and like most 83-year-olds, my mother has self-age-related ailments. but without the quality health care that medicare pays for, i simply cannot imagine what her life would be like. so when i'm talking about medicare, two facts need to be made clear from the outset. one, the program is absolutely potential to maintaining a secure, healthy and effort bl retirement for sires. and, two, if we to nothing to reform it, medicare hospital insurance will go bankrupt in about 12 years and simply cease the exist. again, this is not a scare tactic. it's simple math. in 2012 medicare spending grew by 4.6% to about there are 585 billion, and between now and the year the 23, it's expected to accelerate to around 7.4% a year. by 2026, the medicare trust fund will run die.

will one dry. it raises the iconic question, are you better off than you were four years ago? the rising answer for our nation is an unequivocal no. jobs have been lost, hours have been cut, employers have been forced to drop coverage their employees were happy with, premiums have skyrocketed, millions have lost coverage they were happy with. obamacare has hurt medicare recipients by cutting about $156 billion out of medicare advantage. and this cut was a grave miscalculation. medicare advantage is a shining

success story that millions of seniors, like my mother, rely on. in short, it's a program that allows you to receive your coverage from a private provider using funding from medicare. this has encouraged providers to compete for business by tacking on all sorts of value-added services for seniors. for example, one of the reasons my mother picked her current provider is because in addition to good doctors, they pick her up, and they drive her to her appointment. this sort of competition in the marketplace invariably leads to two very good things; a decrease in prices and an increase this choices. choice and competition are also at the heart of another medicare success story. medicare part d. through this market-based program, seniors have at least 28 different prescription drug coverage plans to choose from. and as competition has worked as a powerful cost control mechanism, this has made part d a booming success by every conceivable measure. the congressional budget office

found that the total program costs are on track to be 45% or $348 billion less than the initial ten-year projections. average monthly premiums are expected to be $31 in 2014, which is less than half of the $64 originally predicted. and not only does it save money, seniors love it. 95% of seniors enrolled in part d find it convenient to their needs. so when it comes to a broad and comprehensive medicare reform plan, let's learn from the mistakes of obamacare and the successes of programs such as medicare advantage and medicare part d. let's dramatically expand health care choices for seniors, spur competition in the marketplace and extend the solvency of the medicare trust fund all while making sure traditional medicare still remains an option. so to do so, i propose we transition to a premium support system which would give seniors a generous but fixed amount of

money with which they can either purchase health insurance from either medicare or from a private provider. the choice would be theirs to make. my friend paul ryan is a leader when it comes to medicare reform. i supported a couple of key proposals to fix the program that were detailed in his road map during my 2010 race. since then he has teamed up with senator wyden to propose a bold, bipartisan plan to institute the premium support model. under plans such as these, the government contribution would be fastened to either traditional medicare or the average bid, whichever is cheapest. this way seniors choose plans that cost metropolitan the benchmark, they would -- more than the benchmark, they would have to pay the difference. by driving competition between private plans and traditional fee-for-service medicare, we could spur choice while controlling costs, and it would also lead to innovations that are specifically focused around the needs of beneficiaries.

the increased efficiency brought about by free market competition will allow providers to offer the same health care benefits as traditional medicare, but for less money. the cbo predicts that by 2030 medicare spending under a premium support plan would be 14% less than under the current system. most importantly, this new system insures that medicare continues to extend an impartial hand to all seniors for generations to come. let me just conclude by mentioning, as i did earlier, that my birthday is later this month. thank you for the cupcakes. [laughter] but it seems just like a few years ago, a few days ago that i was graduating from high school or standing at the altar or welcoming our first child home. as these years go by and the older i get, the more i'm reminded of how quickly things move and how it's never too late to start planning ahead for the next phase of life.

now, as a citizen and as a husband, this means safing for retirement. -- saving for retirement. i means seeing what it takes to be ready when the time comes. but i also share another responsibility, the responsibility to save the time-honored institutions that have long been at the service of the time-honored among us. that allowed my mother and my father and so many millions like them to retire with dignity and live out the final years of their american dream with comfort and peace of mind. the responsibility to save these programs belong to all who are elected to serve. yet many seem to have forgotten that we are here to pass policy, not posture politically. they forget that issues such as these are the why of politics, not merely optional dirty work. partisan politics in america has always been contentious, but throughout our history on issues of generational importance our leaders have agreed to put aside

politics for the sake of our people. if ever there was an issue worthy of sort of solidarity, preserving a secure retirement for 21st century seniors is that issue. and should we fail to address it, history will point its finger at all who stood aside or stood in the way. today i have presented an agenda for addressing this crisis head on, and i am eager to work with anyone, republican or democrat, who will work in good faith on these reforms. ultimately, i believe we will solve the retirement challenge before it's too late. we will solve it because rising to challenges is what we have always done. we will solve it because we must for the sake of our children and our children's children. and we will solve it because once we do, the american dream will be brought within reach in this new century, and the greatest nation in history will shine for many generations to

come. thank you very much for the opportunity. [applause] >> thank you, senator rubio. what do you believe would be the consequences of a failure to take legislative action to shore up social security and medicare finances? >> well, the consequences are as i have outlined. the programs will cease to exist certainly as we know 'em. the longer we wait to address it, by the way, the more disruptive those changes will be. and that's what i want us to avoid. the moment of truth will arrive one way or the other. we never want to reach that point. the closer you get to that moment in time, the more disruptive and chaotic the reforms are going to be. so one of the reasons why i've advocated acting early and acting now, the more incremental

the changes can be, the less we'll have to impact anyone currently benefits from these systems, in fact, i think you can avoid impacting those who are at or near retirement age. the longer we wait, the more significant the reforms will have to be, the steeper the climb will be. if you do this with some foresight, you can gradually do these things in a way that will not impact currentpoiçy benefics and won't be traumatic to future beneficiaries. >> do you believe that social security finances and personal saving exchance need to be enacted together, or is it sufficient to take these objectives one at a time? >> well, i don't know that this process today is conducive for doing anything big all at one time, but i certainly think they both need to be done. every year it gets by it will get harder to deal with social security, and the solutions will be more disruptive, potentially more painful. and as far as the personal savings are concerned, that's

something you need to do ahead of time because it takes a number of years. for me, the real concern is the millions of americans who work somewhere that doesn't offer a retirement savings vehicle. now, theoretically finish. [inaudible] go into a financial institution and apply for it. but if you're the forklift operator at a family-owned warehouse operation, you probably neither have the time, there are the inclination to go into your local financial institution and awe ply for this if you even make enough money -- apply for this. so i'm trying to create an additional vehicle that's easy to access, that allows people to put pretax money. and by the way, if they ever go work somewhere that does offer a retirement plan, they could roll that into their new employer's plan. but i think it's critical that we create more awareness and more access for people to be able to put money aside in a pretaxed way for their retirement. >> following on, how would you propose making up the lost

revenue by millions more putting pretax dollars into tsps? >> well, a couple points. many of the people that would take advantage of this program probably, their incomes are at a level where they're not a significant, you know, significant part of our income tax system. they certainly are paying fica and payroll taxes, but many of the people that would take advantage of this are not making that much money right now which is one of the challenges they have to savings. and the other long term, if people don't have significant retirement, they're still going to have needs, and we're a nation of compassion that is not going to allow people to suffer in their retirement years, so we're going to address it one way or the other. i think it's better to allow people to address it for themselves, but i don't think the costs, whatever they may calculate to be, will be significant enough for us not to pursue creating yet another option for people to put this money aside. the last point i would make, in the question think about what it's implying, and i don't mean to question the questioner's

motivations, but think about what it implies. what we basically would be saying is we need your tax money so much that just because you work somewhere where they don't offer a pretax savings plan, we're not going to make it easier for you to access one even though you have the legal right to access one. i think it's important for all americans to have the ability to not just know about pretax savings for their retirement, but the ability to actually do it. it's good for our country, it's good for our long-term finances. >> addressing declining labor force participation by younger seniors would seem to be a politically attractive as well as a substantially important issue. why do you believe there's been so little legislative attention to improving seniors' work incentives? >> partially because there's been such little legislative attention to anything over -- [laughter] on any issue. but i think part of it is the need for more people on both sides of the aisle to say this is a priority more our country. part of it is, i think, this adjustment we're still trying to

make there the last century to a new century where, quite frankly, people will work longer because they feel productive in their work, and they're making a difference. i joked about the senate as an example, but certainly the senate has many people that continue to work well past retirement because they enjoy their work, not for the paycheck. i think that's also true in the private sector and among our citizens. so i think this is an issue that we're really beginning to confront over the last decade. we have so many people over the age of 62 who want to continue to work, who are still extremely productive, who work, quite frankly, not only because they need to, butin many cases because they want to. >> bearing in mind the various points you made in your remarks, i'd just like to hone in on a specific question. do you think social security and meld care benefits will still be offered when you reach retirement age? >> well, that's actually a

