the president pro tempore: the senator from washington. ms. cantwell: mr. president i ask the quorum call be dispensed with. the presiding officer: without objection. the president pro tempore: without objection. ms. cantwell: mr. president i know my cheetion are coming to the floor today to talk about various amendments and it's likely that on tuesday we'll start voting on at least the pending amendments that we have discussed so far but i would like to come down to the floor today to caulk about the proposal by transcanada corporation and the fact that, obviously, there are some here that want to give an expedited

approval to that and usurp the president, who needs to review this project in detail and to make sure that we understand the interests of various people, property rights owners, people affected by the pipeline, and as one particular issue in this debate about why congress should be hurrying to give a special interest permit going ahead while the president still has issues to address and so do the local communities i know many of my cheetion are going my completion colleagues are going to come here to talk about the issues of energy efficiency and property rights and climate change and a whole host of things. but i'm here today talk about something that i think is particularly important that we close a loophole on and that is the fact that the tar sands has loophole it doesn't pay into the liability trust fund.

both of my colleagues, senator markey and wyden are going to be putting forward an amendment to close this loop loophole. the principle behind that is to keep our waters safe and to keep our communities from paying the cost of this pollution. so it just means really to have commonsense laws on the book that polluters will pay for cleanup. so that is the principles that drive the oil spill liability trust fund, something that we had in place for a while. and basically what the oil spill liability trust fund means is simply that american taxpayers won't be left holding the bag for the responsibility of spills that happen. we currently in law have a loophole that means that companies who produce the tar sands don't have to pay into the trust fund. that's because they are considered as sympathetic

petroleum. so just -- as synthetic petroleum. so just by the definition, they basklybasically have had a loophole. while we debate whether a pipe should be built across our land when the spills happen, and it spills in the water as we saw with this kalamazoo spill it leaves a thicker oil behind, it usually sinks to the bottom of water. that makes it hugely expensive to klein and really almost nearly impossible to clean up. so these concerns are driving us to really make sure that as the united states, as canada continues to look at car tar sands production, that we are getting the sec technology to place to deal with this and to make sure that those who are liable for those kinds of spills actually are paying into a fund

that will help clean up the mess. so that's why it's so important that the senate take aup action on one of -- take up action on one ever these amendments 10 he that we will be paying into the oil spill liability trust fund nor any pipe pipeline that is carrying this crude material. i want to go back to why this trust fund was created and why it was so important. the spill trust fund was created in 1986 as part of a response. this bill was signed by president reagan. and it took -- but it took four more years and a major disaster before the country actually funded the oil bill liability trust fund and that as doesster was -- disaster was ex-so exxon valdez. i had many conversations with the late-senator ted stevens

about this issue and various times in which we increased payments into the oil spill liability trust fund because when you come from the state of washington and pacific waters and you come from alaska, how we clean up these oil spills are incredibly important to our economies. and what happened in 1989 is that an oil tanker hit a reef and ended up spilling 53 million gallons of crude oil and it didn't take long for those pristine waters of prince william sound in alaska to be impacted. so the impacts of the exxon valdez disaster were devastating, not just to prince william sound but to the entire pacific northwest and the total coast of that cleanup was $2.5 billion. so ten years ago a federal judge ordered exxon to pay $6.7 billion to thousands of alaskaians affected by that oil spill, and fishermen in the

northwest lost more than $300 million as a result of that oil spill. so at the time the livelihood of individuals were impacted obviously the wildlife was impacted. it killed sea otters and harbor seals, and so the images of all these wildlife are seared into our memory even 25 years after the spill. when the gulf spill just recently happened, we revisited a the love those issues because we wanted to make sure that we were getting things right. and it was very interesting to see the environmental effects years later and some of the things that still had not recuperated from the oil spill in prince william sound. so in 1990, congress passed the oil spill pollution act signed signed signed

about law by president bush and it added sweeping improvements and held parties responsible and established a mcnix to actually invest in the oil spill liability trust fund. the bill said, let's have a per-barrel tax to raise the revenue for the fund. so today that's an 8-+saepbts-per-barrel tax on all oil products. this was signed into law by president bush who splisk praised the funding of the trust fund. "the prevention and response and liability and comprehensive components fit together in a compatible and workable system that strengthens and protect our environment." the reason i'm bringing that up, if the oil spill liability trust fund was good enough for oil products promoted by a republican president then it ought to be good enough for us here in congress to add tar sand. that have just not thought of -- that was just not thought of inders the current definition literally because of the way the

definition is written and they are a synthetic fuel, they just have a loophole. it is a question of whether we are going to close this loophole or let them pay zero into the trust fund. so the fund is used to pay for media cleanup costs and spills in navigable waters. this is a very, very important point because some people would say, gosh, aren't people just liable for their own mess and why don't re: they just clean it up? because what happens -- and i can tell you this in trying to protect puget sound and locket our coastal waters off the coast of washington, you might think it would be easy to figure out where the oil came from. it is not. so you have a busy waterway like puget sound and all of a sudden somebody sites an oil slick or product in the water and think don't even know how serious it is and it takes months and months sometimes years to figure out where the pollution came from. yes, in the case of exxon valdez you had a ship that hit a reef and caused a profnlt but in problem.

but in many cases you don't know where the spill is coming from. a lot of people will say it wasn't us, or they start this process. an oil spill needs an immediate response. and that is why we established the oil spill trust fund to have an immediate response. so that we're not sitting around waiting for weeks and months to figure out who did the oil spill but somebody can start the process immediately and working with the coast guard to actually clean it up. now, you would think that this doesn't happen that frequently, but it happens a lot more frequently than people realize. and that's why an immediate fund is important and that's why everybody has producing oil should pay into it. yet there is a loophole in the law. so the per-barrel tax doesn't apply to tar sands and in 2011 the i.r.s. issued a ruling stating that the tar sands imported in the united states were not subject to the excise tax on petroleum. the ruling was based on a 1980

house ways and means committee report that crude oil does not include tar sand because as i said earlier it's considered synthetic. therefore, according to the i.r.s., it is not subject to the tax. so we should simply clean this up and have those responsible for their mess also be responsible for paying into clean it up. when the oil spill trust fund was established, it was intended to be a mechanism for all oil spills, not the definition of "oil" as a product. congress should fix this next week when we vote on this legislation and figure out exactly how to take make sure that the commandant of the coast guard would have the tools to deal with this. i, too have concerns about the enact we don'tfact that we don't really have the tools yet to accurately clean up tar sands. when the commandant of the coast

guard was before a hearing just a hearing -- because i have a great deal of concern about moving of this product on a variety of transportation means i asked him about s.a.r. and its because the last thing we want to see is product out on our waterways. and he said "our technology is not as sophisticated when you have tar sand. they are heavier they sink into the water into the ocean bottom, so it is a challenge fours. was unit settles on the sea floor, our technology is lacking in that regard." so basically mr. president i'm finding that many some of the dirtiest oil dirtiest oil out there doesn't pay into the trust fund. we learned that lesson very hard in the 2010 in-bridge pipeline which is owned by another company along the kalamazoo river in michigan. it ruptured and it spilled one million gallons of tar sands into the river. this is a picture of that

cleanup and the process, which was $1.2 billion that was spent. so for those of you who don't know kalamazoo, it was an incredible economic and environmental and historic issue for people of michigan, and the river was closed for business for 18 months after that spill.more than 35 miles of the river had to be off limits because it was difficult to clean up. today four years later they are still impacted. as i said, the cost was $1.2 billion because they had to dredge the bottom of the river. any oil spill of that magnitude is damaging. and yet when we look at this issue, the fact that these tar sands were sinking to the bottom made that dredging even more serious. and it is the reason why we need to make sure that these tar

sands are taxed just like any other oil that's produced in the u.s. and pays into this trust fund. i want to note and will submit this for the record, a cornell university study found that -- quote -- "the spill effects that hundreds of residents that were displaced caused significant impact to the jobs in kalamazoo." i think it's just the start of what the challenges will be for us to allow this kind of tar sands development to move through the u.s. so our responders in the oil spill liability trust fund are very skilled. first, they know that we need to do everything we can to prevent spills to begin with. they are developing technologies to respond in the case of an emergency. and they are doing everything they can to use the trust fund.

so we need to make sure that we are having those who are producing this product pay into this trust fund, and we need to make sure that we are closing this loophole. so my colleagues, as i said, senator wyden and markey have been working on this issue for some time. senator wyden the ranking member on the finance committee i know feels very strongly that they should be paying into the oil spill liability trust fund and paying their fair share of revenue. and i know that senator markey has worked on this issue in the house of representatives as well before coming to the senate. so we need to make sure that people understand that dredging is not good enough, that our country needs a plan, that we need to not just rush through this pipeline and to basically think that we have all the technology, all the methods, all

the appropriate emergency funds to clean this up. we need to make sure that we're not sitting here arguing with a company, a canadian company who just wants us to clean up the mess and leave the u.s. taxpayer paying the bill. in fact, there was some debate in the kalamazoo spill whether these guys, who the in bridge company had hit their liability cap and so the trust fund should pay for it, even though they had never paid into the trust fund. are we going to let the american taxpayers clean up a canadian oil mess at our expense that we've paid in and everybody is affected by that? i think that we should slow down this process and make sure that we are getting things like the oil spill liability trust fund right and that we are getting this added to this legislation before it moves out of the senate. so i know that my colleagues will get a chance to look at this next week as we, as i said,

we probably will start voting early next week on some of these amendments that are being offered. i hope my colleagues will close these loopholes and to make sure that the u.s. citizen and taxpayers are not left on the hook paying for oil spill responsibility that should be the responsibility of these individual companies. i thank the president and i yield the floor. i know we're expecting some of our other colleagues to come to the floor shortly to speak on their amendments. but at this time i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: madam president? the presiding officer: the senator from massachusetts. a senator: i ask unanimous consent that the roll call be dispensed with. the presiding officer: without objection.

mr. markey: thank you madam president. madam president, when the new congress opens there's a choice as to which issues we should start to work on. would it be infrastructure jobs, clean energy jobs, minimum wage increase for all of america? no. no, that is not what the new majority decides to bring up. no. instead, it is a canadian oil export pipeline. so next week, i am going to offer an amendment that the senate will consider that asks whether we will put americans first or oil companies first whether we will keep this oil and gasoline here for americans or send it to foreign nations to help them instead? if my amendment is defeated, it will make clear that this is not an energy plan that is all of

the above. it is oil above all. my amendment says that if we build the keystone keystone pipeline, we keep that oil here, we keep that oil here. we keep the diesel, the jet fuel the heating oil we keep it all all here. because if we send it abroad? what are we doing? we're helping canadian oil companies get a higher price for their oil. we're acting as the middlemen between dirty foreign oil and thirsty foreign markets. without my amendment, there is nothing in the bill or united states law that would prevent this oil from being exported. 80% of our refined fuel exports go out of the gulf coast exactly where keystone would end. and foreign crude oil including crude oil from canada, can be

freely reexported. and we know what transcan be trans-canada's plan is because i asked them at a congressional hearing i asked a senior trans-canada official whether he would commit his company to keeping the oil and refined products from keystone in the united states of america and he said no. and why do the oil companies want to export this canadian tar sands oil? because they can get a higher price and make more profits. tar sands crude in canada trades for $13 less than the u.s. crude benchmark. and the international prices are $3 higher than our prices. and if we do all of this if we build this pipeline and then we send this oil to foreign countries then we have turned

uncle sam into uncle sucker. because, make no mistake without my amendment this bill won't do anything to help people at the pump. it will just serve to pump up the profits for oil companies. we shouldn't export this oil even as we are forced to send young men and women to defend oil interests in the most dangerous parts of the world. so let us have that debate. as we import still oil from the middle east coming into the united states on tankers this proposal that we are debating next week will actually export oil that's already in the united states. we still import millions of barrels of oil every single day. what you hear from the canadians, what you hear from

the oil industry is that this is all about energy independence. well energy independence cannot by definition include the exportation of oil while the united states of america is still importing millions of barrels of oil per day. that's heading us away from rather than towards the goal of energy independence. and so that, ladies and gentlemen, is really at the heart of the issue of what it is that we must understand about this keystone pipeline debate. we want lower prices for consumers lower prices at the gasoline pump, lower prices for home heating oil lower prices for diesel lower prices all across america. it's like a tax break that is going into the pockets of every single plern american, giving them more spending money because they're paying much less for oil

in all of its forms in the united states of america right now and it is giving an incredible incentive for economic growth right here in america. what makes america great? what makes america strong? what makes us strong is when we're strong at home. and what makes us strong at home is our economy because the stronger our economy is, the stronger the united states is in projecting power across the planet. and so that's why this debate on the exportation of oil is so central. it goes right to the heart of what it is that we must be discussing and debating in our country. this is an incredible opportunity for our country. and let's take it to the next step. the next step includes what is the taxation on the canadian oil? well there is a loophole, believe it or not, in the american tax code that allows tar sands oil from canada like

that that would flow through the keystone pipeline to not pay into the federal trust fund to respond to oil spills in the united states. understand that? canadian oil the dirtiest in the world coming through the pipeline that the canadians want to build through the united states, in the event of an oil spill, will not have paid into the oil spill liability fund for oil spill accidents in the united states. i wrote to the treasury department in 2012 urging them to close this loophole through executive action, but their response indicated that they do not believe that they have the authority to close this loophole on their own and they need legislation to do so. yet, there is nothing in this bill that would close this tax loophole for keystone tar sands oil. tar sands oil can be more

difficult to clean up than regular crude but receives a get out of canada tax-free card. that makes absolutely no sense. we are already importing more than 1.2 million barrels per day of tar sands oil into the united states but oil companies don't have to pay into our cleanup fund to import that dirty oil. there are roughly 30 oil companies importing tar sands crude into the united states. if you are one of those 30 companies, you are getting a great deal, but if you're one of the hundreds of other oil companies out there that do pay into the oil spill trust fund, you should hate this loophole, and the american people should hate that loophole as well because the canadians and their oil companies are not paying their fair share of the dues to be able to participate in our great american society. they want to build a pipeline

like a straw right through the middle of the united states, send the dirtiest oil right down that straw and if that straw breaks if there's a spill the canadians have not contributed to the oil spill liability fund. does that make any sense? does that make any sense? of course it doesn't. that's why this debate is so important. the congressional budget office says that this is going to cost the united states of america hundreds of millions of dollars because the canadians escape their responsibility in paying for the accidents. so senator wyden and i are working here to make sure that we have an ability to close this loophole and we're working with senator cantwell, the ranking member on the committee and with senator cantwell, we are going to make sure that we have this important debate out here on the senate floor. and i i know senator cantwell

was out here earlier today raising this issue highlighting this issue pointing out how unfair and unjust it is that the canadians escape their responsibility to pay. that is just another giveaway to the oil industry that ensures that this is nothing more than a giveaway to those canadian companies. and i say this on a day when it's being reported that there are now 140,000 people in america employed in the solar industry. 140,000. there's another 50,000 that are employed in the wind industry. nearly 200,000 people employed in industries that for the most part didn't really even exist in a meaningful way seven years ago. that's how quickly our own domestic wind and solar industries have been developed

creating jobs here in the united states creating growth here in the united states, creating opportunity here in the united states. so this, ladies and gentlemen is really what we should be debating but once again when the republicans are in control we do not debate all of the above. we don't debate wind and solar and biomass and energy efficiency and oil and gas and nuclear. the republicans always make it a one subject and that is oil above all not all of the above. and so i'm looking forward to this debate that goes right to the heart of the security of our country, the economy of our country, the environment of our country. this is the dirtiest oil in the world. this oil is going to dangerously contribute to the warming of the planet. 2014 was the single warmest year ever recorded on the history of

the planet, 2014. you don't have to be dick tracey to figure out that this is a problem that we're passing on to next generations without the debate that this institution must have if we are going to discharge our responsibilities to those next generations. keystone pipeline is the central opportunity that we're going to have to raise this issue of global warming, of the national security of our country of making our economy stronger, and of ensuring that we discharge our responsibility to the next generation. and, madam president i yield back the balance of my time. and, madam president i doubt the presence of a quorum. the presiding officer: the clerk will call the roll.

quorum call:

the presiding officer: the senator from new mexico. mr. udall: thank you. i would ask that the quorum call be vitiated. the presiding officer: without objection. mr. udall: thank you mr. president. the presiding officer: the senator from new mexico is recognized. mr. udall: thank you. climate change is one of the greatest challenges of this century. we have a profound choice before us. we can deny that our climate is warming. we can fall behind our economic competitors. we can ignore the danger 0 our planet and to our security, and that's one choice. or we can move forward with a diversified energy portfolio that includes clean energy, with an energy policy that makes

sense, that creates jobs, that protects the environment and that will keep our nation strong. there is a lot of work to be done. we can work together. we can find common ground, become energy independent move us on a path to energy independence grow our economy and fight climate change, but instead unfortunately our focus is today on the keystone x.l. pipeline. the new majority has not chosen to start with energy policy as a whole or innovation or manufacturing policy or our response to climate change. instead, we are debating on the floor of the senate just one pipeline project which primarily benefits another nation. there is really one basic question -- is the keystone

pipeline in our nation's interests? not canada's interests or wall street's interests. our nation's interests. i do not believe it is. i say this for two reasons. first, we are being asked to do something that i believe is unprecedented. for congress to step in and promote a bill for one private sector energy project to waive ahead a private pipeline for a private important company so that canadian oil can be piped to texas for export to other nations. again, how does this serve our nation? we are told it's about jobs. keystone will create jobs, and of course we're all for that, but how many jobs? about 3,900 temporary construction jobs, but how many

permanent jobs, jobs that american families can count on for years to come? maybe about 50. and yet with all the challenges that we face at home and abroad, this is the priority -- this is priority number one for the new republican congress. so mr. president this is one choice. it is the wrong choice and the wrong priority, which brings me to my second point. we are at a crossroads in our energy policy. we can still lead the world in clean energy production, wind, solar, advanced biofuels to reduce global warming pollution to become energy independent and create permanent american jobs. that is our future. that should be our priority. new mexicans are already seeing the impact of global warming.

