>> unilateral sanctions, if we can't get concerned once with the europeans but we took to be careful. they should be designed to persuade not provoke the europeans because maintaining solidarity with these guys is still very important. >> i would agree with what you just heard. not speaking for iri, speaking only for myself, i think one of the least reported stories in recent months is what's been happening in moscow and the fact that putin has taken a number of steps to impose restriction on his own people and to shut down dialog, which means he obviously fears the effects of sanctions. my own view is that as you've heard here, that ratcheting up individual sanctions and family sanctions are important signals, and they think we should constantly be pushing our european allies and remind them of the lines that already been crossed in an effort to try to

get broader sanctions. and thenians seernational community crimea as lost, at least for the short term. i do not think we could afford to see effective occupation -- twoee de facto operation in inces inive provoin eastern ukraine. whatever can be done to find moscow accountable would be very important. >> my second question. in much broader question about the future of nato and the future of article five protections. i agree europe will certainly react if there is a movement of troops across the border. the idea is that they are protected under the mutual defense covenant in nato, but russia is

perfecting a new form of warfare in which they don't march troops across the border, in which they very slowly but methodically contest areas, gain control of areas with a range of tactics from intimidation to bribery to provocations to little green men with no russian uniforms. so this is a longer-term challenge for us. but is article v still a sufficient protection for countries along russia's border? >> yes, it is, senator murphy, as long as it's backed with a real capability. that's why it's so important that the president has put u.s. light infantry along those borders, and i hope through this billion dollar program, it will be heavier forces and reinforced with nato. to be sure, the light green men were facilitated by the presence of 40,000 traditional motorized rifle and tank regiments along the border that, basically, you know, like scissors, paper, rock

blocked the ukrainians from taking more effective military action in the early days against cry here ya. so he's got -- crimea. the first capability that the eastern states of nato need is a stronger military with u.s. forces there as we had in berlin and other places so they know it only may be a few americans today, but there'll be many more tomorrow. >> okay, let me ask a slightly different version of the question to you. let's say the tactics used in eastern ukraine were used in romania or bulgaria. let's say russia was actively funding separatist movements within those nations. my impression is that doesn't trigger article v, but should we be having a discussion about whether that protection is sufficient. >> >> i think we should have a discussion about how to meet our nato obligations. article v is central to that. i also think the other nato members have to put more into the fight be both in terms of

resources and money. and final point on sanctions which i forgot, a senior russian official was recently at the wilson center and suggested that we yank the visas for russian duma member toss to go to the south of trance and florida. they all love their vacations more than they love their political jobs, and that would really get their attention, and i think that's something that europe could go along with, even if the restaurants in the south of france lose a little money. >> if i could just add briefly, i think it would be actually very briefly for the conversation in nato to be about this appearance of little green men. what happens if 150, quote, local protesters seize a television station in eastern estonia? >> right. >> i think nato ought to have that discussion in advance so when it happens, nato has an answer ready. hi worry is if it happens, it's not going to be useful whether nato debates four or five weeks whether it's an article v con contingency. >> that's my point. thank you, mr. chairman.

>> senator shaheen. >> i would hike to pursue that line of questioning a little bit because it's my understanding over the next few weeks the nato defense ministers are working to develop a readiness action plan. and i just wonder if you all could talk a little bit about the kinds of things they ought to be thinking about not just with respect to ukraine, but with respect to some of the other countries in eastern europe that are potential targets for this kind of russian activity. and what kind of response we ought to be thinking about from nato. should we have a more assertive position either rhetorically or in terms of other symbolic actions that we could be taking now that would help send a very strong signal both to russia about taking further action, but also to our allies about our support for them? so i don't know who, if you would like to speak to that

first, mr. pifer. >> no, i think it's, you know, going back to 1997 nato has tried to be nonprovocative in terms of its military deployments on the territory of the countries that joined from 1999 on. so there has not been, you know, permanent u.s. deployments in places like poland, romania or the baltic states. think what we've seen the last three months, the russians have fundamentally changed the rules. so now it is time to consider i think the pentagon uses the term "persistence," but moving towards some type of permanent american military presence in the baltic states and poland. i don't think they have to be large units. they're basically there as a trip wire, but that kept berlin free for 35 years. the one thing i would add, though, is it does bother me a bit, and i've tried to talk to my european friends about this, when you look at the on-the-ground permanent deployment now in the free baltic states and poland, you have one american airborne company of about 150 troops in

each of those places. it shouldn't just be american. what i've been trying to lobby for would be if you could have the german company with the american company in lithuania, a british company with the american company in poland. i think that would send a signal to moscow that the article v commitment is shared by all nato allies and to capitol hill where you may ask questions, why is this just an american burden? >> well, i certainly agree with that, and i wonder if any of you are willing to speculate on why they've been so reluctant to do that. is it because of the concerns about the relationship with russia and the trading opportunities and their dependence on energy? or is there something else going on? >> first of all, there is the 1997 agreement, and if you look at the language of it, it's clear as ambassador pifer said, the conditions -- and it said explicitly under the current and foreseeable conditions, we will not be making large permanent

deployments. well, it's clear that, god, if the conditions haven't changed under what we've seen in the last few months, they'll never change. and secondly, we're not even talking about, as steve said, large and permanent. we're talking about the few companies from various countries falling on in on what we would call battalion packages. but the, that can very rapidly, i saw it in kuwait in 1998. that can rapidly generate 5,000 troops. the berlin brigade was a trip wire, but as you remember from those pictures of checkpoint charlie this '62, it was m60 main battle tanks. if you have a conventional military capability be, again, you block the ability of putin to intimidate the reaction to the infiltration, the little green men, little seizures of things along the borders because people can deal with those as police problems without having

to worry about 10,000 russian troops coming across the border. >> um, i think that's worth exploring a little more, but i want to change the subject, and i'm sorry i had another hearing, so i budget able to get here -- i wasn't able to get here to hear your testimony. but i wanted to explore the economic situation in ukraine because i know early in this crisis one of the overwhelming views that we heard was that if ukrainians' economy doesn't improve, that it creates a situation where the whole country could fall. and i wonder if you could -- again, i don't know who wants to address this, but if you could speak to where we are in terms of economic assistance for ukraine, to what extent do we think that that's having an impact there? is there more we should be doing? and how is -- are we seeing the

austerity measures that are being called for having a negative effect in a way that's challenging? and then corruption. are we seeing any potential positive efforts to address corruption in a way that we think will have long-term effects? >> well, i think we've all said more or less the same thing, but i think i'm the only mother and grandmother on this panel, and we need tough love here. everyone cares about ukraine's economic future, but ukraine has to care about ukraine's economic future. and the anticorruption piece is absolutely huge. if the resources from the west just go into mcmansions for a few oligarchs or fat bank accounts, wherever, that is unacceptable, and we've already seen that. so the poroshenko government which starts saturday has to move out smartly, and he says

that he will do that. that's point one. number two, there will be austerity measures required to qualify for imf loans, substantial, huge, imf loans. other countries like event aren't prepared to do this. there is a huge political cost to this when you tell somebody your gas bill is going to go up by 100% or more, etc., that is hard o'hare. but this is the third chance for ukraine to people to say to folks, hey, you want a different kind of government, this is what it'll take. after we do this for a short from the, the aid will come, and we will build a noncorrupt country with with, you know, a sensible jobs program, and your future will look brighter. >> there's a -- right now ukraine has an offer in the next two years from the imf, other financial institutions and western donors between $25-$35 billion. so there's a good sum of money out there. the other bit of good news is my

understanding is that when the imf team went to ukraine in march to talk about the program, they said for the first time in dealing with ukraine in 20 years the ukrainians said here's the problem, here's our to-do list. every year at the time they haven't said -- they had the right, so they know technically what they have to do. and they understand that their ability to access that $25-$35 billion will be tied to their continued implementation of reforms. i agree with jane, i think the big question is can they sustain the political support for these austerity measures. on may 1 as one of their prior actions for the imf, they raised the price of heating. that's a great time because no one needs it. but when november, december, when people see their bills up 60, 70%, the government's going to have to come out and say we have to get through in the next couple of years because this is key to unlocking the economic potential. >> mr. chairman, my time was up, but i know mr. green wanted to comment on that. >> senator, thank you.

iri has been polling in ukraine for a long time, and we've conducted two polls right before the election and, of course, the polls in the election. i think the good news is the ukrainian people have eyes open. they understand the path ahead is not going to be an easy one. the polling shows that they're prepared for tough measures and difficult steps. the polling also shows that the leash may be with a short one. so my own judgment is as long as the government sends clear signals that it is moving to take on corruption, that there is some hope that they'll take on these aggravating factors. then they've got a mandate, then they've got the capacity to take these challenges on. ukrainian people are well educated, ukrainian people know what they're up against. the maidan is very much still front and center to them and and close to their hearts, and those who tragically were killed in the maidan, is there is a sense of euphoria tempered by realism.