choice that we'll have to make. if we want them to continue to be offed, we're going to have to make -- offered, we're going to have to make changes. what i'm discussing are changes that will be there for my generation. my generation and people younger than me are going to have to accept that our social security and our medicare will still be the best in the world compared to other countries, but it will look different than our parents'. it will look different because it has to, because we're going the work longer and live longer than our parents' generation, and we're going to have to make that acceptance. and i think my generation's prepare today accept that. but that's a choice we're going to make. if we don't make these choices now. then all i can tell you is from the budgetary figures that are available to us, these programs will not exist at least as we know them. the question is not if social security and medicare will be reformed because they will be reformed one way or the other, unfortunately. the question is whether they are reformed in a way that's less disruptive and more productive, or are they reformed in a

chaotic, emergency way as we near that moment of truth for both of these programs. >> as you would expect and i think you indicated you expect that your remarks and your presence have generated questions on many other topics which i would like to turn to. earlier this week you rejected scientists' assertions that human activity is causing climate change and that actions taken to curtail such activity will destroy our economy. how would you propose z that the country weather any dramatic shifts in climate and the impacts such shifts could have on quality of life? >> well, let me make the first point. headlines notwithstanding, of course the climate is changing because the climate is always changing, and that's a measure bl that you can see. there is climate change. the issue is not whether the climate is changing as it always is changing, the issue is whether there is legislative proposals before us that could do anything about it. and what i have said and what i

disagree with is the notion that if we pass cap and trade, for example, this will stop this from happening when, in fact, half of the new emissions on the planet are coming from emerging markets. so i think a better approach, number one, is i'm all in favor of advances in technology and innovation that makes us cleaner and less, and more efficient. but in way that through a cost benefit analysis determines is also good for our economy. and i don't think those two things are necessarily incompatible, but out must be a part of that cost benefit analysis. and the other thing that i would point out is that i agree we need to spend time and energy on mitigation as well because there are mitigation actions that need to be taken place whether it's how we store water in the west or how we prepare to harden and address storm occurrences in the southeast where i live where we've built very expensive structures near the coastline that are susceptible to natural weather occurrences and all sorts of weather events of this nature. so i have no problem with

mitigation events and, quite frankly, i have no problem with advances in technology. but i by no means am going to go out and tell people that by changing these laws and the way we conduct our energy policy that it would have any measurable impact on our weather, because it's not accurate to say that. >> what information, reports, studies or otherwise are you relying on to inform and reach your conclusion that human activity is not to blame for climate change? >> well, again, i mean, the headlines notwithstanding, i've never disputed that the climate is changing, and i pointed out that climate to some extent is always changing. it's never stat you can. that's not the question before me as a policymaker. the question before me is if we ban all coal in the u.s., if we ban all carbon emissions in the united states, will it change the dramatic changes in climate and these dramatic weather impacts that we're now reading about? and anyone who says that we will is not being truthful.

the truth of the matter is the united states is a country, it is not a planet. and so there are things that we can do to become more efficient in our use of energies, there are things we can use to develop alternative sources of energy, there are things we can do to be better stewards of the energy resources we have, like oil and natural gas. but for people to go out and say this will somehow lead us to have less tornadoes and hurricanes, that's just not an accurate statement, and that's what i take issue with. >> the u.s. geological survey has warned that sea levels could rise by two feet be by 2060, imperilling florida's coastline. how should the united states prepare itself and its citizens to deal with rising sea levels and the catastrophic flooding that is likely to follow? >> again, as i pointed out, i have no problem with taking mitigation action as we did in

my time as the speaker of the house after we were hit by five hurricanes in the summer of 2004 and 2005. we encouraged people to harden their homes against to car insurances of these storms. -- occurrences of these storms. we have extended a large amount of money to drainage programs because, quite frankly, much of south florida was built on a former swamp called the everglades. the natural everglades has been developed, and we've had to account for that over the years. so i have no problems taking steps toward mitigation, in fact, i would think that would be essential. not simply because of weather occurrences, but because of the fact we have developed very expensive population centers near areas that are vulnerable to hurricanes. tsunamis in the asia-pacific region, hurricanes, tornadoes, natural catastrophes have always existed, and as we build out population centers in vulnerable

areas, we will have to take mitigation action to account for that. >> turning to another subject, a year ago you were a key figure in shaping a bipartisan immigration bill that passed the senate but then stalled in the house. what are the chances that immigration will move in the house this year? >> well, i'm not in the prognostication business in terms of what things may or might happen in the house. i think that's a question that's more appropriately poeed to someone who serves this that body. i can tell you it's a critical issue. we do not have a 21st century immigration system. we have a system that doesn't work and is not responsive to the economic realities of today. and that needs to be reformed. we need to have an immigration system that takes our economy and merit and skills into mind. and, quite frankly, the measure we proposed in the senate would do that. primarily based on family

reunification towards one built on merit and skill. the second component is like three sectors of the worder that remain -- border that remain secure. we still have no effective way for employers to verify that the people they're hiring are legally here, and we have no way of attracting people to our country so that we can insure they leave before their visa expires. and then you have the reality of 12 million human beings living in this country that are here illegally, but they are they are here. and while we debated this issue and there was a lot of opposition to it, not a ingle member of the united states senate filed an amendment that would call for the rounding up of 12 million people. we're also not going to grant blanket amnesty. so somewhere along the line we have to address the reality that we have 12 million people living

in this country illegally, and we have to insure that that never happens again, but we have to deal with that reality in a responsible and reasonable way. and that's what we've endeavored to do. and if there's a better way to do it, i'm obviously open to those suggestions. but that has to happen as well. i think the impediment is that people are concerned we'll only do the aspect of those who are here legal but never to the enforcement families. we fear we'll have a repeat of problem as happened after the 86 reform. so i think critical is receiving measurable reforms on the front end to not just modernize our legal immigration system, but to put in confidence that we're dealing with the problem we have now, but this problem is not going to happen again, and we're not going of to have to revisit it once again in the future. >> i truly believe it's the

biggest impediment we're facing right now. >> your participation in those immigration negotiations cost you among some tea party supporters and conservative republicans. do you have any regrets? >> i regret we didn't get more support for it was it's an important -- because it's an important issue we have to tackle. look, i mean, i ran for office to make a difference. i mean, i understand politically i could have simply -- first of all, i knew about the perils of this issue going in. i'm familiar with its history and the reason why it hasn't passed for over a decade. it wasn't like somehow i was surprised, and, quite frankly, much of the opposition that we faced to the bill was legitimate objections that people had and real concerns that need to be addressed. the flipside of it, of course, for me is i came here to do something, not just to be somebody. i understand that politically the easier thing for me to have done is simply to sit back, let someone else propose a bill, file a bunch of amendments on how i would do it if i was in charge instead of them and then

just stand back and say, look, this is what i would have done. i get that politically that would have been a smarter thing to do, i be i actually want to solve this issue. i actually came here to make a difference. i didn't come to just sign on to a bunch of letters and give speeches. i came here to propose ideas and move those ideas forward. and this is not just some theoretical issue. this issue impacts my state dramatically. i've seen every aspect of this issue, the good, the bad and the ugly. and i believe we need to soft this, we need to have a legal immigration system that allows us to win the global competition for talent. as a southern country and for our national security -- sovereign country, we need to have imuation laws we can enforce, and we need -- immigration laws we can enforce. and we have to address it in way that's responsible. i think those are majority positions in this country. they come at some political peril. i made the decision a long time

ago when i got involved in public service that i would do it to make a difference. sometimes that makes you well liked, sometimes it makes you controversial. but it's the only thing that makes you worth it. >> we do have a few questions in the area of politics. would you run for both re-election to the senate and for the republican presidential nomination, or would you choose one or the other? >> well, i've addressed that on multiple occasions, but i would just say a couple points. i think if someone decides to run for president of the united states, i don't believe you can run effectively for an office of that magnitude while having some exit strategy in mind. so ores may disagree and may choose a different route, but that's my feelings on if someone decides to run for an office of that important, you do so because that's what you want to be. you're not simply trying to find some sort of eject button. that's my personal within. others may decide differently

for themselves. >> would you still run for the republican nomination if former florida jeb bush does in. [laughter] >> well, i hadn't heard he was interested, so -- [laughter] well, look, i think governor bush would be a very formidable candidate, and i know he's in his own decision making process about what he wants to do. all i would say in that regard is i think when someone contemplates watt of the united states, you do so based on a criteria you do for yourself. i don't think those are decisions you make with someone else's vision in mind. i think that's the way you approach the decision of that nag -- magnitude. based op your own criteria, not on what someone else might or might not do. >> who, in your estimation, is the strongest democratic candidate for 20126 and why? -- 2016 and why? [laughter] >> probably harry reid, that's

who i hope they'll nominate. [laughter] i'm not really an expert on democratic primaries, so i don't know the answer to that question other than to say, you know, certainly they'll have their own process for deciding a candidate. look, i think any presidential campaign will be highly competitive, and both parties will field competitive, well-funded candidates and, ultimately, people will decide about what direction they want to take our country, so we'll find out, i guess. >> thank you. we are almost out of time, but before asking the last question we have a couple of housekeeping matters to take care of. first of all, i'd like to remind you about our upcoming events and speakers. on may 27th, donald trump, chairman and president of the trump organization. may 28th, dr. ben carson, neurosurgeon ask author. and author. next i'd like to present our

guest with the traditional national press club mug. [applause] senator, you mentioned this was the first time you were at the national press club. i'd like to assure you that speakers who return for further engagements, they get multiples of the cup, so we hope you'll be back. [laughter] [applause] and one last question. if you do become president, which democrat will you invite to your first beer summit? [laughter] >> that's a good -- to my first what now? beer summit? >> yes. >> ah. >> yeah. the current president has had a few, if you might carry on that tradition. >> probably joe biden. he always tells good jokes.