the southwest is at the eye of the storm with historic drought with severe flooding when it does rain and with more and more wildfires. i talked to farmers and ranchers in my state. they are struggling. according to a study at los alamos national laboratory, by 2050 not far away, we may not have any forests left in my state. it will be as if new mexico was dragged 300 miles to the south. our climate will resemble land that is now in the middle of the chihuahua desert. i'm an scientist neither are my colleagues but the experts at los alamos national laboratory and scientists all over the world are clear if we do nothing, it will only get worse. we're already seeing the impact.

just recently, the government accountability office issued a warning. climate change will continue to increase costs to taxpayers for the federal flood and crop insurance programs, fema is already $24 billion in debt due to extreme weather events like hurricane sandy and last year's floods in new mexico. the cost of the federal crop insurance program has increased 68% just since 2007. if left unchecked these costs will continue to skyrocket. but this is more than numbers. disturbing as they are. this is the burden of climate change to farmers to ranchers and to our communities. the damage is real, the threat is here, but so are the solutions and the opportunities, and there are many opportunities. with the right priorities, we

can encourage the production of clean energy. we can create a clean energy economy that leads the world. we can create the jobs of the future right here at home and reviolatize rural america. revitalize rural america. i have long said we need to do it all and do it right as an energy policy. that includes traditional energy sources. oil and gas play an important role in my state. new mexico is a leading producer of both oil and gas. we have strong, independent companies, they employ over 12,000 new mexicans. they help pay for our schools and our other public services. they are an important part of the mix. and so are renewables wind and solar. the united states has incredible wind energy potential enough to power the nation 10 times

over. new mexico has some of the best wind resources in the nation, enough to meet more than 73 times the state's current electricity needs. wind power emits almost no carbon pollution it uses virtually no water it already saves folks in my state 470 million gallons of water a year. the u.s. solar industry employs more than 143,000 americans more than coal and natural gas combined. solar jobs grew ten times faster than the national average. the majority are in installation sales, and distribution. those are well paying, local jobs. those are permanent jobs, and they won't be shipped overseas. now is the time to build on the

momentum and invest in a clean energy economy. now is the time to create energy at home and jobs at home. now, not later. and we need to do it before we lose too much of the market to our overseas competitors in germany, china and elsewhere. they can see the future, too and they can they are going after it. a national renewable electricity standard would help us get there. the proposal i have introduced for many years would require utilities to generate 25% of electricity from renewable sources by 2025. new mexico and over half of the states already have one. the states are moving in that direction, the nation needs to move in that direction. we need a national standard. experts have said a national

standard could create 300,000 new jobs. i have pushed for this ever since i came to the congress the house of representatives has passed it, the senate has passed a version of this three times. we have to get it right. we have to do this. let's get it done. america can lead the world in the clean energy economy. we have the technology, we have the resources we just need the commitment and the cooperation. this is a new congress. let's find common ground where we can move forward. just as we invested in the oil industry, we need to invest in wind and solar and biofuels. we should support tax credits for renewables. we should encourage important cutting-edge energy research at great institutions like sandia and los alamos national laboratories. what we don't need is

congressfully simply acting as a permitting agency for a canadian pipeline. i understand the frustration that this project has been pending for so long at the executive branch. i believe the president should make a decision now. the necessary studies have been done the recent litigation is over. we have debated this project extensively in this congress and in several -- and in several elections. if the president decides to approve it without some strong conditions that mitigate its climate impact, i will be very disappointed. if the president rejects interest the supporters can raise this issue in the next election. but congress should move on to real pressing policy debates. let's get our hand -- let's get our heads out of the tar sands and work together for our economy, our our energy

independence and for our future. thank you, mr. president, and i yield the floor. and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from alaska. ms. murkowski: request the proceedings under quorum call be dispensed with. the presiding officer: without objection. ms. murkowski: thank you mr. president. it's good to be here on the senate floor talking about where we are in the process to hopefully finally move towards approval of a permit to allow for construction of the keystone x.l. pipeline. it's been interesting the past couple speakers this morning have all mentioned don't understand why why the first order of business in this new congress should be this measure. there's a lot of issues that are out there and there certainly are. there always is. there will always be in the

united states senate. this is what we do. these are all weighty issues. but i will remind my colleagues one of the reasons we are moving early to the keystone x.l. pipeline legislation is because in many ways this is a bit of unfinished business. it was just six weeks or so ago that we had this measure before us on the floor of the united states senate. it was before this body for debate good debate led by our former colleague from louisiana who was -- was absolutely passionate absolutely passionate in her defense of why this was timely, why this was important, why this was critical that this measure be approved. and we had that debate and unfortunately the final vote shy by one vote and so we did

not see passage. but it was -- it was a measure that was in front of us because yes, it was timely but also because of the work that this body had done to help advance it init. in the energy committee we had had hearing we had process and we had a bill in front of us. now, first week of the session and we have a lot of measures that we will be taking up that are extremely important. but they are perhaps not as primed, if you will, for action on the senate floor because that legislation hasn't been drafted up. the committees have not met to to -- to really work through some of the legislation that will be before us and so yp why not move why not move to advance the keystone x.l. pipeline? a measure that will provide for

good-paying jobs in this country, a measure that will -- will work to enhance that relationship with our closest friend and ally to the north canada, a measure that will help us from an energy security perspective when we are able to displace oil coming in from places like venezuela with oil coming in from canada. that's a relationship that this senator would much rather enhance and further. so for a host of different reasons, we are here on this measure in now the second week of this new congress. and i'm pleased that we are at this place where we reached unanimous consent earlier to proceed to consideration of amendments on this bipartisan

bill. it's been interesting as i've talked to not only colleagues but reporters out in the hallways, just people that are -- you're having a conversation with and i think there was a fair amount of skepticism that if republicans were to regain the majority, that we would -- we would return the senate to what we know as regular order where there's a processing of amendments, where there's a regular committee process and how we -- how we get back to where we're actually processing amendments. but that's what we're doing folks. and those who are -- are observing what is going on really beginning today is something that really hasn't been seen around here in a number of years. and that's unfortunate that we haven't had that process but

it's never too late to do the right thing. it's never too late to really get back to a process that is deliberative that allows for the open exchange of ideas and consideration of that on the floor. and when we -- when we talk about an open amendment process i think it needs to be clear to all that it's not -- it's not just open amendment for those of us that are on this side of the aisle, it is an open amendment process for the full senate so that members on both sides can offer their ideas and work to get votes on them. now, the majority leader has said several times, he said this process is going to be open but it's not going to be open-ended. we're not going to be on this measure for a full year or even

a full month but we will be taking the time to -- to do the deliberation that i think is important on this. and i think you've already got some people saying, "oh we're spending enough time on it." it's a mixed message. you've got those saying it's not timely, we shouldn't be taking it of up then almost complaining that we've been on it now for -- since last week. but i think it is important for mibzformembers to know that we are expecting -- for members to know that we are expecting to see your amendments filed, we are expecting to see you come to the floor to bring those up, call those up. and i would encourage don't wait until the last minute, because again to use the majority leader's words, this is not going to be open ended.

so let's get to our business and let's get it done. we do have three amendments that are currently pending before the body right now but before i speak to each of those three i'd like to just very briefly address my support for the underlying bill from the perspective of alaska and from being one who is the emersed in alaska's energy process and politics. i've heard from more than a couple folks back home who've seen the debate and discussion playing out, whether it's c-span or in the media and i've been asked, they're saying, we understand that keystone is in the national interest, we get that. but is it really in alaska's best interest? and folks back home are a little worried right now. we're seeing oil at -- at lows

that we have not seen in -- in years sitting around $46 a barrel here today. it's certainly had impact on our state's budget dramatically so. and it's not just alaska. i think we're seeing in other producing states that the good news with the lower oil prices is kind of a double-edged sword for some. and so i think the questions that are being asked at home are legitimate fair and very important questions about okay, how -- how does this fit in with the alaska piece? we've got -- we've got a somewhat unique -- maybe it's not somewhat unique but it's certainly grander in scale with large-scale infrastructure projects particularly energy projects of serious magnitude. we've got a world-class oil field in prudhoe bay and the connector that the transalaska

pipeline provides from prudhoe bay down to tidewater in valdez, an 800-mile silver ribbon that bisects our state is truly a modern marvel. and it has it -- the prudhoe bay and the oil fields up there providing the resource they have to alaska. again, you can have the resource but if you don't have the infrastructure to move the resource it doesn't do your state much good doesn't help your economy doesn't help fund education if you can't move it to market. but as i mentioned alaskans are a little bit nervous right now. there was a "new york times" article recently that described kind of what's happening in alaska. the journalist described it as economic anxiety that hangs over

the state. and it is because again we're seeing price in -- a drop in price per barrel for oil and when your state relies on oil for about 90% of your -- your revenues to fund your budget whether the price drops you notice it dramatically. but there's one way that you can deal with the -- the variations and the variables in price and that's if you have sufficient production. and that's where alaska is suffering from this economic anxiety because our oil production which was over 2 million barrels a day has dropped precipitously over the past couple decades. we're now talking about an oil pipeline that is less than half full.

so what does that mean to a state like alaska? when your -- your artery for your state's revenues is not pumping to the level to which you would hope snch? and we are in -- we are in that place right now whereas a state we're looking -- where as a state we're looking at what can we do to make a difference when it comes to production, because we will have price variables. as long as opec is in play, there will be those price variables that we're -- we're not able to affect as much as we would like. we've got the resource. we've got about 40 million barrels of oil nearly 40 billion estimated bear barrels of oil in our federal areas and this is offshore in the -- in

the chukchi and in the beaufort on our coastal plain within the npra. we're not looking at a situation in alaska where we are running out of oil or about to run out of oil. our problem straight up is our our -- our limited ability to be able to access it. the holdback that we get the pushback that we get from our own federal government, the policies that keep us from being able to access that resource this has been our challenge. now, back to the keystone x.l. pipeline. the keystone pipeline, it's not going to be carrying any alaskan crude. don't get a mixed message here. we've got a pipeline for that. we've already built it. it's just waiting to be filled back up. so our need isn't infrastructure in alaska but really permission

consent from the federal government to access our lands access our waters to achieve that energy potential. so when i'm talking to alaskans about the imperative for keystone and how it intersecretaries with -- intersects with alaska, there's a couple messages here and there'sthefirst one is a pretty simple one. there is plenty of demand in just the united states for all of the oil that canada can produce and all of the oil that alaska can produce all at the same time. the demand is there. even with the -- the surge that we have seen coming out of the bakken and just the increased amount of production that we have seen domestically in this country. we're still continuing to import that oil. so again if we can the rely more on us better for us.

the world view that supports the construction of keystone x.l. is the same one that leads to new production in my state of alaska and that's the recognition that affordable energy is good. this is kind of my mantra, if you will. i keep advertising i've got a bumper sticker that says "energy is good." affordable energy is good and the understanding that low prices result when world markets are well supplied along with a desire to achieve north american energy independence and this is something that i feel very, very strong willing about. willing -- strongly about. so approving the keystone x.l. pipeline is not going to eat into the markets for alaska's oil and i think that's an important message for alaskans to understand. in fact, it's really going to help us preserve those markets that we have. because right now our situation

up north is we -- north slope crude is predominantly shipped to the west coast. makes sense closer in proximity. it's there that it is refined into gasoline and other petroleum products for use here in the lower 48. so we take it down our 800-mile pipeline, put it to tidewater. it's refined on the west coast and then we enjoy the benefit of it here. but this a.n.s. crude alaska north slope crude as we call it is now finding itself in competition from the shale place out of the bakken. so what you're seeing is without a keystone x.l. pipeline, oil -- that -- the oil that is being produced out of the bakken, it's finding a home somewhere. it's not just sitting there. it's not just sitting there. it is being moved. so where is it being moved to?

it's being moved to homes that it can find, refineries that have that capacity. and so it's going west. and it's going west to those west coast refineries that are used to getting that alaska crude. so -- and keep in mind, as it moves west, if you don't have that pipeline, how is it moving there? how are we moving it? we're moving it by rail predominantly. and again we'll have that discussion about the environmental impacts of rail or truck versus a pipeline. the safety issues, the emissions issues. you want cleaner -- you want a cleaner way to transport it's going to be in a pipeline. you want a safer way to transport, it's going to be in a pipeline. so we have -- we have this

discussion and again for alaskans to understand, keystone x.l. pipeline is going to benefit us in terms of being able to -- to continue to send our -- our crude to those west coast refineries. we've heard i think repeatedly and i think very wrongly that keystone x.l. is a foreign project. it's a foreign project. it's going to carry canadian oil to the gulf coast. well okay, trans-canada we know where the name derives from. we know that much much of the oil to be transported will be from alberta but i think it is important to acknowledge that you have got about 100,000 barrels of bakken crude that will come from north dakota and montana down -- down through the mid continent and they will -- they will come down, they will avoid the west coast

if we have keystone x.l. constructed. the last point i'd like to make for the folks back home that i work for on -- and that are following this issue i really think the keystone x.l. is a test for us. it's a test of whether or not we as a nation can still review, can license can permit and build a large-scale energy infrastructure project. now, we're looking at that, we're looking at just that in alaska. we need to know that that can continue to be done in this country, because if we can't do it even here in the lower 48 where your costs are lower where you have existing infrastructure that you tie into which keystone x.l. will, you already have the southern

leg already completed. if we can't demonstrate that we can't even get beyond this process of permitting, a leg of this pipeline over the canadian border into the united states, what confidence do we have that we're going to be able to do other big energy infrastructure projects? that worries me a great deal. so when people say well, you know we're rushing this too quickly, it's premature we need to let everything play out i think we need to remind ourselves that six years is a pretty long time to play something out. most -- most companies don't have the wherewithal to wait

something out six years because the cost of constructing this pipeline, having gone down in this intervening time period, -- if anything, they're going up. we know they are. so we're working on the keystone x.l. pipeline right now but it's just the first step of many that i believe we need to take to do in order to improve our energy policy. so i'm going to be continuing my conversation with members to explain how in my state we've got an awful lot to offer our country, whether it is increasing the flow in our transalaska pipeline, getting our production up so that we are not half full and that we are full up and that we can share that with people throughout the country, and that as we look to move our natural gas our

amazing quantities of natural gas, that that, too that infrastructure project a massive infrastructure project that we can work to advance that. we have got so much to offer the country coming out of alaska, but we need to have a chance and the opportunity to do so. our pipeline up north it's already built. it was completed just after i got out of high school. in fact, i was privileged to -- to be working up in prudhoe bay at that time. and see what actually happened out there in the oil fields. it has operated successfully safely and efficiently for decades. it has far surpassed what we believed we would be able to ship through that line. but it remains surrounded,

surrounded by billions and billions of untapped oil that can be brought to market, bringing jobs, general raiding revenues, keeping prices as low as possible because we all want that and increasing our security . so this is a conversation that's going to continue until the conditions of alaska's statehood. those things that were promised to us back in 1959 when we became a state that they are fulfilled, that we're allowed to produce our resources as a state. so watching what's going on with keystone is something that is of great interest to folks back home. and we will continue to -- to watch it and hopefully be encouraged that we do the right thing, from a jobs perspective from a revenue perspective from an economic and an energy

security perspective. so i wanted to take a little bit of time this morning. we've got three amendments that are pending. and i was privileged to be sitting in the chair a little bit ago where the junior senator from massachusetts spoke to his amendment. this relates to export from the keystone x.l. pipeline. now, my colleague from massachusetts is not from a big oil-producing state as i am, but i think it's fair to say that his is a state where they care a lot about the costs of energy. they have got cold winters. they have got infrastructure challenges. they have got other issues as they relate to energy, and i appreciate that. but it's important to understand what my colleague's amendment would do.

it would specifically prohibit the export of oil that's brought into the united states through the keystone keystone x.l. pipeline as well as the export of the finished products made from that oil, so it's not just the raw crude that's put into the line. it's what goes down to -- to the refineries there in the gulf coast, refined into product whether it's diesel or other product, and prohibit the export of that. so basically it's a full-on flat-out you can't have any aspect of it, any drop of that leave this country. and it essentially says that all all -- every ounce of this new resource this canadian resource, will be brought into this united states, and it will

stay here, and my colleague has raised the concern that the united states shouldn't be kind of that pass-through entity. he used the terminology that it's kind of like a straw from canada down to the gulf and then out the back end there. the president in a comment used the term conveyor belt. the united states shouldn't be that conveyor belt. and the argument is that we shouldn't just be this passthrough where americans get none of the benefits. well if we didn't get any of the benefits, i think we should be talking about that. i think it is important to know that this is not the first time that we have had this discussion or this idea in front of us. back in early 2012, it was part of an amendment that came before the floor. it was defeated 33-65.

