the interest expense deduction to deal with the u.s. profits that they are also trying to avoid. doing so will be a deterrent for those considering an inversion as they'll no longer see that opportunity to avoid u.s. taxation, and it will deal with the retro active problem. you eliminated pro expectatively, but any company that did an inversion six months ago, a year ago, five years ago will still lose this deduction. so it's a prospective policy action to counter past and future inversion activity. it would ensure we don't leave those inverters at the front of the line, the one whose started the trend with a competitive disadvantage. mr. stack, my only question, my time is running out. i know my dear colleague is waiting. does the administration agree that we should consider measures to further limit or disallow the current interest expense deduction for inverters in any legislative package we pursue to combat inversions this year?

>> yes, senator. we fully agree. we think you've shone a light on a very dangerous part of the inversion craze. the ability the day after the inversion transaction to continue to strip the u.s. tax base we have a budget proposal to that effect, but think you are pointing to a very critical aspect of the problem. >> thank you. i want to say to companies doing inversions, you want to operate here, you want access to this market, access to the work force, access to the economy, understand this here today, to continue to have that access, you are going to have to pay your fair share of u.s. taxes. things are changing. >> thank you, senator schumer. the time for the vote has expired. we are going to go. i'm going to come back as quickly as i can. thanks. >> i wanted very much to be here even though we have to go running out. thank you to each of you. i want to say to my colleagues, we have a place to start tomorrow which is to bring jobs

home act. i'm very pleased to be working. it takes a simple first step on what needs to be a series of steps. if you want to move your company we are not paying the cost to move out of this country. if we want you to come back, we'll let you write that off and give you 20% tax credit. if you leave, you're on your own. that's not enough because we have folks that leave on paper. they are not picking up their plant and leaving. i will stay, mr. sloan, i couldn't agree with you more. this is not a partisan issue. this is an american issue. i think the american public is going to be watching very closely to see companies that need consumers who are doing this. i think they underestimate the reaction of consumers and other businesses in going forward. i do think if we can move forward and overcome a

filibuster, get on the bring jobs home act, we could at carl levin. i'm with you. i serve with both my dear colleagues sandy and carl in michigan. carl's approach of a two-year effort to get us to tax reform is the right way to go. we could add that certainly with the bring jobs home act. i believe that we need to do that and we need to get started on this. i also think it's important, you are right in terms of -- certainly all of you saying we need tax reform, we need to do that, we know we need to do that. we know we are in a global economy. we have to address this. but we also do know that i don't know of any sector paying 35%, our corporate rate. the reality is we have a lot of incentives, we want incentives that relate to manufacturing or r&d or other things, but when i look at the list, from medical devices at 18.8% or financial

services 16.5% or petroleum production 11.3% or down to public/private equity paying 0.8% rate, a large disparity and a number of issues we need to address. here is what i want to comment on. that is the issue around -- we have two issues. corporate tax reform, global economy, how do we address this and incentivize making things and growing things in america and innovation in america. then we have folks that just plain don't want to pay their fair share and benefit from america. so you've got folks on inversions who, they don't want to breathe beijing's air. they want to breathe american air. they don't want water of third world countries. they want to drink the water. they don't want the rule of law of a lot of countries. in haiti talking to our business, as you pull up a cargo ship you can't get the product

off the ship without paying a whole bunch of bribes. so they want our rule of law. they want our innovation, education, infrastructure, breathe the air, drink the water, they just don't want to contribute. that doesn't sound like normal american values to me. what it does is create a race to the bottom where we're not going to have customers, then we're really not going to have businesses as we go forward on here. this is a deep concern to all of us. i guess, mr. sack, i would simply ask when we look at competitiveness internationally from your perspective, certainly the rate is important, but we know even going to 28% that means eliminating r&d tax credit, section 199 for small businesses. that means eliminating accelerate depreciation which is so critical in a state like mine with manufacturing. there's got to be more to it

than just tax grade in terms of investing in america. i would ask you if we are going to stay competitive internationally, make things and grow things here, what are some of the other priorities besides lowering the rate? >> thank you, senator. first on the rates, i would also add the point that a lot of the discussion about rates kind of ignores the fact that there will always be countries with lower rates than ours where people may want to seek to go. there is this tax competition going on. in terms of other things we could be doing, the first thing i want to point out and this relates back to rates, our effective rates, very widely. we don't have a level playing field across our industries. number two, we don't have a level playing field for countries that can take ip and put it offshore or have a broad enough market offshore to take advantage of some of these international provision. in addition to lowering the rates, we think it's very important to broaden the base for these taxes so we can create some akwlt, eliminate the

winners and losers so that everybody has the advantage of this lower effective rate as we go forward. as you also point out, maintaining incentives for research and development so that we remain the premier country in terms of this type of activity is also of critical concern. >> thank you. i believe at this moment i better get over to vote or i'm going to miss the vote. thank you very much. are we in recess. we are in recess at the call of the chair. thank you very much. s. corporat

rate was increased in 1995 where it remained since. while it's widely recognized that the statutory corporate tax rate is high -- very much appreciate senator portman's patience. i look forward to working with you closely on these issues. senator portman. >> thank you, mr. chairman. i have had some long conversations with you and i appreciate you championing tax reform. i liked your first response to the inversion proposal. we have a little difference of opinion on tactics here because i do think this is an opportunity for us to encourage solving the problem rather than

dealing with the symptom. we heard a lot of testimony today about what will happen if we just go after this particular issue. i know there's some difference among the panelists as to i don't think there is any difference, i hope, about the fundamental problem. mr. stack and i just spoke. i spent a lot of time talking to administration officials about this issue, too. the bottom line is it is advantageous to being an american company. it makes more sense to be a foreign entity to be able to take advantage of a tax system with the great majority of our competitors who are 93% of our foreign competitors as peter merrill told us today who do have a lower rate. it's a deadly combination to have this high rate and have a worldwide system. i just don't think what we are talking about in terms of a short-term fix is going to help. there's good testimony today about how it could even hurt because if you just deal with

inversions, you have some unintended, but perhaps negative consequences, demanding the location of even more jobs overseas is what dr. desai talked about. my concern is foreign acquisitions. recently we sat down with u.s. companies to talk about this issue. i've been doing this the past few years and worked on this in the super committee. we are hearing over and over again the fact already foreign acquisitions are on the rise, even without this rule. if we put this rule in place then we could limit the deductibility of interest as one of my colleagues said, and we could make it harder to be an american company. we'll have more and more foreign companies owning u.s. assets. some of those will be takeovers. recently, biopharmaceutical company came to see me, last week, from the boston area. i asked about the acquisitions in the boston area biopharma

companies. 28 companies have been acquired in the last several years. 17 of those 28 were acquired by foreign entities. you put the hole in the dam here then you are going to have a flood here and have a worse result, more pressure on jobs leaving this country. so i mean we talk a lot about revenue and income-stripping and earnings stripping. i agree when you do a tax code that captures income in the most efficient way, but this is about jobs. my question i guess to mr. stack is what's going to happen if we continue to make it harder to be an american company? aren't we going to see more, not just acquisitions, but acquisitions of american assets? because foreign companies have higher after-tax profits, it's more profitable for them. they can pay a premium for our assets for subsidiaries being sold. you'll see american companies shrinking if not being taken over by foreign entities. what's your answer to that?