[laughter] >> very good. how about a round of applause. for our speaker. [applause] thank you for coming today. i'd also like to thank national press club staff including its journalism institute and broadcast center for organizing today's event. and if you'd like a copy of today's program or to fete more information about the national press club, please check our web site at press.org. thank you, we are adjourned. [applause] [inaudible conversations] >> and the u.s. senate about to gavel in for a short pro forma session. no legislative work expected. rater this week -- late aer this week we could see more work on executive and judicial nominations. live now to the senate floor here on c-span2.

the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c, may 19, 2014. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable mazie k. hirono, a senator from the state of hawaii, to perform the duties of the chair. signed: patrick j. leahy, president pro tempore. the presiding officer: under the previous order, the senate stands adjourned until 10:00 a.m. on tuesday, may 20, 2014. >> and just april more for session come ashore when innocent. tomorrow in at 10:00 a.m.

eastern. more work expected on judicial and executive nominations tomorrow. you can watch the senat senate e when they gaveling back in here on c-span2. we will take you live to the american enterprise institute for remarks by indiana governor mike pence on implementing the health care law in his state. this is expected to start any moment. [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> good morning ladies and

gentlemen. i'm arthur brooks and i'm delighted to welcome you to this morning's event featuring governor mike pence of indiana. the title of his talk today is market-based medicaid reform in the age of obamacare. we are looking to with very much anticipation to hear about his state's new waiver proposal for obamacare and medicaid. mike pence was elected as the 50th governor of the state of indiana in 2012. prior to that he was indiana's represented in the sixth congressional district for six terms. and how see reserve as house republican conference chairman and the chairman of the house republican study committee. he's had a huge amount of public service as a federal and state levels, always his distinctions health as being a warrior for the people, particularly the people who have less our than average. today's policy is no exception. it's my honor to welcome governor mike pence. [applause]

>> thank you, arthur. thank you for the very kind introduction. and thank you for the hospitality, the american enterprise institute generally grateful. to you and to the aei family. not just for your hospitality today but for really keeping the twin lights of freedom and enterprise burning brightly in a city that too often seems committed to extinguishing those lights in our nation. aei smishing as i see it is about keeping help of opportunity of a better life, a more vibrant society, alive and well in this country. and promoting empirically grounded fresh ideas to make that possible. so it's honor for me to be with you today, and please join me again in thanking the american enterprise institute and arthur brooks for your great leadership.

[applause] >> like many of other admirers of yours end of the work you at aei, arthur, i have been influenced by your writings and your sense of the term earned of success. i come from a state that works. it's a state where people value hard work. and so i see the principle of really earned his success lived out every day across the 92 counties of indiana. so as a troll across my hosted i see in the schoolteacher who hopes at risk kids after school, helping graduate and go to college. i see it in the entrepreneur business owner who started the business in the living room and now employs 50 people. or in the police officer who takes pride in keeping peace in

our streets each and every day. i see in cities large and small all across the state of indiana that principle you've articulated so well, that people are happier and more motivated when they build something of their own. when they take greater ownership in their lives and they earn the success. whatever level of success that is. and that principle is much of what brings me here today. what i'm here to talk about today is related to that point, and it concerns the future of health care in america. and particularly how indiana has been leading the way for the kind of reform that i would submit respects the dignity of every person regardless of their income, and honors the aspiration of every person for a better life.

i agree with the thinking here at american enterprise institute, that it made the case that reform minded conservatives need to ensure that the safety net is well-designed and strong to provide a firm basis for those starting out on lies laughter. eyesight none other than -- lyse latter. none other than reagan who would say in new york city in 1979 these words, president reagan said quote we have long since committed ourselves as a people to of those among us who cannot take care of themselves, but, he added, the federal government has proven to be the costliest and most inefficient provider of such help we could possibly have. i would commit once again reagan was right. the truth is the safety net doesn't need to be expanded as some in this town argue

incessantly. it doesn't need to be abolished as some also are going -- argued. and he's been a better, and i believe back and i believe that can best happen in the of innovation and democracy at the state level. if you think of what president reagan said so many years ago, is that we have long since committed ourselves to a people who can't help themselves but the federal government itself was the least suited able to do that. i come before you today to really say that when it comes the use of health care, i believe that people in my party need to be solutions conservatives, offering real alternatives to the big government answers of the liberal establishment, that are

grounded in respect for the aspiration of every person, to earn their own way to succeed, to achieve self-sufficiency, and to do that in the best way possible with the kind of innovation that can happen all across the country on a state-by-state level. now, i see all of this recognizing that this is the very antithesis of the approach embodied in the affordable care act. ordering every american to buy health insurance whether they want it or need it or not is not the answer to expanding access to affordable health care in america. i've said it before, i'll say it again. obamacare must be repealed. and obamacare must be replaced with a market-based reforms, and as i will elaborate more today, with a flexible medicaid block

program that allows the states to create innovative solutions at the point of the knee. i have and will continue to advocate for a congress and the president that has the political will to repeal obamacare so we can do even more to improve health access and outcomes. some of you have known me for a while in this town know i was a pretty vocal opponent of obamacare when i was in the congress. i said then that this law will not stand, and i believe that more today than ever before. even obamacare is architectures and boosters are breeding issue today, it seems the program is still terribly flawed and should be repealed. it's bad for families. it's bad for business, and it's bad for america. despite the great progress we've been making in our economy in the state of indiana there's not a day goes by that i don't travel across the hoosier state and hear people tell me that the implementation of the affordable

care act has a dampening effect hanging over indiana's economy and our nation's economy. it's truly stifling growth in america. early in our demonstration against that backdrop i need to clear the indians would not establish a state-based exchange, and i stand by that decision. everyone knows the fiscal position of these exchanges is untenable even if they won't admit it. and come november when the rates rise again i predict you'll see another big drop in public support. it was a government takeover of health care and the overly regulated top down command and control structure of the law will never allow the exchange is to operate freely as they should, and as a result access will stay the same or get worse as costs go up. i always thought that was the fundamental flaw of the argument on the other side. most people i talk to backward are serving in the congress back home would say they were most concerned about the cost of health insurance.

but the focus in the congress wasn't on lowering the cost of health insurance. it was by growing the size of government. that's how the affordable care act in to be. well, so obamacare needs to be repealed for all of those good reasons, and i would submit to you for one more. because it's pushing a massive flawed medicaid program on two states. i believe a plan for state-based medicaid reform is not only entirely consistent with the repeal of obamacare, but i believe it helps make the case for why repeal is needed. now, republicans in congress have long argued for reforming medicaid into a block grant so the states have flexibility to design better programs. i can't think of a budget that i voted for during my years in congress that didn't include block granting medicaid back to the states. and i submit to you today that

in the debate over health care reform, states need to lead the way. like indiana is doing. last week i announced the state of indiana will seek to do just that. to seek flexibility from the federal government to close what's known as the coverage gap by expanding our own homegrown health care solution. it's known as the healthy indiana plan. now, honestly i've been talking about using the healthy indiana plan as a basis for expansion of health care coverage in indiana since he before i took office in january of 2013. today i'm pleased to have the opportunity to share with each one of you the details of our administration's proposal to expand the healthy indiana plan and offer consumer driven private market-based health care coverage to low income hoosiers at first a little bit of background. today in indiana we have some 380,000 low income working hoosiers.