we had many of our democratic colleagues join with all the republicans to reject a statutory ban on exports. and i'm hopeful that this amendment that has been offered and is pending will see the same fate ultimately being defeated by at least the same margin, and i say that because i think it it continues to be unnecessary. i believe strongly that it takes our export policies in the wrong direction. this is not just lisa murkowski saying i think this takes us the wrong way. the department of energy has looked critically at this issue of keystone x.l. oil being exported and whether or not that makes sense and in their

analysis -- they state it pretty succinctly. they say without a surplus of heavy oil in pad three that's the gulf coast area, there would be no economic incentive to ship answer oil sands to asia via the point it's coming out of. the department of energy's conclusion was pretty -- was a pretty broad discussion about it but that conclusion was then reinforceed by the state department. in its final completely e.i.s. for keystone, which is -- it's a document that everybody should read. now, granted it's a thousand pages long or thereabouts but there is an executive summary that really does help to condense so much of this, and in the state department final e.i.s. they say that such an option that being export, such

an option appears unlikely to be economically justified for any significant durable trade given transport costs and market conditions. so think about that. because i think these conclusions make some pretty good sense here. the purpose of the keystone x.l. pipeline is to bring canadian and american -- let's not forget the 100,000 barrels coming out of montana and north dakota. it's to bring this bill to the gulf coast. so it doesn't make any sense to bring oil all the way -- this is 849, 850 miles all the way to refineries that can refine it. remember these refineries in the gulf coast are set up to deal with exactly this type of oil. so you have got the line that

brings it from the north to the south where you have refineries that are able to handle this, so tell me why it would make sense to just use this pipeline as a passthrough, as a conveyor belt, as a straw and then ship it to refineries around the world. add that transport cost to it. as the state department e.i.s. says it's not economically justified and it's important to understand what is going on down there in the gulf coast with our refineries. and the state department looked at this, and what they found was that the traditional sources of heavy oil used on the gulf coast are declining. why are they declining? well what -- what we traditionally see coming in as imports there coming in from

venezuela, coming in from mexico but we're seeing a -- a drawdown of that, if you will, a lessening of that, and for a host of different reasons coming out of venezuela and out of mexico but not the least of which is because we're producing more here in the lower 48 states, in the bakken and so we've talked a lot about the misalignment that is going on within our refineries and what is being produced and what we are capable of refining, but again, what we're seeing in the gulf coast is -- is a -- an ability to take on more capacity for this heavy oil. and so the -- the opportunity to refine that product coming out of canada there in the gulf

coast refineries, it's real. it's there. now, i think it is important to be honest here -- i don't want to be written up in somebody's fact checker because believe me we look at those. but there are small amounts of oil from keystone x.l. that could be reexported as a matter of economic efficiency. that shouldn't get everybody excited or reason other to panic. it may come as a surprise to some but the reexport of canadian oil that is not commingled with the domestic crude is already completely legal, it is already a routine matter with the commerce department just routinely signs off on it. this is no big deal, this is no

change in policy that is dramatic. the obama administration has already approved dozens of licenses to reexport crude oil all across the world. now, i think it's important to recognize that, again this amendment from -- offered by my colleague from massachusetts would not just block the export of the crude but it would block the export of finished products. as he said, it would be everything. it would be the crude and it would be everything that then is produced every bit that we have he would have stay here. but blocking the export of finished products would be a reversal a reversal of existing law and current practices. and think about it just from a practical perspective. how do you enforce this?

really how -- how would you realistically enforce this -- this measure of diesel that came from this refinery from this pipeline here in the lower 48, that you can go ahead and export and this is what we do it's not any great state secret but we move our refined products. and we do so in a significant way to the benefit of our nation. and so how do you -- how do you kind of fence off everything that comes out of keystone x.l. and say the refined product from this particular pipeline, you can't move outside this country. it just creates potential havoc, which i don't know but that's the point here. but i do think that the senate

should recognize that this amendment is not going-term prove this bill. i don't think it's going to change anybody's mind, bring new support. i think it -- it's meant to just kind of poison the well here. and perhaps ensure that this pipeline's never going to be built. and that it can't operate. so i would encourage my colleagues look at a couple of different documents here. i mentioned the final supplemental environmental impact statement that the state department did. it is an important read for the analysis the critical analysis that went into it and i have cited those areas where they speak specifically to the impact of the export.

but there are others that have reviewed not only that but other documents, other outside facts. i mentioned that president obama had made reference to -- to the conveyor belt theory, tagging keystone x.l. as being a conveyor belt for the oil. he made that statement when he was over in burma in november. and his specific words were this would provide the ability of canada to pump their oil sending it through our land down to the gulf where it will be sold everywhere else. so the fact checkers got on president obama for that, and did a pretty good analysis, i felt a pretty good analysis, laid it out in clear english

and ultimately decided that the president was going to be awarpedded three pinocchios for that statement which a pinocchio for those who aren't familiar you've made a significant factual area, obvious contradiction you get three pinocchios. but it wasn't just "the washington post" and glen kessler that a did this assessment. we also had another fact check coming out of politifact and they also rated that statement mostly false on its truth- truth-o-meter and i will submit both of these fact checks to the record asking unanimous consent for that. the presiding officer: without objection. ms. murkowski: but, again, mr. president, i think it's important to be looking to a full understanding of what we're

talking about when -- when we talk about the export of keystone x.l. and the imperative that in order for something to -- to work as the -- as the senator from massachusetts has suggested, that we're just going to be this pass-through, it has to make sense for those who are moving this product there has to be economic justification at the other end and where it makes sense is to move that product to the gulf coast where our refineries have the capacity to handle that heavy crude. turn it into product there create -- continue to create those jobs within that region, and advance.

so i'm not going to be supporting senator markey's amendment. i think that's obvious from my statement. but i do think that it was important to just give some of the background there and we commend to colleagues some of these articles that i have referenced. there's two other amendments that are pending before us, and i'll speak very, very quickly to the amendment that has been offered by the senators from ohio and new hampshire. they have once again teamed up to offer this bipartisan amendment on energy efficiency. they worked very closely on these issues over the years. we're to the point where you can't think about energy efficiency without thinking portman or shaheen. so i commend my colleagues for their diligence on this. i have been happy to support them in their efforts. and i'm happy quite honest think that we're going to have an

opportunity to vote on an amendment that does relate to the energy efficiency. it is not the full-on energy efficiency bill that my colleagues have introduced previously but it's an amendment with a text that's identical to the measure that came out of the house the energy efficiency improvement act. this is a bill that moved through the house 375-36 during the last congress towards the end. we tried we tried to move it through here in the senate, we came close to advancing it by unanimous consent but there were still a few outstanding concerns that we couldn't get around so it's back before us once again. but really, nothing has changed since then, and in my view, this is a good reason why this proposal is really regarded as

important, noncontroversial, it's cost neutral it contains four provisions, one of which is extremely time sensitive. and we -- sometimes people don't want to get down into the weeds of certain aspects of what we're dealing with. the time sensitive provision that we're dealing with is these federal energy efficiency standards related to water heaters where we have a consent decree from back in 2010 that our water heater manufacturers have until april 16 of this year be -- so exactly three months from today -- where they have to meet these revised minimum efficiency standards from d.o.e. the problem is that the d.o.e. standards effectively ban production of these grid-enabled water heaters that many of our

rural co-ops use for electric thermal storage or demand response programs. so instead of saving energy, these revised standards now threaten to actually work against these goals so you've got a bizarre unintended consequence here, and we've been working for a couple years now to address this, to fix it and now it's urgent. now we've got to deal with it because in three short months manufacturers are worried what's the congress going to do is it going to be resolved should it i be building any of these. so i think thanks to the cooperation of senators from ohio and new hampshire we've got an opportunity for us to have this measure in front of us once again. there's three other provisions in this amendment that are actually noncontroversial. they all relate to voluntary efficiency programs. one focuses on the efficiency of commercial office buildings

another provides greater information about energy usage in those buildings and then the third looks at energy efficient government technology and practices. so again mr. president this is one that i would hope we would be able to advance without further delay. this is really a commonsense effort to fix a real problem for our rural co-ops. and more importantly let's embrace energy efficiency around here. we're talking now with the discussion about -- about increased production is very real i started off my comments by to go about alaska's desired contribution to the national energy economy. but i kind of view energy from a three legged school perspective. you've got increased production you've got all the technologies that are going to allow us to achieve our potential with our clean and renewable resources which is

hugely important but you also have the efficiency and the conservation piece. we don't talk about that enough around here. we need to do more. shaheen-portman is one way to get us there albeit in a very small way. and then the last amendment that we have pending is an amendment offered by my colleague on the other side of the aisle from minnesota, and also serving on the energy committee. he's introduced an amendment that would require all the iron and steel and the manufactured goods used to construct the keystone be produced right here in the united states. and i think all of us want to do all that we can certainly, to encourage more jobs and job creation here in this country and to put in place policies that would allow us to do so and

i do appreciate that senator franken's amendment inserts language in the amendment that allows -- i guess it avoids a conflict with our international trade agreements because we know that that could have really threatened the bill, it would actually have given the president real reason to threaten to veto this bipartisan bill. but they have addressed that within the amendment. i also appreciate the amendment allows the president to waive the requirements for american materials based on findings that he makes. so that's language that's included in it. but i have to tell you, mr. president, we're sitting here at 2,310 days, 2,310 days since the initial cross-border application was submitted for this project.

i was reminded that when the initial application was first presented, the president was then senator obama that much time has elapsed. and so i see this language and i think it is included in this amendment in good faith but i just can't be convinced that the president would actually exercise this type of a waiver in a timely manner. he certainly hasn't demonstrated it at any point throughout this whole long, drawn-out process that we have been on with keystone x.l. amp six years. so -- after six years. so i am going to be opposing this amendment for the same reasons that i opposed it when we had it in front of us in 2012. it was included as part of a broader amendment at that time, but it did fall on a pretty

strong bipartisan basis. and, you know, these are important -- these are important issues to be thinking about and considering and i did take good time to review this. but, again, i i think all of us want to do more to encourage jobs production job creation. i buy american and i buy local wherever and whenever i can. i strongly support the use of american materials in american projects whether it's in my state or around the country. i know that you probably do as well. the senator from minnesota does as well. but in considering whether we here in congress should maintained specific materials for the keystone x.l. pipeline,

i have come down on the side that we should not mandate that. and i think we need to look at several things. first off is the commitment that has been made to buy american without any sort of mandate without any requirement coming out of congress. fully, 75% of the pipe from this project is going to come from north america. that's the commitment that's been made. and i understand that more than half of that -- it's about 33 332,000 tons is going to come from arkansas alone. so again mr. president, this is a commitment that has been made to ensure that america does derive benefit that we do see these direct and indirect -- those induced jobs. and so when you make a commitment you say hey, we will pledge a full 75% of the

pipe for the project is going to come from north america i think that that's important. and it was important enough that trans-canada announced this three years ago. so this is not just something that they have decided oh, in order to help facilitate this, we're going to -- we're going to say 75%. they made this commitment a while ago. now, here in congress we passed the "buy american act," and that act specifically is applied to projects that are federally funded. but, keep in mind here, when we're talking about keystone x.l., this is a private project. keystone x.l. gets no subsidies. it will receive no taxpayer dollars. it will be built to the government's spesifications. and we've seen that -- when you look to that final seis where

the additional mitigation measures that are required once the permit is approved, it will be built to government specifications but i don't think that the government should decide what it is actually built with. we're going to define the parameters in terms of mitigation. but, again, this is a private project. this is -- receives no federal funds and so it is -- it would be somewhat precedent-setting. so i asked the congressional research service to see can you identify for me any other projects where the congress has sought to force or direct private parties a private company, to purchase domestic goods and materials? so all the materials that go

into it, not just the steel but everything else in there -- and they've been looking. they've been looking. they've got some pretty sharp folks over there at c.r.s. so far they have not been able to come up with an example in our laws. so i'm concerned about this, quite honestly. as much as i support buy american and making sure that we receive the benefit of these jobs from creating these products. but i'm concerned about the congress setting a press sent here. i think -- a precedent here. i think it puts us on a potentially pretty slipe slippery slope. so if we're going to set the precedent here for keystone x.l. why would wouldn't we do it for other projects? on wind turbines. i know some of my colleagues in other states, where they're

manufacturing good wind turbines. is that a policy that we're going it take on where we're going to say nope, it's an important industry, it's an important sector and so we're going to require it be all made in america? if that's the case, why not on our vehicles, on our autos? why not everything? i worry about that. i worry about the precedent. i worry about kind of where we go beyond keystone x.l., if that's the requirement. and i think it's also important to listen to industries industry's perspective on this. the american oil and steel institute have been a huge supporter of keystone x.l. for years now. and they've got major producers like u.s. steel. they have got 125 major producers. right after we came into session, before this amendment was even filed the american

iron and steel institute sent every one of us a steel gram reiterating their support for keystone x.l., and their letter is pretty definite. they don't -- they're not nuanced about it. they say, it is essential that congress act to ensure the approval of the keystone x.l. pipeline without further delay. so i think we should listen to those words. those words aren't coming from trans-canada they're not coming from an oil company. they are coming from associations and workers around the country who believe earnestly and honestly that construction of this pipeline will be good for this country it'll be good for these families. so let's listen to them, and

let's agree that 2,310 days and counting is more than enough time to make a decision. we saw the supreme court of nebraska come out with their determination that what had -- the decision that had come out of nebraska was not unconstitutional so it clears away that excuse, if you will, or that reason to say we can't move forward. there's really nothing holding up a decision at this point in time other than the president's unwillingness to do so. so i think if we want to move forward provide good jobs -- and we've had the debate about how many jobs are really created. is it the 42,100 that the final

seis states in terms of direct and indirect jobs? is -- if you want to just focus on the permanent jobs -- you know, that is definitely a much lower number, 35 to 50 permanent. but, you know what? when you build something the opportunity for good, honest work for well-paying jobs, for welders, for truck drivers for operators, people are looking for alookingfor an opportunity like this. they want to be part of i would abouting something. i can tell you in arks in alaska, when we're debating how we're going to move our natural gas to market and how we're going to build this natural gas pipeline that will move this, nobody is saying we can't build this because it's only going to be temporary construction jobs.

that's not what they're talking about. they know that there is benefit there. and they're hoping that they're going to be part of that benefit. so when we talk about where we are with some of these amendments coming forward i think -- i think it's good to have this debate. i think it's good to have this disawtiondiscussion whether it's talking about exports because that's a legitimate part of the discussion talking about requirements that may be placed on construction. but i think we have to remember, we are not the zoning board here in the senate or in the congress. this bill doesn't have anything to do with siting. we are not determining the route. that is what the states do, and rightly so. what this bill does, what this two-page 400-word bill does is

approve the issuance of that permit to allow for construction construction. but we're not -- we're not -- we are not the ones that is determining, this is the way the line goes. and i would urge colleagues, look -- look critically at the language. see wheact exactly what it does. understand that when we're talking about the benefits and burdens of a pipeline, it is true: pipelines are not 100% fail-safe. not much that we build is 100% fail-safe. but what we try to do at every turn at every opportunity is to make it as close as possible. but when you look from a safety

perspective, interest an environment perspective the safest and the most environmentally sound way to move this oil is in a pipeline. it's not putting it in rail to other parts of the country. i.t. notit's not putting it on the roads, as we're seeing. and those are the options right now, mr. president. because whether or not people in this body or across the chamber here object canada is accessing their resource. they are accessing their resource and they will move their resource. and right now the wait that they're moving it is in a way quite honestly, adds to emissions, has greater --

greater potential for a spill for an environmental incident. so i'm looking at it from the perperspective of canada is going to move that. they have made it very clear. in fact, there was an article just yesterday -- actually it was a couple days ago now -- out of the "wall street journal" and it's talking about the impact of lower oil prices and the impact on what is happening in canada as an oil producer. are they slowing down their production in response to lower oil prices? absolutely not. what we're seeing is almost a -- not a -- i don't want to describe it as double downing because that's an inaccurate

phrase. but what we're seeing is continued -- continued effort within canada to access their oil resources. and some of the statements that are made by some of the canadian oil companies i think are really quite telling. they say that -- that canadian natural -- canadian natural is an oil company -- will ensure the oil sands will continue adding to the global glut for a long time to come, regardless of the price of crude. they go on to say it's not well-understood just how robust the oil sands are. if you stopped expansion of the oil sands tornlings you'd have no declining in the production for decade. few in canada envision scaling back problems at their oil sand operation. so what we're seeing is, there

was -- there was big investment up front with the oil sands in canada and accessing a resource that is plentiful but if you are to believe some of the statements from these canadian companies they're going to continue to produce their resource. even if the face of what we're seeing with declining world oil prices. so if canada is going to continue to produce how is that product going to be moved? i would rather it be moved safely through a pipeline with fewer emissions through a pipeline and to a part of the country where we are set up to accommodate that resource in our

refineries so that we can real estate fine that product -- so that we can refine that product to our benefit. to me, that makes sense. so we will have good and -- excuse the pun -- energetic debate about amendments in these coming days. i think you can see from my comments we're going to have some amendments that i like and some that i'm not supporting. but what i am looking forward to is the fact that we are at a point that we're describing as regular orders, going to be voting on amendments, perhaps quite a few as we move towards final passage of this bipartisan bill. and i look forward to the exchange that we will have. with that, mr. president i thank you for your attention and i yield the floor. a senator: mr. president? the presiding officer: the senator from north dakota is

recognized. mr. hoeven: thank you mr. president. i'm very pleased to join my colleague this morning and the chairman of our energy committee, the senator from alaska is doing a fantastic job leading our energy committee. and i so appreciate her leadership on the committee her knowledge of energy and her words this morning very well spoken and i think really goes to the heart of what we're trying to do with this legislation, not only pass important energy legislation for the country but have this open process, open dialogue, have a real energy debate. and not just a debate but actually get the people in our community to vote. republican and democrat alike we're saying bring your amendments let's have a serious discussion about energy and about building the energy future of this country. offer your amendments, make your case and then let's vote. if you can get 60 people to support your amendment, if you can get 60 votes that gets

attached to the legislation. that's the way it's supposed to work around here. we're encouraging our colleagues to join with us and get the work done that the american people want done. again, i'd like to thank our energy chairman for setting that in motion. that's the right way to do business. that's what we're elected to do. that's working to get something done for the american people that sent us here for that very reason. when you look at what's going on in energy today you've got to feel fretty good about it -- pretty good about it. and if not drive over to the gas station and fill your car because gas prices at the pump are about $1 lower than they were this time a year ago. if you equated that savings that our consumers are receiving at the pump to a tax cut it would be more than a $100 billion tax cut for hardworking americans. that's pretty exciting. that's pretty exciting. that didn't just happen and it

certainly didn't happen because opec venezuela or russia decided they want to cut us a break, cut hardworking americans, hardworking taxpayers, consumers, small businesses across this country a break. it happened because we're producing more energy in this country and we're working with our closest friend and ally in the world canada, to produce more energy. on a daily basis we consume about 18 million barrels of oil a day or oil equivalents. oil and oil equivalents and produce about 11 million of those barrels here domestically. and we're up to about 3 million. of the 7 million we import, about 3 million comes from canada. we're down to importing about 4 million barrels a day from other sources. if we stay on this track build the necessary energy infrastructure like the keystone x.l. pipeline, and we continue to build good business climate and get our companies to invest, to create jobs and produce more

energy, we can get to a point where we truly have north american security meaning we produce more energy here and at home with canada than we consume. then we're in the driver's seat. not opec. then america is in the driver's seat. if we block projects like we're debating right now then we put opec back in the driver's seat. when they hear our president say he's going to continue to block this project or veto this legislation if we're able to pass it with a strong bipartisan majority that's music to opec's ears because that puts them back in the saddle and that's what they want. but we work for america and that's why we need to continue to move forward and build this exciting energy future for our country that we're building. it's energy. it's jobs. it's economic growth. this project will create hundreds of millions of dollars of revenue state local and federal to help reduce debt and deficit. that's a huge and important impact of the project. and of course it is about national security with energy

security. i want to emphasize that again because that is doing the work that the american people sent us here to do. but for the opponents a couple things i've heard this morning and i hear on an ongoing basis and one that oh gee, we should be doing renewable energy instead of fossil fuels. why not do all of it? why are they mutually exclusive? how is doing this project in any way prevent us from doing any renewable project that we ought to do? let's do those renewable projects. in my home state we use steam from coal plants to produce biofuels to power biofuel plants. we use the wastewater from some of our communities in those biofuels plants. we have wind energy. we have geothermal. ethanol, biodiesel. and we're now the second largest oil producing state in the country, produce 1.2 million barrels a day second only to

texas. they're not mutually exclusive. let's do it all. how does holding up one enable us to do the other? it doesn't. when i hear this argument we ought to do other things, let's do them. but this project just helps us. it provides more energy. let's do the other too. arguing we should do renewables is not an argument against this project. fine let's do it. let's do them both. the other argument that i heard this morning and i hear of course a lot from the critics and opponents is the environmental argument. and again i say look at the facts, go back to the science. the report itself says no significant environmental impact. that's the report done by the obama administration, the environmental impact statement that's designed to look specifically at the environmental impacts that have been done over the course of six years. they have produced not one not two, not three but five

reports, three draft reports two final reports and the results are in the report, keystone x.l. pipeline will have no significant environmental impact. and in fact, in fact we have higher greenhouse gases without the pipeline than we do with it. or if somehow they manage, critics manage to block that, then it would go to china. we would have pipelines built to the west coast of canada and the oil would go to china. it would go in tanker ships be refined in refineries that have higher emissions. however you slice it without the pipeline you have higher greenhouse gas emissions. but here's what i want to touch on for just a few minutes today and i'll talk about it more next week. canada is working aggressively to get investment in the oil sands to reduce the greenhouse gas emissions.