>> senator, i think that the tax code as we look out in terms of leveling this playing field, i think it is important for us to take as an opening step that we will never be able to offer, let's say, rates as low as countries that are trying very hard through tax competition to lure companies overseas. so there will often be a tax differential between the united states and other countries that might on the margins fuel some of that acquisition activity. we have a lot of great things in this country though that keep companies here and keep them competitive and keep them doing very well. so i do agree then, and all the plans on tax reform seek to lower the rate, and there is universal consensus that and we should be bringing it down. and when we bring it down, we will come closer to level the playing field with those foreign -- >> so i think this is not just an important problem. i think it's an urgent problem. i think you have all sounded the alarm here.

again, we have differences on the panel and on our panel as to how to address it. but it seems to me when you look at the history of our country, the only time you see major tax reform is when the treasury takes the lead. omb has to be involved in the numbers. what's treasury doing? tell me what concrete steps are being taken to address this, as said today, emergency situation. is it just to plug the hole in the dam here or are you actually looking as the president has talked about over the last couple years actually solving the underlying problem? >> sure. senator, the president's framework in 2012 really was kind of a far-reaching move forward. to think differently about our international tax rules. and that is to say it was going to be able to bring down the rates, broaden the base to deal with some of the differential effective rates i mentioned earlier. but also through the foreign minimum tax try to cut out some of the game playing that goes by stripping into, you know, very

low-tax jurisdictions. we think that kind of set the tone for some of the work that was done both in finance committee and by chairman camp. and that there's a very robust set of proposals, you know, on the table right now. in addition, for many of the things we're talking about today in terms of base stripping, we put several detailed proposals in our budget to get at this opportunity once a company inverts to strip out of the u.s. base, which as everyone knows provides a lot of juice for these transactions so that they can do better once they're offshore reducing u.s. taxes than they could before. so we think we've shown leadership in our framework. we think we've shown leadership in putting concrete proposals in our budget. i know the president and the secretary stand ready to work with congress on both sides of the aisle to push through international tax reform. >> love to see a proposal. i'd love to see that push. maybe my colleagues see more of it than i do. i've had great conversations with individuals at the treasury and in the administration,

including at the white house. but i just don't see the push. i hope we'll use this unfortunate situation where we've got examples every week of another major inversion, another one this past week and happened to be a pharmaceutical company, to actually get us to the point where we're solving the underlying problem. if we make it worse by making it even less advantageous to be a u.s. company, i really worry we'll look back five years from now and see a hollowed-out american corporate base and wonder, what happened? what happened is we ab i did katd our responsibility here in doing our things we have to do to reform our code to make it competitive. i know my time is up, mr. chairman. i appreciate the testimony today. i hope it results in very specific action by the administration and by the congress. >> thank you, senator portman. i look forward to working with you on these matters in a bipartisan way. i'd say to our guests, i have some additional questions. senator hatch is on a very tight timeline. so i'd like senator hatch to go first. >> very gracious of you, mr. chairman. i appreciate it. it's a pleasure to work with

you. this question is for dr. merril. as you know, both japan and the united kingdom adopted territorial types of tax systems in 2009. switching from a worldwide tax system with deferral. these are two countries with large economies. japan is the third largest economy in the world. and the united kingdom is the sixth largest economy in the world. can you tell me why japan and the united kingdom switched from a worldwide with deferral system like the current united states tax system to a territorial system? and after five years of experience with a territorial tax system, what have been the results for both japan and the united kingdom? >> yes. thank you for the question. the united kingdom was experiencing phenomenon not unlike what we're experiencing now. they saw a number of large

multinational companies. you know, some quite significant, that had actually moved their legal headquarters out of the u.k., primarily to ireland. and that was of great concern to the government. they decided that it would be appropriate to adopt a more competitive tax system along the lines of the quote in my oral statement so they would be -- their tax system would be more welcoming to multinational business. one of the factors for the u.k. is they have many companies there that earn only a small part of their total income, worldwide income, in the u.k. yet, the u.k. was -- had a tax system like ours that was taxing the worldwide income of companies that only earned a small amount of income in the u.k. so in order to become a more attractive location for multinational companies, they went to the territorial-type tax

system, 100% exemption of foreign dividends. and they made a number of other changes, lowering their tax rate and a 10% refundability research credit. also a 10% phased-in tax rate on income from patents. they also modified their cse rules. they've done a whole package of things mainly to make it more attractive for multinational companies to be headquartered in the u.k. and they've been successful, as dr. robinson mentioned. some of the companies that left the u.k. actually have moved their headquarters back to the u.k. in response. japan, different situation. obviously japanese economy has not been attracting the kind of growth that they've been looking for. and they saw japanese multinationals, like the u.s., facing very high corporate tax rate, worldwide system, money not being repatriated to japan.

the ministry of economy trade and industry wanted to see that money come back for additional investment in japan, and that's why they made the change. >> thank you. mr. saint-amans, glad to have you here. i appreciate what you said in your testimony, that the work of the osce is done in consensus. presumably, consensus of all member countries means that all member countries will consent to the work the oecd is doing or else the oecd won't do that work or won't issue such report. am i right on that? >> yes, senator. a consensus means that a report is agreed when no country around the table objects to it. >> and in making sure you have the consensus of the united states, please keep in mind our system of separation of powers.

law making capabilities primarily invested with the congress. in obtaining the consent of the united states it is necessary to get the consent of the u.s. congress. so we do appreciate you being here for this hearing. will you please assure me that you understand that to obtain the consent of the united states for the oecd's work, including for the vets project, the congress must be kept informed of the work, and that has to be working in conjunction with the u.s. treasury as well. >> senator, i do think that not only the secretariat of of course but all the oecd member countries are fully aware of this. we are more than happy to engage with the staff with the senate but without impeding on what treasury is doing. and i would like to add that

most of the measures which are contemplated in the project fighting profit shifting are soft, low rules. these are common interpretations of standards, and they do not require translation by parliament but in formation of all stakeholders, and in particular the congress, is taken seriously by the eoecd secretariat. >> mr. stack, let me ask you the same question. please reassure me the u.s. treasury department will keep congress informed and not get ahead of the congress in the decision making process and in negotiating with the oecd. >> yes, senator. we fully intend to do that. i've already been up to the hill twice to meet with bipartisan staff, both houses. i look forward to continuing that throughout the process. >> we appreciate your work in that regard. thank you for doing that.

i want to thank all of you for being here. i have to leave because of other commitments, but this has been extremely interesting. i'm going to read the transcript, and i'll know exactly what you all say. i'm going to hold you to it. thank you. >> he will. be on notice. we're moving towards the end of the hearing. senator portman may have additional questions. but let me give you my sense of where we are. i certainly am not interested in building any walls. i want to close a loophole, and then i want to drain the swamp. i want to fix this dysfunctional mess of a tax code so we have incentives for creating red, white, and blue jobs, creating jobs here in our country. i know we're going to be calling on you all often in the days ahead. i have a couple other questions about issues that are pending.

senator thune, you're next. if i could just finish these two questions, we'll go right to you. the first deals with the implications of inversions on health care costs in america and the implications for the american consumer. i was struck by comments made in "the wall street journal" recently by the ceo of abbott, who said that he was concerned about the higher prices that american consumers would have to pay if proposed inversions like his companies did not go through. and i'm still trying to figure out how these savings are going to be passed on to consumers and of course to taxpayers who put up so much of the money that funds the medicare program. so mr. -- we'll ask all three of our professors.

explain to me how somehow these costs, particularly medical costs, because so many of the inversions thus far are medical, explain to me how or even if -- because you've done some scholarship on this, dr. desai. how's this going to benefit the american consumer and the medicare program in particular? we'll start with you, dr. desai. >> so i think the broad way to think about this problem is to understand that this question relates to the broader question of the incidents of the corporate tax. so who pays the corporate tax? there's really three sets of folks who can play. so the first is customers, which is what you're referring to via the health care system. the second is workers. the third is capital or shareholders. so whenever there is a tax-saving move, like an inversion, we can expect those benefits to accrue to one of those three sets of people. either workers are going to get higher wages, shareholders are going to get higher returns, or customers will get lower prices.

i think most of the consensus in the scholarship is when taxes change, they don't typically get transmitted to product prices. >> they don't get typically translated to product prices, which would be the prices that americans pay for health care. >> in this example, exactly right. >> very good. thank you. >> they typically get translated more likely to wages and some degree shareholders. >> very good. senator thune has just come back. we'll bring you into this question, dr. merrill and dr. robinson. that is the impact of reform on the deferral issue. of course, one of the goals around which there's bipartisan support for corporate tax reform is to simplify the system. i think we all understand that the international tax is inherently complicated. my question is, wouldn't repealing deferral go a long way towards corporate tax simplification by eliminating

the complicated system that exists today of tracking unused foreign tax credits and the related earnings and profits. in effect, income would be subject either immediate taxation or exempt from the current foreign tax credits and utilized against current taxable income. so answer to the question, if you might, would deferral eliminate a very complicated feature of the tax system, and would doing that as part of bipartisan comprehensive tax reform make the system more simple and understandable? dr. robinson. >> i do think, as i put in my written testimony, that the implicit cost of the u.s. tax system is higher than the explicit cost. and what i mean by that is that the cost associated with actually avoiding repatriation