and as long as they start making those very clear steps, i think the mandate is there. >> thank you. thank you all very much. >> senator markey. >> thank you, mr. chairman. very much. there's an old saying that if you give a person a fish, you feed 'em for a day. you teach 'em how to fish, you feed 'em for a lifetime. so that's what we're really talking about here. ukraine is the second least energy efficient country in the world. second from the bottom. ukraine, if it just improved not to germany's level, but just to poland's level, backs out almost all of the natural gas it imports. teach a country to fish, huh? it has vast untapped natural gas resources. vast. third in europe.

teach a country to fish, to develop its own energy resources. that's where we should be. that would scare russia. that would petrify russia. that would be the ukrainian people banding together themselves. saying we must do this. so i introduced a bill this morning to deal with this around kill lease heel of ukraine -- around kill lees heel that doubles the usaid, export-import bank, u.s. trade and -- [inaudible] to deal with this issue, both with energy efficiency and natural gas development inside their own country. to leverage programs that are already there, but to bring in our expertise to help them telescope the time frame that it takes for them to do it. so that is, without question, where we have to be. as a nation. that is our opportunity. and exporting lng from our

country, heat their homes for a day, huh? we can do that, but that's really not where we should be. and i'll just add parenthetically here, for those who are criticizing president obama's plan on monday that the epa announced to reduce our greenhouse gases and decrying the increase in electricity rates here in america for doing that are the very same republicans who are also supporting exporting our natural gas which is going to so dramatically increase our own it will dwarf any increase that comes from the president's announcement on monday for what the epa is doing. it's not even close. if that's a co'é/

whole area and how dramatic you believe it can make as a difference given your own experience with your righting legislation -- your lighting legislation here in hurricane? >> you really do know this issue cold. >> thank you, senator harkey. it's kind of interesting -- markey. it's kind of interesting to see you at the bottom of a queue in committee. this is new for me. >> a little bit of humility is a good thing. >> your very humble now. >> i'm proud of my humility. >> you and i worked closely on energy efficiency, and so did all of our colleagues on the house commerce committee, and i think we did pretty well. and you mentioned lightbulbs which were a bipartisan initiative and passed on a bipartisan basis. and official lightbulbs seems like a little thing, saves a huge amount of energy. we also did building standards, and we did fuel efficiency, and we did a number of other things. i can't vote here anymore, but i certainly support your

initiative to help countries help themselves. it's a point we have all made about tough love for ukraine. they have to take these steps, but we could give them tools that would help them take these steps. so i think others may want to comment, but i think this is a very good angle. finally, i said something, i'm not sure you were here, about using our asymmetric strength against russia which is our economy, some of our good ideas like these. and the aid we give ukraine could help with these ideas. and that would go a lot further than some of the other ideas that are more kinetic. >> may i ask each one of the witnesses just very briefly, i don't have a lot of time, on this question of energy efficiency, natural gas. you know, we have to help them with the reverse flow and other issues, but the real issue, do you all agree this is area where we should really zero in on and

that'll make the bigger long-term difference? >> certainly energy efficiency in ukraine and helping ukraine produce its own natural gas is a bilge thing. i think -- big thing. in 2012 the price that ukrainian households paid for their heating gas was one-sixth the price that ukraine was paying to import that. by raising the prices, they're going to introduce a huge incentive for all of those households to close the windows. >> thank you, sir. ambassador jeffrey. >> absolutely, there's two major components, and i would include us to export lng and encouraging europe to get it from other sources as well. >> even if it does increase energy prices in the united states? >> for reasons that go well beyond -- [inaudible] >> congressman? >> senator, iri doesn't take a position on energy legislation, nor sanctions legislation. ly say that we believe in a comprehensive approach. so it's almost all of the above in terms of building capacity in ukraine. >> with regard to technical expertise, however, the

ukrainian government welcomes on energy diversification and a host of all the reform issues, they welcome technical expertise in a major way as they go forward. >> yeah. i think that we really do have a huge opportunity here, and the more we learn about this country is the more that we can see that it can be transformed in the blink of an eye. they could increase their energy efficiency by 10% in two years. they could increase by 50% in five years. we have to use every bit of leverage that we have in order to help them accomplish that goal. that's what's going to keep people up at night with nightmares. that's why china looms larger in their life, because they're going to see a market shrinking dramatically, because that's what it's really all about. whether you talk about syria or iraq or libya, unfortunately, oil underlies a lot of each one of those regions, and here we

really get a chance to do something for them that makes them self-sustaining. and my hope is that we can talk about this issue on a bipartisan basis in the committee and get right at the heart of their weakness, get right at the heart of what this whole story's about which is their necessity today of importing natural gas. but it's something that we can really change dramatically and have the ukraine say to russia we don't need your natural gas any more than we need your soldiers. and that's a statement they should be able to make in the very near future if we help them to construct a plan which gives them the help they need in order to be successful. thank you, mr. chairman. >> thank you. senator markey may be the newest member of the committee, but he is front and center on energy policy and global affairs, and we appreciate his expertise on the committee. two final questions. one, ambassador green, you've talked about this several times in your answers, and i'm concerned about and would like to hear some other views as well.

ukraine, yes, but all of eastern europe, and that is the saturation the russians have created with their broadcasting. into the region. of course, it is not open-ended broadcasting in terms of views, it is very directed by the state. what should we be doing, voice of america, radio-tree europe, to quickly -- radio-free europe, to quickly increase our level so in addition to a domestically-created social networking platform that there is additional opportunities for multiple voices to be heard? >> senator, i would argue that we should boost those programs, boost them into the regions. but we should also take a look in the social media platforms. there are ways that we can help to create anchors outside of the

region such that it makes it harder for mischief, it makes it harder for the russians to comeñ in and shut them down. so it's helping to provide the technical expertise to foster the development of social media platforms that are indigenous in the region, but also taking steps to help reinforce and protect them from hostile moves such as we saw in eastern ukraine. >> uh-huh. anyone else have thoughts? >> i would say we can always work with the poles and others in eastern europe. this is not just something i think the united states isçñr doing. i think we have a lot of friends in the region in which we can enhance their capacity for broadcasting communications in ukraine. and also bolster the ukrainian capacity in this regard as well. >> and, jane, do you want to say -- >> well, just to reinforce mark green's earlier comments about social media. i think there is a huge voice this ukraine that knows how to speak for itself, it just needs resources. >> uh-huh.

one final question which is really, i think, an important one but which in the focus of ukraine we haven't talked about, and that is the nuclear non-proliferation implications of what's happened in the ukraine. ukraine voluntarily surrendered their nuclear weapons that they inherited from the former soviet union in exchange for a commitment by russia as well as the u.k. and the u.s. to respect ukraine easter to have y'all integrity -- ukraine's territorial integrity. are there implications for global non-proliferation regimes with the loss of crimea and the threat to eastern ukraine that if you have a conclusion that if ukraine had retained these nuclear weapons, the loss of crimea would not have happened and, therefore, possession of nuclear weapons is the only guarantee of territorial integrity when threatened by

another nuclear power such as the russians. and i'm concerned that at some point some are going to rivet their attention to that. in some of my travels, i've heard a little bit of that from other countries. and i'd like to hear if anybody has any perspectives on that. >> mr. chairman -- [inaudible] security assurances which was part of the agreement by which ukraine gave up its nuclear weapons. and what i think one of the tragedies of what the russians have done with their assault and the annexation of crimea and in their continued action in eastern ukraine which is violating the commitments they made in that document to respect ukraine's territorial integrity, sovereignty, is that they have now devalued the idea of security assurances which could have been a tool in another proliferation case. for example, it might have been part of the solution on iran or north korea at some point. and so one of the reasons why i think it's now incumbent on the united states and britain, who

co-signed the budapest memorandum, this is one of the reasons why we should be supporting ukraine but also to make clear there are, in fact, consequences for violating these sorts of commitments. but the russians have done grievous damage in future proliferation cases. >> i agree with steve, but from the standpoint of the middle east where i spend much of my time and effort in the past and now, what's important is what happens in the days, weeks, months, years ahead. if russian action is punished at an ever greater degree of power by the international community, if crimea is not acknowledged as, basically, russia and the way we thought about south ossetia, if we can show that there are military and other actions that, trawl, will re--

first of all, will preserve the bulk of ukraine, then i think countries will say, yes, led by the united states the west stood up for that aggression, and there is an international alternative to us developing not just weapons of mass destruction, but large armies and little 1914 kind of local coalitions and other things that taken together are going to undercut this global order. so we've got a lot of work ahead of us to insure not just for the sake of ukraine, but for the sake of than proliferation and the overall international order that, to quote an earlier american president, this shall not stand. >> well, this has been a very insightful panel. we appreciate you sharing your time and your expertise and your insights. this record will remain open til the close of business on friday, and with the frat tuesday of the committee -- gratitude of the committee, this hearing's

adjourned. [inaudible conversations] >> coming up on c-span2, a hearing on access to training for first responders in high wildfire risk areas. then, a look at the annual american bankers association economic report. and live at 10 a.m. eastern, the u.s. senate returns for votes on judicial nominees. >> this year marks the 50th anniversary of johnson's declaration of the war on

poverty and his signing of the economic opportunity act. this morning the house budget committee holds a hearing focusing on the impact of federal aid programs in reducing poverty. live coverage starts at 10 is a.m. eastern on our -- 10 a.m. eastern on our companion network, c-span3. >> also today the special inspector general for afghanistan reconstruction, john sopko, testifies before a house foreign affairs subcommittee. the committee's holding an oversight hearing examining the management of more than $103 billion in government funds for reconstruction programs in afghanistan. see it live at 2 p.m. eastern on c-span3. >> now, a hearing examining the training and resources available to firefighters and first responders in communities threatened by wildfires. it's an hour.