exxon has got a major project up thrvment shell's got a major project up there. exxon project is the curl project. the shell project is the quest project. in both cases they're bringing down the greenhouse gas emissions of the oil sands by investing in new technologies, in co-generation it carbon capture and storage. hundreds of millions, billions of dollars that's being invested along with the canadian government in carbon reduction technologies. not only does that reduce the carbon footprint of the oil sands but think about it. as that technology is developed what happens? it's adopted in other places. it's adopted here in this country. it might be adopted in places like china and other places around the world. so the advances they make in technology in reducing greenhouse gas emissions in reducing the footprint of this oil production and finding better ways, more cost

effective, efficient ways, more environmentally friendly ways to produce that energy, that technology that is adopted around the world. in other words they're finding solutions to some of the concerns that are being raised on the environmental front by the very critics of this project. instead of stopping that investment and that advancement why don't we find ways to continue to develop it which is not only a benefit in the oil sands in alberta but it's a benefit that we can utilize to produce energy this this country and other places around the globe. that's true for oil true for gas. that's true for all fossil fuel energies. that's how america has always worked. we create that business climate. we encourage the investment. we get american ingenuity we get american companies to use their entrepreneurial genius to make those investments to not only create good jobs, but to produce more energy, giving us energy security. and you know what? deloitte very technologies that -- deploy the very

technologies that give us the environmental stewardship we want. when we block these projects, when we prevent the investment, when we won't let them build the infrastructure you bring all that to a grinding stop. why would we do that? it doesn't make sense thrvment's thrvment's -- it's not one penny of u.s. taxpayer dollar going into this project. it is private investment. why wouldn't we want the private investment that helps us build the infrastructure and develop and deploy the technology that gives us better environmental stewardship? isn't that what it's all about? isn't that why our power plants and our energy production in this country is light-years ahead of what they're doing in countries around the world where in many cases they're still using third world type energy approaches. let's lead the way forward in technology. let's empower that to happen. and because i note that time is

wrapping up here, i'll come back to the floor next week. but i'm going to talk about the hundreds of millions that are being invested in the curl project, which is exxon is doing that project. and also in the quest project. shell is doing that project. and they're working with the provincial government in alberta to develop carbon capture and storage, something we talk all the time about wanting to do, and here we've got private companies working to put hundreds of millions into developing that technology. since 1990 -- since 1990 the greenhouse gas emissions for the production of oil in the oil sands has come down 28% been reduced almost by a third. and they're continuing to find ways to improve the environmental stewardship and reduce the greenhouse gas emissions. isn't that what we want? versus continuing, for example to import oil from venezuela

that has as high or higher foots print and you don't have that investment in technologies, that kind of investment in stewardship. let's talk about this issue in a way that advances the ball and do it the right way where we get the energy, the jobs, the economic growth, we build our relationship with canada rather than saying no, we're not going to work with you guys, and at the same time get better environmental stewardship. we can do it. let's do it. mr. president, with that, i thank you for the time, and i yield the floor. i also note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from utah is recognized. mr. hatch: i ask unanimous consent that the quorum call be dispensed with. the presiding officer: without objection. mr. hatch: mr. president i

rise today to discuss the critical need for cybersecurity legislation. computers control nearly everything we use in our daily lives. they control our cars, our phones our water supply, our power grid, our financial services our retail networks, our food production. and in many respects our military capabilities. fortunately, our add adversaries have not succeeded in inflicting major physical damage on are our nation's interdependent critical infrastructure. that is not to say however that they are not vulnerable to persistent threats in cyberspace. look no further than in the 2014 u.s. state of cyber crimes survey. that's a study prepared by pricewaterhouse coopers the u.s. secret service carnegie melon university and c.s.o. magazine. of the more than 500 u.s.

executives and security experts surveyed 77% of businesses detected an attempted security breach in the previous 12 months. and 34% of these businesses said the number of security incidents detected increased over the previous year with an average number of 135 incidents peroration. the report makes many key observations but let me emphasize a key finding that resonated with me. quote -- "one thing is very clear. most organizations' cybersecurity programs do not rival the persistent, tactical skills and technological prowess of today's cyber adversaries." cyber thieves proved their determination just last week when russian hackers amassed over a billion internet user names and passwords, the largest known collection of internet

credentials. in the years following the september 11 attacks the u.s. director of national intelligence consistently ranked terrorism as our number-one threat. but that started to change a few years ago. in 2012, then-f.b.i. director robert mueller predicted that -- quote -- "in the not too distant future, we anticipate that the cyber threat will pose the number-one threat to our country." he was right. nchtin 2013 and 2014, the intelligence community's worldwide threat assessment lists cyber as the top threat to our nation. terrorism, nuclear proliferation and unauthorized leaks of classified information remain grave threats to our country but cyber is now our number-one threat. yet it is hard to believe that no major cybersecurity legislation has been enacted since 2002 when congress passed

the federal information security management act or fisma and the cybersecurity research and development act. of course, there have been provisions relevant to cybersecurity enacted in subsequent laws but nothing as significant or comprehensive as the laws passed 12 years ago. as we begin a new congress, let me articulate a few guiding principles that should be included in any cybersecurity legislation. first, we must acknowledge the need for the government and the private sector to cooperate in order to fend off cyber attacks. but today businesses are reluctant to share critical information out of fear of legal repercussions. congress must provide proper incentives like liability protection to encourage the private sector to share cyber threat information with our government. next any cybersecurity

legislation must strike the right balance between protecting our nation's computing infrastructure and protecting individual privacy rights. thus information sharing between businesses and the government must be tailored to the recipients' actual security responsibilities. moreover any legislation should avoid overly broad language that could clash with privacy protections. furthermore, a voluntary nonregulatory approach is most likelied to yieldlikelily yield consensus legislation. the role of the government agencies should be to provide advice and resources to improve our nation's security posture not to pile on additional burdensome regulations. finally and perhaps most importantly, we must build a strong cybersecurity work force in the public and private sector sectors.

enacting cybersecurity legislation will mean very little if there are no trained professionals prepared to tackle our nation's cybersecurity challenges. in order to build the enduring capabilities capable of protecting our cyber infrastructure we must encourage young people to pursue high-tech careers and attract highly-skilled workers from around the world. beyond the civilian realm the cyber threats we face present critical new challenges to our national security. arguably, we have not faced a similarly novel catalyst for policy formulation and change since the development of our nuclear deterrent strategy more than 60 years ago. as we face this new world of cyber threats the fundamental question remains the same -- what is the most efficient and effective means to defend our

country, the united states? while remaining true to the constitution at the same time? answering that question should be the cornerstone of the president's cybersecurity strategy. i was encouraged to hear the president say during his visit to the national cyber community integration center earlier this week that -- quote -- "cyber threats are an urgent and growing danger." i certainly share that assessment of the dire natured of this very real -- dire nature of this very real threat to our national security. and while i applaud the white house for its plans to host a conference on cybersecurity and consumer protection next month the nature of the cybersecurity threat demands a comprehensive strategy to protect our nation. mr. president, much work remains to be done on this front especially from the standpoint of the department of defense and the department of homeland security. the urgency of this task was

amplified when the congressional research service concluded just this month that be -- quote -- "the overarching defense strategy for securing cyberspace is vague and evolving." as we face this -- these threats, we must act decisively to ensure that bureaucratic barriers do not hinder the development of an effective strategy to counter threats from cyberspace. as it stands there is not a single agency primarily responsible for cyber defense. the department of homeland security is charged with protecting civilian networks and working with the private sector. the f.b.i. and secret service are responsible for investigating cyber crime. and the department of defense is responsible for defending its own systems and partnering to protect the defense industrial base. critically the defense department is only tasked with

supporting d.h.s. when the cyber attack is directed at our homeland yet these differences of responsibility could operate as artificial barriers to the efficient and effective cyber defense system. indeed the lack of a single organization with direct responsibility runs counter to the basic leadership principle of unity of command. it bears. remembering that these boundaries only exist for our agencies, not the hackers which seek to exploit the limitless terrain of cyberspace. and in a world in which the lines between cyber crime and cyber warfare are increasingly blurred, we need to ensure that all our defensive cyber capabilities are brought to bear against the wide variety of threats facing our infrastructure, private and public civilian and military.

nevertheless, the need for a primary agency of responsibility does not necessarily mean that the department of defense should be that agency. even despite its remarkable capabilities. such a course would raise both legal and practical concerns. beginning with the legal issue as the supreme court has stated, there is a -- quote -- "traditional and strong resistance of americans to any military intrusion into civilian affairs." and the use of the military to enforce the law with respect to domestic hackers or to virtually patrol on private networks is problematic because of the prohibitions of 18 u.s.c., section 13 85. in addition, the defense department's organization to defend against cyber attacks might not be the most efficient. currently u.s. cyber command which is responsible for the training and equipping of our cyber warriors is also

entrusted with the department's operational activities in cyberspace. such a construct makes sense yet unlike a unified combatant command cyber command is a subunified command under u.s. strategic command. and though this configuration has been considered and agreed to by the senate armed services committee i am still not convinced of its value. therefore, i also hope the president addresses how our military forces can best be aligned to facilitate the most efficient and effective cyber defense possible. but, mr. president, returning to the larger question if concentrating our efforts entirely in the hands of the defense department is not advisable, what are we to do? one possible solution has been presented by richard clark the noted former member of the national security council in

his book "cyber war." to be clear i am not endorsing mr. clark's proposal. we surely do not need another government bureaucracy. but i do believe that it is an important concept to be discussed during future debates on cybersecurity. specifically mr. clark argues for a civilian cyber defense administration which would be responsible for protecting -- quote -- "the dot.gov domain and critical infrastructure during anan attack," as well as assigning those federal law enforcement agencies personnel responsibility for cyber crime to this centralized cyber defense administration. it would only be be logical to ask if such an agency could provide other cyber defense functions. accordingly, addressing proposals such as this as part of answering the question as to what is the most effective organization we can employ for cybersecurity, should be a focal

point of the president's address. but we should not just place these questions at the president's door. the senate itself must consider modifying the way it considers cybersecurity legislation and issues. currently, there are at least five separate senate committees which are responsible for various aspects of cybersecurity cybersecurity. therefore, we, too have a unity of effort issue and the senate should consider means to concentrate this body's expertise on this critical matter. mr. president, in conclusion, there are a myriad of questions which our government must address before we are able to state we have the most effective effective, efficient and constitutional cybersecurity defense possible. i hope the president fully utilizes the opportunity presented to him in his state of the union address to answer these important questions. and if he doesn't we've got to.

so we've got to solve these problems. i presume the president will speak intelligently on these issues and hopefully in a way that will unify the country unify the congress and get us all working in the same way. we can't afford to let this drag any longer. this is one of the most important sets of issues that we have in our country today. it may be one of the most important issues or sets of issues in the world at large. mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

quorum call:

quorum call:

mr. mcconnell: mr. president are we in a quorum call? the presiding officer: the senator is correct. mr. mcconnell: i ask consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. the majority leader is recognized. mr. mcconnell: i ask unanimous consent the senate proceed to a period of morning business with senators permitted to speak therein up to ten minutes each. the presiding officer: without objection. mr. mcconnell: now, mr. president, i ask unanimous consent the senate proceed to the consideration of s. res. 27 submitted earlier today. the presiding officer: the clerk will report. the clerk: senate resolution 27 to authorize testimony and representation in united states of america v. jeffrey a. sterling. the presiding officer: is there objection to proceeding to the measure? without objection. mr. mcconnell: i ask unanimous consent the resolution be agreed to the preamble be agreed to, and the motion to reconsider be laid on the table with no

intervening action or debate. the presiding officer: without objection. mr. mcconnell: i understand there is a bill at the desk and i ask its second reading. first reading. the presiding officer: the clerk will read the title of the bill for the first time. the clerk: h.r. 240 an act making appropriations for the department of homeland security for the fiscal year ending september 30, 2015 and for other purposes. mr. mcconnell: i ask for a second preegd and in order to place the bill on the calendar under the provisions of rule 14, i object to my own request. the presiding officer: objection having been heard the bill will be read for the second time on the next legislative day. mr. mcconnell: so, mr. president, i ask unanimous consent that the presiding officer of the senate be authorized to appoint a committee on the part of the senate to join with the like committee on the part of the house of representatives to escort the president of the united states into the house chamber for the joint session to be held at 9:00 p.m. on tuesday january 20, 2015. the presiding officer: without objection. mr. mcconnell: i ask unanimous consent that when the senate completes its business today it

adjourn until 10:00 a.m. tuesday, january 20, that following the prayer and pledge, the morning hour deemed expired the journal of proceedings be approved to date and the time for the two leaders be reserved for their use later in the day. i further ask the senate then proceed to a period of morning business for one hour with senators permitted to speak therein for up to ten minutes each with the democrats controlling the first half and the republicans controlling the final half following morning business. the senate then resume consideration of s. 1. further that the senate recess from 12:30 to 2:15 to allow for the weekly policy lunches. the presiding officer: without objection. mr. mcconnell: senators should anticipate votes on pending amendments to the bill starting shortly after lunch on tuesday. chairman murkowski and senator cantwell are working with members on both sides of the aisle to debate and offer amendments to the bill. now that we've overcome the

democratic filibuster on the motion to proceed senators are free to come to offer their amendments. the tree has not been filled and chairman murkowski is managing an orderly process to alternate amendments between the two sides. if there is no further business to come before the senate, i ask that it stand adjourned under the previous order. the presiding officer: the senate stands adjourned until >> the senate finishing up its work for today debating amendments to the keystone xl pipeline bill. more than 60 mms have been filed so far with debate continuing on tuesday. watch the senate live on c-span2 c-span2. >> president obama and british prime minister david cameron held a joint press briefing at the white house earlier today. the two leaders discussed u.s.-uk relations and issues of

importance to both countries. you can see it tonight at eight eastern on c-span. >> here are some of our featured programs for this weekend on the c-span networks.

>> tuesday night president obama delivers his state of the union address. live coverage at 8 p.m. eastern including the president's speech, the gop response deliver by newly elected iowa's senator john ernst, and your reaction through open phones live on c-span and c-span radio, on c-span2 watch the president's speech and congressional reaction from statuary hall in the use capital. the state of the union address live on c-span c-span2, c-span radio and c-span.org.