or maintaining deferral for long periods of time is what i believe makes our tax system uncompetitive. so i do think that eliminating deferral so long as the rate, of course, was lowered sufficiently would be what i would be in favor of. the reason i say that is because the alternative approach, of course, is to implement some sort of territorial system, but i think those types of systems, to design them appropriately, would have to recognize instances where earnings were not subject to robust tax systems abroad and you have to introduce all sorts of exceptions and exclusions and base broadening provisions. by the time you introduce those, you're sort of right back where you started. so i am largely in favor of ending deferral and lowering the rate as a means of simplification. >> dr. merrill, unless you want

to add anything, i'll recognize senator thune. was there anything you wanted to add? >> why don't you take mr. thune's question. >> very good. senator thune. >> thank you, mr. chairman. i want to thank you and senator hatch for holding this important hearing. thank you, all, for making time to share your expertise with us. i suspect there are significant differences about how we improve the u.s. tax code, differences of opinion among members here in the finance committee and probably in the senate and the congress. but i think that all of us agree that we want american companies to be competitive. we want to for them to be able to compete and win in the global marketplace. i think unfortunately, we ask them to do it with one hand tied behind their back because we actually make the rules they play by. when you make bad rules, you get bad outcomes. there are economic signals right now that are driving a lot of the decision making that our businesses are following. so i think some of this

inflammatory rhetoric and accusing them of not being economic patriots is really not helpful. and i would hope that we could focus on not just the symptoms but actually the cause for these problems. and that is we have an outdated, dysfunctional tax code with the highest rate in the developed world. and we're also one of the only few countries in the world that continues to use the worldwide system that hasn't moved to a territorial system. i shouldn't say in the world, but certainly one of the few countries in the oecd. so i just think that we need to focus on the problem mere. the problem is the high rate. there was a time when we were back in 1986 when the tax code was last reforms where our corporate tax rate was five points lower than the average. now it's about 14 points higher than the oecd average. it is only -- i mean, this is what you're going to get when you have these kinds of rules.

we need to change the rules. we need to reform the tax code. so i guess it seems to me, at least, that the system is basically the worst of all worlds. because we've got -- if you're asking your businesses to compete in the foreign marketplace, not only do we have the highest corporate income tax rate among oecd nations, we're also one of the few nations that has a worldwide system of taxing income. so dr. merrill, i guess i would ask you, could you elaborate a little on your testimony in term of what this means for a u.s.-based company competing in foreign markets against companies that are based in nations with more modern and favorable tax systems. >> yes, thank you. so what we're seeing is a world where a u.s. company that operates abroad is now generally competing with foreign competitors in the same market but facing a very different home country tax system.

they all face the same rules in the country where they're operating. the difference is they face different home country taxation. so if the u.s. company earns income abroad and wishes to invest it back home in the united states, bricks and mortar, if it wants to use the money to get back to its shareholders, if it wants to use the money to pay higher wages to its workers, it faces a u.s. tax on that repatriated earnings that would not be the case if it was a foreign headquartered company under a territorial-type system. so we see this manifesting itself in u.s. companies stuck in a way building up cash abroad that they would like, in many cases, to return to the u.s. to invest here, to use for a

variety of purposes. but if they do, they would face the highest tax rate in the world in bringing it back. so that is a very important driver of why a u.s. company is not particularly an attractive target when they go out to buy a foreign company. if you're a shareholder in a foreign company and a u.s. company says, gee, i'd like to buy you, you realize that means that if you're acquired, any foreign profits that will be distributed to you have to go through the u.s. corporate income tax system. if you're purchased by a foreign acquirer, that's not the case. it makes it harder for u.s. companies to make foreign acquisitions. it makes it harder for them to even invest back at home. >> and there seems to be a misperception about what this -- the way some of this has been covered at least in the press articles. it's implied that u.s. companies are somehow changing the taxation of their u.s. income

through these deals. isn't it the case that income earned in the united states remains subject to u.s. tax regardless of the corporate structure? >> u.s. company that moves its legal headquarters abroad is still subject to u.s. income tax on its u.s. operations. it's still subject to tax if it brings back the foreign earnings it has previously earned in its foreign affiliates. >> and this is a question -- one more, mr. chairman. there's a suggestion in the administration's proposal that we attempt to stop corporate inversions in that, you know, there's a concern about some of the steps being taken designed to stop them could create more harm than the inversions themselves. in particular is a concern this management control test that's being advanced by the white house and some here in the senate could have the effect of encouraging mergers whereby management control would be outside of the united states.

what's your view on that issue? >> congress has a long history of trying to address inversion transactions, and each time finding unintended effects. congress tried in '84. the irs tried about ten years later in '94. of course, congress in 2004 adopted legislation, each time trying to deal with the transaction of the day. and what happened is companies found different ways to achieve what the economic incentives are driving them to do, which is to have the assets owned in a tax jurisdiction that's more favorable. so the concern would be that, you know, another stop-gap measure could lead to kinds of transactions that are not desirable from a u.s. standpoint. a true foreign acquisition of a u.s. company where the headquarter jobs are abroad and the u.s. headquarter shrinks. >> mr. chairman, i thank you. i appreciate the answers to these questions.

i would ask if i could get my statement, entire statement, which i didn't use all of included in the record. again, point out that we got a problem here. the problem is our tax code. >> without objection, it is so ordered. >> thank you, mr. chairman. >> senator thune, you may not have been here when i made this point. i am fully committed to working with you and colleagues on the other side of the aisle for the ultimate cure, which is fixing this dysfunctional mess of a tax system. the question is, what are we going to do about the damage that's being done right now? senator portman, do you have any other questions you'd like to ask? >> thank you. why don't you go ahead. >> i have no other questions. >> can i just do a quick, quick round? >> of course. >> with the team here. first of all, i quote you all the time because the tax code is 100 years old and it looks like it. so i appreciate your attitude

about wanting to pursue reform. i'm concerned that by taking this detour it's going to make it harder, not eeasier. again, the unintended consequences we talked about, include accelerating this acquisition of u.s. companies by foreign entities. the joint committee on taxation, which is our official nonpartisan scorekeeper has said with regard to the president's proposal in his budget last year, and these are mostly international tax revenue raisers to deal with some of these issues. they said, and i quote, many of these proposals may make corporate structures with a domestic parent relatively less attractive than corporate structures with a foreign parent. and because these proposals are likely to raise u.s. tax liability, parent structure more than the foreign parent structure. seems pretty clear. and that's not republicans or democrats. these are our nonpartisan arbiters as to what we ought to be doing in terms of good tax policy. i guess one question i would

love to hear from this distinguished panel is, dr. robinson talked a little babout access to capital. it's a big disadvantage to u.s. companies now. forget the rate. even forget kind of the general notion of territorial versus worldwide. the fact is these u.s. companies are not as nimble. they can't move assets around where they need them. and i think that has to be addressed. here's my question. sometimes when i debate my colleagues can on this issue, they say, well, just because a company is foreign doesn't mean they don't have u.s. jobs, which is true. anheuser-busch still has u.s. jobs. they sell a lot of beer in america. their market share is in good shape. maybe, peter, if you could address this or dr. desai or dr. robinson, whoever has looked into this, but can you tell us

about what happens when -- peter talked about fortune 500 companies. you've seen a one-third reduction in u.s. companies. what happens? what is the impact on jobs when you see u.s. companies being acquired by a foreign company? >> yeah, i have not actually studied that issue. it could go either way. if the foreign company is a better managed company, bring in new technology, it could increase jobs. on the other hand, it could go the other way. i don't know what the actual experience has been. >> dr. desai? >> i think you're right to put this in the context of a broader market for corporate control, which is really the issue with foreign acquisitions. i think the issue with foreign acquisitions is particularly with respect to high value added headquarter jobs, those may well get relocated when it becomes foreign owned. that is something that we have seen at least anecdotally.

