the department of defense i was witness to the extraordinary efforts of the military and the other national security components of our government and countering the terrorist threat from overseas. here at home, getting the increasingly decentralized threat, i believe it is critical over the next several years thae dhs continue to build relationships with state and local governments and first responders in those governments. we must also continue to encourage public participation in our efforts on that behalf in the nationwide suspicious activity reporting initiative and campaigns such as if you see something say something which was on prominent displays at airports and even at the super bowl five days ago. homelanhomeland security is a tm effort.

>> both chambers of commerce will return this monday. the house next week will take up a bill altering

in many ways we focused so far on the challenge around protecting credit card and debit cards, but the potential exposure that we have is people get into our bank accounts or online transactions that we all do more and more online banking and other services. that offers an area where there are very few protections at this point in almost unlimited liability for consumers.

>> from the workplace to shopping for groceries to the smart phones to browsing the web at home, virtually every action we tak take involves the collecn of information some of it very sensitive. many of these have clear benefits to the recent data breaches are a strong reminder that they create risks for consumers. >> we are out sometimes ahead of determining and looking at the data as it relates to the financial industries and through partnerships that we have in the financial industry sector that is able sometimes to bring us the data where we are able to go through to be able to find out where information is leaking into the criminal underground from. some journalists are able to get a hold of that information.

should be swept from [inaudible] >> ibb that we will go very successfully indeed over the life of the fact. >> there is a whole list of what had been ruled as unparliamentary and a few weeks

ago i think the president minister i seem to recall a remark he made which suggests that i can't remember the details of it now. but it was said that churchill was instructed to withdraw and he said if instead of accusing he said i will call it a terminal annex aptitude but no one can find the official report so it's probably a mix. >> sunday night at eight on c-span q-and-a.

>> ththe healthcare law will create a disincentive to work for about 2 million americans according to the head of the budget office who testified before the house budget committee on wednesday. the latest report shows the federal budget deficit will decrease in the short term before increasing over the next decade. this is about two and a half hours. >> the hearing will come to order. >> hello everybody and welcome. i want to thank director elmendorf. congress was a little late so i'm glad we have time to get to this. yowe've put together a very informative report and it is a great job of laying out the challenges that we face. my main take away is we still have a lot of work to do. we are going to run a deficit of $514 less than last year but it's nothing to brag about.

the deficit will start growing in just two years. we will be running trillion dollar deficits again even though we will be taking in a historically large share of revenue. even though the taxes are at a historically high place, we still have trillion dollar deficits in the future. that's because the spending will be growing twice as fast as the revenues over the next ten years we will add $10 trillion more to the national debt for a grand total of $27 trillion. it's time to start congratulating each other. i was glad to see we passed the deal last year it was a step in the right direction but only a step. we need to do more. we need to do much more. and it's déjà vu all over again because we know what the problem is. the interest payments are driving the debt and well quadruple over the next ten

years. and obamacare is perfect problem it adds trillions of dollars in government spending and it's made things worse for the economy and working families. by 2017, cbo projects that people will be working fewer hours, precisely because of the incentives created in the law. the effect will be severe as if two and a half million people stopped working full-time by 2024. between 2017 to 2024, overall labor compensation will also decline. and these changes, they disproportionately affect the low-wage workers. translation? washington is making the poverty trap much worse. the report points out weak spots in the economy. low investment, high unemployment, people leaving the workforce. if we got our act together, we could start paying down our debt and give the economy a certainty

it needs, regulatory reform, energy development. these could increase of jobs and take-home pay. if you could bring up from the report, slide 2.8 this is a point that i would like to highlight. this report says not only does the debt gets worse, but we have slower economic growth and what is particularly troubling is the cbo projection of the labor force participation debate half of the decline is attributable to the population. this is what we knew. fewer people are following them into the workforce. a problem we have had that we have yet to solve. but most notably in this report is that cbo also says that government policies especially the president's healthcare law are discouraging work. washington is making this

problem worse. this doesn't have to be the state. we need to reverse this decline. so i consider this report a call to action. we know what the problem is. we know how to fix the problem and i believe we can work together to get it done. the debt won't care of itself. it's up to us, the men and women in the branch of the government elected to represent them. we need to take action so i want to thank you once again for this report, for your time today. i look forward to a great conversation and to your testimony and i would like to welcome the ranking member mr. van hollen. >> thank you to you and your entire team for the good work you do. as i look over the most recent report, it is a good news bad news story. the good news is that we have seen economic growth over the last few years and continue the economic growth going forward.