those below 100% of the federal poverty level. or for a family of four that's about $24,000 a year. these are hoosiers lack access to the kind of cool the health insurance that many other better off neighbors enjoy. experts as i said rightly call this the coverage gap. but truthfully many hoosiers up to one at 38% of the federal poverty level, which is about $33,000 a year in income for a family of four, also is about to go mad can't access affordable coverage and daily with uncertainty in the family as well. last week we will make our announcement i had the opportunity to introduce the people of our state to a number of hoosiers that fall into this coverage gap, working men and women who were out rolling his sleeves up oftentimes in the most difficult circumstance, courageously moving forward, providing for the family. people like becky kincade, proud hoosiers all. who find themselves essentially for all intents and purposes

caught in that gap where the income simply doesn't give them the ability to purchase health insurance for themselves and for their families. now, some of our neighbors across the midwest have chosen to address the coverage gap by expanding traditional medicaid, and i respect the decisions that others have made. i'm here to talk about indiana's decision. from the beginning of my tenure as governor we've been saying no to obamacare in indiana. we declined a state-based exchange and i've made it clear from the outset that we would not expand traditional medicaid on my watch. medicaid is not only broken, it's broken. medicaid is not a program we need to expand. medicaid is a program we need to reform. it was nobly created some 50 years ago to help the poor and those with disability access quality health care.

truth be told medicaid has morphed into a bureaucratic and fiscal monstrosity that does less to help low income people than its advocates want. and obamacare advocates continue to promote medicaid expansion despite the overly evidence the program doesn't work as it is supposed to. at that and this but a study in oregon showed just last year, medicaid actually increased emergency room use by enrollees and produced healthy outcomes that were no better than being uninsured. other studies have also shown that health outcomes are no better and sometimes even worse for people that are covered by medicaid compared to those with no coverage at all. and the truth is last years oregon study should have sent sock ways -- shockwaves through the ranks of public health policy experts and advocates across the country. for some reason it didn't do that. it should have caused people to cost and ask themselves how to spend a program that doesn't

improve people's health outcomes was the right approach for america. or how it is just and fair and right to do that. i mean, if you care about low income americans why in the world would you want to expand a program that provides such inadequate coverage? the only thing medicaid does well is make it on the gao's list of high risk programs every year. we all know doctor susie medicaid eligible individuals for free rather than dealing with medicare. the program is bureaucratic, difficult, prone to fraud and complicit in the growing disconnect between coverage and access and health care. let me say again, i think obamacare needs to be repealed for many reasons including it's pushing a massive flawed medicaid program onto the states. now, some proponents of expansion, to those who helped author that underlying legislation, the affordable care

act, are satisfied with covering a vulnerable population with a program that is so deeply flawed. fortunately, hoosiers have found a better way. in indiana we learned the way to change medicaid is to base the program on what we know improves health and lowers costs. namely, consumer driven health care. using health savings accounts. let me brag on the hoosier state for just a second. we think indiana is the birthplace of health savings accounts. some of you in the policy committee here in our nation's capital remember the name j. patrick rooney. he was an insurance executive and a visionary. in addition to his ideas which he called medical savings account which you perhaps more than any other american popularized on capitol hill was able to achieve being added into

the tax code as a pilot program. he also personally financed the first privately funded educational choice to grant in the united states of america. j. patrick rooney was my friend but he was a visionary who sure, and we miss him. but beginning with his vision in the early 1990s, indiana became a centerpiece for the discussion about consumer driven health care. in fact, today indiana has more public employees, 96% in our state government, enrolled with health savings accounts plans. more than any other state. and a private marketplace has a higher percentage of people enrolled in consumer driven plans compared to many other states. so the healthy indiana plan bill as it is on health savings accounts and consumer driven health care makes the most sense being launched and piloted and expanded in the state were

consumer driven health care in many respects was born. six years ago against that backdrop and that progress, indiana became the very first state to successfully great a consumer driven plan to expand quality health insurance coverage to the population affected in medicaid, and covered in medicaid. it's graded on a pilot basis and we called as i mentioned the healthy indiana plan. it provides health savings accounts today to some 40,000 hoosiers, and empowers them to take ownership of their health decisions, and it works. the healthy indiana plan integrate the principles of consumerism within medicaid, encouraging enrollees to take charge of their health care and powering them to act as consumers in the health care market. here's some of the facts. the healthy indiana plan has lowered inappropriate emergency room the use by 7% compared to traditional medicaid during the course of the program.

60% of hip and goes, that's our acronym, 60% of hip invalid use preventive care which is similar to the rates we see in general commercial market place. hip enrollees choose generic drugs at a much higher rate than people covered by other private insurance plans. effect wednesday in a very broad sense, consumer driven health plans have been shown to decrease health care spending by 25% across the country and the public employees that are mentioned in the state of indiana who have a 96% enrollment rate and health savings accounts, essays me about $23 million a year for taxpayers in indiana, thanks to the adoption of those programs. we are also beginning to see this downward trend in health care costs within the healthy indiana plan as well. and let me say try t you have a track record of managing their

own health care decision. 93% of hip enrollees make contributions to their savings account on time. a third of them say they regularly asked her health care provider about the cost of services, ma and 98% say they would enrolled in hip begin if they were given the choice. in a word, indiana has proven in the last six years that consumer driven health care works, and it works for those that are starting out on the first wrong of the letter of the american dream. because of this success last week my administration announced plans to submit a waiver to the center for medicare and medicaid services to replace traditional medicaid indiana for all able-bodied adults with an expanded version of the healthy indiana plan. this will go for those up to one of 38% of the federal poverty level, and we actually call it hip 2.0. my kids like that.

hit 2. 2.0 would offer three bac options i want to roll through them with you quickly. personal get agreement this is a plan that helps low income working hoosiers access employer coverage and second we have two health savings account like plans with varying degrees of coverage. it's essentially a three-legged stool for health care in indiana. we collect hip link, hip plus and hip basic. now, each of these would allow people to utilize private insurance options and consumer behavior to increase access to quality health care in to manage costs and help outcomes in the long run. first off, in hip 2.0 we would offer hip link which is a premium assistance program for people access to insurance through their employers today but mason did not be able to afford it. now, this is, this is a defined

contribution a premium assistance program, and he is the first of its kind in the united states of america. those who qualify for hip, hip link would receive a defined cogitation from the state into what we call their power account, the health savings account. which they could you for being his, copayments or deductibles. secondly as the first of the two health savings account like programs, hip plus is available to all qualified hip members who make their contributions to the health savings account, their power account. those contributions will range from $3 a month to $25 a month based on income. the hip plus plan offers dental and vision for adults and a conference of scripted a program that also covered maternity services with no cost-sharing

during the duration of the pregnancy. lastly is turn 11, something of a default plan. it's exclusively for hoosiers below 100% of the federal poverty level who failed to make the required contributions to the health savings account. members of this plan must make co-pays. they will receive fewer benefits until they can begin to contribute to the health savings account again and move back into the hip plus program. by way of summary, the premium assistance program helps people who are employed but can't afford that employers health plan plan or don't have access to a plan. the enhanced health savings account plan, hip plus, provides incentives, offers a more generous set of benefits. the second health savings account plan serves for those under 1% of federal policy who make payments under hip plus.

it contains incentives for them to reenter the hip plus program in both plans penalize inappropriate emergency room use and encourage preventative care instead. now, contributions are required for all hip dosage is one of the health savings account plans. those above 1% of federal poverty level risk losing the coverage entirely if they do not make contributions. those below, those little 1% of federal poverty level should they stop making contributions as i said must make co-pays, secure benefits until the seek to make cogitation to get to the conservation amounts are reasonable and fair by income level and are designed to be that way. as we've seen in a pilot program, let me say this emphatically, low income working hoosiers in our state take pride in managing their accounts and making their contributions to the health savings account

consistently. we are proud of that fact. a couple other elements. the plan also includes will be called a gateway to work referral program that will connect those who qualify for hip coverage with job training and job search programs offered by the state of indiana so they can move up and out of the program. hip 2.0 is not meant to be an intelligent it is a safety net program that aligns incentives with human aspirations. the plan also includes high co-pays for inappropriate er usage to encourage enrollees to use primary care rather than in emergency room care to manage non-emergency health needs. and i'm very pleased to say that 2.0 will be fully funded at no additional cost to the hoosier taxpayer. hip 2.0 will be funded through a combination of federal funds and an agreement with indiana's hospitals who have partnered with us to improve access to health care coverage within the

state of indiana. this means if approved by the federal government our way will allow us to expand health care coverage to hundreds of thousands of hoosiers with no new state spending and no tax increases required. now, i haven't -- if i haven't thoroughly confusing, or if i have, you can go to our website and read all about hip 2.0 to your hearts content. learn more about this program. i think hip 2.0 maintains emphasis on the principles that animate my political career and i think there at the very heart of the people of our state and the people of this country. it put the emphasis on personal responsibility. they also represent a continuing effort in indiana to find innovative fiscally responsible ways to get people the care they need. reforming traditional medicaid

through this kind of market-based consumer driven approach i believe is essential. of creating better health outcomes for the people of our state and curbing the dramatic growth in medicaid spending of the people of our country. i truly believe once obamacare is repealed that the consumer driven plan that we are proposing and the healthy indiana plan will serve as a model for what block granted medicaid programs could be in states across the country. with this i'll close. and be pleased to take some questions. i believe there are only two futures for health care in america today. there's government driven health care or there's consumer driven health care. years ago when the healthy indiana plan was first adopted, indiana chose the better portion by embracing consumer driven health care giving eligible for hoosiers the power to make their own health care decision. and now we are seeking