we also know that headquarter jobs are really important. they give rise to lots of economic spillovers more generally. for that reason, i think you're right to be suspect of the potential for these foreign acquisitions, which is they can lead to high-value added jobs going abroad and in particular headquarter jobs. >> dr. robinson? you do any research on this? >> i was going to say, i don't have anything to add concrete. i've not done any research in this area. >> let me just assert something that's probably pretty obvious. when a company chooses a domicile somewhere else and when the headquarters moves, which often happens, there's an intangible impact. so the companies in, you know, our great cities in america are major benefactors. companies in my home state of ohio are involved in every single nonprofit in one way or another. and often provide a lot of executives to, you know, help to lead these nonprofits and

charities. and obviously make huge contributions. i've love to see some research on that. i do think this is sort of the intangible impact of companies pulling out of the u.s. it hasn't been given adequate focus and research. so if any of y'all have any thoughts on that, i would love to see if we could look into that. certainly on the jobs front, we'd like more information. but also on just intangible benefit. what happens? why does it matter? i think it matters. i think my colleagues do. that's why we're working hard on this. i think we need better information to be able to explain this more in terms of the impacts, the negative impacts to our constituents. thank you, mr. chairman. >> thank you, senator portman. at this point, i'd ask unanimous consent that a statement by senator levin be included in the hearing record. without objection, the statement will be included. let me leave you all with one thought that we really haven't, i think, gotten into much this

morning. it seems to me it would be one thing if there were just a few of these inversions. in other words, if there were a few of them, we'd work, as we've talked about this morning, on comprehensive, bipartisan, you know, tax reform. we fixed it, and then we wouldn't be back here again in another decade. part of what has influenced my judgments is that's not going to happen. and i spoke a couple hours ago from reports about the financial press about this feeding par ii. that's what's actually going on out there. it's not a few of these inversions you could put to bed with financial tax reform. according to the financial press, it is a feeding frenzy where you have the investment bankers going out to all the possible companies with their slide decks and say, you better do this quickly.

and the reality is that tax reform is moving slowly and the inversions are moving very rapidly. as i indicated before, i think that's a prescription for real chaos. so you could hear from the senators here today. wasn't a lot of shouting and a lot of screaming and finger pointing. so a lot of goodwill here. my hope is that with your good accounts, very thoughtful testimony, you can help us address both of these tasks. to close the inversion loophole and then move on to the great challenge in front of this committee. that's the real cure, which is comprehensive bipartisan tax ar

>> the objective is not to conquer that. that is never set as the objective. and we hope to achieve this objective of the piece to restore the same peace and quiet militarily or diplomatic. so it is preferred to achieve that objective diplomatically. the prime minister if he will recall we are now in day 15 or 14. before the conflict began, so about two and a half weeks ago the prime minister said that quiet will be met with quiet. that without an incredibly popular position to take at the time because at the time we had a few dozen rockets flying in ad every day so we didn't even want to which the operation to begin

with even that which we had embarked on. and unfortunately, those statements i've administer were met with 100 rockets that started the operation. bow before the grand operation, there was another opportunity to end the military operations on both sides, and that operation came to that opportunity, excuse me, came from the egyptian cease-fire proposal that was put forward in egypt and i think now it is about seven days ago or eight days ago. the cease-fire proposal was backed by the arab league and the egyptians are putting forth again it wasn't a very popular position in israel. i want you to understand that. it was against the public and that is one reason why they were not so favorable towards the

idea of the cease-fire. you have to put yourself in their situation. that situation. if you have two thirds of the country in the bomb shelters firing rockets an into the third round don't forget we have the defense and now we are in the third operation and they just want to make sure that it's going to be real and sustained and we aren't going to have the operations in five years and then the operations in six years. that's where the opposition came out because they want to continue it. it also was politically contentious and it thought that there were is really ministers in the security cabinet that were publicly opposed and oppose it as the prime minister who did not want to escalate the conflict in any way and actually backed it and pushed it through the security cabinet. it was supposed to take into effect 9:00 in the morning according to the egyptians about a week ago in israel passed it as i said not without some contention, but it was gone and

that would have avoided any of the ground options if you saw them subsequently. what happened unfortunately in the hours when israel was holding the fire and seizing its offensive military actions in the strip, hamas fired dozens and dozens of rockets over the six-hour period so that's how that fell apart. then we had a couple of theories in the cease-fire by the humanitarian cease-fire. they do not take the offensive actions we have been trying the best way we can to avoid having to go further and having to intensify or expand military operations and thank you does everyone else you may want to be the only one in the room that's peace is now that you mentioned

it the have tried to not expand the operation. unfortunately we have to continue. the actual trigger for the grand operation was something very specific that happened that some people may have forgotten, and that is the intent to insult rate it up to perpetrate the attack. it's to get that the israeli civilians and we found that the equipment that we were clear they were also trying to kidnap people. i don't want to get specifically into what they've had but there have been things that attract laser devices. they were trying to kill and kidnap people. we had a case of 13 coming out of the ground going through gaza, not only for gaz through t coming out of the other side through this subterranean and

all of the mazes they have underground which is pretty remarkable but i refer to it the other day with all of these vast networks underneath so they popped up on the israeli side and we were very fortunate that one of our soldiers saw it. it becomes very difficult because in many ways they will dress up as jurors so you have to tell whether it is friend or foe and a lot of times that means the action and you will take is somewhat delayed and in that case we have to be to make sure they were. and we were not able to get to all of the terrorists because a lot of them went back into the tunnels but it just made clear that in the tunnel networks where they will infiltrating and they remind you the tunnels between gaza and egypt, those are largely weapons and good

smuggling tunnels. those i'm talking about now are the networks between gaza and israel where you have a sense in order to perpetrate. it's not within the smuggling that it's to get people on the other side and i think now we have had four different attacks at this point. i think for different attacks where people have tried to infiltrate and we've suffered casualties as a result. but it is an operation designed to work out of the tunnels and take some time. i'm not a military expert but you certainly have to draw the tunnels in a certain way that you are not just going up and opening that they can rebuild very quickly. so that is the process that israel is in now. of course anywhere we find missile batteries wthatmissile g to deal with that as well. we are in the area where there is a great deal of warfare from the ground forces. we have lost 27 people total.

israelis 25 soldiers, about 65 wounded. we have destroyed up until now about 20, was into 40 different openings of the tunnels because it is in just one, while other times it is an underground maze so you have to find where all of these points are anti-story then. the second thing is i wanted to discuss quickly is it's the nature of the warfare on both sides. one critical moment on the israeli side has been ironed out. it wasn't present in the first tax and that led to the faster ground operation because all the rockets were landing you had to move quicker to get into the missile launch. then we ended up not having the ground operation because after eight days we would be able to achieve a cease-fire.

it's very similar to the goals of the 2012 operation ended up ending the ground invasion or incursion and we were able in 2012 to get the cease-fire after eight days and that led to a fairly religiously long period of quiet. it goes down the number of attacks for a while but then it starts picking up again. then you have the color of defense and it went down and started to erode and now you have this other operation. it avoided the ground action and we have an iron dome system just taking a look of rockets out of

the sky and those of you that do not know the system, it doesn't fire at every incoming rockets so you have about 2,000 fired at israel. it will engage everyone. if it is headed towards an area that we deem to be a very low likelihood of having a civilian population because it could be in an open area, then the system will not engage. it's only when we have a rocket that is coming specifically to a built-up area that we use the iron dome on the defense system to knock it out and it will come in probably after the operation ends and the research in each instance. but i will say that it looks. it was 84% so it's higher. only 16% said let's say significantly higher right now but we only know the final numbers when they come in.

the other thing i want to stress -- >> they pay me to be rude -- i will end with this. i come from israel -- remember we had a congressman joe wilson who said you lied and people were outraged? while we were sitting in the israeli professor's office and when we heard that news reports come in, we said to ourselves if we could get our feminist or into and out with only one person calling him a liar they would give them the prize. so rude is relative. [laughter] the final point i will make and i will skip the third point because i'm sure that it will come up in your questions anyways people don't realize thathat it also saves palestinin lives and i will explain why.