>> thank you all very much for being here. this is, actually, something we're trying because it is hard to get people sometimes -- especially in the west where there's a lot of these issues, especially fire-tighting issues -- fighting issues and especially in alaska. so it's a pleasure to have folks here. this is the subcommittee on emergency management and sewer government relations -- intergovernment relations, and i apologize. i've got a little cold here, so i'm kind of suffering through a cold, so i appreciate you all being here. i want to thank the witness for being here, especially on short notice, to lend their expertise to our discussion. we're here today to take a close look at the problems that are serious and concerning to many states for a while now, and that's wildfires. this is a challenge that confronts communities of all sizes, towns and villages, cities, states and the federal government. as a former mayor myself, i know firsthand how important it is to have personnel resources to prevent and fight fires when they occur. the stakes are high, and we hues

insure that first responders who are out there protecting lives, homes and businesses receive the training and support they need. that's why we're here, to the learn from these experts and leaders about the situation on the ground, across the country from a variety of perspectives. we have to know where we're succeeding and where we need more resources or a new approach. there are many different levels of government involved in fighting fires. from locals to various federal agencies, it's important we have comprehension -- comprehensive0! protection and response no matter where a fire occurs. i know providing that protection has become more and more expensive, especially on the federal level. in the past 12 years, federal costs have averaged more than $3 billion a year. that doesn't include the $2 billion spent by state and local communities and as well as other private spending. those costs are increasing because wildfire activity is

growing. when you talk about wildfires, most people think of flat, grassy states like montana or states hit by drought like california. but as weather patterns have been changing with the rest of our climate, more states than ever are being hit by huge wildfires. in the past decade, acres burned up are almost up by 67%. right now in anchorage more than 700 men and are fighting -- women are fighting the dangerous fire in the kenai. it's called the funny river fire, but there's nothing to joke about. brave firefighters have been fighting this fire since may 19th. they have done an amazing job, are -- alaskans are grateful for their efforts. danger the life and property has been nearly eliminated. it's scorched almost 200,000 acres of our forest, close to residences, businesses and individuals. it's early in the fire season for something of this magnitude

in alaska. my state has had one of the warmest=t winters on record, and now strong winds and low humidity are combining the allow these fires to grow quickly. over the weekend there were reports of 15 new fires in the fairbanks service area. luckily, these were relatively small fires, but they only stayed that way because of the outstanding work of our firefighters. to make sure we are prepareed as we can be, that we have the resources and experienced personnel out there in the field, we have to look at the first responder hiring and retention practices, the skills men and women learn during training to become a firefighter or smokejumper or hot shot team. members are invaluable. we must recognize their importance not just with words, but in what we and how we treat them. earlier today i was proud to introduce the senate version of the federal firefighter flexibility and fairness act to address a glaring misstep in how we treat federal firefighters.

across the country municipal firefighters are able to work out changes in their schedule among themselves with supervisor approval. they can trade shifts without impacting their pay schedules, allowing them to take care of sick family members or attend their children's important events. this type of flexibility is important to morale and life balance, and i'm glad that state and local firefighters have it. but for some reason, federal firefighters do not. right now these men and women can only swap shifts within a two week period, and in the accounting system that the government uses ends up with one firefighter receiving no pay for the shift while the other receives overtime. it doesn't make sense. because the system is so nonsensical, some departments don't allow shift swapping at all. i can't blame them for not wanting to deal with that headache. but this problem needs to be fixed. treating our firefighters well is the morale -- moral thing to do. but it's also fiscally

responsible. the bravery and skills earned by these folks out in the field make it even more important to retain them as long as possible. attrition reduces the effectiveness of our fire fighting teams which is unacceptable. we need to train and maintain the best teams we can. clearly, that goes for municipal firefighters as well. i've been a strong supporter of important federal resources like fire and safer grants that go directly to our local fire situation from palmer to -- [inaudible] firefighters have told me how beneficial these grant programs are. that's why i'm fighting to, that's why i'm fighting to roll back president obama's proposed cuts to these programs in this year's appropriation bill. as a hebb of the appropriations committee -- as a member of the appropriations committee, i'm committed to restoring the $10 million proposed reduction because every dollar spent will save more than that in local communities. over the last, on one last issue i want to bring up very briefly

before i introduce our witnesses is a broader issue that impacts many firefighters in alaska, the disadvantage, the disadvantages to seasonal employees in the federal hiring process. i've been working with senator tester and looking closely at the bell that question -- bill that he and senator mark udall have introduced, senate bill 1120. seasonal workers are so important to alaska, a large number of alaskans hold different jobs based on the season since we have such unique climate. many firefighters come from the lower 48 to help us fight fires in the summer. right now it seems to me that the federal hiring practices isn't giving these seasonal workers who have developed great expertise over many years a fair shot if they want to transition to a full-time job in the same field be. i'm glad to hear your thoughts on this issue, and i'm looking forward to the continuing discussion with senator tester. i'm not sad, i'm cold. i've got a cold. [laughter]

leapt me introduce our witnesses, and i'll start with mr. jim hubbard is the deputy chief of the u.s. forest service which is part of the department of agriculture. jim? >> thank you, mr. chairman. glad to be here. as you've noted, we're into the fire be season. alaska -- fire season. alaska is especially. arizona and new mexico are having normal fire activity, but it's, it's busy. the funny river fire is a bit unusual. you don't have 200,000 acres burn on the kenai very often, and that gets a lot of attention especially with the values at risk and the people in the way. and what our season looks like is that june will continue to be that kind of a problem for alaska. maybe it'll moderate by the time july gets here, i hope so. alaska went a little longer than usual in past seasons. as we move further into the

season and get into july, california, oregon look particularly bad. nevada's not going to be good. so that's where we expect most of our problems. it'll be scattered throughout the west as usual, and we'll have surprises pop up all across the west. but those three states in particular look problematic. our forecasts tell us we probably will be spending more money on suppression than we have in the budget, so we'll go through that process again. we are prepared. the interagency forces are at 14,000 firefighters that are available to us. currently we have 14 large air tankers, but we could have as many as 22 under exclusive use contract before the season's over as those next generation planes begin to fly for us. we always, we still have the eight military maas units -- mass units as surge capacity,

and we do have the 72 single-engine air tankers under contract and more than 600 helicopters under contract. so the aviation forces and ground forces are in place for the season. but the conditions are challenging. the long-term drought, the changing conditions that we face with climate and with fuels and with insect and disease have all caused problems not to mention the development that has to be protected that is in the way of some of these difficult situations. risk reduction occurs on about three million acres per year. that's, that's a substantial amount, and it addresses some of the priorities. it does not cover the territory that needs to be, the risk that needs to be reduced. it is a combination of what you

do on the landscape and what you do in the community and around the community that will save us in the future. system of our limiting factors have to do with the transfers that occur when we don't have the suppression dollars to pay the bills and we have to take it out of other accounts in the service to do so. then how we budget for suppression has been an ongoing debate. you mentioned do we have the resources and do we have the right approach. perhaps that needs another look. another look such as was proposed by senators wyden and crapo in the bill they introduced that suggests that perhaps the forest service and the federal agencies continue to provide in their budget the initial attack and the forces and the the costs of that initial attack. and we do catch 98% of our fires

during that period. but it's those 2% that get away that cost us about 30% of that suppression budget, and those are fires that perhaps fall into a disaster category and ought to be treated, financed differently. if that were to happen, then we would hope that the agency could headache proposals -- could make proposals for using some of that budget constraint to increase the land treatment and reduce the risk further. and that would be our approach, and we would hope that something like that could at least be considered. thank you, mr. chairman. >> thank you very much. let me ask, i'll ask questions at the end, but let me ask william dougan, national president of the national federation of federal employees next, please. >> thank you, mr. chairman and members of the subcommittee, for inviting me to testify. our union represents 110 is ,000 federal workers including 20,000 in the forest service. for 22 of my 31 years in federal service, i fought wild tyes,

serving in -- wildfires, serving in many positions. i spent 14 years in alaska. i can tell you, fire fighting is a dangerous business. when you're on the fire, the only thing between you and trouble is your equipment and the brave men and women with you on the fire line. that's why it's so important that we arm firefighters with the training and resources they need to be safe and complete the mission. the wildfire problem in the u.s. is growing. six of the worst fire seasons since 1960 have occurred since 2000. we must recognize that this is the new normal, and we must change the way we do business to account for it. with respect to training, the usda inspector general issued a report in 2010 that predicted future shortages of qualified firefighters in the forest service. too few were being trained to replace those retiring. that prediction is now coming to fruition, and it is a major problem. wildland fire fighting agencies have done tremendous work to improve interagency cooperation.