permission from the federal government in the form of a waiver to build on that choice by expanding the healthy indiana plan for even more working hoosiers. hip 2.0 takes consumer driven medicaid reform to the next level by replacing traditional medicaid indiana for all non-disabled adults and offering instead a healthier culture that is built on healthy decision-making. again let me say hip 2.0 does not intend to be a long-term endowment program. our hope is that people will not be on a very long at all. but will transition into the private insurance marketplace, that there are opportunities and taking greater ownership of the own health care will lay a foundation for good health for prosperity and the family as they move up and out of the program under able to obtain insurance in the marketplace. hip 2.0 is a safety net that aligns incentives with earned success, hope and opportunity. the truth is that soft

paternalism of the modern welfare state has failed to honor the dignity of the working poor in many ways. by failing to give them the benefit of the doubt and by failing to believe in them, in indiana we believe in our people. regardless of their income, regardless of where they find themselves on the path to success. and hip 2.0 is really designed and built with that faith and that confidence in the people of indiana. and the ability to take hold of their futures, if given the opportunity to prosper. lastly let me close here at this policy group, surrounded by so many think tank people, let me ground this a little more in the world in which i work every day. i think as we talk about policies and coverage and health care reform, the debates that

take place on cable television and on the airwaves across the country, we must never forget we are talking about real people. working people who deserve a better way. hip 2.0 and our proposal to reform traditional medicaid in indiana is about reaching out to people that are working hard to build a better future, but simba don't have the ability, don't have the means and health insurance economy that we have today to be able to provide coverage for themselves, for their family. but they are real hoosiers, and i've talked to many of them across our state since i began to serve as governor.

and one of them, i'll close with, is named diana. i met diana at a visit at tenet hospital east in indianapolis. just a few weeks back. she was in with a heart condition but she said it was okay if i came to visit her anyway. she was self-conscious about how she looked. i tried to set her at ease. i told her, you look great. i sat down next to her bed, i took her by the hand. she told me her story. diana had lost her insurance when she lost her job. and shortly there after she started having chest pains, even though she knew it should go to the emergency room to get treatment, she waited. she actually told me sitting up in her bed, she said the doctors

told me i put off coming in a little too long. but she said i didn't want to come in because i was embarrassed because i didn't have insurance. thank god she's okay. and i prayed for her more than once. but she touched my heart. i mean, it was a hard-working woman -- here was a hard-working woman who just want to find a way to pay her own way and not rely on the free access of a public hospital. i think diane is like a lot of working hoosiers. people who don't want a handout but they need a hand up. in indiana, we have long

cherished the principle that you should love your neighbor as yourself. and that we should never walk by on the opposite side of the road when someone is hurting and in need. i think it's what makes indiana special. and let me just say, that's what hip 2.0 is really all about. respecting the dignity of every hoosier, including our working poor, to find a way to cover themselves and their families, respecting their ability to make their own health care choices and empowering them to lead healthier and better lives. i think the healthy indiana plan is a better way, better way to better health, better coverage to a better health care system, and a better future for working people in the state of indiana,

beyond. i hope that our success with this program will help other states as well, and serve as yet another reason why we should start over on health care reform in america, why we should repeal obamacare and replace it with a plan that includes consumer driven health care for low income americans and empowers them and their families to meet their needs and make their own way. thank you very much. i appreciate your time and attention. [applause] >> i think we got a little time for questions. go ahead. [inaudible] >> my name is dan. i'm the head of the coalition. i want to thank you first of all for mentioning my mentor, and

his role in this. and secondly i want to just endorse what you are doing. i think it's incredibly innovative. i think it's incredibly courageous. you've got tremendous streak red for the 96% of state employees who were using it now. in addition to that, your hip plan is the only one in the country like it. and the result are clear on their face. people save money. you save money, and you bring personal responsibility and choice within the government construct under an obama construct. that's no small trick, so just want to say thumbs up. >> well, thank you very much for that. i appreciate it. and we are proud of our heritage with health savings accounts in union.

we really do believe it was an idea born in the hoosier state, and someone asked me last week after we announced it, why are you expanding the healthy indiana plan? i said, because it works. i mean sometimes you know i worked in this town for about 12 years and everybody is always got a new idea. this isn't a new idea. this has been in the field working for people eligible for medicaid in indiana but it's also working for our state employees, and that's a very core, very practical core of why we want to expand this program. microphone real quick. >> my name is barbe barbara anda nurse and a caretaker and i want to thank you for the work you are doing on this. does healthy indiana work through a combination of health savings accounts and sometimes a modified insurance?

and doesn't have to work within the mandatory benefit package that sometimes gets too much of one kind of care and not enough of another and drives up costs? >> the short answer is, and i recommend that you go, and i'll plug it for our c-span audience begin. hip basic. read all about it. the first piece of the, hip link basically allows individuals to use what would be the state's contribution to the health savings account. for premium assistance. there's a lot of people in this category. and again if you walk out of here with no other, and the other realization, this is a program that we are designed to meet the needs of working hoosiers, okay? these are people with jobs and maybe they have fallen on hard times but these are people are working for a living or aspiring

to work for a living. and so first would be the premium assistance peace allows people to purchase health insurance they might not otherwise be able to afford through their employer. and as i said it is, and this is for the technical people in the room. it's as if the fund could division premium assistance program, it's the first of its kind in the country. it is in effect a voucher for people to use these public resources and go purchase their piece of the health insurance through their employer. the other two pieces, hip plus is a much design after healthy indiana plan today and it's a true health savings accounts, there are consequences for nonpayment. it's open to everybody that is eligible within the population up to 138% of the federal poverty level. but to your last point for people under 100% of the federal poverty level given current federal regulations there is a certain minimum amount of

coverage that within the waiver that we have today and the waiver we are requiring, you know, cannot be denied, but the way we have structured it is ineffective by making the full had 10 plan, the hip plus more attractive, with better benefits that we have every confidence that people are going to choose the hip plus plan in increasing measure and believe that we have created what we call a value proposition that will drive people to that outcome. but again i waiver has been structured within existing federal law and regulations affecting the lowest. yes, right here. go ahead. >> good morning, governor. i'm the chairman for the american bankers association. we represent about 92% of every agency in the united states and i can tell you that the worst

user today really resonate and it's one that i used for the democratic senator years ago back in 2006. it was dignity. what you're doing so i can tell you is an empirically it would be happy to share this with anyone who's interested in hearing it and who are reading it we can to you that the outcomes that derive from ownership and dignity of ownership will drive direct choice and will, over time, teach our fellow americans all the way across the country how to handle their health care expenses. so we endorse you. we thank you for what you are doing, and we congratulate indiana. my question is, do you think -- >> thank you for that. i did know that when i called on your. >> is there an appetite with other republican administrations in the state today, your fellow governors, who follow this type of example? what is your opinion on the? >> well, i have a better idea for this week. i'm traveling to new york from

your on the train to go to the republican governors association. i suspect to be some conversation about this, so i will defer on that second one but thank you for your very eloquent statement about health savings accounts and their value. at the core of this, the reason i'm so enthusiastic about indians leadership on consumer driven health care is because it's better for people's health to give people a great opportunity to take ownership in the health care decisions. i mean, you know, there's that old saying that says when you've got your health you have lots of problems are when you don't have their health you've got one problem, right? in my family, and yours, we all aspire to good health. what's great about consumer driven health care, and yes, there are advantages, it bend the cost curve. most experts suggest the advent

of consumer driven health care is what's slowing down the rate of inflation in the health care economy today. i get all of that. i get more excited when i talk to somebody working for a small business in indiana or in the healthy indiana plan today that says my life got better because i had an incentive to take advantage of preventive medicine. i found out something i could do in the area of smoking cessation, or losing weight, or all these different areas. you know, that a lot of people have the opportunity to avail yourself of primary care on a regular basis, go see your own doctor, you take for granted. but for people to have greater access and have the incentive to take greater ownership in their own health care choices, which is the very core, that original vision for consumer driven health care and health savings accounts, what i get most excited about. yes, please.