if you are forced into a situation and with peace missiles and rockets that are being knocked out of the sky, the cost of the restraint goes way up and could have many more civilians killed, muc much or damage, many more wounded. and therefore, the pressures to take very fast action tickets to all of those places where the rocket launchers are would be much greater and with the iron dome has done is not only protected our civilians, but it's giving the leadership sort of time and space that needs to make more carefully and calibrated decisions ancalibrato something which is not only it could be costly for israel in terms of the lives of our soldiers but it would certainly be called for the palestinians. i will leave it at that and open up for questions. >> one or two and then we are going to go to john to start. i was struck this morning reading a "new york times"

report. they quoted one of the survivors saying i will marry again four times and i will have ten signs with each wife and they will all be in the resistance. so i wanted to ask you sort of the access digital question about the tension between the military power and success creating a longer-term problem for the state of israel. >> there are a lot of different elements to the question. first let me make this clear we do not target civilians. we don't. i'd seen myself personally i saw how many operations there were that are important because you see the civilians are coming in

harms way. we have to understand first balf all what the rules are because people don't know them. they throw around words like disproportionate without any understanding of what that means. it is proportionate response from what i can gather in the interview is that because you and questions i'm asked, it is the need to be what is the body count on both sides. so therefore there were 600 something palestinians were killed, 25 israelis were years ago it was 200 palestinians and the one israeli that is deemed to be a disproportionate response and that is how most people deal with it you think the actions you were taking a disproportionate and that is what is asked all the time and it's hard to understand what portion of the years and we will get to the question after asking. you make a distinction between combatant and noncombatant that is the most important principle and they always make the distinction they hope to kill as

many as possible and israel did not target a single post any and. we do not believe they targeted. if not for us, when a civilian is killed is an operational failure and the more civilians that are told the greater operational failure. and obviously a tragedy in and of itself. and for hamas, they celebrate. the greater the number of casualties, the -- for them the greater the success of the operation. that is a basic distinctio distt you have the proportionality. and this is okay but say there's a legitimate target because when a schoolhouse hospital mosque's turned into a military command center or a weapon or a place that we can fire rockets can it becomes by the rules of the war legitimate target. you cannot turn a hospita hospio a military command center according to the rules. it is a war crime for hamas to do that.

that is a war crime. you cannot use a mosque as a missile manufacturing system and if it comes with legitimate targets for the question is okay but can you target a specific instance box then you can do the question of the proportionality. meaning just because it is a legitimate target doesn't necessarily give you the right to hate it because that's for you to be able to do that, you have to show the gain that you would get is worth the potential loss of lives that you might seek ahead of time so i don't want to go into the theoretical examples but if we had one rocket that is sitting in a school somewhere and there's 50 kids in a classroom, then you cannot actually target to get to the rocket. that would be disproportionate because you would have that one rocket that would justify killing 50 children in the school. on the same token if you had 200

rockets into place and you had one civilian by the rules of the war, you could target the place even if you knew ahead of time they would be hurt. can you target the same target tomorrow or in an hour or three hours? and they always make these calculations. i was amazed being in the war room, which the legal officials of the military play a role in the real-time decision-making. i will give you an example. in the last round our intelligence knew where he greater number of the long-range rockets were and in the first hour of the operation one of the assignments in the first two hours was to take out as much of the long-range capability as possible. and i think that it was 18 rockets if memory serves the number that we have pinpointed and 17 of them were destroyed. one of them was not the straight into the reason why is because we had that system and all of a sudden we saw a kid coming into

the brain and they made a decision at the time not to attack it and move on. they would come back to it. they didn't move into it because it was fired. that is to rescue only speak to make these decisions. but we don't target. as to the specific question i have to know each specific case and sometimes it takes time for us to investigate what exactly happened. an instance the first day we know what happened when you had seven members were five members of the six members of the same family and in that case, israel tried to get his family out of the house. they apparently had left the house. then we fired what is called a dummy bomb which hit the top of the hous house and the structurl damage but it's like the last two dates out of the building.

apparently his family believed that was the real bomb and from the time that it was launched they granted to the house that's why they were caught. >> without regard to the specifics the more general problem is the large civilian casualties strengthening long-term resistance and enmity -- >> i get to that. first of all the reason you have to civilian casualties is because i think it is in an unprecedented way you use human shields as part of their defense strategy their attack strategy. i don't know what the national security strategy is that i think that it would use human shields in a texaco way somebody hiding in somebody's house and

using a woman or a child hiding behind. they are placing their missile batteries in a strategic way so it is to put the civilians in harms way so here we do dropping leaflets and making phone calls and sending text messages and we have officials if you haven't seen the video we will provide it to you. they are telling the palestinian civilians to go into harms way to use themselves as human shields. it's part of their operation and they are saying it on television on something that an israeli official vehicle of the videos on palestinian television without going out and saying don't listen to them can ignore them and get out of harms way. recently you had a case when we went in with our ground forces in one area where there were a lot of casualties in this case

of what we think a majority of them were the fighters of hamas and in this case none of those people should have been there. 48 hours befor before we told everybody to get out of those areas and to go, they have places where to go and we told them exactly where they should go to get out of the way of the fighting. some of them i think were forced to stay. you have palestinians are forced into a situation where they are forced to stay then we have the rocket attacks against us or our soldiers are moving through the centers of town and all of a sudden you have for man and i thinmen and ithink rocket that d at that or from the house and from that house there are five or six civilians to fired back into the civilians were killed. what do you do long-term? i think it is a very difficult challenge. it's a difficult challenge to overcome but understand the hatred for israel has been deeply embedded for a long time.

the charter is committed, that they are committed to. there's 10,000 people from their homes and we gave the keys to the palestinian authority. james and the head of the world bank had a group of people many of whom were jewish philanthropists to buy agricultural facilities greenhouses. i think it was around $15 million to leave it behind. there could be. it's about thinstead both the gs were destroyed. and the question is how much money does it take for them to

build that network and you have massive amounts of concrete, not just soft soil. the maximum amount of concrete. so all of this money that is going in is being used basically to fuel the war against israel and that is what is creating a generation. and the incitement is creating a generation of people. the decisions of the palestinian leadership to fight against the war. do i think -- somebody whose family was killed. and even i could see the most just action that you could take it doesn't diminish the fact that it's a tragedy when innocents are killed and how does it affect the family i agree with you that is an issue how do you deal with it but we have to look at the alternative that israel has. we are in a situation we have to defend our people and we are doing it in ways that other countries have not done and what not to do and that is what i would say to somebody born and

raised in the country. 200 million americans were sitting in bomb shelters do yesterday tha the u.s. militarye u.s. government would take -- wouldn't take action that is less forceful than israel and by being diplomatic and i think that is true of any country in the world as we are very careful. we are not perfect even if 99% of the time we get it right if you have 2,000 operations in the heavily dense populated area 20 of them go wrong, you have a lot of civilian casualties and if it is a tragedy, we don't want it and as i said, we do everything to avoid it. and for us, the more civilian, the greater the failure. the greater the failure of any. >> we are going to go to howard and george. >> dot about the nature and frequency of the consultation between the president and the rest are at this time and that

relationship itself certainly started out rather difficult. those early meetings when president obama can and it was pretty painful to watch the minister lecturing them and so on. and i know as a diplomat you are required to se say the relationp is wonderful. but can you talk about how this evolved and what it was then and what it is now? >> they focus on the differences that exist. you don't write stories saying it was a normal day. ate dinner with the kids com, pt them into bed, story at 11. it doesn't work that way. you know that you will always focus on attention and there've been ways we haven't seen eye to eye with the administration. obviously the peace process has been one of them. the support for missile defense

is at record levels and very appreciative of the fact that we would be able to have a system working so well that it's untargeted. for me the rubber meets to be coming to the road in the relationship in the u.s. and israel the rubber meets the road when israel is forced to defend itself and the question becomes where is the president of the united states and i will tell you this is the second time the pillar of defense being the first where the president has been backing israel's right to defend itself in the strongest possible times. i was with the prime minister for eight days and i don't think that support have been any better than it was. here now i'm in washington and basically every day in touch with the white house or the state department and a lot of times both.

i think the print mr. has spoken to the president three or maybe it will be four times, spoken to kerry more than that. and we feel there is very broad support to defend itself. there's always been concerned with the civilian casualty. we are concerned with civilian casualty. but i think that if the support is there because they are recognized was what they do if they were faced with a similar situation. so i think in terms of the relationship where the rubber meets the road and it's been very good if not excellent. on the things that matter most. and i expect that will continue if israel continues to move forward >> would you be able to tweak the deal in us to get whoever the interlocutor is to convince

them to sign onto a cease-fire could israel accept that or is it now the mission as you stated to destroy the tunnels and sustain and protect israel collects >> the mission is the sustained peace and quiet. the issue in the tunnels triggered the exact ground operation that we are working now as we speak. the military is working to destroy those tunnels. look, they supported a cease-fire proposal and we were hoping that it would be supported and the pressure would be brought to bear on hamas to support those terms. not going to get into the negotiation on those terms. we have a proposal the premise through the cabinet and don't forget it is a decision that has to go through the cabinet. and last time he had a fight to put it through the cabinet, but i'm sure that if the prime minister believes that the goals that i said to you to sustained peace and quiet for israel can

be achieved that he will bring that to the cabinet. >> .. you can have in gaza. this is one objective of dealing with the tunnels that are really proximate to the border. but there's other things there. an argument can always be made we will do a little bit more and do a little bit, something else and something else and something else. but remember again i don't want to belabor the point that there would've been no ground operation had the hamas accepted the cease-fire proposed. i think i should answer the question. we knew there's a tunnel network there.