the development of a consistent certification and training system administered by the national wildfire coordinating group is an outstanding achievement. our union is proud to be a partner in the wildland firefighter apprenticeship program which we hope will take consistency and training to the next level. unfortunately, this program has been underutilized, in our view. within the forest service, training resources are not reaching the field in a timely way. from one forest we are hearing the primary fire personnel are unable to attend training classes that are only offered out of state, leaving them no option for certain training. at another forest we hear that managers are getting their training budget too late to get employees into classes. congress can improve access the training by exercising oversight to insure that the action items developed as a result of the referenced ig report are properly implement implemented e certain the apprenticeship program is used to its fullest potential. also congress should make every effort to appropriate funds in a

timely manner so resources get to the ground this time to be used. -- in time to be used. with respect to work force retention, the attrition rate for wildland firefighters is alarmingly high. something must be done about it. here's something that can be done right now. for wildland fire fighters, experience is hard earned on the fire line. however, the firefighter career path is blocked by flawed and dysfunctional federal regulations. many federal fire fighters begin their careers on temporary appointments. many return year after year acquiring valuable training and experience. however, firefighters looking to advance their careers face a critical barrier. current regulations do not credit their service regardless of how long as qualifying if more acquiring competitive status. because of this barrier to career advancement, many skilled firefighters eventually leave, taking their valuable skills with them. to explain, agencies have the flexibility to fill positions from current employees under

merit promotion or from among civilian applicants under the competitive process. over two million other federal employees have the status to compete under merit promotion. however, firefighters classified as temporary seasonal workers do not. they cannot compete for jobs filled under merit promotion procedures. we strongly urge passage of the bipartisan land management work force flexibility act, s. 1120, which would address this inequity. funding for wildfire suppression is also a problem. with to car insurance and severity of -- the occurrence and we havety of wildfires increasing, the portion that goes to preparedness has increased dramatically. the expense of fighting wildfires often exceeds the funds appropriated for wildfire suppression. when this happens, agencies transfer funds from other programs into fire fighting accounts to cover the shortfall. this so-called fire borrowing results in cancellations and delays in the agencies

on-the-ground program of work. ironically, many of the canceled projects are those designed to reduce the frequency and severity of catastrophic wildfires. it's robbing peter to pay paul, and it costs taxpayers more. we urge congress to pass the wildfire disaster funding act, s. 1875, to address this. i will conclude my testimony by quoting one of our members currently out on fire assignment in alaska. in alaska we do have a well-constructed, tactical plan to deal with fires. but wildland fires are on the increase. 3(qciñr

. >> as you know, mr. chairman, raging fires currently threatening your state are a stark reminder of this present danger. before the hearing we spoke with tom west cot, our state president in alaska, and he estimates a vast majority of his membership, municipal firefighter, will be engaged in those efforts before the fire is finally brought under control. the scourge has become epidemic. we support the administration's proposal changing the way in which federal government budgets for wildland fire fighting. it makes sense, it should be done, but it is only a first step. for decades foresters and firefighters have battled on how to deal with firefighters. today we must develop a more global and holistic strategy to deal with this issue. clearly, the federal government must take the lead. we applaud congress for mandating the national cohesive wildland fire management strategy. this strategy establishes a national vision for wildland fire management and response.

the strategy is an excellent first step, but once again more must be done. in the 1960s and '70s, american cities were blighted by an epidemic of arson and fire deaths. to address this crisis, the national commission on fire prevention and control issued the landmark report "america burning." over 40 years later, the document is frequently cited and still has value. the federal government could shake a similar approach to the wildland fire problem. we propose the establishment of a commission with congressional participation to fully study this issue and make relations. although the iaff has implored the administration the establish such a commission, they have yet to act. the federal government is the only entity that can insure the participation of all stakeholders. we hope that either on their own volition or with a gentle nudge from congress they will soon act. state and local governments also contend with devastating wildland fires.

when privately-held or state-owned lands, fire fighting operations are exclusively handled by assets. nearly every firefighter will be called upon to fight a wildfire. disturbingly, not all firefighters are trained to battle these fires. cash-strapped fire departments frequently cannot provide training. we propose a pilot program to provide training for local firefighters in high risk areas. furthermore, because fire fire fighting is an inherently governmental function, it should be a default policy to contract with a governmental entity having jurisdiction in the impacted area if additional resources are needed beyond the federal everett. however, if private contractors are ride, they should be required to meet the same rigorous standards of their governmental counterparts, period. this is an issue of public safety, firefighter safety and operational efficiency.

lastly, we need to protect the men and women on the fire line. not quite a year ago 19 brave fight fighters and proud members of iaff local 3056 died battling the yarnell hill fire. those tragic deaths and, indeed, the death or injury of any wildland firefighter should give us pause. it's physically taxing, mostly draining and incredibly dangerous. the job differs greatly from that of a structural firefighter. wildland fire tighters are on scene fighting fires for days or even weeks at a time. through government investment and research over many years, much is known about the health impacts of fighting fires for structural firefighters and how best to protect them. but we are only beginning to examine these impacts on wild lan firefighters. -- wildland firefighters. the iaff is uniquely positioned to help coordinate research efforts. with our california forestry local 2881, san diego state

university and much-appreciated funding from the department of agriculture, research has already started. san diego partnering with cds studied improving protect i have clothing worn by wildland firefighters, a great start. it is incumbent that we study appropriate staffing patterns to ascertain the impact on firefighter health and safety. partial funding from doa has been provided for such efforts, and we encourage the federal government to continue this investment until the resource is completed. in closing, we must act now and very decisively on multiple front toss address this complicated issue. i thank you for the opportunity to testify and will gladly answer any questions. >> thank you very much. and let me go to mayor navarre, mayor of kenai boar roll from my -- borough from my state of alaska. i was down there about a week or so ago at the funny river fire which we know has been top priority. so we appreciate, mayor, also

for being on a pilot here of trying to use our technology. we'll allow you to testify, and then we'll open for questions after your testimony. mayor navarre. >> thank you, senator bell itch. begich. >> uh-oh. hold tight. >> thank you, senator begich. i appreciate you for touring the area and asking the right questions about the adequacy of the response and whether or not the resources were available where needed and when needed. and in answer to that, i think it is absolutely. i was exceptionally impressed with the incident command structure and the way that there was coordination between all of the agencies as this fire was developing. we had incredibly high winds, changing wind directions and conditions, but the knowledge that they, that command team had of fuel sources, of fire waiver, of logistics, all of the things

that count when you're really reacting to an ever-changing fire dynamics was truly impressive. the coordination between the agencies, i can't say enough about how all of the resources and the resource agencies worked together. one of the things that i should point out is that the refuge folks were quick to order up a command team and also had done some fire breaks between urban and wildland interface that really were critical to the way that the planning and protection of the populated areas and the structures there. so we were very, very fortunate. so i want to say thanks to you and to the resources that were put towards this. and the result was that we had very few small structures, some remote cabins that were lost. absent that, all of the residential areas were protected. the priorities were clear from the outset; that is, protection

of the firefighters who were employed. also election of land -- protection of land and property in the developed areas around the me anyones la and then looking -- peninsula and then looking at where the important infrastructure is including some very high voltage hines that needed to be -- lines that needed to be protected. and i want to also just talk briefly about the importance of the planning process well in advance of what we know are going to be an increasing number of wildfires. and that is federal resourcings important to the kenai peninsula in a variety of ways. we had funding over a long period of time to deal with the spruce bark beetle infestation that allowed us to identify a plan that we could -- allowed us to identify a plan to enhance natural fire breaks, power lines, roads, between urban and rural or wildland areas in the

event that at some point we saw a wildland fire that would threaten the developed area. so we other a period of time, i think we got as much as about $18 million from the federal government, and we used that to build fire breaks, to do a fire program, to renew fuel sources. so i think that is critically important. the other thing that was important and that we also used federal grant funding for was the borough's geographic information system. we have a very good system. we update it regularly. the last time we were able to update it with a central grant during some aerial flight gathered data and put it into our system was actually 2012, so we had pretty up-to-date information on where structures were including in remote areas. and it allowed them to tap into our system and use it to know where they were going to muster their resources, so it was an excellent planning tool for

them. so i guess that's one of the things that in looking at whether or not resources were adequate in this case, as i said, i was very, very impressed with the level of effort that went into this fire, the resources that were employed on the fire, the landing that went -- the planning that went into with it on a nightly basis and then the planning that was put into place and executed on a daily basis and sometimes an hourly basis. so i think we did have adequate resources, and one of the things that i'm thrilled about was your efforts to get the drones that the university of alaska fair banks, that was something that employed in this fire sort of at the end of it to do some overflights, and i think that it's something that will be an even more increasingly valuable tool as we move forward. and as you know, senator, the state of alaska has incredible, remote wildland areas and a lot of interface between rural and urban and small pockets of