>> on tuesday house foreign affairs committee chair ed royce calls for tougher sanctions against north korea during a hearing on nuclear and cyber threats. state treasure and homeland security department officials defend the president's policy. the hearing focuses on whether china and russia are our allies regarding north korea. >> [inaudible conversations] >> this briefing will come to order. and the members here know we're not going to be able to formally organize until next week, but i very much appreciate the ranking member, mr. engel, his cooperation in beginning this

process of holding today a briefing so that we can get started on the many pressing issues that we face. and i look forward to meeting next week to formally organize the committee and discuss how all of us can work together in a bipartisan way in order to advance u.s. interests around the world, and one of the things i've enjoyed a working with this committee is the way mr. engel and myself and the members on the committee have been able to dance the idea that we work on a consensus, and then move that forward with one voice overseas. i think that apple fights a message from the united states. but the issue we're discussing today, north korea is one where, for years the united states and our allies have been rightly concerned about the threat from north korea's nuclear missile programs. mr. sherman and myself remember very vividly the situation of

proliferation by north korea with respect to the transfer of that capability into syria, and on the banks of the euphrates a weapons program being developed there as a consequence of north korea. and four years we've watched that program grow and now his brutal regime has added a new weapon to its arsenal which is cyberattacks. and the state sanctioned cyber attack on sony pictures underscored three unchanging facts about north korea. first, this rogue regime has no interest in being a responsible state. second, while kim jong-un continues to carry out human rights abuses around the world, and by carrying out attacks for those of you remember some of

the exercises of north koreans have taken offshore as will most importantly of what they've done to their own people. the way in which a country treats its own people will sometimes tell us how they will treat others. the current president of south korea, her mother was assassinated by north korean agents. so we looked at that u.n. report that was recently filed after the evidence and interviews with many of the survivors defectors out of north korea. this was the conclusion of the report. the united nations has found no parallel in the contemporary world for the treatment of people in north korea. that's quite a statement. and in the meantime, of course, instead of assisting that population the resources that north korea gets its hands on continue to go into its nuclear and missile systems. and, of course cyber weapon

capability as well. and third, the third point north korea's weapons are not merely for show. we and our allies in northeast asia are facing a brutal and dangerous regime, one that not only is trying to miniaturized nuclear weapons to put them on icbms, but also one as i said earlier that has been involved in the past in central asia and in the middle east in proliferating these weapons different types of weapons, missiles and other types of offensive capability as well as nuclear weapons capability. so north korea's growing cyber capability emerged most starkly in 2013. our allies, south korea suffered a series of cyberattacks that temporarily brought down some of the commercial and media networks. it disrupted banking systems. the hackers called for this dark

seoul but in particular whether able to do was shut down the banking systems in parts of the country, shut down the atm systems and so forth. despite limited internet capability in north korea, the fact is that there is an elite cyber warfare unit. the defectors have told us about the, bureau 121 which was traced back as the source of these attacks on south korea and some of the expertise was obtained overseas by sending them to other countries for training but certainly that capability was deployed against south korea. and last year's cyber attack is estimated to have cost sony hundreds of millions of dollars in damage. it was a state sanctioned attack that as many americans asking if that is what north korea can do to a movie company how vulnerable is our

infrastructure? how vulnerable is our electric grid? you know what is electricity was cut off? i mean, that obviously could be a dark chapter. earlier this month the administration announced long overdue sanctions targeting officials and front companies of the north korean government and i'm glad the administration has described as as just a first aspect of its response because many of those north koreans blacklisted, many of those individuals who were blacklisted have already been targeted by u.s. sanctions. but the significance of this new executive order may come from the broad power it gives the president to target anyone who is a part of the north korean government, or is assisting them anyway. that is if the administration chooses to use it to its full advantage. we need to step up and target those financial institutions in asia and beyond that are supporting the brutal and dangerous north korean regime.

such sanctions have crippled in north korea in the past. for those of us remember the consequences on banco delta asia being sanctioned and left the regime unable to buy the loyalties of its generals at that time who could not be paid. this committee has been focused on the north korea threat for years, bringing attention to the regimes human rights abuses. it's a list of criminal activities, its growing nuclear and missile programs, and helpful scrutiny of north korea in nuclear negotiations. indeed last congress the house passed legislation that ranking member engel and i offered to ramp up the financial pressure on north korea pressing for north korea to be designated a primary money laundering concern, as has been done with iran curtailing its sale of weapons and stepping up inspections of north korean ships, among other steps. unfortunately, the senate failed to act on this critical legislation before it adjourned

but will soon try again and give us in a chance to join us in tackling this growing threat. i will now turn to the ranking member for his opening comments. >> thank you very much chairman royce. thank you for calling this briefing on the threat that north korea's nuclear, missile >> a and cyber capabilities pose to our national security and that of our friends and allies in the asia-pacific region. i want to on a personal note say that i commend your strong leadership on this issue, and it means a great deal that this briefing is the very first item on our committee's agenda in the 114th congress. i look forward to working with you and the rest of our colleagues to address this challenge and to continue working in a bipartisan and productive way in the year ahead. and i want to second what you said, it is very important for us, whenever possible, to have one voice in international affairs. it strengthens us. it strengthens us around the world, and that's what we've tried to do in this committee. so you and i, mr. chairman, have introduced joint legislation, we've written joint pieces,

joint op-ed pieces, we've done joint letters to officials, and i believe that we've gotten the biggest bang for the buck because we've shown unity on this committee. one of the things that i've noticed is that when i go overseas and we take a bipartisan delegation along our differences really, really narrow because we're all americans and we all love this country and i think it's very important. i think this committee leads the way in terms of the way congress ought to govern in a bipartisan fashion. so i want to thank you mr. chairman for all you do to ensure that that continues. i also want to thank our witnesses for their service and for their testimony today. the recalcitrance, cruelty, and unpredictability of the kim regime makes north korea one of the toughest challenges we face on the global stage. the last three administrations, democratic and republican alike have attempted to address the problem of north korea's nuclear program. unfortunately, very little

progress has been made. despite a long list of sanctions north korea is no closer to denuclearization today than it was several decades ago. rather north korea has continued to develop its nuclear, conventional, and cyber capabilities at an alarming rate. already, north korea has a significant arsenal of short-range missiles that could reach south korea and japan. most troubling to me is the continued development of north korea's medium- and long-range missile capabilities. they may be unreliable today but some of these missiles could eventually pose a threat to guam alaska, or even the west coast of the continental united states. and some believe that north korea has aspirations to build submarines that could carry these missiles even closer to american shores. north korea appears to be working toward a miniaturized nuclear warhead that could be mounted on intermediate and long-range missiles. i was concerned by comments made in october by the commander of u.s. forces in korea that at this moment, north korea may

possess the ability to miniaturize a nuclear warhead. and based on recent events, it's clear that north korea's aspirations do not stop at conventional or even nuclear weapons. the kim regime is wielding 21st-century weapons as well and has quietly developed an offensive cyber capability. like many others, i was deeply disturbed by the cyber attack on sony that took place in november, an attack that was not just disruptive, but also destructive. agents working for the north korea regime vandalized threatened and coerced a company operating in the united states. this attack and the ensuing threats of violence were a perverse and inexcusable act by the north korean government. as i said then, no one especially an entity operating in the united states, should feel that they must cede their rights to operate within the law because of veiled threats from rogue actors. i look forward to the witnesses, to hearing how each of your departments is dealing with this threat. are you engaging with the

private sector? are you ramping-up information sharing and collaboration across agencies? are you putting safeguards in place to ensure that these kinds of attacks will not be successful in the future? i look forward to hearing about your progress in these areas. there is no international agreement or clear definition of what constitutes cyber war or cyber terror, yet it is clear that cyber attacks can cause destruction of property, stoke fear, intimidate the public, or even bring about the loss of life that could be as serious as conventional acts of war or terrorism. we must ensure that north korea's cyber capabilities, and the cyber capabilities of other state-sponsored and rogue actors do not threaten our citizens our businesses, or our national security. i'd like to hear the witnesses' assessments of these risks and our ability and the ability of allies and partners to effectively defend against them. finally let's remember that the greatest threat the regime in pyongyang poses is to its own people.

i have visited north korea twice myself. mr. wilson of this committee was with me on one of the trips, and i still remember the incredible uneasiness that i felt being in a place where absolute power is consolidated among a very few and where the rest of society is systematically and brutally oppressed. for years we've heard reports about the abuses endured by the people of north korea, torture starvation, forced labor, and execution. a recent united nations commission of inquiry report confirmed these reports, calling the north korean regime responsible for systematic, widespread, and gross human rights violations, including what they said was crimes against humanity. the chairman and i share a deep commitment to addressing the injustices endured by the north korean people. so we face a delicate balance holding the korean leaders who perpetuate this violence accountable while recognizing the need for basic support for the north korean people.

maintaining that balance makes our work on north korea all the more critical and all the more difficult. so i look forward to hearing your perspectives on this issue and i thank you for joining us today. thank you mr. chairman. >> thank you mr. engel. this morning we're joined by representatives from the department of state, from treasury and from homeland security. ambassador sung kim is the special representative for the north korea policy and the deputy assistant secretary for korea and japan. previously he served as u.s. ambassador to the republic of korea, and he was a special envoy for the six-party talks. honorable daniel glaser prior to his confirmation as assistant secretary for terrorist finance in the office of terrorism and financial intelligence at department of treasury, he served as the first director of the treasury's executive office of terrorist financing. and financial crimes.

brigadier general gregory to help them is -- tokyo is deputy assistant director of the department of homeland security. previously he served in the united states air force as the chief information officer and director of command control communications and cyber systems. at u.s. transportation command to answer without objection, the briefers full prepared statements will be made part of the record here. members will have five calendar days to make any statements to you, or questions are putting x-rays we go into the record. and ambassador kim if you would like to begin, and if you could summarize remarks, then will go to questions. >> thank you, mr. chairman. ranking member engel, and members of the committee, thank you very much for inviting me today. along with my colleagues from treasury and homeland security to testify about north korea. as we respond to north korea's destabilizing, provocative and

repressive policies and actions, we appreciate the interest and attention you and the committee have given to this important issue. in recent weeks, mr. chairman the american people and the international community have been deeply troubled by the destructive cyber attack on sony pictures entertainment. and extensive fbi investigation has concluded that the attack was conducted by the government of north korea. the administration is totally committed to defending u.s. citizens, u.s. businesses and our nation's constitutionally protected right of free speech. that is why the president made clear that the united states would respond proportionally to the dprk's attack anytime in a manner of our choosing. our response to the attack on sony is consistent with a policy under the dprk across the board. one which seeks to work with our allies and partners to increase the cost of north korea of its irresponsible behavior to sharpen the regimes choices, and to persuade the dprk peacefully to abandon its nuclear weapons

program, respect the human rights of its people and abide by international norms and obligations. mr. chairman, as you stated al gore in a recent interview we need to change the equilibrium in north korea and move the regime away from hostility. together with international agreement with using the full range of tools at our disposal to make clear to the dprk that abandoning its nuclear weapons, provocative actions in human rights abuses is the only way to end the political and economic isolation. in our messages to the dprk and to our partners, we made clear that we will respond to the dprk's this behavior. the executive order signed by the president on january 2 is an important new tool. in response to the attack on sony pictures but also provides a framework for addressing the full range of dprk illicit behavior. in applying this pressure just as their efforts at engagement our work with our allies is vital. the united states very limited economic and other ties with the

dprk, so our financial sanctions are much more effective when supported by our partners. we also work with our allies to deter dprk aggression. i can tell you that our alliance with south korea is stronger than ever, and our growing trilateral security cooperation with south korea and japan also sends a powerful message of deterrence to pyongyang. if i may i would like to take this opportunity to thank you and the committee for the committee's strong support for our robust alliances with both japan and south korea. mr. chairman, as we apply unilateral and multilateral pressure and strengthen our deterrent, we will continue on principle diplomacy. we have made clear to the dprk at the door is open to meaningful engagement. close coordination with our partners in the six-party talks is essential. thanks to our continued robust engagement with south korea, japan, china and russia, our unity has never been stronger. wherever pyongyang terms it here's a strong unwavering

message from all five parties, echoed by the wider international community that it will not be accepted as a nuclear power. our alliances with japan and the republic of korea are a bedrock of our diplomacy. both allies are resolute in their commitment to the goal of the denuclearization of the korean peninsula and an end to north korea's illicit behavior. oath governments have condemned the attack on sony pictures and express solidarity with the united states in our response. to intensify our coordination our travel to yoke you for trilateral talks much up in his south korean counterpart later this month. on the trip i will also visit beijing to strengthen our cooperation with china. china has been a great deal on north korea. we believe it can do more. in the wake of the cyber attack against sony pictures china did condemn malicious behavior in cyberspace. although russia has recently pursued investment in north korea and invited kim jong-un to visit moscow later this year our limit on the clear goal of

denuclearization remains strong as ever. we also work actively with partners in the broader international community especially on human rights building on the important work of the u.n. commission of inquiry. this patch of u.n. human rights commission and general assembly adopted by overwhelming margins resolutions calling for accountability for north korea's human rights abuses. just last month the u.n. security council to cut the dprk rate human rights injustices understanding agenda for the very first time. mr. chairman, standing up to north korea requires a sustained and concerted effort by all of the countries of the six-party process and, indeed, by the entire international community. together we will to bar your words again change the equilibrium in north korea to persuade pyongyang to north korea will not achieve security or economic prosperity while pursuing nuclear weapons traffic on international norms and deep using its own people. thank you again for the opportunity to appear before this committee. >> thank you, ambassador kim. dan.

>> thank you chairman royce ranking member engel, and distinguished members of this committee. thank you for inviting me to speak today by the u.s. government's efforts to counter the threat posed by the militias cyberattacks of the dprk. the dprk is a brazen and isolated regime that has repeatedly shown flagrant disregard for international standards. this is evident in the dprk's development and proliferation of its illicit nuclear and ballistic missile programs, each repeat of violations of the u.n. security gaza resolution, its repression of its people through serious human rights abuses and its cyber attack on u.s. company and attempts to stifle freedom of expression in our country in response to the dprk's cyber attack on sony pictures the president signed an executive order, executive order 1367 on genworth six 2015 granting the treasury department the authority to impose sanctions is agencies, instrument penalties officials and entities controlled by the government of north korea and the workers'

party of korea. executive order 13687 represents a significant broadening of treasuries authority to increase financial pressure on the dprk. .. which is the primary arms dealer and the ten officials of the

government including the eight officials throughout the world. secretary lew also made clear that we will continue to use this broad and powerful tool to expose government officials and entities. the treasury also used existing tools to raise the cost of the dprk of its provocative actions. since 2005 the treasury designated 60 entities and individuals under executive order 13386 13382 that targets the proliferation related activities and executive order 13551 which targets the arm sales, procurement of luxury good and economic activities. under these authorities the treasury eggs exposed and cut off access to the system by entities and individuals such as the foreign trade bank which are two of the most important banks that provide a crucial financial support for a number of dprk elizabeth activities. we've also generated delete who designated at the head of the --

the director named as the official that likely order to the cyber attack on sony. today the dprk is financially isolated and functions no small part to the actions i described in over the years treasury has ensured that they have limited access to the u.s. financial system and worked with allies to restrict the access to the international financial system. as a result of sanctions and other measures targeting the dprk ellis of conduct for financial institutions around the world began severing ties in order to avoid entanglement with the illicit activities. these actions contributed to the dprk isolation and spurs positive change in the behavioral banks across the globe. while this is made targeting the dprk more complex treasury continues to deploy the tools at its disposal to raise the cost of the dprk's behavior and industry government to abide by its international obligations. the governments response to the

malicious cyber attack is a demonstration of the determination to hold the dprk responsible for its actions. protecting the u.s. from cyber attacks isn't just about implementing sanctions, it's also about working with the private sector to safeguard the economy and infrastructure more broadly. yonder the response to cyber attacks come as a guard in the u.s. system and its critical infrastructure from the threat posed by the militia cyber activity is also a part of the mission. treasury harbors with the sector to share specific threat information and baseline security and enhance industry response and recovery. i go into this in my written testimony in greater detail. as the united states conference the action of the dprk the employee the international financial system. treasury will continue to use its arsenal financial measures to combat the threats by the dprk. thank you mr. chairman for your invitation to testify before the committee and i look forward to answering any questions.

>> general? >> thank you very much mr. chairman and ranking member and distinguished members of the committee thank you for having me today. i appreciate the opportunity to appear before you today alongside my colleagues from the department of state and treasury created the department of homeland security leads the national effort to secure federal civilian networks and coordinate the overall national efforts to protect critical infrastructure and enhance cybersecurity. the dhs cyber security mission includes analysis, warning, information sharing vulnerability reduction mitigation and aid international recovery efforts for critical infrastructure information systems. the dhs ensures maximum coordination and partnership with federal and private sector stakeholders while working to safeguard the public's policy, confidentiality, civil rights and civil liberties. within the dhs county, the office of cyber security and communications focuses on

managing risk to the communications and information technology infrastructures and the sectors that depend upon them as well as enabling timely response and recovery to incidents affecting critical infrastructure and government systems. our office executes the mission by supporting 24 by seven information sharing analysis and incident response for private and public sector partners. we provide the tools and capabilities to strengthen the security of the federal civilian executive branch networks and engage in strategic level coordination with private sector organizations on cybersecurity and communications issues. the dhs offers capabilities and services to assist federal agencies and stakeholders based upon their cybersecurity status and requirements. the department engages its stakeholders through a variety of mechanisms including information sharing as well as through the national cybersecurity communications integration center which we call

the nccic. at the national nexus of cyber and communications integration for the federal government the intelligence community and law enforcement. our activities include first-come incident response commander during or following the cyber security incident, dhs may provide response capabilities that can aid in the mitigation and recovery. through our integration center, dhs further disseminate information on potential or active cyber security threats to public and private sector partners. when requested by an affected stakeholder committee hs provides incident response through the united states computer emergency readiness team referred to as the u.s. cert or the industrial control system cyber emergency response team referred to as the ics

certt. upon request, the dhs inducts assessments to identify potential risks to specific operational networks, systems and applications. and then we provide recommendations for mitigation. our third activity is providing technical assistance. the dhs may provide direct technical assistance upon request. for instance following attacks on the financial services service sector in 2013 and in 2015, the united states computer emergency readiness team went on site with major financial institutions and other vertical infrastructures to provide direct technical assistance. the u.s. cert technical assistance and technical data include identifying 600000 distributed denial of service related ip addresses and contextual information about the source of the attacks, the identity of the attacker and

associated details behind the attack. we have had a long term long-term consistent thread engagement discussion with the department of treasury, the fbi or private sector in the financial services sector. regarding the payment incident, in november of 2014 they were made aware of a specific significant breach in the private sector impacting sony pictures entertainment area to cyber threat actors targeting the sophisticated cyber exploitation activities. since that time dhs has initiated a series of proactive steps designed to protect not only the space from the potential spillover to share information and private sector partners. we have worked extensively with partners including the fbi and other agencies and international partners to share information and collaborate on incident analysis.

the dhs has published multiple products related to this incident. what other private sectors and the general public as a trusted information sharing partner to the private sector. our mission secures critical infrastructure and protecting the federal space. at present a challenge to the cybersecurity of the nations infrastructure and its civilian government system. inside and outside of government to enhance the security of the resilience of the networks will incorporate privacy and civil liberties safeguards into all aspects of the work.