>> will my name is sarah. i'm a reporter here. i was wondering, the obama message is very motivated to close this coverage gap that you talked about. do you think this is a moment where you and your colleagues across the state would have more leverage to assess some of the flexibility like which are looking for in this way because i was one if you talk about those associations in this particular moment when you're working towards the same goal but it seems. >> well, we haven't shaken hands on this deal yet, but i'm hopeful. what i can tell you is that right after i was elected governor, i said then that i do not believe india should set up a state-based exchange, and that i ruled out an extension of traditional medicaid in the state of indiana. for all the reasons that i stated today. and i stood by the decision.

early in our administration we reached out to federal officials to seek to renew our existing healthy indiana plan, our waiter was running out, and as i reached out -- waiver. reached out to officials and i spoke to the secretary and our team met with him, we said we have a two-step process here. first, because the healthy indiana plan had been such an unambiguous success for the people of indiana, as i said, some 40,000 hoosiers enrolled in this today, 40,000 hoosiers that all medicaid eligible, okay? my first of objective was i want to preserve the healthy indiana plan and, frankly, in the wake of the 2012 election there were some that speculated we wouldn't be able to do that with traditional medicaid expansions available. there was a lot of skepticism whether the administration would

be willing to extend a waiver. but we made it very clear what our position was and we made it very clear that if we were able to see the healthy indiana plan waiver renewed, that we would then be willing to continue a dialogue about using the healthy indiana plan and consumer driven health care as the framework for further discussion. i must tell you that i continue to be very grateful for the good-faith negotiations that took place between our administration and the administration in washington over the renewal of the existing healthy indiana plan, and we secured a one year extension the middle of last year. since that time i would say we've been in continuous discussions with federal officials, and the proposal that we unveiled last week has been a result of that dialogue. again, there is not agreement on it but we remain hopeful that

the administration will allow the state of indiana to continue to build on the healthy indiana plan. and in effect build on our commitment to medicaid reform in the state of indiana. so that's how i would characterize the discussions but they've been ongoing. we are in a comment period right now where we have unveiled a proposal. the law requires us to collect comments from across the state of indiana and then we will be submitting the waiver formally we think sometime next month, and then i expect discussions will continue there. but we believe the proposal that we unveiled last week is the right proposal for the people of indiana, and would also believe it's a good-faith proposal, that is, that i think will serve the people of our state well for many years to come.

we will seek the maximum allowable time under the law which i think is five years for that waiver. but let me say just as a close and then i will finish the formal program, but i can catch up with some of you afterwards if you want. you know, i served 12 years in the congress and i served the better part of year and a half as governor. i become more convinced every day that this will come more from our nation state capitals than ever will from our nation's capital. i mean at the very core of this waiver request is my belief that many of the most attractive of issues facing our country, including health care, can best be solved by giving the states the freedom and flexibility to design programs that can solve, can solve the challenges the people of their state are facing in those areas are and so we

will continue those discussions with federal officials. i'm hopeful that we will be able to expand the healthy indiana plan in a way that will serve the people of our state, will close the coverage gap but will do it in a way that continues to advance the principles of empowerment, personal dignity, consumer driven health care in our state and maybe be an example to other people around the country to thank you all very much. i'm honored to have you with us. [applause] >> [inaudible conversations]

>> and if you missed any of this speech by indiana governor mike pencpence you can see it onlinet c-span.org. to let you know it today on c-span2 will be hearing from a former "new york times" executive editor jill abramson. she gave the commencement address today at wake forest university in north carolina. her first public appearance since being fired last week by the newspaper. she is the first woman appointed as the executive editor of "the new york times." she took the position in 2011. we will have her remarks in their entirety 1:00 eastern right here on c-span2. missouri senator claire mccaskill will be hosting the first of a series of discussions about sexual assaults on college

campuses with a panel including student survivors of assault, campus security and college administered. we will have that live at 2 p.m. eastern here on c-span2. and capitol hill working on the appropriations at this time of year dealing with the department and agency budget. the house rules committee will be setting the rules for debate for one of those spending bills. commerce, justice and science, you can watch that at 5:00 eastern on c-span3. >> the communication policy has not been reform since 1934 so there was really a compelling need in 1995 to begin a process of massive telecommunication reform. and at that time he basically had boxes. you had a box for broadcasters, a box for telephone companies. a box for long distance, you know, cable, satellite. and our view was we had to come in and try to eliminate the lines of demarcation and promote

competition. believing with competition they would be innovation, more investment, more consumer choice, more innovation and fortunate i think the result has proven as correct and that's exactly what's happened. happened. >> when the 96 act was written we were largely focused on telephone service and whether it was local or long distance, to some extent we focused on cable tv service and we wanted to take the steps to make that market competitive which we did. but the primary focus was really just will be called plain old telephone service. and today the landscape is fundamentally different. the sec has managed as well as it can without clear direction from congress about how the transition from the air of telephone service to the time when everything is delivered over the internet should take place, and in my mind the fcc has done a good job.

>> evaluate the 1996 telecommunications act with two of the house dems who helped write it tonight on "the communicators" at eight eastern on c-span2. >> today the justice department announced indictments against chinese officials for hacking into u.s. companies. several chinese government and military officials were named in the indictment by attorney general eric holder. he let the briefing today with several other members of the justice department. the briefing is about 30 minut minutes. >> good morning. i am joined by assistant attorney general for the national security division, united states attorney for the western district of pennsylvania, the executive assistant director of the fbi bob anderson, and scott smith the special agent in charge for

the fbi expert office. in its 2013 state of union address, president obama called the theft of corporate secrets by foreign countries and companies and i quote a real threat to our security as well as to our economy, unquote. we are here this moment to discuss a matter that proves the threat warned about by the president is all too real. today we're announcing an indictment against five officers of the chinese people's liberation army for serious cybersecurity preaches against six american victim companies. these represent the first ever charges against nonstate actors for infiltrating the united states commercial targets by cyber means. a federal grand jury in pittsburgh has found that the five chinese military officers conspired together and with others to hack into the computers of organizations in the western pennsylvania and elsewhere in the united states. the victim entities include westinghouse electric, alcoa am

a allegheny technologies incorporated, united states steel, united christian in, and solar world. this is a case alleging economic espionage by members of the chinese military. the range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. the indictment alleges that the pla officer maintained on offers access to victim computers to steal information from the entities that would be useful to their competitors in china, including state-owned enterprises. in some cases they still trade secrets it would've been particularly beneficial to chinese companies at the time that they were stolen. in others they still sensitive internal communications that would provide a competitor or an adversary in litigation with insight into the strategy and the vulnerabilities of the american entities.

in some the alleged hacking appears to be conducted for no other reason than to advantage state owned companies and other interests in china at the expense of business here in the united states. this is a tactic that the united states government categorically denounces it as president obama has said on numerous occasions, we do not collect intelligence to derive a competitive advantage to united states companies or to the united states commercial sector. our economic security and our ability to compete fairly in the global marketplace are directly linked to our national security. the success of american companies since our nation's founding has been the result of hard work and of fair play by our citizens. this is how it ought to be across the globe. it should be based solely on a companies ability to innovate and compete, not on a sponsored government the ability to spot and to steal business secrets.

win a four nation use the military or intelligence resources and tools against an executive or corporations, for trade secrets or information for the benefit of state owned companies, we must say enough is enough. this administration will not tolerate actions like any nation that seeks to illegally sabotaged american companies and undermined the integrity of fair competition in the operation of the free market. this case should serve as a wakeup call to the series this of the ongoing cyberthreat. these criminal charges represent a groundbreaking step forward in addressing that threat. this indictment makes clear that state actors who engage in economic espionage, even over the internet from faraway places like officers in shanghai, will be sought for apprehension and prosecution in an american court of law.

with that it's my pleasure to turn over to the system potential for national security division. >> thank you, sir. the national security division commission is to protect our nation's security by using every legal tool available to confront and defeat threats to our country. today, that tool is an indictment backed by the independent and credibility of our cruel justice system. the threat is from members of unit 61398 of the chinese military who has targeted the u.s. private sector for commercial advantage. we alleged that members of unit 61398 conspired to hack into computers at six u.s. victims to steal information that would provide an economic advantage to the victim's competitors, including chinese state-owned enterprises. ..