developed areas in population. so it's critical in alaska. so i want to again thank you and thank the incident command team, rob allen. also the fema and the preplanning that we had through our office of emergency management and the coordination that our emergency manager did in mustering local resources to help support that effort. i think all of that, you know, this was a good example of how in part we were lucky, but the reality is that there was a lot of planning that went into it well in advance of when a fire might happen, and it really worked in this case. so i think it's a good example of the right amount of resources, the right amount of expertise that's brought in from a lot of different areas around the country and around the state. so it was impressive. thank you. >> thank you very much, mayor. and just so folks here in the room -- these are pictures from that fire. it's incredible devastation that

occurred. i was down there on monday, as mayor navarre talked about, some incredible resources all came to the table at the right time. one thing you mentioned, mayor, and i want to just ask you, i made a note here, but your borough mapping system, was that funded by the borough? was that a combination of federal or state? how did you upgrade that? >> you know, it's operate toed by the kenai peninsula borough, and it's available publicly, and it's got a lot of tools that the folks who are familiar with gis systems can tap into and use to get all kinds of different can vegetation mapping, you know? there's a lot of tools that are available on it that can be used to identify, as i said, where the, where strategies can be employed to attack a fire like this. and, you know, the other thing that i should mention is -- and you're aware of it, but often times at the federal level the sheer perspective and size of

this fire was huge. and, but in terms of the state of alaska and even the kenai peninsula, it's only a small portion of our land mass. >> yeah. thank you very much. let me, if i can, there's a -- and i don't know, maybe, jim, you might be able to answer this first question i have. when i was down there, i took a tour of some of the areas, and what i saw was these areas where they thinned out some of the tree ares, kind of found -- trees, kind of found natural breaks. i think the mayor described some of these areas. and you could go from the clustered areas, in some cases a rad or utility -- road or utility corridor. it was a raging fire, but when it hit that area, dropped low total ground, firefighters could attack it, manage it much quicker and control it at that point. and they were describing to me that that came from -- i was expecting to hear a big number, to be honest with you, a big

cost to that piece. they said, no, that was about $175,000 out of the wildlands fire fund that they were able to get a grant for to do that. can you tell me kind of the status? i know that has been under pressure for many years in its financial capacity. because that's kind of -- that's more preventive than disaster. so tell me a little bit about that fund and is there, is the administration talking about looking long term at that and additional resources? and does that connect at all -- and i'm going to put this issue way over here for a second. i know the president's put together a proposal, i think it was a billion dollars in climate change issues and so forth, disaster management, some other things. is that at all connected or just kind kind of a two-part question there. ..

what happens there, competitive process in the west with those different states proposing their highest priorities for protection. and, the money being allocated and -- >> so that fund, that money comes out of for local communities like this that get

grants, give me the sense of that. i understand it is under pressure and not as robust funding as it used to be. can you comment on that? >> it's, we try to protect that one. >> does it need more? i'm giving awe softball there. i know you can't answer because omb hasn't told you but -- i might jump to these two. >> sure, yeah. it's not, you asked if it was connected to the president's climate change proposal and we are working the administration through the department on what we might be able to propose in that regard. part of that -- >> maybe how to tax some of that money and perhaps move it. >> perhaps but it is definitely connected to the proposal how we finance suppression. if that were to pass or go into effect and free up, for the forest service, roughly

$300 million of discretionary funding. >> gotcha. >> the appropriators control that. that would be our proposal to use it this way. >> let me make sure i clarify what that is because i know some people may be watching or later find out what we're talking about. in the past the way your disasters were funded were, fires occur, you rob all these accounts because we never funded it enough. then we come back and try to fix it all and we never really do totally. now the idea is, i might be wrong about the numbers, i know i'm close. we look back five years. figure out 80% of what that cost is and try to fund it so you at least have a budget to work with, so you don't rob all the other agencies, is that fair? >> that's fair. >> i can toll tell you when i said that, and i know mayor navarre was there when we did an incident press conference, i said that in the middle of the press conference, one of your employees jumped up excited about the whole thing because it

sounds like that is a big piece of the puzzle you need to get out of the way in order to fund. this is the piece that wyden and crapo are working on but as an prepare traitor we'll try to do -- appropriate tore we'll try to do this year, and is that a fair statement that is a fair statement. thank you very much. >> let me ask you, there was an estimate, we know since the '90s, the amount of money for suppression gone from a billion to three billion. there is some report out there, that says we'll still be about half a billion short in efforts. do you agree with that? based on your analysis what you're seeing this summer? >> yes i do. those forecasts come from forest service research and they provide them to us periodically during the year. it is based on what's going on with the forest conditions. it is based on the drought. it is based on what, how the weather patterns are setting up with specific oscillation and

ocean temperatures. it gives us a indication of what's coming our way for the season and where it might hit and what that might cost. right now it's predicting that we will fall short. >> the question, or the comment that mayor navarre talked about which was the spruce bark beetle. i know my state, colorado, has issues, northwest has issues, it is a constant growing problem, for several years i know alaska was earmarked. we had earmarks that were able to do this. for some reason some people in this body don't like earmarks. i do because people do not understand what it was. it wasn't adding to the budget. taking from the existing budget and gave some discretion how to attack these issues. do you think we have enough resources to go after it? i use spruce bark beetle, might be different in other states. you know, basically beetle kill or forests that have dead kill in them? are we doing enough there? or do you think that is an area

that may be, we better be watching carefully here because that could be growing because of these dryer temperatures and droughts that we're facing? does that question make sense? >> yes, it does. the drier temperatures, the drought, the condition of the forest. the age of the forest. in the west it is largely a disturbance forest and created by disturbance and being regenerated by disturbance, fire, insect, disease. that will continue on a large-scale. there are things we can do to mitigate that. we can't stop it but, yes, there is more that can be done to help with the impacts of it. >> let me, if i can, to mayor navarre, then i will go to you two in just a second here. mayor navarre, at this point you don't have anymore federal v.-- resources for that type of activity, spews bark beetle or cleanup or management at this point or do you still have federal resources

you're tapping into or is that pretty much gone and what are you doing now to combat that issue? >> what did we do? >> in other words, the grant money you used to get, do you still have any of that remaining that you can still use to do some of that spews bark beetle management or now some of resources that are pretty limited to manage the dead kill? >> well, it actually happened last time i was mayor from '96 to '99 where we identified the problem. we that mayor gilman had come to the alaska legislature in order to do funding to do firebreaks in the cooper landing area. when i succeeded mayor gilman in '96, and, flew over the entire kenai peninsula, i was actually shocked at the level of infestation and the potential for a huge fire.

and really because of the different landowner ships and agency oversight and things like that what we did initially was put a task force together that worked very well reaching common ground on things that everybody could agree on. natural firebreaks and enhancing them whether they are power lines where you have 100-foot right-of-way and trees on each side that are 200 feet tall, trying to broaden those a little bit. making sure you clear rights-of-ways for roads a little bit further. and then, perhaps as importantly as the fire wise program, defensible space because people want to stay in their homes and protect their homes. it is their largest investment in their often times in their entire life so making plans ahead of time that put resources into those types of necessary

areas so when you have an event like this you have the ability to actually combat it on a reasonable basis and at the same time, putting adequate resources to it and protecting the folks who are actually out there fighting it as well as the urban areas. so we still have areas that we could use additional funding for, but you know, we're going forward with that, in any event. the educational process for homeowners, you know, where they can, where they can build protections as best they can. and then, making sure that our emergency operations plans are in place. you know, the reverse 911 system in this case worked exceptionally well for prenotifying folks. when there wasn't evacuation in two areas we could get them out in an orderly manner.

those are things that critically important in the interrim as what we said we know are going to be growing numbers of fires. >> thank you very much. jim, i said i have no more questions, i have one more and i just remembered when mayor navarre was talking to me and that was down in, i saw this map of utility company, i think it might be homer electric but -- utility company had a power line going through two federal properties. one a reserve and one not and yet they were able to clear their power line area, so they had a clear area, all the way and then this new designation of federal land goes after that and they can't clear. yet, to anyone else you wouldn't know the difference between the land but you see there is no clearing going on. and their point was, part of their job because they have access to those utility lines to have that area cleared but also from a fire protection area it

is fantastic opportunity there. do you work, have you run into this problem elsewhere where you might have a different designation by federal agency of one land and then another designation side by side? maybe only a, you know the west has this problem. and yet, i mean i couldn't believe the map. just clearly they show where they have clear-cut. you know, this strip for the power line great, firebreak, everything, utility corridor, it stops. the utility corridor keeps going with the utility line and they're not allowed to clear this other area yet the fire could occur anywhere. do you run into this and is there something, not to get you in trouble with any other agency is there something we could do legislatively to help this problem? >> yes, we run into the problem and it is not just differences of federal ownership, it is differences with state and private ownership. when we get into this it really