the economy has added 8.2 million private-sector jobs over the last 46 months. on the other hand, the report projects a very sluggish growth in the job market. in fact as i read it the average unemployment rate in 2014 will actually be higher than the unemployment rate in this ambergris last year. and that is not good news. page three of the report sums up the story when it states economic growth is projected to be solid in the near term but weakness in the labor market will persist and that sums up our challenge. and it seems to me that we should therefore take the actions that are within the control of the congress. congress can change the trajectory. the report is based on the current law that congress can take action today that will actually change that story for the remainder of this year and

increase job growth. the president has put forth clear ideas to do it. we have a plan that calls for a significant investment in the national infrastructure in the roads and bridges and broadband to help boost to the international competitiveness and put people back to work. we can increase the minimum wage which allows more americans to keep the fruits of their labor and by putting more money into the pockets of relatively lower income individuals who tend to spend it more they will create more demand in the economy, and at the same time while we have a chronic problem with long-term unemployment we can extend employment insurance to the 1.7 million americans and is the congressional budget office itself has had some of that will actually create additional jobs this year, 200,000 being the last projection so there are things we can do today mr. chairman and to get back to

work and get the country back to work. one thing we should not do is mess around with whether or not america pays its bills on time because that will create uncertainty to the economy and that will hurt economic growth and jobs. now, doctor elmendorf, you have a comprehensive report for the first thing the chair man referred to, and i have to say this is an example of when want this interpretation gets out of the box early and goes around the world and it takes the truth and long time to catch up because what we believe we should focus on is the availability of jobs whether there is a demand for jobs tod today. and instead with the chair man was focusing on was beginning in 2017 when the economy gets back to full employment as a result of the affordable care act, more americans will be able to voluntarily choose to work fewer

hours or not take a job because they don't depend on the job anymore for the provision of health insurance, because before the aca if you lost your job, you've lost your health insurance. now you can go to the exchange and get affordable health insurance. and as a result people may choose differently and i find it really kind of ironic that back in 2008 when senator mccain proposed a plan of the heritage foundation heralded this as a plan that would help break job lock. they said today leaving a job or changing jobs means leaving behind health insurance provided in a place of work and individuals work to take a better job in the change careers or retire early and by god for making health care reform plan will end up that plot. while the act and that it will

allow americans to choose to spend more money with their family. the fact that here in the house we have a focus on trying to eliminate the affordable care. rather than creating more jobs for millions of americans that should be the focus and that is the conclusion of the report if you look at the entire thing instead of a few paragraphs and i think you doctor elmendorf for your work. i'm pleased to discuss the cbo report on the outlook for the budget and the economy as well as our companion report released yesterday that dug more deeply into the recovery on the market. beginning in the budget, the federal budget deficit has

fallen sharply during the past few years. and it's on a path to declining further this year and next year. under the current fault the deficilaw thedeficit will totalt $500 billion this year. compared with 1.4 trillion in 2009. at that level the deficit would equal 3% of the nation's economic outlook or gdp posted average percentage seen in the past 40 years. the baseline projection shows what would have been to federal spending and deficits over the next ten years if the law was generally unchanged. under that assumption it is projected to decrease again to about two and a half% of gdp. after that deficits are projected to start rising in dollar terms and as a percentage of the output because revenues are expected to grow at the same pace of gdp where the spending is expected to grow more rapidly

than gdp. why the more rapid spending growth? and baseline is based on four primary factors the aging of the population, expansion of federal subsidies for health insurance, rising health care costs per beneficiary and the mounting interest payments on federal debt. spending for social security will increase about 5% of gdp to 5.5% in 2024. the category that includes medicare, medicaid and the subsidies through insurance exchanges require even more under the current law. and the interest payment and the government are projected to grow rapidly because the return of interest rate. in a sharp contrast, the rest of the federal government's noninterest spending for the benefit program and the the department on the ones i just mentioned and for all other nondefense activities is

projected to drop from 9.5% of gdp this year to 7.5% in 2024 under the current law. that would be the lowest percentage since 1940 which was the earliest here which comparable data had been reported. thus a sharp increase in share of the federal budget would go to the benefits from a few large programs and a shrinking share would go towards most of the rest of the government functions under the current law. the deficits recorded in recent years have substantially increased federal debt and the amount of debt relative to the size of the economy is high by historical standards. we estimate federal debt held by the public would equal 74% of gdp at the end of this year and 79% in 2024 under the current law. such large and growing debts could have serious consequences including race training economic growtgrowth in the long term, gg