i was good to start with the question of the assistant secretary. they made the point that increasingly russia has stepped in where china has curtailed with respect to support for north korea speaking about the issue of forgiving debt and certainly the investment from russia into the network i travel in north korea and a functioning network just ends at the border and once you are in north korea it is not operational, so at least not that i can see. so the investment would seem to be coming from critical in russia. the question i ask is does that investment and in-depth sanctionable under the interpretation that i just read and on top of that if we look at

by section 311 sanctions that you were at the center of in 2005 iron member working with you on that at the time with respect to the bank in asia there is a lot more that we can be doing here if we were to label north korea primarily the money laundering concern as we've done with iran that would be possible. after all, we caught them at $100 u.s. currency. we had 100-dollar bills that were counterfeit out of north korea. so the question i have then is to go to that issue of the financial sanctions on north korea. as the former top state department official for asia noted recently that he could move effectively with that and make life much more difficult for those who are making life difficult in south korea and here. >> thank you for the question

chairman. i certainly agree with you is it is our goal and has been our strategy and the treasury department for many years now to implement sanctions and other financial measures in a way that isolates north korea on the international financial system and that would be from the international financial system elsewhere whether it is china or russia or the united states or europe or other places in asia. the goal is to squeeze them financially as much as possible. with respect to the new executive order that you made reference to and i discuss in my testimony that is an important tool we have at our disposal precisely because it gives us a tremendous amount of flexibility in how we approach targeting. so we could go and we could target any north korean government agency and target any government official and we could apply sanctions with respect to any individual or entity that is

providing them material support or any individual entity that they control so that gives us a large -- >> that's where we need to have the focus because the foreign trade bank is a designation a long time coming but just to designating north korea and institutions is not going to curtail the kind of hard currency that the regime uses to continue to expand their icbm program for example. >> and that's what we are trying to do is identify the nodes. you mentioned the bank of d-delta h. a designation under 311 that we did ten years ago. why that was so successful was not with respect to the specific action on the bank of delta asia but that tied up to the $25 million that north korea said it was north korean money. but the real impact of the bank

of delta was that it created a chilling effect throughout the financial system. banks around the world we still live in that world today. it's the action and a lot of other actions have made it a lot harder. >> that's why we have the legislation that we have over the senate. my observation at the time was that it was a dozen banks all that were willingly doing business in laundering basically or doing business with north korea and once those accounts were frozen not only could it not be his generals but our leaders talked and had worked on the missile program. he said that missile program came to a halt to cause we didn't have the currency. we couldn't even buy that clandestine gyroscopes that we would buy on the black market for those missiles. we couldn't pay for anything. and that's the kind of pressure that i think could cause a regime to recalibrate its

thinking. there has to be consequences and it has to impact you know the family itself is run that country. and the best way i can think of doing that is to not give them a hard currency for the generals are not paid, the army isn't paid and at that point people say there has to be a better way forward in the kind of reproach and then is going on and that's why we are trying to jumpstart this beyond just sanctions in north korea to the financial sanctions that were to truly create additional pressure. do you think the legislature that we passed in the senate last year if we get that out of the senate you think that would be a useful tool? >> it was more than dozens, it was hundreds making the decision at the time to not do business with north korea.

so we have that impact and that has an impact that we are still living in. so again you say the goal is to identify financial institutions outside of north korea that provide these points of access and that's what we are trying to do. you mentioned that foreign trade bank. that was north korea's primary source of access in the system. >> i would just point out there's a number of banks that we've been following that are doing business with north korea frankly if we really wanted to squeeze we could cut that off and if we do cut it off it becomes very problematic for them to get the resources even to send these hackers to moscow or beijing to get the kind of training. if you cut off the hard currency these regimes like north korea cannot carry out the kind of offensive attacks that

they are giving to. >> that is what we are trying to do. the credit bank and the big east land committees are banks we have targeted with sanctions that we used to section 311 and the actions we have taken caused a chilling effect even in the chinese financial system and even the bank's major commercial banks within china have cut off the relationship for such a smart trade bank. so i think that is exactly the right approach we should be taking. >> thanks for being here to testify today. we go now to mr. engel. >> thank you mr. chairman. the chairman mentioned, and i agree the bottom line is that there needs to be an impact on the families that from the country the kim family and all of their entanglement. when we went to pyongyang -- now granted i was there twice, and

granted you are limited to what you can see -- we were told that we could only be in the capital copy couldn't go outside of the capital and then we deserved people going to work in the morning and it didn't look to me like -- people were wearing dress clothes for work and it seemed like any other major city. but we are told that pyongyang is essentially where that leads live and so they are treated relatively well. the rest of the country is starving and that's the problem so what can be done to bolster the enforcement of the existing sanctions in a way that would impose meaningful costs to the north korean elites? what other levers that we have

to influence them to make sure that it's not a situation where you have deleted the capital doing relatively well and impose sanctions that hurt all the people starving all around the country but the elites basically are untouched but might we do to make sure they are caught up in the city do they suffer the penalties for their actions? >> thank you for the question congressman. i don't think that the misery that has been inflicted on the north korean people can be attributed to sanctions. i think the government has a responsibility for the ministers of the north korean people that i take your point that the goal is to try to put pressure on the elites and i think that it is precisely through access to the international financial system and we can do that because that benefits and how that is --

that's how they acquired the hard currency that chairman talked about, the luxury goods and the other things that make their life pleasant and make the system run as far as the system actually runs so that is what we are trying to do. we are trying to identify the sources of currency. one of the important sources is the conventional arms sales. that's why we target the officials in the recent sanctions a couple of weeks ago. these are individuals that operate in places like africa for the regime and we are trying to put that off of the source and as the chairman said, we try to identify the plaintiff access so that they cannot repatriate or use the funds that they do have. we've identified a number of banks, but this is an that this is an ongoing effort that has been ongoing for ten years.

it's a hard target because the needs are relatively small. the only need a handful of points of access and it makes it effective when we can put our finger on the notes we can have a big impact. but they try to gain access through the deceptive financial measures and through countries in which we have less influence and so it is an ongoing effort and we are continuing to work on that and i think that the recent executive order gives us the flexibility to step up. >> i'm wondering if any of you can talk about how obviously north korea is gaining additional convention and the nuclear capabilities and obviously it seems to us that this emboldens themselves with respect to the activity and the domain such as cyberspace. can anybody talk about that in hearing your perspective on that?

>> we are obviously deeply concerned about the efforts to improve the dangerous capabilities in the nuclear fund missiles as well as now cyberspace. they posed a greater threat not just in the region but to the united states directly. i think what we need to do is continue to strengthen our efforts on the sanctions and also continue to work on instructing the deterrent capability on all fronts. and this requires the continuing effort with partners not just in the six party process but more broadly in the international community. i can assure you that regardless of -- despite the continued efforts to improve the capabilities, we are fully capable of defending against any threat posed by the north koreans. pointing to one upcoming example which is the military exercise with the south koreans that will be coming up shortly, this is a very important exercise, defense oriented and making sure that we

maintain the strongest possible capability so that we are prepared to deal with any threat posed by north korea. >> and don't north koreans usually react hostile to the numerous to become the new verse ten south korea and the united states? we are saying it is a joint drill that we are doing together and is routine and it is end related to the report that north korea is trying to increase its capabilities. whether it is or isn't aren't we likely to see some acting out by north korea as a result of these maneuvers? >> i don't want to speculate on what they may be planning to do. you are quite correct they don't like our exercises because i think they understand that they strengthen our capability. but these are routine exercises that we've carried out for 40 years and we've been quite open

about it so they have no right to complain about these exercises. >> and you mentioned the six party talks. when we were there and it was several years ago so things may have changed how they seem to be more interested in having to party talks with the united states rather than the six party talks. is that still would we find coming from that? >> unfortunately at the moment they don't seem to be interested in any constructive dialogue with anybody including the united states and the six party talks. we believe that the framework still provides a viable forum for discussing this issue. one of the main reasons is the six party process must clear the commitment to the denuclearization and still hold of the commitment and i think we need to hold them to attend the six party process also includes other key countries in the region that have a stake in this issue and not just an issue for the united states but for the whole region and we have the chinese have actually chaired

the process in the process and i think we need to try to work within the process to make progress in the denuclearization. >> my last question i just want to follow-up follow up on the discussion that we had before. we find that the elites in north korea find creative ways around the existing sanctions obviously. they work through chinese banks and those banks are not exposed or integrated in the international market so what are we doing to go after these types of institutions? >> the chinese financial system is integrated into the financial system. i think one good example of our ability to impact behavior even in china was as i had the exchange with the chairman. our designation of the foreign trade bank which is north

korea's main bank that they do most of their commercial conduct. upon the designation, the major commercial banks acting as you would expect of any international community bank and they were cutting foreign trade bank's offerings from their banks so we can have an impact on the commercial banks in china. that said i think you're exactly you are exactly right, china does provide north korea the lion share of its access in the taxes in the financial system. it's an issue and a subject i've had discussions with the chinese many times on and it's something that we need to continue to talk to the chinese about to try to get assistance on making sure that their financial system doesn't provide the opportunity to engage in proliferation or any other illicit economic activities. we were talking about this just before this hearing, and i know that they plan on having this

conversation with the chinese as well. so it is a significant issue and it's one we will focus on and will continue to focus on. a stack we will be in beijing in march and continue the dialogue. we are going to mr. steve chabot of ohio. >> think you for the meeting to convene the threat. this committee has long recognized the dangers of pyongyang's growing capabilities. in fact last cheer as the former chairman of the asia committee i held two hearings specifically on north korea because not only is it the greatest security threat to the peace and stability of asia but it's one of the united states most vexing security challenges and greatest policy failures in many ways such as the couple of questions. ambassador in june of last year the asia pacific subcommittee heard testimony from your predecessor ambassador glenn

davies and he said it is the last remaining patron. however, as the chairman already mentioned pyongyang has a growing relationship with russia and ellis at this works with countries in the middle east especially iran. we know that north korea maintains a fairly robust illicit trading network with these various nationstates and terrorist organizations and last year signed an economic trade deal with russia. this will provide pyongyang with a boost to counter sanctions and counterbalance the chinese who have been putting some pressure on them in light of the recent cyber attack on sony. it really is and where it has received the training to

orchestrate such an attack, the ambassador could either of you discuss who are north korea's primary patrons at this time and a second, second, could you discuss where north korea is gaining its cyber capabilities and expertise? and finally, do you have a more accurate sense as to how big of the cyber army really is? and i will let either one of you go first. >> i will refer to the cyberspace issue. with regards to that patrons, frankly i think north koreans are running out of funds. they are becoming increasingly isolated because of the misbehavior on the nuclear front and human rights abuses. of course china has a special relationship with north korea. they have considerable leverage and i think what we have seen in

the cooperation with china is they are working with us more effectively and trying to stifle the dangerous activities. it's an ongoing effort all of us need to do more including china. ..

openly available through the marketplace and frequently posted online. so the acquisition of capabilities is readily available to anybody including the north koreans through open-source activities. >> thank you. i think i've time for one more question. i will direct this to you as well, general. north korea's cyber capabilities were first revealed back in march 2013 as south korean financial services and media firms were attacked. at the time it was the latest attack to emerge from a malware development project called operation troy which revealed pyongyang was attempting to spot on and disrupt south korea's military and government activities. could you say whether north korea's focus on using the master boot record wipe functionality, if you're familiar with that for its attack on south korea is similar to the attack launched on sony,

and what possible responses or protections do we have against this type of cyber attack? >> thank you very much for that question. the attack using a wiper virus or capability to attack the master boot record in essence means that every computer has an instruction set that's contained in part of the disc call the master boot record. it tells the computer what to do when it's turned on to it tells where the information is stored and the like. using attack against the master boot record basically wipes out the record. the computer no longer knows how to turn itself on and look for the information. so it's a very devastating attack to the computer. as we take a look at the code, and we've done some malware forensics with the malicious

code that was discovered as a result of this attack, it was a very sophisticated, well organized piece of code that was specifically engineered to attack the master boot record. when it comes to detecting that type of malicious code, it's very difficult to do that for each and every piece of code. our current database of malicious software numbers over 100 million different sample sizes. that said, we have taken the information we have done from our malware forensics and we loaded those indicators not only into the einstein system to protect our federal systems but we have also shared that with our international partners with the private sector and the like. so the indicators that we have derived from our analysis we have shared, but this is very, very well-crafted code. >> thank you very much. yield back. >> we go now to mr. brad sherman

of california. >> witnesses should relax for a few minutes as i kind of an opening statement that i will use some of my time with but don't relax too long. i will have a question general, in a few minutes. north korea is worthy of sanctions, but how do you trade sanctions against the nation where we have no trade, then i visited these it's a country that census no visitors name and shame the country that is shameless? the ranking member and the chairmen have pointed out that we could have secondary sanctions. their bill does just that, and secondary sanctions are where we threaten another country or a bank or other company in another country with sanctions if they do business with north korea. but before going to designate those who provide me to support to the dprk we would start with the government of china. which doesn't just do business with north korea but gives them

free money, free oil subsidies. and i know the ambassador points out that the chinese have perhaps on occasion stifle the north korean behavior by pushing them to be a little bit less aggressive. but the fact is that just last month they threatened to blow up multiplexes in the distance of every member of the year, so sure that they been all that stifled. i don't think china, china has made a strategic decision. for now, regardless of the annoyances, they are backing north korea. every day they're giving them free oil. every day they are supporting them militarily and diplomatically. and so we would have to do things that china disagrees with. do things to chinese companies, do things to china's own trade relationship. one thing we did is designate them a currency manipulator if they don't radically change their behavior toward the korean

peninsula. this has the additional advantage of being true. they are a currency manipulator. since were probably unwilling to do that we will target this or that chinese company or bank. i think with some success, to at least suppress, i know i north korea. but china seems to have made a strategic decision that north korea's success is so important that they will give them free money. so i can imagine that they will allow us to completely shut off their banking relationships. so i support all the efforts of the gentlemen here and ranking member and chairman to try to turn the spigot down a bit but i don't think we can turn it off. there's one other thing we can do. first, we off to reflect that this was a unique attack. it wasn't just an attack on our company but it was attack against freedom of speech in the

united states. so i would like to give north korea a double dose of free speech. we spend $8 million broadcasting in the north korea. we could increase that to 16 an additional cost of 8 million, or roughly 1000 of 1% of what we spend on the naval, air and land forces to confront north korea. right now we are broadcasting it to north korea only 11 hours a day. the target is 12 hours a day. it ought to b-24 hours a day. and i believe that those broadcasts will undermine the regime, both with the people and the elite. i can pick up anything we can do for $8 million that would better express our dedication to the first amendment and deposing difficulty for the north korean regime. i would like to explore satellite television broadcasting into north korea and other brought television broadcasting because i particularly want to broadcast a

particular movie and help that we do the directors cut before they toned down the climactic scene. i commend to all of those on the committee the december 8 report just a month old issued by the broadcasting board of governors which, of course, oversees voice of america and radio free asia. this report was issued pursuant to the north korean human rights reauthorization act that went through this committee. general, how certain are you and i realize now you're out of government, you may not have seen all the information that north korea is the entity that both hacked sony and threatened terrorist action against our movie theaters? >> well, thank you very much for the question.

just for clarification, i have just changed uniform. i'm still part of the government. i retired from active duty and was recruited to come on board dhs as a deputy assistant secretary. >> thank you for the codification. >> thank you. attribution of these type of events is not a function of my organization. it's a function of intelligence and law-enforcement communities. that said, i'm very well for me with the attribution methodology, the preservation of evidence and thus the things that done by the intelligence and law enforcement communities. based upon what i've seen in consultation with my partners from both the intelligence communities and law enforcement communities come in this particular instance i have trust and confidence in their conclusion. >> and you've seen more than some of these outside experts on 24 hour news channels that think

they can second-guess the fbi? >> yes, sir. i've seen more than some of my colleagues in the private sector. >> i yield back. >> thank you. we go to mr. mike mccaul. spent i thank the chairman -- >> by the way, chairman of the homeland security. >> thank you for mentioning. we just passed a bill last day, last congress, five cybersecurity bills one codifying. general, as you know nccic which is like cyber command within dhs, giving it the congressional seal of approval. i see it as really the civilian portal to the private sector. when sony happened i asked the question well which of the 16 critical infrastructures does this fall under, and it's a bit it's not clear. i know the president is announcing a cyber planet this

afternoon. i just got off the phone with the secretary. i think the vision is to make the department of homeland security the portal civilian interface to the private sector between the federal government and the private sector. sharing information from various data points, whether it be nsa fbi, through the nccic to the private sector, with liability protections to incentivize anticipation in this civilian interface, safe harbor if you will, within the department. i just wanted, and after this i want to talk about the foreign affairs aspect of cyber and the cyber jihad threat to send combat we breezily just saw. how do you do the role of nccic -- said dhs broadening with respect to an event that happened with sony? >> thank you very much, sir, for

the question thank you very much for your leadership in helping us with the legislation that just passed and your continued support of the department. thank you very much but as we take a look at the nccic, integration is part of our name with the national cybersecurity and communications integration center. and as you mentioned sir the law enforcement partners, the intelligence community to the other departments and agencies and our private sector partners are all coming together as part of the nccic teen. on the floor of the nccic, which i had the honor to direct on an acting basis from august through last month, the nccic has the ability where we are bringing in folks from all aspects of our critical infrastructure, law enforcement and the intelligence community, as well as representatives from the department of defense. so that we are sharing information. we are very transparent with each other. the information ranges from top

secret, compartmented information down to unclassified information. we are finding that these partnerships having everybody co-locate and work together is helping strengthen not only our situational awareness, but in getting solutions to issues as they come in. we are working together to secure and make our infrastructure more resilient by leveraging the activities of the nccic. we've come a long way in the last couple of years, and as we look to the future, the legislation that's proposed in the activities that have already occurred are making of -- >> the division of legacy not just expand to 16 critical infrastructure but really to the private sector to the sony's of the world to participate as well. i think that's the vision. i like the idea of private groups, came out so strongly in support of not only my legislation but also your

reference, sir, at dhs but because there is a robust privacy office at the department of homeland security. i want to just close with that. we had the sony attack and then we had come yesterday, an attack by cyber jihadists purporting to be on behalf of isis at sentencing american soldiers, we are coming, watch your back, isis. this is disturbing because as a threat, as we look at china russia the normal ones, iran, becoming more sophisticated, now with these jihad is groups we've seen attempting to get this type of technology and this type of mao were now actually being successful at hacking into our said -- centcom come into our military isis. this is a very disturbing to me.