and it shows that while the men and women of our american businesses spent their business days innovate, creating and developing strategies to compete in the global marketplace these members of unit 61398 were epspending their business days

in shanghai stealing fruits of our labor. it shows that the business information that these individuals stole including trade secrets would have been particularly beneficial to chinese companies. let me give you some examples of the allegations in our indictment. right about the time that solo world was rapidly losing its market share to chinese competitors pricing exports well below costs these hackers were stealing, costing, pricing, and strategy information from solarworld's computers. while westinghouse was negotiating with a chinese state-owned enterprise over the construction of nuclear power plants, the hackers stole trade secret designs for components of those plants. to be clear, this conduct is criminal and it is not conduct in most responsible nations within the global economic community would tolerate. at the department of justice and the fbi we have repeatedly pledged we would do more to hold those accountable who engage in

these actions and today we begin to fulfill that pledge. and we will continue using all of the tools at our disposal to pursue those who steal our intellectual property, no matter who they are or where they reside. i now would like to turn it over to david hickton, the u.s. attorney for the western district of pennsylvania, who has been a valuable partner in these efforts. >> thank you. good morning. as you know pittsburgh has long been preeminent in the metal industries and home to organized labor. now as a result pittsburgh has become the target of state-sponsored cyber intrusions. the organizations targeted by the chinese defendants named in the indictment are, united states steel, the largest steel company in the united states. westinghouse, one of the world's leading developer of nuclear powered technology, alcoa, the

largest aluminum company in the united states, allegheny technologies, a large integrated specialty metals company headquartered in pittsburgh, the united steelworkers union, the largest industrial union in north america and solarworld, a leading solar products manufacturing company. these victims are tired of being raided. it is important for their government to take a stand against criminals who infiltrate and exploit their computer networks. some of the malicious activity described in the indictment appears designed to benefit chinese-owned steel industry. our domestic corporations struggle to compete with china on the pricing of steel and other goods. our competitive advantage has been to engineer superior, stronger, and more advanced products such as oil country tubular goods and seamless,

standard line pipes. these initiatives cost billions of dollars in capital in research and development cost, and these computer intrusions enable the best of this technology and blunt our ability to compete. at the time of these computer intrusions by the chinese military u.s. steel, the steelworkers and ati and other companies were involved in trade disputes to redress dumping by china's state-owned steel companies through accepted international dispute resolution mechanisms. the success of these entities in trade litigation also made them targets. the hackers stole internal trade strategy, attorney/client communications and cost and production analysis. the conspiracy by chinese hackers targeted each of these

entities at critical times such as in the midst of negotiations to build a nuclear power plant or in the middle of a trade case. the effects of economic espionage are far-reaching. obviously the victim companies lose their capital investments in research and technology. but the important message is, that cyber theft impacts real people in real and painful ways. the lifeblood of any organization is the people who work, strife and sweat for it. when these cyber intrusion occurs, production slows, plants close, workers get laid off and lose their homes. this happens in steel towns in western pennsylvania like braddock, mckeys port, claritan and many other similar towns and cities in the united states. this 21st century burglary has to stop. we would not stand idly by if

someone pull ad tractor-trailer up to a corporate headquarters, cracked the lock and loaded up sensitive information. hacking, spying and cyber theft for commercial advantage can and will be prosecuted criminally, even when the defendants are state actors. these victim organizations and indeed every organization are entitled to a fair shot and a level playing field in an intensely competitive global market. we thank the fdbi for its great work. it took world class investigators to follow a complicated trail of computer evidence to one building on one block in one city in china. and we stand ready to bring these defendants to justice in federal court in pittsburgh, pennsylvania. thank you. we will now hear from bob anderson, executive assistant director of the fbi.

>> thank you. good morning, everybody. as my colleagues have said today's action is charging five chinese military hackers will legally penetrating the computer networks of six u.s. victims, demonstrates very clearly that we will not stand by and watch other countries steal your nation's intellectual property. is no secret that chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state owned industries. diplomatic efforts and public exposure has failed to curtail these activities. so we have taken it to the next step of securing an indictment of some of the most prolific happenners of the 3-poa. , they are alleged to use a variety of techniques, including emails that launch malicious software to steal proprietary and sensitive information from our u.s. victims.

the victims have suffered losses as a result of 3-poa's tactics. our view future is being built every day by innovation and effort of american workers and companies. none of us can afford to watch it be stolen. we believe that there are many other victims and we hope today's actions encourage them to come forward and to talk with us. as stated earlier by the attorney general, my colleagues on this stage, this announcement is a culmination of several years of work by those represented on this stage and many, many others who are not here today. that includes a task force for the department of justice national security division, the united states attorney's office, the fbi's pittsburgh office, the cyber division, the counterintelligence division and the criminal division at fbi headquarters. this investigation has touched

46 fbi field offices in the last several years. it's a landmark case that shows how interaction between u.s. government and private enterprise can succeed. this first indictment of chinese cyber actors clears the way for additional charges to be made. this is the new normal. this is what you're going to see on a recurring basis, not just every six months, not just every year. it's very clear, if you're going to attack americans, whether or criminal, or national security purposes, we are going to hold you accountable, no matter what country you live in. thank you. >> before we take any questions i'd like to make just one further statement. i just want to confirm that over this past weekend there were a series of law enforcement actions undertaken across the

globe related to a separate cyber hacking case, working in close coordination with our international partners, we conducted a series of arrests and other actions targeting the creators and purveyors of malicious computer software known as black shades which can victimize ordinary americans by stealing and exploiting their personal information. there is announcement at noon in this matter in new york city so i would refer you to the southern district of new york, u.s. attorney's office for other questions related to this case. suffice to say these two cases show that we are stepping up our cyber enforcement efforts really around the globe, whether the perpetrators are foreign governments or civilian hackers, we will simply not tolerate these activities. now, i will, we would be glad to take your questions. >> [inaudible]. expectation of potential

retaliatory cyber attacks? >> it is our hope that the chinese government respect our criminal justice system unless the -- lets the case proceed as it should, let justice take its course. we expect and hope that the chinese government will work with us and bring these indicted men to justice but we're also continuing to remain vigilant when it comes to cyber threats that eminate from china and from other countries. >> mr. holder, is it likely that these defendants would ever stand trial in a u.s. courtroom? and if it is not, what is the real goal here. >> well our intention is for the defendants to have due process in an american court of law. that is the intention of what we have done today, to hold accountable people who have engaged in activities that violate american criminal law. that is our intention. >> but it does seem likely, doesn't it? do we have even have an extradition treaty to china? have we extraditeed people for

these types of offenses. >> you never can tell how things will play out. we stated what our intention is. we filed a charging indictment. it is hopeful for these people to stand before an american jury and face justice. >> you mentioned this is the first-of-its-kind prosecution. what new tools were available to you to make it happen in four fourth or what barriers or obstacles do you do to get to this point. >> i will refer to the folks that conducted investigation. >> i'm reluctant to get into the manner and means of the investigation to talk about details beyond what we shared with you in a fairly detailed complaint but i'm very grateful for the leadership of the president and attorney general and gave us green light to proceed and we had both the will, manner and means to achieve what we put before you in western pennsylvania. >> since these are state actors, is it possible that you bring subsequent indicts against the state entity?

indietments. >> we'll not discuss what possible charges might be brought in the future beyond to say the cases that we brought today are hard t was through phenomenal work by the fbi we were able to bring a case by name what people did and specific actions that they took. we hope the conduct will stop by bringing criminal actions but if it doesn't we'll continue to use every tool at our disposal because one thing is clear, the status quo can't stand. american businesses can not continue to their secrets stolen day in and day out. >> so in light of the nsa spying controversy and the chinese government's, you know, frustration with what happened there, is there any worry that they could retaliate in a legal context and start filing charges against, you know, u.s. officials who spied on china or things like that, maybe, i assume that these buys, these

chinese are on interpol and they can't travel outside of china. would that happen -- >> all nations are engaged in intelligence-gathering. what i think distinguish this is case is that we have a state-sponsored entity, state-sponsored individuals, using intelligence tools to gain commercial advantage and that is what make this is case different. >> can you put a dollar value on the information that was stolen, either, any of the components or in total? >> it is not possible to put a dollar value at this point. the indictment alleges a threshold required to charge but i think surely all of you know that what it takes to do the research and development, to develop these new projects, to complete in increasingly competitive global market. we know what the impact is when the cyber occurring so the dollar value is substantial. >> can you give as you range?

millions of dollars of information or billions of dollars of information? >> i won't give a range but it is very substantial. >> sir, whatever you said the investigators were able to track these hackers to a block and a building where they worked. and did all of this wasn't that an opportunity to apprehend them or work with partners to actually bring them to the justice and have this be, u.s. justice in a court of law? >> i would say we've been able to charge specific individuals by name. we've mentioned where they work, their department of the people's liberation army, unit 61398 and we hope as the attorney general said and anticipate that we will be able to bring them to justice in the western district of pennsylvania and have due process and face charges in a

court of law. >> wasn't that a missed opportunity? were you able to point, find them in this building or was this just a building like another government building? they were not necessarily in there? because the impression that i got from the statements read, is that these individuals were tracked down to this particular building and this particular block. so why not take them in. >> the building that we're referring to is in shanghai, china. and we will, we hope that these individuals come to face their charges and in a u.s. courtroom but, beyond that, i'm not going to comment further. >> it is, we talked a little bit about the cap -- can you speak a little bit in terms of the u.s. jobs that have been lost as a result of these kind of hackers? >> i think there's a lot more data on that that is in other forums but i can speak directly from western pennsylvania.