policymakers less flexibility to respond to unexpected challenges them individually increasing the risk of a fiscal crisis. turning to the economy, we expect after a slow recovery in the recession of 2007 to 2009 for the recovery will grow at a solid pace that will continue to have the unused capital resources. growth in housing construction and business investment should raise employment and the resulting income should boost consumer spending. the addition of the current law the federal government's tax and spending policies will not restrain economic growth to the extent they did last year and a state and local governments are likely to increase the purchase of goods and services for inflation after having reduced them for several years. as a result the baseline shows inflation-adjusted gdp expanded more quickly from 2014 to 2017

an average of 3% a year than it did in 2013. we expected the increases and output will serve businesses to hire more workers pushing down the rate and attending to raise the rate of participation in the force as they return to the labor force in search of jobs. that participation will keep the rate from falling much as they would otherwise. we project the rate would decline only gradually over the next few years dropping below 6% in 2017 and going down further after that. nevertheless the participation rate is projected to decline further in the next few years because according to the analysis the increase in the participation coming from the improvements in the economy will be more than offset by downward pressure from the demographic trends especially the aging and thofthe baby boom generation. after 2017 when the demographic trends would still be unfolding

that the effect of the cyclical conditions would be expected the participation rate is to decline more rapidly. that is the main reason beyond the 2017 would projected economic growth would diminish to a bit more. >> i have a few questions about the health care law and the market. what is your best estimate of the affect obamacare will have on the total number of hours worked for just the issue we are talking about. i want to make sure we understand what it is that you are saying. >> we think the affordable care act will reduce the amount of hours worked in the economy between 1.5% to 2% between 2024 relative to what would have happened in the absence of that act. what is that equipment?

full-time equivalent workers so given the fact that well, the calculation we have done to calculate that, it suggests they equivalent between two to 2.5 million reduction in the full-time equivalent. >> to make sure everybody understands this and i think reading the report, 2 million equivalent in 2017, 2.3 million in 2021 and 2.5 million in 2024 and a right-click >> yes mr. tremaine. >> so it's not that employers are laying people off, it's that people are not working in the workforce, they are not supplying labor to the equivalent of 2.5 million jobs in 2024 and as a result that lower workforce participation rate that lower supply lowers the economic growth.

who are the people typically in the category from the income scale who are being affected by this? >> the effect is principally on the labor supply of the lower wage workers. it'it's to provide the debate coproduced the subsidies on the lower and middle income people to buy health insurance and to encourage the submission of the people to buy an expensive inexe product like of insurance. they are then withdrawn over time as the income rises. and by providing a heavily subsidize health insurance to fr people with a very low income and event withdrawing the subsidy as income rises would create a disincentive for people to work relative to what would have been the case in the absence of that act and the subsidies of course make those lower income people better off.

this is an implicit tax where if the government raises our taxes we are worse off and it takes a an incentive to work more but people are better off and they do have less of an incentive to work. >> i understand that. i guess better off in the context of health care but better off in inducing a person not to work those on the low income scale not to get on the ladder of life to begin working putting the dignity of work into getting more opportunity rising the income and joining the middle class this means fewer people will do that and that is why i'm troubled by this. we are seeing a significant rate that's 2.8 and i will just make a point here. this is what is so concerning about this is if i understand your point, and you know, a big part of this is something we already knew which is the baby

boomers are retiring so we are doubling the amount of retirees we have in the country over a generation and far fewer people in the workforce. something like 100% and a 17% increase in the workers so that is already a problem where we are not prepared for the boomers and the retirement but this is adding insult to injury. you are saying because of government policies as the welfare state expands, the incentive to work declines beginning grew the government and shrink the economy fewer people are going to be working and the economy will be slower as a result we have about a trillion dollars and less revenue because of slower economic growth from the last forecast which goes from the deficit to the dead and makes it that much less prepared to get ready for the baby boomers to pay off this debt. so that's toomey is just job dropping. if you look at the budget and i am rounding here social security