we don't know how to respond to these things. we don't know proportional response to what does that mean? active warfare. what does it mean? mr. chairman, i would like to work with you on a cyberhygiene on this committee because it is outside the lanes of my committee in terms of what do we do with other countries? do we have a nato alliance with cyber? what is the appropriate response when a nationstate gets our infrastructures? and this case when a terrorist organization hits our military. general? >> well, thank you very much sir. to address the points the first one about the attack and the attribution that it got into the centcom networks. first of all this was a marshall space, a twitter account. there was no compromise and there's no evidence of any penetration into government specifically the military

computer systems. rather, it was a commercially facing bulletin board as it were through the twitter account. and certainly any time there's a come demise in any account, it's serious business. and in talking with my partners in the department of defense and the fbi last night, they are investigating it with all the vigor. i will be getting an update from them later today. >> let me close, i think mr. chairman, we have an opportunity to work on this committee on legislation that could do with defining what is proportional response, how other countries should respond with us. what is going to be the response of the united states of america when our companies are attacked and when our departments are attacked, when our military is under fire? with that, i yield back. >> thank you. by the way, mr. mccaul, i would be happy to work with you. i was working with mike rogers on a piece of legislation and

maybe we can work together on cybersecurity, and i appreciate you bringing it up and look forward to working with mr. engel as all of this concept, okay? we now go to mr. connolly from virginia. >> thank you, mr. chairman mr. mccaul. if you're looking for a democrat, i'll be glad to work with you on that as well. >> balance in all things. >> cybersecurity is a really big issue in my district. we do a lot of work on it so i would be delighted to help in any way. and i think the chairmen and rankingranking member for only this evening, and welcome to our panel. your last comment, general i think underscores something though. i mean, the distinction between the private sector and the public sector when it comes to cybersecurity really isn't a helpful distinction. 85% of the critical infrastructure in this country for example, is controlled by the private sector. that doesn't mean we don't have a public sector interest in it. and the interface between social

media and other things we may be doing in the public sector is often almost seamless. because they are so connected. so that's why seems to me we've got to be concerned even with the kind of attack that occurred the other day on the pentagon, and better understand where the boundaries are or even if you want to recognize there are boundaries. and they think mr. mccaul was pointing out, too, we really need to be rethinking the codification of cybersecurity attacks and the severity, and what it means from our point of view, not only u.s. law but frankly, what it should mean in international law. if you have a cyber pearl harbor, is that an act of war? i mean, at what point does the intensity and severity and magnitude constitute an aggressive act that has to be addressed?

>> thank you, sir, for that question. and the magnitude and severity the rubric of crossing that line, when does it become an act of war is one that has been highly and actively debated for many years. currently the administration is working to put together codified construct for the priorities and the prioritization and taking a look at it from a risk management and consequence management standpoint. that's still a work in progress but ultimately to our congressional processes at her constitutional processes rather, you know, we will be making those determinations. >> i fully appreciate the would be a work in progress but i think one of the tests are government faces and the international committee faces is looking a fresh at the legal codification of the subject because we are really at a very early stage, and i think we want to make the international law

serve as a tool and an ally in protecting. i'm going to try to do this will quickly. mr. ambassador, does my memory served me well in a few years ago probably the north koreans helped shut down much of the banking system of south korea for a day or two? >> there was a cyber attack on south korea financial system. >> and financial system. >> andrew whitley that was generated by the north? >> we believe so. more importantly the south korean authorities have indicated that it's such. >> think about it. virtually the entire banking system went down. >> i don't recall the exact extent, that it was a serious attack spent the south korean economy ranks where in the world? >> tenth or 11th. >> so the 10th or 11th largest economy in the world had its banking system shutdown by a cyber attack. everything that the real warning in terms of both what the north's capability is and the

vulnerability of a whole sector of not just south greece economy but, frankly, our own as well. china, how helpful do we think -- you mentioned in your opening statement that china has been more forthcoming and we want them to be even more forthcoming. but the chinese themselves are engaged in cybersecurity attacks every systematically sponsored by the pla. that state-sponsored cybersecurity attacks. so how reliable do we think the chinese are going to be in trying to rein in the north koreans in their cybersecurity malfeasance? >> i will defer to general touhill spitted two? >> dhs calling for part of your question. more generally i do believe chinese cooperation on the north

korea issue, all dimensions of it, has improved in recent years. i would point to the cooperation in the u.n. security council for passing a resolution act of a north korean nuclear test last year. as an example of how the cooperation has improved. i think they can improve much further and will continue to work on persuading the chinese that when they think about their strategic interests unconditional and defending north korean. -- >> but my question, we are limited in time, mr. ambassador. i understand all that in general but when it comes to this topic cybersecurity, their hands are dirty. why would we count on them to help us rein in north korea in separate attacks when they are engaged in it with all four paws and it's not? >> i think one of the reasons is that when they saw our cabinet sony attacked like this such a destructive manner, it should've been a wakeup call to the chinese.

the chinese are also subject to a response to attacks in countries like north korea. >> i'm sorry. we are running out of time, but thank you. general, did you want to comment? >> as we take a look at information sharing and the threats and trantwelvtrantwelv e voter out there, when we have a common thread and as the ambassador had mentioned -- vulnerabilities. some of the absurd could just as easily threat of the chinese. so it's in everyone's best interest to address the issue and make sure that everyone is a responsible member of the world community. >> mr. chairman, just a final observation. that sounds very noble and boy scout light, but the fact is the chinese have been stealing military secrets from us including weapons designs and bypassing, you know, the r&d stage, for quite some time. in a very systematic way. the pentagon knows that because the pentagon has been one of the

biggest victims. it just seems to me i wouldn't rely on the chinese in that respect on this subject given their record. it is a problematic aspect of what we are talking about today. thank you, mr. chairman. >> we go to judge poe of the texas. >> thank you, mr. chairman. thank you all for being here. globally, there seems to be among the many bad folks in the world three main countries. you've got syria, you've got iran, you've got north korea. i call them the sick access because they're in different parts of the world and are a little sick. but i understand that the official definition of nuclear weapons from our government is you have the bomb but you also have the delivery system. i want to divide the definition and just talk about the weapon, the bomb itself.

does north korea have a bomb of some magnitude? ambassador? >> it's just yes or no. >> i wish i could give you a simple yes or no. >> can you say yes or no? i just did a yes or no. either they've got it or they don't have it. >> welcome we know they have continued to work other nuclear capabilities. >> do they have the bomb? >> i'm not sure i can say that. >> mr. glazer, do you have financial? >> i would defer to the state department on that. >> so you don't know whether you have a bomb or not? >> as ambassador kim stated, north korea has, well north korea has conducted nuclear tests. >> they have since settled into overt spent if conducted nuclear test. >> general, do they have a bomb or do they not have a bomb? >> sir, i do not know.

>> you don't know. all right. now, i personally think they have the capability to make one based on hearings we've had in this committee. looking on the other end, the delivery system, the president of north korea said he wants to develop the intercontinental ballistic missiles, and for some reason he said he wants the first intercontinental ballistic missile to go to austin, texas. i take that a little personal since i'm from texas. what is the status of the delivery system, if you know, general? >> sir, i do not know. >> mr. glazer's? >> -- mr. glazer did you know? >> actually not a treasury department issued. >> how about you mr. ambassador. act to you? >> we would be happy to provide you a full briefing on a classified setting. >> we've had some open hearings.

they had the ability to understand and develop and make as they call it a scud in the bucket. are you familiar with that mr. ambassador? a missile that can go from north korea to south korea. >> yes. >> do they have the capability to do that? >> yes. >> all right. the united states used to north korea on a state sponsor of terror list that was removed in 2008. based on what you know do you think it might be a good idea to put them back on the state sponsor of terror mr. ambassador? >> sir as you know there's very clear criteria on -- >> do you think they should be back on the list? i'm just asking another yes or no question. >> my personal opinion i don't think is relevant. >> that's what i want is your personal opinion. >> there is a criteria, a process. we are constantly evaluating all available intelligence and information to determine whether north korea should be designated

-- >> how long is that evaluation going to take? after all, they're hacking into our cybersecurity in the united states. do you all have a time limit on how long you're going to take? >> i just had your concern and frustration as a matter of law the sexiest it was determined the government of that country has repeatedly provided support for acts of international terrorism, and we are in an ongoing process to determine whether or not north korea meets the criteria. if they give -- >> i am reclaiming my time. do you think that hacking into our system is an act of terror or not? >> i believe that is beyond -- >> so you don't have an opinion. general, you're in the military. is that an act of terror or not? people are afraid to say it is an act of war. i'm just wanting your opinion. >> i think as we take a look at this, this is something that should be part of the public debate, and we should have a conversation. not necessarily constrained to this particular incident but as

we take a look to the future for any cyber incidents. we should have a public conversation. >> that's the diplomatic version i assume but it seems to me that's an act of terror. we are too strong consider putting north korea, these outlaws, on state-sponsored terror list. i don't know why we are so timid in doing that but it seems like the right thing to do the logical thing to do. i hope the state department eventually makes up their mind before more of these attacks occur against the united states. i agree with mr. connolly when he said that the line is very thin between an attack upon the government of the united states and an attack on private industry in the united states. that seems to me to be an act an attack, a terrorist attack but anyway, i will yield back, mr. chairman. thank you. >> very good. we go to brian higgins of new

york. mr. higgins? >> thank you, mr. chairman. the nuclear missile and cyberthreat of north korea is profound. now, the question is how does the trend respond to north korea's cyber attack on sony? ..

and that is to work with our allies, both new and old and north korea's existence as an independent entity and reunify the korean peninsula. north korea's nuclear threat. north korea has nuclear devices in hundreds of short and intermediate range missiles. they have an active uranium and plutonium program. it's not inconceivable with korea in time we'll have a capability to reach the united states. north korea's regime is a proliferation threat. a decade ago we held to be a live debate could build a reactor in serious, and it is a potential source of missiles and nuclear material to the rogue states including terrorists.

north korea has a serious conventional military, which is a threat and excess dental threats to the region. in a population of 25 million people come into the fourth-largest army in the world north korea's army is two times that of south korea with it occupation which is half of south korea. there are 28,500 american troops in south korea. further aggression would bring the united states into a major costly and dangerous war. north korea is a threat to its own people. there are crimes against humanity and their own people that include extermination and murder enslavement and forced starvation. 100,000 political prisoners held under around brenda's conditions. attacks against sony are not new. they regularly attack the banks

and businesses. also there is a changing view of north korea by its neighbors and only economic sponsors. china and south korea changed their views. the south korean president used to be luke warm to talk about the unified korea. today the south korean president speaks openly of the reunification and the enormous economic benefits of this unification. china gets frustrated that north korea ignores its request to freeze or dismantle its nuclear program. a nuclear armed north korea, south korea and japan will want or need to develop a nuclear weapon program. china increasingly is being north korea as a strategic liability, not an asset. china views north korea as a growing threat to the stability

and china's ties with florist. china is the leading economic partner and president with regular visits to south korea and not north korea. so while the discussion is centered on cyber attacks against there is a larger discussion that needs to take place. your thoughts? >> thank you very much, congressman. i think you are right about the improving relations with south korea and this is relevant to the .1 of your colleagues made earlier which is what is china's strategic perspective? i don't think we can continue to assume that unconventionally defending the military misbehavior is in china's strategic strategic interests in fact i think there is an ongoing debate going on in beijing on the future direction of the policy and one of the reasons is because they see the future of the relationship of south korea and major trading relationships, huge flow of traffic students

tourists business people, and i think that is where the future is on the korean peninsula. and this is one of the reasons why we are starting to get more forthcoming cooperation with regards to dealing with the threats and misbehavior. >> the gentleman's time has expired. >> thank you madam chair. north korea has a history of cooperation with a range of other rogue regimes including a serious, iran and cuba. although i don't guess that it's politically correct to say that it is a rogue regime that i'm going to keep them on the list because i don't think the tiger change his stripes quickly. make some connections. north korea, the ship was seized by, db2 -- by panel in july. the soviet weapons from cuba and

actually sailed through the pamela canal, turned the transponder off was looted with aircraft parts and other aircraft and military hardware taken back discovered the weapons in the ship, 32 members released, the other three are still being held. see save the cuban north korea in connection. let's talk about venezuela. venezuela is the largest and best ally in the region. venezuela. i look back against december of 2011 and a venezuela top diplomat was linked to an alleged cyber terrorism plot against the u.s.. there's another connection with iran and there have been flights from tehran to venezuela.

as we've got to venezuela and faults in the cyber folded the cyber terrorism against the united states, you have the cuban connection with north korea and we've got now a cyber attack on the american company. it continues a lot of the nations involved in cyber terrorism. i have to ask the ambassador to the extent extent are they teaching with allies such as china, russia, iran, cuba and possibly maybe just by association venezuela in the connection to cyber trigger was on their. >> generally speaking we have a concern about the relations in the other countries you mentioned. i don't have any specific information that we do know that they have had relations with a number of countries you mentioned and it's something we

monitor very closely. one example of how cooperation can yield results on the sanctions and i think that's a very important point because of limited dealings directly we need international cooperation to make sure sanctions both international and unilaterally can be effective and the situation you mentioned is a perfect example of that. >> are you tracking money? is there any evidence of it going from north korea venezuela can any of the companies are you aware of that? >> we spend a lot of time working with the intelligence community that does the tracking to try to identify the financial networks wherever they might be, whether it is with the regime such as iran or the institutions in iran and asia and potentially

south america. to be honest with you i think when it comes to trying to apply financial pressure we should take our eye off the ball. that's where north korea gets its primary access. that is as we devised a strategy to put pressure. >> ecd purchase weapons from cuba. >> and we've responded. >> i don't think they just gave them the weapons. >> again that's why we look at the other deals we targeted. we were trying to go after the financial networks that support the arms dealers. we have the financial arm that's another entity that we go after so what we are trying to do is make it more difficult if not

impossible i don't know that you ever get to impossible but to disrupt and dismantle their ability to move the funds are out of the world and ultimately re- use the funds and as you pointed out in the financial network would've evolved would involve deceit and dividing -- identify them to use the funds. >> i'm going to be claimed by time and i think you answered the question for me. on the cyber psych -- >> thank you mr. duncan. >> i'm going to follow up on some questions that have already been asked. i think that to the ambassador you've already indicated that we are beginning to see indications that china has grown weary of north korean aggression. i think you've answered that. i would like to know is there anything else you can add to the

relationship you haven't described between the people's republic of china and pyongyang and also as i'm interested as we go forward how is the united states engaging the people's republic of china and the common interest and in a more stable korea lacks what specifically are we doing as we go forward? >> in terms of evil thing relations between beijing and pyongyang it is clear that the chinese are thinking much more seriously about their health care policy and i think they are beginning to realize that when they misbehave it hurts china's own interest. it's not a question of north korea misbehaving without any effect on china. their own interests are harmed and that affects the approach.

one example is if you look at the interaction between the leadership of china, south korea and north korea, they've had numerous meetings in the first two years of their leadership but then she visited south korea as a second overseas visit after the election to china after visiting the united states first and a number of interactive eco- -- interactions. i think that says quite a bit and we want to continue to work with china so that they work more effectively and cooperate better in terms of sanctions enforcement and in terms of preventing north korea from taking actions and also in terms

of working towards the credible negotiations because we haven't given up on the negotiations. we want to try to resolve the nuclear issue and i think the chinese have a clear stake in it because for one thing they chaired the six party process. so this is a topic between us and the chinese at all levels president obama talks about it in every meeting and this is an effort that will continue to take very seriously. >> my next question is to the general. you vindicated to us that you are fairly satisfied that it really was the north koreans in terms of the sony cyber attack even though you are not able to discuss with us some of the potentially classified information. recently the fbi director in responding to some of the same issues has urged the intelligence community to

declassify more details of the evidence to counter some of the skeptics. if any of you can specifically talk about the status of the declassification and what those discussions are and will we be able to see some of this information? >> thank you for the question. regarding that particular declassification effort i am not part of the conversation but overall our position has always been information sharing requires transparent information and declassification as much as possible. we believe it's important to share information across the whole community as much as possible, so we are very much in favor of the director's efforts. >> the other question, is there a potential fear on the part of the chinese were others that there could be a collapse in the government?

>> i think that we prepare prepared for all contingencies on the pencil -- peninsula and have a magic into what might happen to the north korean government anytime soon but the important thing is that we continue to coordinate very closely with partners in the region including china so that we are effectively prepared for whatever happens on the peninsula. >> anyone else? >> now we are so pleased to recognize the new member of the committee. >> thank you madam chair and i want to thank the panel. you have been patient this morning thanks for being here. >> how large is north korea's gdp?