takes everybody coming together and different agencies have different mandates and different environmental clearance process they have to go through but when you have a common problem such as this and you have values at risk that need to be protected you need to find a way to work it out together. >> i may bring you an issue then. i think in some of these states with this huge swath of jurisdictional issues, especially federal lands seems like we should figure out this because the comment, on one hand we're watching the area burn up and on the other hand we're controlling this on other land we did it right way and other side is burning up because we didn't do the right control so we'll follow up. if i can to william and kevin, thank you very much for being here. there was a recently released national wildfire strategy. are either one of you familiar with that? william, you want to go first? >> yes. >> okay. >> can i assume and if i'm wrong, correct me, can i assume,

your organization, members of your organization might have been involved in the strategy or at least responded to the strategy? can i -- >> our organization was not directly engaged in that. >> okay. >> we certainly have had input over the years talking about, about fire management issues and about you know, the more strategic picture how we manage our landscapes across the country. >> do you think, why i bring this up, kevin had a comment about a blue ribbon committee. one thing i'm always nervous about to be frank with you is another committee around this place. we'll committee stuff to death. you mentioned as a matter of fact the ig report which is a question i will ask my staff, that ig report came out what have we done and what have we not done? we found with the va, with ig reports you should actually respond to them and this might be the same thing. do you think this strategy could

morph into where we engage stakeholders, for both of you, to engage stakeholders to say look, we got to strategy? what do we need to do, what is the action plan that goes with the strategy to move us forward in a preventative way as well as a response in a sense? can you respond to that. >> sure. >> i think the national strategy has great utility in terms of being a very strategic, sort of broad-based document to get us to thinking about how we engage across jurisdictional boundaries, across other regional boundaries. that is part of the problem we have in country where -- >> [inaudible]. some of those land issues that, they're jurisdictional? >> absolutely they are. it becomes very difficult and challenging to, to try to deal

with fire across those boundaries, because, you have to understand, fire doesn't respect geopolitical boundaries or other jurisdictional boundaries. >> we saw that in kenai. they really don't. >> the challenge for us as a country to figure out how we engage the stakeholders and get people to understand this is not just a federal issue. this is not just a local issue, this is a national issue that everybody has skin in the game on and -- >> good example of that, i think three billion plus taxpayer money. >> absolutely. >> i think the data point that jim you gave i thought was interesting, 98% of those, you get right at them but it is that 2% add to 30% of the costs. those are ones where we may not be as aggressive as maybe we could be. so i thought that was an interesting, interesting quote. can i ask, i will jump back and

forth. you heard commentary here. i like the idea that, we kind of attack this issue in the sense of what do we need to do? there are clearly changes in the environment. for alaska to have a fire of that magnitude in may, is unheard of. and we were very, very fortunate where it was, how quickly they control it on the back end. it could have got to a whole bunch of businesses, homes, property, lives. seems like little things of prevention, could in some cases. we lucked out on one. it jumped over a river and hit a swamp. thank god the swamp was there. it kind of moved a little different direction. the winds helped us. the winds are moving left and right literally, 24-hour cycle, aggressively moving fire. give me thought on strategy and can it be morphed into the idea you have, given the stakeholders going after this?

>> let me first say as old firefighter i'm not much on commissions and meetings. >> i know a lot of firefighters and you fit that mold i can tell you with that voice. >> with respect to this issue first i want to laud what the national action plan has done. i agree with phil. i think it has awful lot of utility. wild land fire leadership council i think is doing a good job. the international association is not part of that this is not a parochial issue for us. this is complicated issue. you can get firefighters in a room, come to consensus on the ground, coordination, between federal, state, local assets is tremendous. it is more than just a fire problem. in my testimony i used the word holistic. by that, if you actually read the action plan in my hand and i think it is a great document, all it talks about in the document, bringing people outside of the fire service, other stakeholders to the table. quite frankly efforts were undertaken several years ago by the congressional fire service

independence statute, international codes council to try to bring people together and they weren't successful. why? because nobody had the hammer to get all the stakeholders at the table. homebuilders, code enforcement folks, all these people who weren't part of this effort but frankly who need to be involved in a larger dialogue as it relates to this problem. as everyone testified, it is going to be a problem for many, many years and my analogy to america burning was simply made to draw that point. if you look at history there, and it worked very effectively. >> basically, if i can interrupt for a second, basically what happened there, look, we see this as a national issue. we're not interested in one group taking the lead or another group. we just want to have a strategy that has an action plan to look at to determine if we can fund it, help it, make it happen from the state, local, private, federal levels. that is kind of what happened there. is that -- >> that is correct. even though i have an aversion to those type of commissions i don't see any other entity aside

from the federal government that can force people to the table to have that conversation. >> do you agree with that? >> yes, i think the convenor has to be the federal government. i think we need to sort of start thinking outside the box. when we need to do, interests to satisfy to get people to the table. for some it may be, we might need to consider some sort of incentive program, such as, you know, if you participate in this program and, and do certain pretreatments to your land, you could get a tax break, for example. >> gotcha. that is an interesting idea. >> because again, as you described on the kenai with the utility corridor, if we have people that are participating or landowners that are participating and other landowners that are not, that's really not going to solve the bigger problem. >> right.

>> there were two federal agencies. one wanting to, one not. that is something we definitely have control over in this body. let me ask, you had said something i had thought, also two things. one in your written testimony that sis we're still doing business the old way and it is not working. you also talked in your oral presentation about apprenticeship programs. i'm always intrigued about apprenticeship programs. we used them quite a bit when i was mayor of anchorage. as senator i use internship programs all the time. i was intrigued by that, with business as usual not changing much. give me a sense what are those innovations we need to be doing? i agree with the you on issue of temporary. we had same problem with the mayor of anchorage. we came back every single summer. every single summer. they had probably 20 years doing it. because the way the system

worked, the first, someone could come in working for the city full time, first year, boy, and walk in and have a better chance of getting that job than the temporary. we changed that because we thought that was not right. if you have 20 years working seasonally, odds are you're pretty good at it. we wouldn't hire you back seasonally for 20 years. so besides that, which i obviously introduced legislation to fix that, we think there are a lot of interesting ideas here. tell me what you're thinking here when you say the old way. i will turn to you, kevin. >> another good example is the funding issue. how do we pay for fire suppression? historically federal agencies have basically been given a budget of x-million dollars for fire suppression and when the money runs out -- >> we rob everywhere. >> yeah the agency is forced to look elsewhere in its budget to come up. again, fire is unique relatively

speaking in terms of an agency's program. we can't just, when the money runs out we can't just walk away and fold our tents up and leave. >> so you support concept of the wyden-crapo bill. >> absolutely. >> i feel very confidentially we're moving in the right path when we get interior budget bill, we're doing two bills a week now. we did two more day. we'll do two more next week in the full committee. that seems, to be frank with you, i was somewhat shocked when i got here we were funding 20% level or some well, we know the average. we know what is going to happen. we would hope not, right? everyone hopes we don't spend anything in disaster firefighting but that is not real but maybe this approach is better. so that is a new approach you think would be huge? >> yeah, i think that's going to insure that the agency has the fund in the programs that help it to accomplish its mission. whether those programs are, are

pretreatment instead of robbing money from pretreating forest fuels. they will have a full budget in that area. we continue to do some of these projects to, to mitigate, you know, future fire occurrences and hopefully allow us to catch these fires when they're small, before they escape and become these huge catastrophes. >> thank you. kevin? >> why i absolutely occur. we have to have a different mentality. years ago wild land fires were largely contained in areas that were simply that, they were wild land. they were massive fires, part of healthy forest, fire is natural phenomenon and they burn. some of the mentality was you allow it to burn. i'm certainly not qualified from environmental standpoint to comment on that but from a firefighting standpoint with the development of wild land urban interface we had to change our view how to do that. when you talk to folks in terms

of my membership which is municipal, we don't represent the federal wild land folks but almost all of our people west of the mississippi are engaged in wild land firefighting. coordination on the ground is great. there are mutual aid agreements where it is automatic. if, for example, we have california department of fire station for federal lands. in many cases they are able to mitigate the event before federal resources are there. conversely, same thing happens when there is federal station near state land or privately held land. their radio systems are compatible and there is unified command structure. and it works very well. however we are hearing coming back to our folks and gets back to money, timely payments for local assets assisting the federal government. this is something particularly in california, some municipalities and counties are skewing a little bit the agreements because they're concerned about repayment. it gets back to basically money.

same thing applies with training. i agree with bill 100%. train something vitally important. when you have municipal fire department has to train people on structural response, ems, hazard does material, clearly there is so much money in a pot. one of the things we want to insure, the red card, the qualified certification versus trained certification. we want to make sure everyone of our firefighters who will be exposed to a wild land fire will be number one, safe, and number two effective on the fire line. there is no substitute for training and unfortunately that costs money. >> let me ask one last question, again, i want to thank the whole panel here. i know that is helpful in the river fire, mayor navarre, correct me if i'm wrong, or may not get this right, jim, you might know this, i think we had to bring in two canadian water tankers if i remember right in addition to our crew, if i remember this right.