and medicare nearly double over the ten year window. medicaid more than doubles but interest on the debt quadruples, is that right? so the baseline shows that adding about $10 trillion to the debt over the next ten years would save 50% increase in the amount of the national debt and at the same time interest payments as i mentioned quadrupled through 880 billion by 2024. here is what i'm really worried about. you assume a fairly stable interest rate. you assume a normalization of basically no inflation over the rise of the decade and the ten year goes to 4.8 or 5% at the end of the window. we have a 4 trillion-dollar expansion on the monetary base and we are in uncharted territory in the federal reserve they've just begun to normalize that are already seeing above her creations in the third world

into the emerging market coming at they've only tapered a little bit. what happens if they don't go as we hope they do? what happens if we have a spike in the interest rates say 1%? what if they are 1% higher thann you are projecting to the interest payments? >> as you know mr. tremaine we try to set the focus to be in the middle of the distribution of outcomes and we think it can be higher and it can be lower. >> to give me a sense of 1%. >> as you know, the rules of thumb are the changes would affect the budget and they are meant to be used only roughly that this estimate is an increase in the interest rate of being one percentage point higher for the entire decade would increase by about $1.5 trillion over the perco and correspondingly those that are 1% lower would reduce the deficit by about $1.5 trillion i would say there is upward

pressure on interest rates from a large amount of federal debt and we take that on the projections there is downward pressure from the aging of the population and economies with slower economic growth tend to have lower interest rates. we are taking on board of the projections as well and we do not see any sign of inflation over the past year that has been unusually low and inflation over the last half dozen has been in the federal reserve goal of 2% so we do not see inflation as a substantial risk going forward although the macroeconomists learned to never say never. >> especially 10-years-old it's hard to predict. i think you could make a good case that the reserve has been bailing out the fiscal policy for quite some time since the crisis by keeping the interest rates artificially low and depressing but true fiscal picture that we have.

congress didn't take advantage of that moment to walk in consolidation plans to tackle the entitlements which is what the budget we passed three years ago did and adults with the entitlements. now the federal reserve is normalized and they are basically pulling back because they are 65 billion a month. >> they are still buying more assets. >> they are just not extending as much as they were before. but they are showing signs of normalization. we've never been in the territory before or had this kind of balance sheet. it's all knew if they get it wrong and if the unforeseen things happen to $1.5 trillion increase in deficit so time is running out. we are looking at the fact that we squandered the opportunity the last five years to do something about this and in the future it is that much more

uncertain because it isn't going to be bailing us out like it used to be. that is my concern. let me ask you a point in relation about the driver. page 15 and report it compares where we were in 1974 to where we are going to be in 2024. we are on track to increase compared to 74. meanwhile if you look at the upper right side of this we will have cut defense in half and we are going to be collecting a full percentage point more than the revenues. given these facts what is driving so people are clear what is driving the tenfold increase in the deficit. >> there's growth for social security and medicare and medicaid above all else by the aging of the population and expansion of health insurance subsidies and rising health care per person. >> thank you mr. chairman.

a quick comment of the federal reserve pointed out the fact that the congress created a fiscal drag on the economy made things worse and it did take accommodating actions but the message to congress was sequester is doing harm and hurting economic job growth and it continues to do so to this day its refusal to take action on investments in infrastructure and in basic foundations of our national economy in many areas. there's been a lot of talk about the report and what you said about the affordable care act. i want to go through a couple things. you found, did you not, the opinions offered in the next change would go down 15% compared to the earlier projection is that right? and on page 125 come you point out that there is, quote, no compelling evidenc evidence pare

employment has increased as a result is that right? >> we have heard statements how people are forced into part-time work by the affordable care act one of the findings that there is no compelling evidence that is the case. a second there is nothing in this report that changes the earlier assessment that over the ten year window into the longer-term window the net effect is to reduce the national deficit is that right? and does it reduce the deficit as the economy kicks into high gear mean stronger economic growth? as a result of the deficit back in 2017 and beyond the affordable care act will help spur economic growth. i want to talk about what we are doing focusing right now because on page 125, the cbo talks about the impact on the labor market on the labor demand today.

and it says and i quote, on balance the cbo estimates the aca will boost overall demand for goods and services over the next few years. and then you go on to say the net increase in demand for services will boost demand for labor over the next few years. that's the conclusion you make right? so when you boost demand or labor in this kind of economy, you actually reduce the unemployment rate because those people who are looking for work can find more work. so for all that media who shot across the headlines this idea that somehow the affordable care act was going to hurt jobs i just want to be clear the director of the congressional budget office says for this year and the next couple years actually it will help reduce unemployment. more people who are working for work will find work as a result of the affordable care act.