that's different knowing about and going and working to actually destroy them, but israel didn't say we need to go in, we need to destroy all the tunnel works so we will reject the peace our proposal.they we it didn't happened until i would pr think that would be guiding the decision-makers in the future as well. ll. >> ambassador, i saw -- palestinian rocket fire on israel with the german attacks on london. and i'm wondering if that is accurate, if the reports are accurate. so i'm wondering if you could talk about how in your mind you can compare the attacks on this area they killed an estimated 9000 people. >> well, what i was talking about is how countries respond

to the threat of missile attacks and what actions they take in response to those missile attack. and you are right that the civilian casualties were much greater than they are in israel. and it's not because hamas is trying to do that but because the system is working better. so as i said before the reason why think that iron dome protects them gets to the exact point you are making now they don't have mass casualties on the israeli side and if you did then israel would probably be forced into a much horse will respond from otherwise be the case until my issue is the criticism of israel for the way that people perceive that it is. so you may disagree that it was through the united states or britain and they would take is a waste a forceful action. but if you had an attack from

contiguous territory of two thirds of on shelters, because everybody knows what i'm saying is true and it's really important to remember how this works. especially one in similar situations, not a perfectly similar situation because of the casualties him as you mentioned, but you have a party that wants to destroy israel nsi said they called for genocide of the jewish people worldwide and you can read it there. so it's not because they don't have the will or the intention to do a because they don't have the capability and that is a compact and i made and i think it's very important and this is the central point. and so i don't think that israel should be judged by a standard of perfection. we are not perfect, we make mistakes and a missile can hit the wrong place, but we don't

target civilians. so given the fact that we have our people in on shelters, i think that israel should earn the admiration of the international community for the restraint that it has shown in the face of these are. you know, we have our soldiers right now, our soldiers are dying so that innocent palestinians can live and not is what happens because a lot of the operations that we have you won't have to put soldiers in. it happened with or and i remember it happened in 2002. and also to statements that were made when our troops went into the june event in 2002 and that is a place where more suicide bombers came out in any area in the west bank. they could have decided that we are going to tell people you have 48 hours to leave the area and soldiers went into those areas and died protect the innocent. what is happening now is we have

soldiers fighting and people standing in the house using civilians as human shields and we now have a suicide bombing situation going on in the area where soldiers are fighting, whether it is explosives, cars, all of that information is starting to come out and they are once again using suicide bombers and hamas is an organization that uses about 80 of them to blow up our cafés and pizza shops. so the general point that i make is that israel should not be judged by a standard of perfection, and we will continue to insist that we hold the highest value and you have to ask yourself this simple question, what would america do. you can follow what would france do, britain, other countries. how would another threat be responded to, a similar threat.

so i haven't heard that any of them would respond with less force. as i said last night we're not talking about a worn thousands of miles away. we are talking about the decision-making happening when two thirds of the country is in bomb shelters and when the prime minister secretary of state said the other day on television that he has else of his foes to go into a bomb shelter. so imagine that situation happened time after time. and so i said that you were accused, if i was on the taken, but i think 500 people and another person said it was 5000 people. it's always just thrown out there. and so this is what you have. so in three months you have like 9000 people killed and a half million people and there are

6000 people that were wiped out, 10,000 people were exterminated every day in auschwitz. and so we are doing everything to make sure that the billion casualties are not, that the civilians are not heard. despite all those allegations, when all the dust settled, it remains and stays there. but when all the dust settles eu and in a report and i believe they came up with 54 people that were killed and i think 51 of them were armed according to a u.n. report. so let's wait until everything ends before people rush to judgment about israel's act and you'll see exactly what i said yesterday, that no military has done as much as israel has to avoid civilian casualty on the other side. >> we have about 20 minutes left. [inaudible question]

>> i'm wondering what is the state after this operation and are you engaged on this replenishment and secondly, human rights watch come you mentioned rules of war and human rights watch came out detailing cases where israel violated the rules including boys killed on the beach on the waterfront. >> how do they make that investigation? >> they have concluded and now they're going to look or evidence. >> the first question they asked me about this. >> okay, so obviously there is some information that we talk about publicly and i can only tell you that israel is quite capable of defending us.

the second thing is that we are constantly in touch with the administration about the issue and as i have said we received the support of that we have from them in congress and additional monies that congress has already passed a week ago or 10 days ago it has to do with moving part of the assembly line to the united states. some of that will happen here and that was supposed to balance out. and so let's understand something. one of the reasons that hamas is using human shields in zimbabwe is not just because of the nature of the regime and the people, if you yourself are going to have this, you're not going to care about the

palestinian civilian population. but beyond that, one of the reasons why they do this is because it works and it's a strategy that seems to work and what happens is even the most careful action by israel would lead to civilian casualties and if those casualties then have pictures, you then have video in it's heart wrenching. and so unaffected i'm affected by it as well and i understand the contacts and why israel has to do the action is taking. so what they rely on is pictures lead to pressure on israel and that's only what happens. you push one button and you put he put them in harms way and that's what hamas does by placing the missile batteries were they place them, firing from areas where they fired. and then the second step is to

have them respond in the third step requires that those be blamed on israel and if they succeed in doing that in this becomes an effective strategy, they continue to do it again and again which gets me to the point where after 2009 you have this report and we tried to talk about these war crimes. it leads to the situation where hamas feels that it's in their interest to place their command centers next to hospitals and schools because they can get away with that the question i asked this last night in his speech that i gave is a will the world actually taken down again the use of human shields. i saw that senator barbara boxer sent a very strongly worded letter to the head of the u.n.

human rights commission and council who had made a statement 10 days or week before and said why are you not taken a stand and senator durbin had issued a written about that. the question is where is the u.n. and what they should be doing is dumbing hamas not just one or two sentences in a 10 page indictment of israel, but focus on this and this can lead to a change. the chances of them using a go down. you asked me about specific cases of human rights and how can you make that calculation. they don't know the evidence and they don't know what israel's decision-making is at the time to accuse someone of a war crime is a deliberate act and i know

it is target them. and i don't know what led to civilians being killed. until you get all the facts you cannot make that judgment. it's what they are doing is serving in this court that somehow afterwards will try to find asked. but with the statements they made an wait until all the facts are in and then you will see that what i told you was true. we will go case by case and we have an investigative arm to everything and anyone who deliberately targets the innocent is held accountable. it is not the policy of israel's government and what i have seen having been in the war room, it is remarkable how much, as i said, and the legal decisions go with the rules of war and how

much they are involved in the day-to-day and our decision-making portion of israel, every single strike is something that we appropriate legal officials in the military would have to authorize. [inaudible question] >> obama famously put the odds of reaching a nuclear agreement no better than 50/50 in light of developments. where would you put the odds? would israel consider itself bound by it in some sort of nuclear program in iran? >> i don't know what the odds are. and i haven't seen any evidence that this is serious about dismantling their nuclear weapons capabilities.

and so if that is the case then it will obviously lead to one outcome assuming that they would have to significantly diminish their nuclear weapons capability. israel's position is that they don't need any capability whatsoever, they don't need nuclear weapons capability and this has been a difference between us and the international community because they say that they should have a weapon we say that they shouldn't have a nuclear weapon of ability. but a peaceful civilian nuclear program, israel has assessed that to be in the wrong. but i don't think they understand that you do not need an underground bunker in the side of a mountain or is to have a program. so they don't need any of that stuff and that is why they shouldn't have it.