am i right on that, mayor navarre? i think that is what happened down there. >> that is what happened. they brought in a couple of black hawk helicopters and they had planes that were also deploying retardant in areas that it would be effective on the particular fuel sources. >> here's my general question on that. i think, jim, you lay out a really good inventory, kind of our mutual agreements. i'm assuming that was one of them. our international agreement with canada, especially alaska, probably states that border from the lower 48, do you, on equipment that we have, that we operate, that we have a relationships with, do we, do we believe that we have good resources, for their continued maintenance and upgrade? is that an area we have to really look at here long term to make sure we're not, let's assume for example, this season, a busy season again. it is an argument you might make

for a good dying i have a very is, more hours on the plane, the more wear and tear it takes and therefore capacity to operate longer term diminishes. do you see that as an issue we need to really reexamine because these fires are more severe and happening on longer spreads of time? meaning their season is longer i should say. is that something we have to look at or is that something you are looking at? >> both. we are looking at it. we have made some strides. we have moved from a primary fleet of 1950 vintage aircraft that are getting tired, to a next generation fleet but we're just getting into that. there is ways to go making sure we're updated, and assets and large airtanker portion of that. progress is good. but we're not there. >> we did something last year

through the national defense authorization bill. i think we got 21. seven went in your direction and 14 went to the coast guard if i remember this correctly. >> that's correct. >> i hate to use the word surplus planes from the military. who knows what they were going to do with them but they saw an opportunity right? we were able to mobilize them for forest service as well as for the u.s. coast guard. is that -- >> yes, that's correct. that was a welcome addition to the fleet and we don't have those yet but we will and we'll start to phasing them in next year. so that was seven c-130hs. and we got 15 sherpa aircraft as smoke jumper platforms. >> that is excellent. we worked with senator mccain. we thought that was win-win not only for forest service but coast guard with equipment desperately needed. we were happy to hear that. let me end there. i think the record, the record will stay open for 14 days for other committee comments and or

questions. i want to thank the full panel here. especially mayor navarre, via alaska via teleconference or skype, whatever we ended up with. you're lear. which is good, we appreciate that. you're dealing with a real live issue on the ground. thank you to the panel here. thank you for your written testimony. there are some suggestions that some of you placed we'll absolutely examine. this commission deals with emergency disaster, first-responders, fema and other this is is important issue. i have a feeling that you described very well, mr. hubbard, that the summer is just beginning. we're already seeing a lot of issues. thank you all very much. the meating is adjourned. the record will be open for 14 days. >> thank you.

>> this year marks the 50th anniversary of president johnson's declaration of the war on poverty and his signing of the economic opportunity act. this morning the house budget committee hold as hearing focusing on the impact of federal aid programs in reducing poverty. live coverage starts at 10:00 a.m. eastern on our companion network, c-span3. >> from the perspective the victims i don't see any distinction. if you try and justify my program on the basis of the victims lost i can't

convincingly explain why 9/11 yes, '93 world trade center no. i think that the openly way you justify this program as a special carveout is from the perspective of the nation. a recognition that 9/11 was along, with the american civil war, pearl harbor, maybe the assassination of president kennedy and 9/11, its impact on the american people was such that this was really a response from america to demonstrate the solidarity and cohesiveness of the american people towards these victims. >> read more of our conversation with kenneth feinberg and other featured interviews from our book notes and q&a programs in c-span's sundays at 8:00 from public affairs books now available for a father's day book gift at your favorite book

seller. >> now christopher lowe, economic advisory committee chairman for the american bankers association discusses the aba's annual economic forecast. his remarks are 25 minutes. >> okay. we'll get started everybody. welcome to aba economic advisory committee press conference. we welcome those joining us on the phone. my name is jeff sigmund. i'm vice president of public relations here at aba. the aba meets with the federal reserve and other officials twice a year. the presentation you will hear today was presented to the fed yesterday. please note our meeting with the fed is completely off the record. today's presentation solely represents the opinion of this committee and shouldn't be interpreted to imply anything what the fed may belief. we're fortunate almost all of our members were able to stay today. they will be available after the

event and if you have any questions. aca members in attendance are from the back, scott anderson, bank of the west. robert dye, america bank, ethan harris, bank of america merrill lynch, stuart hoffman, pnc, peter hooper, deutsche bank , nathaniel carp, bba compass, greg miller, suntrust. george machon, huntington bank, richard moody, regions financial corporation. christopher probin, state street, and carl tannenbaum, northern trust. after today's forecast we have a question and answer session. if you have a question you please state your name and the name of the publication. without further adieu, let me introduce chris lowe, aba chair and chief financial economist to get things started, chris?

good morning, thank you for me being here. i know it when it false on a friday, it can be tricky to get you away from the desk. i appreciate you all are here. if you pick one word to describe the mood in the room yesterday as we sat down to discuss our forecast and form the consensus view, it would be optimism. we are optimistic that we will see solid growth going forward through the rest of this year and into next year. in the first quarter of course gdp growth fell 1%. that was in part the weather but it was more than that. there was a global slowdown in activity in the first quarter which looks an awful like mini but fairly violent inventory correction. the good news, and that news was confirmed this morning by the may employment report, is that

we're back on a much better track in the second quarter. 217,000 jobs today. on average, about 250,000 in the first first two months of the quarter is the confirmation of our sense we'll not only have a decent bounce in activity. we expect gdp growth will in fact reach almost 4%, not quite, but almost 4% in the second quarter of this year. and then we'll settle into something like 3% growth going forward. if you look closely at the forecast, the growth rate does decelerate a little bit but not much. we start out at about 3.25% at the end of 2015. we're looking at something closer to 3 and that's partly because we're optimistic the unemployment rate will continue to fall. we expect the unemployment rate rate in fact will be 5.6% at the

end of 2015. that is, within touching distance of our estimate of 5.5% as the natural rate of unemployment. at the same time, we expect a moderate rise in interest rates over that period as well. and that, allows, well, for one thing, it is the reason that economic growth moderates, just that little bit. but it is also something that keeps inflation in check over the period. we do expect inflation is going to accelerate. it is too low now. our sense by the end of this year, from the 1% numbers we're seeing at the moment, we'll be closer to 1 1/2. by the end of next year, we'll be very close to 2% which is the fed's ideal tar get. in terms of sources of growth, we expect consumer spending will be modest but decent. so we're looking at numbers that

are in a range of about 2.57 to 3%. occasional quarter a little better or a little worse. the bulk of the contribution to gdp is up coming from private investment. we expect that housing is going to recover from the recent soft patch. that housing investment will run close to a double-digit rate at 2% forecast period. we're expecting business investment will pick up and that's partly based on the fact that companies are, in a very good financial position, they have a lot of cash on their balance sheet but it is also anecdotal. we are all bankers. we've seen a pickup in interest in cni loans and cre loans which suggests that companies are

beginning to contemplate at least stronger spending on both equipment and structures. looking foreign trade in inventories there has been quite a bit of volatility over those factors in recent quarters. that is where most of the weakness was in the first quarter, for example and while we figure that volatility is likely to continue in the future, we're not expecting a whole lot of positive or negative from the two over the long run. so while they may be responsible for an occasional quarterly surprise here and there, we don't think they're going to change the trajectory of growth. finally when we came to discussing the fed there is remarkable agreement and i ought to step back and say even on the growth picture, the view is tighter than it has been than at other meetings.

there is general agreement as always there is slight range ever views but from the strongest to the weakest there's not a whole lot of difference. and i think that is partly because we are now in the later or the middle stage of a cycle anyway. things have played out mostly as expected. the biggest surprise recently was the first quarter and of course we now have quite a bit of second quarter data in hand suggesting that orders and spending and job growth are pack on a better track. and it is similar when it comes to our view on the fed. particularly the wind down of qe. the fed has been very clear that barring some kind of a extreme shock, they're going to stick to the tapering pace that they have established and the committee is in agreement that qe will end

this year in november or december. the, most of us in fact are in agreement that it will be in november. and then after that we are looking for the fed to begin normalizing interest rates, to begin moving the fed funds rate up, in the second half of 2015. there there is a little bit of divergence in view again but not much. the first hike is expected in the third or fourth quarter from there, we also think that the fed will stop reinvesting securities as they roll off of its portfolio. and, allow, the fed balance sheet to begin to shrink. it is important to stress too, that while it is the beginning of a tightening move that we're looking at next year, it is still, we consider, anyway, a normalization of interest rates.

in other words, rates are so extraordinarily low right now, at least in the beginning, the first few moves are more about removing accommodation than they are about outright tightening. all right. so that's the forecast, if anyone has questions i would be happy to answer them. yes? >> [inaudible]. i wanted to talk a little bit about the labor market. obviously a good report at least most people are calling it today. did the committee talk about some of the caveats of the labor market picture, something you're still looking at that are soft spots or maybe if they're structural or cyclical and over what time frame they might be getting a little bit better? >> absolutely. the question is about the labor market. we've had good news in today's report, for example. the question is whether the discussion went deeper than that.