so if you were to repeal the affordable care act and your projected unemployment rate would go up, right? >> let me be clear we have not broken down the sides of the variousize of thevarious piecesn this act so i don't have any estimates of the particular channel but that channel you point to is something that we think spurs unemployment and would reduce unemployment over the next few years. >> i think it is a factor and as a result if you repeal the affordable care act you will wil live at least in the near-term increase the unemployment rate because there would be less demand for jobs and over the long term because the affordable care act reduces the deficit you will spur economic growth as the economy continues to recover. i think it's important that information gets out there because as the media themselves have confessed, they bought hook line and sinker some of the

talking points from their republican colleagues and unfortunately misrepresentations go around the world three times before the truth begins to catch up on him but maybe it will catch up at this time. in terms of the long-term deficits and debt, as the chairman indicated into the board indicates as you go out into the future we will see rising deficits and it's important to point out that your findings show that right now the deficits are dropping and will continue to drop the next couple years. but as more baby boomers retire and more people in medicare and social security spending will slowly go up is that right? >> more than one of the people collecting benefits a decade from now band are doing so today and whatever the benefit is per person, multiply that by a larger number of people into the overall cost of the program would rise very sharply. >> i believe it is in the range of 30 plus million more people on medicare and just so people

who are following this understand it's not because we are increasing the benefit it is just more people coming into the system this is a demographic changes that right? so that is a big driver. our republican colleagues saying those deficits concerned than? however they are only willing to look at the spending side of the equation meaning if you want to address those spending problems that means you have to reduce the benefits from social security or medicare somehow if we are looking at those two pieces. >> unless one is willing to contract the government below the share of the economy of 1941 needs to focus on the programs that are getting more expensive. >> as you pointed out, we have squeezed the so-called discretionary programs to the lowest point in the reported budget history is that right? >> after the caps are bundled. >> so it's simply to look at

squeezing those benefits that help millions of americans including a lot of middle income struggling seniors and they refused to look at the revenue side of a creation. it's their position you cannot close a single tax loopholes for reducing the deficit. that is the grover norquist pledge you can't close a one loophole in the taxes for the oil and gas funds to help reduce the deficit. >> my question is if you go back a little way in history when is the last time we actually had a balanced budget? >> in 2001. >> and in fact the last time we had a balanced budget for a very long period of time was 1999, 2000 and 2001 and just so everyone understands for decades before that we were running decades and obviously since 2001 we have run deficits. now doctor elmendorf, if you look at the revenue as a

percentage of gdp during that period of time, they are hired in each of those years than they are today is that right? >> that's right congressman. >> and they are higher than each of those years than they will be as a percentage of the economy ten years from now. >> my calculation is the average amount of revenue as a percentage of gdp when we balanced the budget it was 19% of gdp. the average amount was 19% of gdp. now you testify that the main reason that we are going to see an increase in the deficit in the out years is because we have tens of millions more americans on programs like social security and medicare. so it is our republican colleagues position we can somehow deal with that increase in a number of americans on social security and medicare

with less revenue as a percentage of gdp than we had when we last balanced the budget in 19982001 when we had fewer american on social security and medicare and that is a problem a lot of your democratic colleagues have you take the position you won't close a single tax break for the purpose of reducing the deficit and you say you care a lot about the deficit. you recognize that you've got tens of millions of more americans on social security and medicare but you still want the government to operate on less revenue as a percentage of gdp than the last time that we had a balanced budget plan we didn't have all of those on social security and medicare. .. into investments in defense and scientific research and infrastructure, is to simply

cut these other programs. and the irony here is the affordable care act actually was able to reduce the medicare spending i reforming it instead of cutting it. we come as a result of the affordable care act, dr. elmendorf, we are seeing reduce medicare costs, isn't that the case? >> yes, that's right. >> that's a significant part of the reduction or repair time, right? >> yes. >> our republican colleagues after initially lambasting that an demagogy that, they included a provision in their own budget so they would achieve those deficit savings. so we were able to achieve medicare savings without hurting beneficiaries. and that is the model that we will continue to look at, and combined with closing tax rates or special interest in order to meet these long-term challenges. but our immediate challenge is to put people back to work, and that's why we need to adopt our infrastructure investment plan, pass the minimum wage, and for the folks who are still out there