and we have we've taken everything that has been thrown at us in western pennsylvania and faced all of the challenges of the global marketplace. but if you look specifically at an example that told you about earlier and investments and seamless pipe and oil country tube, u.s. steel for example, bought a plant in texas to compete. they expanded their capability at the mack keys port operations at great cost and expense and this is above the research and development costs. when these intrusions hit and market was flooded with below-cost pipe from china, these plants were padlocked and people lost their jobs. and so it has a real and direct negative impact in the jurisdiction where i practice and the same is true in lorraine, ohio. that was another location for some of this investment to compete. so, all around the country there has been a real and demonstrable

loss of jobs and negative impact in our communities. yes, sir. >> let me be clear, mr. hickton. you're saying that plant in texas was shut down as a result of allegations you're making, cyber spying allegation thaws made? >> the below-cost sales of competitive products and the cyber hacking, the, there was a very substantial trade case about this in twine that you can look at but, yes, absolutely. i'm saying that this cyber hacking leads directly to the loss of jobs here in the united states. >> can you talk a little bit about why now? obviously this has been something you worked on for a long time. the conduct occurred tweeding up to 2012. what made you do this the time to unseal these charges? >> these cases take time to bring and, we bring cases when they are at a point where we can identify individuals or entities that are responsible for the conduct n response to question earlier about a is

mid-opportunity, it's a legitimate question, one thing you have to keep in mind that the people who were charged in this case have never been in the united states. it was not a question of being able to put our hand on them while in the united states. >> these hackers employed bit people's liberation army, they wouldn't have done this without the presumably the approval of the state, the chinese state. that doesn't happen in the pla without the chinese state's approval. would you expect the same state to simply hand them over to u.s. justice and if they don't what else can you do to bring them to justice. >> we hope we have cooperation from the chinese government. we'll see what happens. it is in the interests of china, it would seem to me to be seen as respecttors of the rule of law. our hope will be as a result cooperate with us. to the extent we do not have that cooperation we will use all the means that are available to us to ultimately have these people appear in a federal court in the united states in

pittsburgh and be given due process of american law. >> [inaudible] >> there are a change range of thing we can do and we will employ all of them. >> mr. holder, back to the question of why now, and you mentioned these cases take a long time to develop but at love this activity has been going on for a long, long time and there was some, some mention that the leadership gave a green light to this case. was it a problem in the past to get that green light? i mean was it simply that, that decision to move ahead? >> well really a function of the great investigation i think that was done by the people who are standing behind me. took a number of years to put this case together and it was really a function of getting to a point where we felt comfortable bringing the charges that we are announcing today. not as a result of any kind of a interaction problems we had within our own government. >> last question and then we can

spend some time after -- [inaudible] obviously indictment spoke discusses on very specific industry. what threats to you see other american industry being vulnerable? >> i would express concern about other industry would potentially are at risk, not only from china but from other country as well. as we've all indicated, this will, i hope serve as notice to every nation around the world that would engage in these kinds of activities that the united states takes it seriously. we will bring charges where that is appropriate and we'll take all measures that we possibly can to hold individuals responsible for their conduct. >> thank you. >> thank you. >> coming up here on c-span2, former "new york times" executive editor jill abramson. she gave the commencement address at wake forest university in north carolina.

it was her first public appearance since being fired bit newspaper. miss abramson is the first woman appointed as executive editor of "the new york times." she took the position in 2011. we'll have her remarks in their entirety at 1:00 eastern, about 40 minutes away here on c-span2. this weekend we took a closer look at recent controversies who is invited to speak at commencements. this is about 10f minutes. >> on the program right now greg lukianoff, foundation for individual rights and. tell us about your organization. >> guest: celebrating our 15th anniversary last year. we were founded to defend free process and academic freedom on college campuses. >> host: we invited you on. three people caught our attention. >> guest: right. >> host: condoleeza rice, former secretary of the state and christine lagarde and all dealing with situations in colleges. tell viewers what happened to these folks.

>> guest: give a little bit after backstory. we're a free speech organization. it was bubbling up 2009 for some reason we had increase in situations where students and faculty members get together and demand speakers not speak there. be clear, not just commencement but gets a lot hotter around commencement season. internally we have this joke, invitation season it happens every year. it gotat less and less funny ovr the years because every year it got a little more intense. i'm a first amendment lawyer. that's why i got into the business. f i'm totally okay with people wear arm bands like mary tinker and i don't like it when the goal is not to get someone to your campus. >> host: these individuals were all invited and declined invitations because of -- >> guest: in terms of protest. first of all, condoleeza rice, she stuck in there for months. as soon as announced condoleeza rice would speak at rutgers, faculty and students made a lot ofer noise we don't want her hee

and we'll protest and disinvite this person. then i thought it was going to be fine but then condoleeza rice ended up withdrawing in the face of protest. same thing happened with christinet lagarde at smith whe she with drew in the face of protest.ng but the real telling was ali. they did same thing to lagarde and condoleeza rice and went to her behind the scenes. listen it will be a little bit after mess when you show up. awe chance to withdrawow your name. she said no. theywi revoked her inindividualtation to speak at brandise university in massachusetts. >> host: were the protests so intense that forced decision? was small group of students that did that? guest guest sort of different in each case. it is relatively small minority of faculty and students. the smith case, the christine lagarde one is the most striking one how little the protest was. it was something like 500 signatures on a online petition thatut seemed to be what convind her not to come.

which is pretty low threshold. >> host: rutgers students put out a open letter in their newspaper talking about condoleeza rice. this is part of what they said. inviting heran to speak and honoring degree we're encouraging a world that justifies torture and debases humanity yet you insist on arbitrary decision to alienate countless students and faculty affected by, time for that to change. >> guest: as far as students righting that, that is the kind of speech we defend every day on colleague campus. standing outside picketing wearing black armed bands is fine. part of i idea of college campus this would beca marketplace of ideas. i wish we would instill this of i shouldd idea hear this person out. >> host: that is not happening, what you're saying? >> guest: not happening enough. some of the criticism and some of the disinsittation pushers that students have the right to

process. we always pointed out that the students have the right to protest. what affect tiffly ends up being small minority of students and sometimes faculty have a heckler's veto over majority of students who might be interested hearing what someone woo have to say. >> host: there is story about haverford college, the latest speaker there, roberts, i'm probably going to pronounce -- >> guest: i think bergenow. i would that is wrong. >> host: he is not speaking but tell his story. >> guest: he was fired, if he isn't pure enough nobody can pass increasingly difficult purity tests. when it comes to different social issues he is would be considered really good by most protesters we would think of on a college campus but apparently the main objection to them he called police on occupy wall street and essentially apologized. then blamed the police for handling it wrong. because of that, there was a students atth haverford insisted

he concede to nine demand, which originally he said, no way, i'm not going toco concede to deman. i will speak on campus. the very next day he with drew his name. i'm curious what happened behind the scenes there. >> host: four examples backed, are thereew examples where colleges decided to keep the speaker regardless of protest or trouble they see from students orhe faculty? >> guest: all the time. we keep a running list. we are up to 18 different examples of speaker controversies. half u of them when there is mar controversy, more than half, the university will stand by, stand by the speaker. just been unusually bad couple of years though. definitely it b has been about 5 different, what we refer to successful disinvitations which means either the protesters got their way and speaker didn't speak there or, it was actually disinvited or with drew in the face of protest. in worst cases you have the real heckler's veto where they show up and students shout them down or otherwise make it impossible.

>> host: cases where protests happen is it student driven, faculty-driven or more combination? >> guest: it depends. rutgers was faculty case and -- >> that was some of the discussion about commencement speeches. you can watch all of it online on c-span.org. in 30 minutes, former "new york times" executive editor, jill abramson. she gave the commencement address at wake forest university, in north carolina, her first public appearance since being fired bit newspaper. we'll have her speech 1:00 eastern on c-span2 before that viewers comments on whether or not commencement speakers should reflect values of students and schools that they speak to. >> host: get to your thoughts in a minute, let me get to inside higher ed piece this morning. the substitutes speak out. that is the headline this morning. says this, in east season which

numerous commencement speakers with drew over protests of past actions or points of view, academic leaders stepped in for two them sought to strike a blow for free speech in crucial place for free speech and exchange in higher education. one appeared to hurt the feelings of some of the graduates. every year see as share of graduations speech controversies but this year's crop managed to spur particular intense debate because some of those who drew students enemity were generally well-regarded and well-credentialed leaders not overtly partisan political figures more commonly spur these sorts of protests. robert burginaw with drew at pennsylvania's haverford college after students and faculty members criticized how police at university of california at berkeley treated student protesters while he was chancellor there. at smith college, christine lagarde, head of international monetary fund backed out after

cadre of students criticized imf policies that contribute to global inequality while others noted irony the students at women's college were objecting to someone who champions women's rights around the globe. these controversies led some commentators to ask whether the bar for satisfying today's students has risen to i am possibly high level. others to criticize the protests as political correctness run amok. we want to get your thoughts on this morning. what do you think? democrats, 202-585-3880. republicans 282-585-8881. as we said, if you just graduated from college or about to graduate from college we want to hear from you as well. 202-585-3883678 should these commencement speakers reflect the value of the students? back to inside higher ed piece. it says this. it would have been easy for those who e spoke at these ceremonies to avoid or at least play downth