and there are 17 countries around the world, including the one i've been in southern neighbors and so there's no reason why they should have any of those capabilities including significantly dismantling it. they don't need any of that have a peaceful program. of course iran is not interested in this program and that is why they have invested tens of billions of dollars in their nuclear program and that is why they have absorbed well over 100 xt billion dollars and they don't have is that there is than to give a nuclear payload and so

they have already been able to reject this, so they are able to continue their illicit nuclear program and what they did it and so their position is that the world should stand very firm and ensure that iran has sued fully dismantle its nuclear weapons capability. and so what i would suggest everyone here is imagine if we were meeting exactly one year ago today. and i would tell you that i believe that it's possible and

everyone would've thought that there is no chance for that have that happen. but that didn't happen. there was a right mix of pressure with credible military force and the diplomatic view the basically forced syria to dismantle everything of its chemical weapons arsenal which is strategically for israel very important that these weapons have been removed and something that obama doesn't get enough credit for for having achieved a very significant objective. because the nightmare scenario a year ago was the class of syria, chemical weapons in a dozen places and then also some parties getting their hands on these weapons rant to imagine them running through with chemical weapons and i think that the diplomatic thing that we have done, every deal that we have done has a certain hot elation of orson and it's true

that it hasn't solve the humanitarian situation in syria and from this point of view the syrian deal is a good deal. and so we were never opposed with talking to iran. even during the interim agreement. we just had keep the pressures up because the best situation from our point of view would be to fully dismantle iran's nuclear weapons capabilities without having to take military action. so that is the best point of view. and israel always reserves the right to defend it self and we

have a regime that is openly calling and working in supporting terrorism all over the world and they perpetrated attacks on five continents in 25 countries in last four years and they are the patron of hezbollah , which is their main proxy in syria and that is something that we have not talked about because hamas has had a different relationship that has changed over time and so they also not only armed and helped train hamas for many years, but now the palestinians have significant weapons arsenal that is not reported a lot and

they represent a great threat to my country. >> last question. peter baker? >> we have been very good about explaining this. your explanation has been excellent, but i'm wondering if you could explain about this referring to what he calls a pinpoint operation and then secondly it i'm wondering how you put what happen right now and honestly mention syria and iraq and the tall over the last couple of years. how do you think this goes? >> i saw that clip and it wasn't clear what he's actually was actually looking at. i can only tell you that i have spoken to the secretary personally and the prime

minister has a number of times and there are these very strong public statements and he is understanding that war -- how did he put it? as someone who has fought in wars committee understand that you can have civilian casualties and we can have very strong backing and especially from president obama and secretary kerry. so as with the regional forces, and the question raises ideas and you can look at why is hamas doing what hamas is doing other than the lack that they want to kill as many people as possible. okay. but why now? they feel that they are under

enormous pressure. and it's because they have very few friends in the arab world. and hamas is pretty much the only people who are opposing this and the change in egypt has changed their environment as well because the government has cracked down in a very serious way against this. so those tunnels that i am talking about include the tunnels between egypt and gaza and there were hundreds and over a thousand hamas. and we have a customs and loeb and we collect this information and we transferred to the palestinian authority's.

and their source of cash is coming from that underground economy that the egyptian government led by icc has really cracked down on the terror activity also within this area. so they see not only is hamas part of the muslim brotherhood, but also hamas was involved in one form or another and they know that. and i think the basically have radical shiite forces led by ron.

and there you put in isis and al qaeda and others and there is a great battle and sometimes it's a battle between them and sometimes in certain areas taken crossover that divide with a lot of money they supported iran by hamas for years and they tried to a few months ago interjected that and that had 40 of these rocket which is 44 miles from the northern tip of gaza. and so we interjected 40 of those rocket and you had cases where iran, the leader of the shiite radicals, they could support this and basically you have a big struggle going on also between them in many areas

are in to what we see is the great danger of allowing any of those arteries to get access and that is why we see chemical weapons in agreement and that is why we see them as having nuclear weapons or being a threshold nuclear nation is being so dangerous and we haven't discussed what would happen as part of the threshold nuclear power a few months away from being able to get a nuclear weapon and what the impact will be in the region and a lot of the sunni powers and the dangers of proliferation that happens. to argue, israel's view, we're not going to be able to resolve these issues. i think that we won't be able to determine the muslim world who the rightful heir is. what we need to do is we need to

ensure that the worst don't get the worst weapons. and that has to be, and come in the most important. because this can take a long time, these fires can take a long time to burn out in the middle east and what we have to do is make sure that the out side world doesn't get singed by it. and to do everything that we cannot humanitarian basis to help israel. we have a situation in syria. we are trying to treat those bleeding and near death. someone talked about this, how people see israel and the impact and these people came with pretty much the same story. we were told that you guys are the ones who saved us and there's over 1000 people. right now actually it was yesterday, the ivf just established a field hospital or at a crossing point to treat

palestinians that were wounded. so what impact is that when have two i don't know. we can do things on a humanitarian basis and i don't know how this thing is going to play out, but the chances of this fire consuming more and more people will go down. >> we have exhausted our time with you. i thank you very much for coming, sir. >> thank you. [inaudible conversations] >> here's some of the we are covering on c-span3 today.

at 10 eastern the house foreign affairs committee holds a hearing on escalating violence in iraq. state and defense department officials will discuss the rise of the military group isis. then at 2:30 p.m. a senate hearing on cruise ship safety. the commerce and transportation committee is considering new rules to protect passengers aboard cruise ships from sexual assaults and substandard medical care. we will have live coverage on c-span3 and c-span.org. >> c-span2 providing live coverage of the u.s. senate floor proceedings, and key public policy events. and every weekend at booktv, now for 15 years the only television network devoted to nonfiction books and authors. c-span2 created by the cable tv industry and brought to you as a public service by a local cable or satellite provider. watch us in hd, like us on facebook and follow us on twitter. >> in 2008 while serving in

afghanistan, army staff sergeant ryan pitts sustained injuries while fighting off a taliban ambush. he was the only one of nine african soldiers to survive the attack. on monday, sergeant pitts was awarded the medal of honor at the white house. this is 20 minutes. >> serving of our nation's highest thanks. to receive this admiration for the valor, bravery and heroism displayed in battle as a warrior that made his country proud, added forever to his units legacy. he is of the chosen few which have received this honor today. the nation pauses to recognize him. our hearts are touched by staff sergeant ryan pitts who humbly insisted his remarkable action during the battle of wanat, afghanistan was simply his duty, and it was and always will be on his loyalty to his unit. we acknowledge that same devotion came from the legacy of

a -- someone who cared for, courted, sergeant pitts symbolized, every day in his source again four. we join our hearts together as we honor his desire to remember the nine soldiers who continue to respect by his deeds each day. by on him today we honor the courage, commitment of all who serve in harm's way. this we pray in your holy name. >> amen. >> good afternoon, everybody. welcome to the white house. please be seated, please be seated. for our forces in afghanistan, the battle of wanat was one of the most fierce of this entire war. forty-eight americans, along with their afghan partners, were manning their small base, deep in a valley when they were attacked by some 200 insurgents.

and those insurgents seemed determined to overrun an even smaller post just outside the base, an elevated patch of boulders and sandbags defended by just nine american soldiers. soon, under the relentless fire, all nine of those men were wounded or killed. insurgents broke through the wire. and that little post was on the verge of falling, giving the enemy a perch from which to devastate the base below. against that onslaught, one american held the line, just 22 years old, nearly surrounded, bloodied but unbowed, the soldier we recognize today with our nation's highest military decoration, the medal of honor, staff sergeant ryan m. pitts.

now, i don't want to embarrass ryan, but the character he displayed that day was clearly forged early. i'm told that in kindergarten, when asked what he wanted to be when he grew up, he drew a picture of a soldier. when he was in the 5th grade, his teacher sent home a note that described ryan in words that would be familiar to all those who knew him today, ryan, she wrote, is a very special human being. in ryan pitts you see the humility and the loyalty that define america's men and women in uniform. of this medal, he says, it's not mine alone. it belongs to everybody who was there that day because we did it together. so i want to welcome those who were there that day, ryan's brothers in arms, and those who are going to be welcoming him into their ranks, the members of the medal of honor society. we are very proud of them and we are honored by the presence of the families of our fallen heroes as well.