and some things that are not going as well, and yes, sir, absolutely it did. in particular we talked about the appropriate level of the unemployment rate, in the sense that we know, labor force participation isn't what it has been in prior cycles. in fact, it is not only not what it has been, it is not stable. it is dropping. normally you would see growth. we talked about unemployment and how that suggests slack in the labor market. our forecast on jobs is that we're going to see slightly faster job growth this year than we have in recent years. we're optimistic on average we'll see more than 200,000 jobs a month this year. we're optimistic that pace will pick up a bit further in 2015. we're optimistic that the unemployment rate will continue

to come down. there are reasons to think demographics played a role in the drop in labor force participation. for example, but there are also reasons to think that there was a lot of cyclical damage done. while it is extremely difficult always to estimate where the natural rate or naru is, we're comfortable there is plenty of slack left in the labor market. in addition to that, that we do have ideas how to approach it. for example, we discussed the weight that ought to be put on long-term unemployment versus short term. our sense that normally long-term unemployment reaches

equalibrium partly because people lack skills. our sense there are still quite a few skilled workers in that group, for example. that would be a reflection of the extreme nature of the cyclical recession in '08 and '09. still weighing on the economy. so, we would think, you ought to put a higher weight on that. for example, when considering how many people might still come back into the labor force and participate. but if we do continue to see job growth, maybe not as strong in the last two months at 200 plus, i think a lot of that slack will be gone over the next couple of years. >> okay. walt from aba. marketing and sales magazine. you're anticipating a pickup in business lending and i was curious, how does that work out

between you and small community banks and larger banks? will that be across the board? or will be there modest growth in community banks. >> the question was about a pickup in lending. we're expecting improvement will be across the board. it is not necessarily going to be exactly even between large banks and small banks. but you know, we're considering a couple of things. when we made that forecast. one of them is that there is stability now in delinquencies. looks like we're finally getting to the point where default rates are bottoming out as well. so that create as more stable environment to work from. another reason helped something picking up because we have a lot more clarity on regulation of the as i'm sure you're aware, there has been significant tightening of regulation. and, new directives on how to

apply that every three to six months for the last couple of years. but we have a much better sense what that is now and that makes decision-making easier. but i think maybe more important than either of those is that we're starting to see a pickup in loan demand. it is a little more balance to where, for example, if you look at consumer lending, last year the bulk of the strength was in a couple of categories, student loans and auto loans. those categories are still strong. but we're starting to see other types of lending pick up bit as well. a recent example is home equity lending has begin to recover. and, our sense is, that community banks can participate in that kind of lending at a greater rate. >> fed is getting a bit more flexible with its inflation target? in other words, maybe up to 2 1/2, 3%?

don: the question was, do we think the fed is getting more flexible with its inflation target, perhaps 2 1/2, 3%? that's not something that we discussed yesterday in the meeting. so, i mean i can answer that question my own view, which is, that, no, i don't think they have necessarily changed their guidance on that. there may be a bit of flexibility anyway, just because we've been so low for a while, but i suspect that the judgment will be made on the specifics. if we did see inflation go high, but there were clearly one off or temporary reasons. that might be a reason to allow it to continue for a while. but again, that is my view. that is not the view of the committee. >> is there, peter barnes with fox business.

is there anything out there that you worry about? is there anything that is keeping you up at night, you and your colleagues that could, you know, knock the recovery off track like the, obviously we saw the bad weather? the ukraine, other events. >> yeah, so the question is there anything we particularly worried about that keeps us up at night that might knock the recovery off track? yes, one of the things we discuss is upside and downside risks. on the list of downside risks geopolitics is right up there. it is not just the, the military action that is going on in ukraine, although that is part of it. it's also the crackdown on credit, for example. in china. it is something that we applaud.

it is necessary. but, it is tricky too. it is going to be difficult i think to negotiate and china is extremely important to the global economy. we're also watching the tide of regulation as well. and that is related at least, in the sense that, in europe, there are still stress tests, bank stress tests underway. the european banks are a little slower than the u.s. ones in implementing new capital and liquidity requirements. and, that is a potential, if it is not handled delicately, a potential source of economic weakness as well. but, again, none of these were big enough concerns to tilt the base case forecast. and on the other side there are potential reasons for optimism. one that, we kept circling back

to, for example, is the possibility that we'll start to see more spending from wealth. we've seen a really decent appreciation in home prices. so homeowners are feeling little better off. and we've also seen some decent appreciation in equity valuations. and between those two things, it may be possible that consumption could be a bit better than, fairly conservative forecasts we have in our numbers. yes? >> hi, ryan tracy with the "wall street journal." to what extent are you in the other members seeing any change in underwriting standards, lending standards? you talked about the regulatory environment being a little bit more stable but i wonder if that is also constraining or whether, given those other things about default rates that you were talking about, there has been some loosening that is observing? what is going on there?

>> the question is about willingness to lend and bank environment and whether we're tightening or loosening constraints on lending. i think the bulk of the conversation, the consensus view on committee it is little tougher to get a loan now primarily because of new mortgage rules that went into effect beginning of this year. average fico scores for people getting mortgages are higher this year than they were last year as a result of that new regulation. in terms of other lending, they are, there is maybe a little, maybe it's a little bit easier to get a business loan than it was. it's maybe a little easier to get straight up bank loan than it was. but, you know mortgage lend something an important part of the our business and it is, it's

tougher to write those loans now. >> mike flaherty from reuters. what about, you mentioned the reinvestment. what's the board's sense in terms of stopping reinvestment before a rate hike or stopping reinvestment after the first rate hike? >> could, i'm not sure i understand the question. could you -- >> would they stop reinvestments before -- >> i see, the fed. >> yeah. >> so the question is, about the timing of the fed ending its reinvestment in its balance sheet when those bond roll off. would that come before or after the first rate hike and it's, it's just barely before. again, the range of views on when the first hike is coming, there's two who see it in the second quarter. the bulk are in the third and fourth quarter of 2015 and

there's one expecting the first rate hike in the first quarter of 2016. most of us agree that reinvestment is likely to end right at the middle of 2015. so it would be just in front of the first rate hikes. >> follow up on that too? >> sure. >> looking at the fedex it, in totality, it has, it went into this unprecedented, extraordinary rescue of the economy with balance sheet to 4.5 trillion. and now it is beginning this process of exiting and will begin the process of unwinding. it is uncharted territory of the fed as the crisis was, the ex-wit will be. is there, any sense of level of confidence that all of you have

in the fed's ability to, to do this? you talked about the chinese and tricky situation with their lending. there are plenty of folks out there say this will be tricky for the fed. >> the question is about our level of confidence in the fed's ability to exit from its extraordinary easing measures, in a way that is not disruptive to the economy. and, i think we're more confident than we were before, than we have been in the past, partly because the fed introduced new tools, to help manage that exit. in particular the reverse repo facility which has been i vigorously tested. there is an appetite for that. what that does is, it gives the fed the ability to keep the securities that are in its balance sheets even if banks draw down excess reserves that

are currently financing it. it gives the fed access to cash from other sources. and, i think that gives them the flexibility and, certainly, yesterday, there was not any concern expressed by the committee. it gives them the flexibility to, to gracefully, exit and avoids i think, any shock. yes? >> i'm frank -- [inaudible] there was -- [inaudible]. there was some talk that the markets are very calm at the moment but almost -- very little turnover and bill dudley had said he has been scared about that and, of course, there is connection with the fed because the fed makes this kind of policy. what do you think about that?

is there some danger that markets action could cause harm and people are awakening suddenly later and, i don't know, the right -- >> yeah. so the question is about bill dudley's recent remarks in a speech he said that if he is worried he is maybe a little worried that the markets are so calm, there is so little volatility. interest rates have drifted lower again and it might be a sign of excessive risk-taking. that is something we discussed yesterday. we went back and talked not only within our own institutions but also those of us who have capital markets groups talk to traders and salespeople to try and get a sense of where our customers are as well. and, while there are some modest indications of, for example, the spreads on high-yield corporates are quite tight.

that suggests an appetite for risk. no one had the sense that there was excess. and in fact, in some areas, duration has been reduced. in other words, people have removed risk from their interest rate portfolios. partly because the regulators have done a very good job of making people aware, particularly small banks, community banks, of the possibility of a sharp rate hike and what that might do to their investment portfolios. so while low volatility, very low interest rates, could be an indication of risk-taking, again, it is very difficult to actually find it. we're not seeing signs among ourselves or our customers. any other questions?

all right. thank you very much. >> thank you for coming. we hope you stay and meet the economist. thanks, everybody. [applause] >> c-span2 providing live coverage of the u.s. senate floor proceedings and key public policy events. every weekend, booktv, now for 15 years the only television network devoted to non-fiction books an authors. c-span2, created by the cable tv industry and brought to you as a public service by your local cable or satellite provider. watch us in hd, like us on facebook and follow us on twitter. >> the u.s. senate this morning is scheduled to vote on three district occur nominations for virginia, massachusetts and nevada. the chamber will recess for weekly party meetings from about

12:30 to 2:15 eastern. at 2:30 members take another series of votes whether to advance three presidential nominees for the federal reserve floor. live to the senate floor here on c-span2. 4 the president pro tempore: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. majestic god, forever wise, we're grateful for this day and