we welcome ryan's family, many from new hampshire, including his wonderful wife, amy. i have to take a pause because they are actually celebrating, ryan and amy, their second anniversary today. as ryan put it, it's going to be tough topping this one, as anniversaries go. [laughter] but let me just give you a piece of advice as somebody who now has been married for over 20 years, you should try. [laughter] i'm just saying don't rest on your laurels after just two years. [laughter] we welcome their gorgeous son, one-year-old lucas, who ryan is beginning to teach a love for all things new england. of course, the red sox and the bruins and the celtics and the pats. i want you to try and imagine the extraordinary circumstances in which ryan and his team served. this was the summer of 2008, and this was a time when our forces

in afghanistan were stretched thin and our troops were deployed to isolated outposts. they had just arrived in wanat just days before and they were still building their very small base, a handful of armored vehicles and fighting positions and foxholes and sandbags. wanat, one report later concluded, had significant vulnerabilities. parts of the village sat on higher ground. on every side, mountains soared 10,000 feet into the sky. heavy equipment to help build their defenses was delayed. in the 100-degree heat the soldiers ran low on water. and the aerial surveillance they were counting on was diverted away to other missions. early that morning, in the pre-dawn darkness, they spotted several men up the mountains. but before ryan and his team could take action, the entire valley erupted. machine gun fire and mortar and

rocket-propelled grenades poured down from every direction. and those 200 insurgents were firing from ridges and from the village and from trees. down at the base, a vehicle exploded, scattering its missiles, back at our soldiers. it was, said a soldier, hell on earth. up at their tiny post, ryan and his team were being pounded. almost instantly, every one of them was wounded. ryan was hit by shrapnel in the arm and both legs and was bleeding badly. already, three american soldiers in that valley had fallen. and then a fourth. as the insurgents moved in, ryan picked up a grenade, pulled the pin, and held that live grenade, for a moment, then another, then another, finally hurling it so they couldn't throw it back. and he did that again. and he did it again. unable to stand, ryan pulled himself up on his knees and manned a machine gun. soldiers from the base below made a daring run, dodging

bullets and explosions, and joined the defense. but now the enemy was inside the post, so close they were throwing rocks at the americans, so close they came right up to the sandbags. eight american soldiers had now fallen. and ryan pitts was the only living soldier at that post. the enemy was so close ryan could hear their voices. he whispered into the radio he was the only one left and was running out of ammo. i was going to die, he remembers, and made my peace with it. and then he prepared to make a last stand. bleeding and barely conscious, ryan threw his last grenades. he grabbed a grenade launcher and fired nearly straight up, so the grenade came back down on the enemy just yards away. one insurgent was now right on top of the post, shooting down until another team of americans showed up and drove him back. as one of his teammates said, had it not been for ryan pitts, that post almost certainly would have been overrun. even with reinforcements, the

battle was not over. another wave of rocket-propelled grenades slammed into the post. nine american soldiers were now gone. and still, the fighting raged. ryan worked the radio, helping target the air strikes that were hitting danger-close, just yards away. and with those strikes the tide of the battle began to turn. eventually, the insurgents fell back. ryan and his fellow soldiers had held their ground. this medal, ryan says, is an opportunity to tell our story. there was valor everywhere, according to ryan. and so today we also pay tribute to all who served with such valor that day. shielding their wounded buddies with their own bodies. picking up unexploded missiles with their hands and carrying them away. running through the gunfire to reinforce that post. fighting through their injuries and never giving up. helicopter pilots and medevac crews who came in under heavy fire.

said one soldier, never in my career have i seen such bravery and sacrifice. and so i would ask all those who served at wanat, on the ground and in the air, to please stand, those of you who are here today. [applause] most of all, ryan says he considers this medal a memorial for the guys who didn't come home. so today, we honor nine american soldiers who made the ultimate sacrifice for us all. the son who absorbed love like a sponge, the expectant father

whose dream would later come true, a beautiful baby girl -- specialist sergio abad. the boy who dominated the soccer fields, and fell in love with motorcycles, and there in that remote outpost took a direct hit in the helmet and kept on fighting -- corporal jonathan ayers. the photographer whose beautiful pictures captured the spirit of the afghan people, and who wrote to his family, afghanistan is exactly where i wanted to be -- corporal jason bogar. the father who loved surfing with his son, the platoon leader who led a dash through the gunfire to that post to reinforce his men -- 1st lieutenant jonathan brostrom. an immigrant from mexico who became a proud american soldier, on his third tour, whose final thoughts were of his family and his beloved wife, lesly -- sergeant israel garcia. a young man of deep faith, who served god and country, who could always get a laugh with his impersonation of his

commander -- corporal jason hovater. the husband who couldn't wait to become an uncle, the adventurous spirit who in every photo from afghanistan has a big smile on his face -- corporal matthew phillips. the big guy with an even bigger heart, a prankster whose best play was cleaning up at the poker table with his buddies and his dad -- corporal pruitt rainey. and the youngest, just 20 years old, the little brother of the platoon, who loved to play guitar, and who, says his dad, did everything in his life with passion -- corporal gunnar zwilling. these american patriots lived to serve us all. they died to protect each of us. and their legacy lives on in the hearts of all who love them still, especially their families. mothers, fathers, wives, brothers and sisters, sons and daughters. to you, their families, i know no words can match the depth of your loss, but please know that

this nation will honor your soldiers now and forever. and i would ask the gold star families from that deployment to please stand, including ali kahler, age 11, and jase brostrom, who this week turns 12. please stand. [applause] this is the story ryan wants us to remember, soldiers who loved each other like brothers and who fought for each other, and families who have made a sacrifice that our nation must never forget.

ryan says, i think we owe it to them to live lives worthy of their sacrifice. and he's absolutely right. as commander-in-chief, i believe one of the ways we can do that is by heeding the lessons of wanat. when this nation sends our troops into harm's way, they deserve a sound strategy and a well-defined mission. and they deserve the forces and support to get the job done. and that's what we owe soldiers like ryan and all the comrades that were lost. that's how we can truly honor all those who gave their lives that day. that's how, as a nation, we can remain worthy of their sacrifice. i know that's a view that's shared by our secretary of defense and by our joint chiefs of staff and all the leadership here. they're hard lessons, but they're ones that are deeply engrained in our hearts.

it is remarkable that we have young men and women serving in our military who, day in, day out, are able to perform with so much integrity, so much humility, and so much courage. ryan represents the very best of that tradition, and we are very, very proud of him, as we are of all of you. so god bless you, ryan. god bless all who serve in our name. may god continue to bless the united states of america. and with that, i would like our military aide to please complete the ceremony. >> the president of the united states of america, authorized by act of congress, march 3, 1863, has awarded in the name of

congress the medal of honor to sergeant ryan m. pitts united states army for conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty. sergeant ryan m. pitts distinguished himself by extraordinary acts of heroism at the risk of his life above and beyond the call of duty while serving as a forward observer in 2d platoon, chosen company, 2d battalion, 503d infantry regiment, 173d airborne brigade, during combat operations against an armed enemy at vehicle patrol base kahler in the vicinity of wanat village, kunar province, afghanistan on july 13, 2008. early that morning, while sergeant pitts was providing perimeter security at observation post topside, a well-organized anti-afghan force consisting of over 200 members initiated a close proximity sustained and complex assault

using accurate and intense rocket-propelled grenade, machine gun and small arms fire on wanat vehicle patrol base. an immediate wave of rocket-propelled grenade rounds engulfed the observation post wounding sergeant pitts and inflicting heavy casualties. sergeant pitts had been knocked to the ground and was bleeding heavily from shrapnel wounds to his arm and legs, but with incredible toughness and resolve, he subsequently took control of the observation post and returned fire on the enemy. as the enemy drew nearer, sergeant pitts threw grenades, holding them after the pin was pulled and the safety lever was released to allow a nearly immediate detonation on the hostile forces. unable to stand on his own and near death because of the severity of his wounds and blood loss, sergeant pitts continued to lay suppressive fire until a two-man reinforcement team arrived. sergeant pitts quickly assisted them by giving up his main weapon and gathering ammunition all while continually lobbing fragmentary grenades until these

were expended. at this point, sergeant pitts crawled to the northern position radio and described the situation to the command post as the enemy continued to try and isolate the observation post from the main patrol base. with the enemy close enough for him to hear their voices, and with total disregard for his own life, sergeant pitts whispered in radio situation reports and conveyed information that the command post used to provide indirect fire support. sergeant pitts' courage, steadfast commitment to the defense of his unit and ability to fight while seriously wounded prevented the enemy from overrunning the observation post and capturing fallen american soldiers, and ultimately prevented the enemy from gaining fortified positions on higher ground from which to attack wanat vehicle patrol base. sergeant ryan m. pitts' extraordinary heroism and selflessness above and beyond the call of duty are in keeping with the highest traditions of military service and reflect great credit upon himself,

company c, 2d battalion, 503d infantry regiment, 173d airborne brigade and the united states army. [applause] >> that's not bad to stand up on this one.