>> i don't have the exact number. it's religiously small for a country of that this size. >> do you know by chance? >> reports would tell us that it's somewhere in the range of 13 to 20 billion. does that sound reasonable? >> i'm going to go back to the line of questioning given that about 20% of the gdp as agriculture is relatively small. sony pictures annual revenues 8 billion so if the gdp is at the lower end of the spectrum do we move the amount for agriculture sony's revenue is about the same size as the gdp so this goes back to the money and ultimately if you can follow the money, you can get some sense of what the capabilities actually are. i'm curious again on the money where it's coming from. could you talk to us a little

bit about the forced labor in north korea? and is the part of where the money is going at least the workforce? >> as far as the access to hard currency, there's a little bit of legitimate they engage in the countries. they also receive a significant amount of support from china and then of course they engage in a variety of illicit activity to supplement the income. as you point out they are a very small country. they really only care about the needs of the top echelons of society. so by engaging in illicit activity and the conventional arms sales, they can raise the hard currency that keeps things comfortable at least for the small group of people that's on top.

that's why that presents us challenges and opportunities. the challenges are they don't need a broad access when you are dealing with a country like iran and look at the sanctions programs it was a target rich environment, and the idea is that a large economy. we need to shut off the broad access. we've already had the exchange with chairman. that's already been accomplished with north korea based on the actions we've taken in the past and based on the fact that the self-imposed isolation on themselves so the idea is trying to identify the note you can put your finger on it really has an impact of foreign trade bank these are points of access in the financial system and then how do you work where they get the key points of access and they need to china to persuade the chinese that it's in their interest.

there's been a lot of questions on why he won't china work with us. china is going to work with us because it is precisely in their interest is north korea not engage in illicit activity because it is in their interest that north korea not to use their financial system and we see the commercial banks make that decision time and again so that is the challenge and that is the strategy. it's frustrating because it's difficult, but it's something we've been committed to for ten years and something that we are committed to continue. >> is frustrating because the economy is so small it's difficult to get it and that's my question more on the forced labor and human trafficking the element of revenue that's there because free labor could actually be a large number. are you aware of the north koreans using forced labor to do construction? >> north korea is a human rights

disaster. and as i said before, the government bears full responsibility for all of the misery that they inflict on their people. i would be sure to ambassador kim to get into the details of how the mechanisms by which they oppress their people but certainly there's been extensive reports on the use. >> would you like to add anything? >> i would just add that we know the forced labor is a part of the north korean human rights abuse. we don't have any figures on how much that contributes to their gdp, but the thing is the north korean human rights record is among the worst if not the worst and this is why we need to pay more attention to this issue and why i think what happened in the un context last year is so significant with the permission of the report findings as well as the overwhelming passage of the human rights resolutions.

>> thank you. i yield back. >> there has been good reporting on the use of other sectors, but particular what would you call it, forced labor in order to bring the hard currency back into the country and the fact that they never see any of that money we now go to ms. chelsea of hawaii. >> thank you gentlemen for being here and mr. ambassador is good to see you again. as you know, and as it is apparent to all of my constituents i come from hawaii which is the place most geographically closest to the korean peninsula and a place where people who are not sitting in rooms like this actually monitor and listen when north korea delivers its threats and when we learn about these tests and continually increase the

capabilities by north korea because it's something that is real for everyday families in hawaii that currently sit within the range of the missile program. i think it's been unfortunate that we've seen a disconnect in a lot of different ways. some people in our government and others are so-called experts that have really been very dismissive on the threat that exists coming from north korea so i appreciate that we are having this hearing because it is a threat we had to take seriously. my first question goes to the ambassador kim and mr. glazer with respect to china. clearly china has expressed that it is in their best interest to continue to have stability and it's good to see that they are interested in working with us to detail the instability caused by the cycle of threats and i'm

wondering what specific things what specific targets are you looking for to deal with north korea? >> thank you very much congresswoman. china obviously values to stability on the peninsula but as you suggest i think they're beginning to realize that the behavior causes instability on the peninsula and that hurts china's interest. we are looking to improve the cooperation with china on several fronts. one on the sanctions enforcement and here i think we have seen some instances where the chinese enforcement has strengthened considerably. we also want to work with them to ensure that the north koreans don't take any provocative actions and over the years we have seen numerous examples of north koreans taking irresponsible actions.

cyber attack on sony is the latest example but they have a tax on assets on islands. so we need to prevent them from acting that way. we also want to work with the chinese on how we can get back to a credible and meaningful negotiation because we cannot forget that they continue to pursue this dangerous program and we need to work with china and other parties in the region to try to get this problem under control and work towards a lasting verifiable and complete [inaudible] >> anything to add? >> just to go back to the question about the type of targets that we look for and that we work with the chinese on my guess you could think about it this way that there are -- the north koreans i would say have two primary ways they would access the international financial system including the chinese financial system are currently through their bank or

that would be working through front companies or individuals who are disguised as their true employer their true origin and if so we would want to and we do focus on those and we try to share information on both with respect to financial institutions. as i said before we impose sanctions on the major financial institutions that give access to the financial system including the bank that has a branch in china and this is obviously an issue that we've raised on a regular basis for the chinese. we see that there has been an impact and the major banks have cut these issues off and there are many small banks that have an opportunity for them to gain access but at least as far as the large commercial banks they've had an impact that had an impact in with respect to the different companies that is an ongoing challenge that we try to share information with our

chinese counterparts so that they can take steps to protect their financial system. sometimes they follow up on that and sometimes they do not. >> i'm about to run out of time. you mentioned earlier and the chairman of the hard currency sanctions. you said they had the impact that was intended. the policy in my view wasn't in place long enough to have the impact that it could have to force major change within north korea. so i would like to see how this policy will be pursued again. >> we have been trying to isolate north korea from the financial system. we have a lot of success in doing that. as i said before though, the problem is that they don't need broad access.

they only need a few points of access to get what they need which presents challenges and opportunities. the challenges are finding the point of access and the opportunities are once you find them you could have a major impact. so certainly the overall goal is to act as a responsible member of the community and we have not achieved that goal. that is an ongoing effort that isn't going to be based on sanctions but the overall policy and all of the things the ambassador talked about. but from the treasury perspective, we are going to keep doing our part of that which is keeping the pressure on and increasing the pressure as much as possible to try to present a choice to the regime as quick as possible. >> congresswoman, north korea indicated to the state that they would open negotiations again and that is why the sanctions were lifted. unfortunately it turns out they failed and this has been the

problem we get a little leverage and then they somehow manage to convince us they are going to turn over a new leaf, the sanctions were lifted and after the fact we find out that they are full again developing their nuclear weapons programs. and i think the problem at the end of the day having talked to the former minister of propaganda coup defected into china at the end of the day the problem is the number one goal is to get that icbm delivery capability for the nuclear weapon and we should recognize that that's what's driving them and cutting off their access to the funds to do that is very much in our national interest. let's go to mr. kirk of florida. >> i express my appreciation to all of you for coming here today and also for your service to the

country it is noted and we are very grateful for what you do. let's drill down a little bit on something mentioned earlier if you don't mind about submarines. the research group 38 north recently reported north korea may have installed | full launch tubes on the sub green. does the administration come heard that north korea has installed the missile launch capabilities on the sub green? does the administration believe that north korea is pursuing a nuclear strike capability and what would that be for the region, for the security of our allies and the security of the united states? >> i don't have anything confirming the report but we are also deeply concerned that they

continue to pursue many dangerous capabilities. we do know they have been interested in developing the submarine capabilities so i wouldn't rule anything out but beyond that i would be happy to arrange a classified briefing to you to provide a full picture about the assessment of the capability at the moment. >> i appreciate that offer and i think that would be excellent. >> with the growing nuclear capability in the region in general what does that imply for us and our allies not just the sub dream? >> i think it poses a grave threat to our allies in the region and to the u.s. directly and this is why we need to intensify the effort on all aspects we talked about this morning, sanctions and trying our best to cut off the funding for them to use on the programs to working with our partners and

the broad international community to change the equilibrium of korea so they realize they cannot continue to pursue the dangerous programs and they hope to get out of this international isolation that they have been suffering. the greatest threat the north koreans pose is to their own people and that is true. having visited several times myself, a deep sympathy for the public that has continued to suffer as a result of the leadership decisions and i think we need to try to work harder so that we are not only dealing with the dangers but also to try to improve the situation for the public good has been suffering so badly. >> bill from massachusetts.

>> i would like to thank the witnesses for their patients and for being here. we talked a lot about the international community and how they can affect things. i am a member of the cyber security committee and we realize we have to go further than just our own domestic abilities to influence the situation and discuss china agree to to deal that let me ask a question about russia. russia continues to supply commander recently the report i think for the first time that kim jong favorably acted on the invitation from russia to attend ceremonies in may commemorating the anniversary of world war ii this to my knowledge is one of the first public international visits that he will do as the

supreme leader said if you factor those in it is a relationship with russia and north korea in the opinion of the witnesses that would like to comment. >> as you pointed out russia has had senior level contacts with the officials in fact he sent one of his top deputies just recently with some indication of russian investment into north korea. but i am convinced that the russians do remain committed to the shared goal in fact if you look at the public statements that came out immediately following this visit to moscow is all about russia's commitment to the six party process, the denuclearization and how they would strongly oppose the nuclear test by north korea. so yes the picture looks mixed

but i think fundamentally they do remain committed to the goal. >> do you think there's any possibility that they did have some assistance either in the sunny attack or other attacks from other experts not to deny the sole responsibility but getting expertise they may not have had it might have happened on the private side of russia given their expertise in this area were there any concerns that might have been a factor? >> thanks for the question. >> frankly there's always that possibility. at this point, however i'm not seeing any indication of that. >> because we spent a great deal of time talking about china, but other asian communities do you feel could be useful in our efforts to deter this kind of cyber activity?

what other countries could we get assistance from aligned together on this cost? >> thank you for the question. as we look at it from the department of homeland security we have several different engagement organizations such as the asian pacific emergency response team which we did share information on the collection in 21 different countries and we also used our international network membership and send information out to a dozen other countries. this really is something that has impact across many different countries and we have leveraged all of our different partnerships across the communities to share information regarding this incident. >> thank you and i will yield back. >> thank you. we go now to dave of michigan and a member of the kennedy.

>> i want to thank the chair man and all of you for being here and allowing me to ask you questions this afternoon. first, the assistant secretary, do you think the executive order 13687 is sufficient to accomplish the goals? >> again, congress and our goal is for north korea to act as a responsible member of the international community so certainly that executive order standing alone is not going to get us there. it's about all of the executive orders and financial tools that we have combined with all of the efforts of the state department and even then it is an incredibly difficult and frustrating issue. but i don't think a single action or issue is going to get us there nor have we asserted that it would. >> do you think our actions in the past ten years have moved the ball forward or have we lost

ground to what we want to accomplish? >> again it depends on what you are referring to specifically. i think we have been quite successful at playing a financial and economic pressure. >> you think there were fewer human rights atrocities and paying to the un after ten years or not? >> i don't think we have achieved our goal. >> does the executive order give you the latitude of the true man's bill that passed in the last congress with respect to secondary sanctions were do you feel that you need more to pursue the sanctions? because i think earlier you spoke and said you supported the north korean sanctions enforcement act but the chair man introduced last year. would that be a fair statement? >> it isn't for me to opine on that legislation. but i can say is what the new executive order gives is a flexibility we haven't had before to target the government

and the officials and to target that plaintiff provides material support to any destination entity that isn't the authority we've had before and i'm sure that we will put it to good use. >> if this doesn't work as well as we had hoped what is plan b.? >> with respect to the sanctions? >> what if they don't change their bad behavior, what is plan b.? >> will again there is a broader policy that is trying to move in the right direction from our perspective we had a strategy that we have been implementing for many years now to try to increasingly isolate north korea from the financial sector. and i think we have a lot of success that we can show. i think it is one way to bring pressure to bear to precisely the people we need which is the decision-makers because they are the ones who benefit from that. but again, the goal is not to bring financial pressure.

the broad goal is to affect a change in the north korean behavior and as you point out we are not there and it's incredibly frustrating and something we work on every day to try to change. >> is there any effort to review the criteria to designate the estate sponsor of terrorism? >> it is a pretty reassessed by law. what we are doing is evaluating all of the information to determine whether they meet that criteria. >> any idea when that will be done? >> is an ongoing process but as soon as we make the determination that there is credible evidence to support, we will move forward. >> let's say we made an egregious error and somehow concluded they were actually not responsible responsible for the state-sponsored terrorism what problems would be created for us? with a stop being as operative

as they have been? >> that is a fairly straightforward matter that we are trying to eat the requirements of the law. the secretary of state must determine that the government of the country has repeatedly provided support for the act of international terrorism and we try to do whether they meet the criteria and when we do we will move forward. >> and i think it is an ongoing process. >> hell do they view our actions in the the measures would be like us to do more? >> they've been very supportive. we have stated very close touch stayed in very close touch with south korea as well as other allies including japan. as i mentioned earlier the issued a strong condemnation of the attack on sony and expressed strong support for the reaction to the attack. >> we go now to mr. tom of minnesota.

>> thank you chairman and ranking member for holding this important hearing. i would also like to thank the committee staff for their work into the panel for providing their analysis. ambassador, david albright, the president of the institute for science and international security has commented that the north korean policy of president barack obama's administration has been called, quote strategic patience and recently the president said in response to the hacking that the u.s. would respond proportionally. can you define that for me and comment if you will on this strategic reference?

>> i think it has been misunderstood as our policy. it's not. it was just a description of the approach we were taking as a result of the negotiations because potentially the important lessons that we have learned from the previous experts negotiating in the the process and also bilateral earlier in the framework's. we wanted to make sure to take a delivered in a cautious approach and coordinating with our partners so that if and when negotiations resume and we would have a much better chance come a much more credible chance of action making progress on the nuclear issue. so it simply referred to that approach.

i think that is where we are still. we want to make sure there is adequate demonstration and commitment before we return to the negotiations. >> mr. ambassador if i can take you to the next part of my question and i understand about proportional response language was in response to this sony episode but is the administration now signaling an increase in the intensity? >> i think that would be accurate. the new executive order signed by the president gives us tremendous flexibility and broad authority to go after targets as we develop information and we meet the standard of evidence we will designate more entities and

personnel and this will make it more difficult for their progress. >> there are so many questions and you have been patient for all of the people that are here and this is a process for me and i know the time is limited so if you could just give me this the ranking member at the beginning today talked about the delicate balance of holding the north korean leaders accountable while at the same time being mindful of the population. can you tell me and maybe this is a combination of the ambassador and the assistant secretary but how are you doing that, managing the delicate balance and can you give specific examples of how these exposed authorities under the recent executive order are being applied? >> again i feel to see how any actions that we have taken

through our financial sanctions or other measures apply to north korea has negatively impacted the korean people as i've said time and again it is attributable entirely to the policy decisions of the government of north korea. why we've adopted the approach we've adopted is for a couple of different reasons one of which is in order for the government of north korea to maintain itself, it needs access to hard currency. it needs access to the international financial system. not a lot, but it does need it. so this is -- when you identify -- >> could you give me a specific example of how you are doing that since the executive order? >> simultaneous with the executive order it was announced

that we employ the executive order with respect to the entities and individuals and importantly with respect to those individuals eight of them were in the primary conventional arms company of north korea. one of the impacts of that as it has been reported in the press is two of the individuals the government is considering expelling two of the individuals this is an important of the conventional arms sales in africa. i'm not giving doing a victory lap about this but it's an example and it's going to be an ongoing effort of how we can and how we will we will continue to use that authority? >> general, a couple of questions. you are familiar if you are familiar in the national defense authorization act of late last year that applies now to provide sanctions against anyone

supporting or engaging in industrial espionage and cybersecurity; is that correct? >> yes, sir i am aware of that. >> let me go through a couple of questions. north korea has no independent access to the internet is that correct? >> so they are entirely dependent on a single strand that comes from china is that correct? >> that's my understanding. >> do you happen to know what the bandwidth is if it is publicly available? >> i do not know off the top of my head. >> let's call it the equivalent of what one home has for comcast so they have a range of ip is provided by china as though they were being provided by comcast here in the district of columbia, one line coming in from china is that correct? >> and absence that is correct.

>> two questions. first of all, do you have high confidence today that north korea participated in the espionage or any other espionage in the last year? >> based on the evidence that has been provided by the intelligence community and law enforcement community regarding a richer future and i have confidence in nasser. >> so pursuant to this you now have the ability to have sanctions based on that, correct? >> beyond financial, sanctions or a broad term. >> agreed. however, the nba said the sanctions against anyone supporting or engaging in what is it inherently be said that since the only way north korea had the ability to this post through the route provided by the people's republic of china that in fact i'm sorry mainland

china has in fact supported espionage? reasonable assertion by the american people, couldn't have done it without china. as we know china monitors all of the internet transactions. it doesn't have a true open internet per se. a china in fact had to know what you know isn't that correct? >> at this point, and thank you for that question, i do not know what china do at the time. >> do they know now, have we directed the knowledge that we have sufficient so that they know what their lifeline to the internet was in fact engaged in espionage in other words supporting espionage by north korea? >> we have shared our information with the chinese computer emergency response team and we had telephone conversations with them as well and continued to exchange

information regarding this incident. >> so based on this incident which goes to the very heart of not the sanctions on the country that is so isolated that the only thing we know for sure is that people are at least 6 inches shorter than people in the south, in fact some sanctions on north korea are extreme and have not worked because they simply do not care enough about their people to relieve their suffering and since the government of china now knows that their lifeline was used to conduct industrial espionage are we and will we hold china responsible to be an active participant in preventing this this in the future or should we in fact consider that china would then by supporting espionage by not taking action be in fact held accountable in the future? >> i would have to i would have to be sure to my colleague heard to my colleague for that question.

>> you are close enough. >> do you agree that if in fact another country anywhere provides direct support in the internet line is by definition direct support that as we like to say they either have to be part of the solution or they are part of the problem. >> thank you congressman. i wouldn't want to opine under the statute, but i could say that at least from the treasury perspective we are committed to holding entities within china responsible and we've demonstrated that we are willing to target them. >> pursuant to the government of china providing the line to the government of korea that has been used in the industrial espionage. >> again, congressman i don't think that i am familiar enough with all of the details on that particular line of questioning. all i can say is we've demonstrated with respect to the

authority we have that we are prepared to use them with respect to the parties that need to be held accountable. >> that is a very good point and it's one that in dialogue with beijing i certainly think should be explored because you're right that line obviously has been used and the other consideration is the fact that in the past maybe not currently but in the past they have training in beijing as some have training in moscow and so i think reminding him the necessity of discussing this with those who might enable this kind of activity is a good place for you to raise. >> i was only sort of befuddled a little bit of general that now has authority over cybersecurity ultimately in the last days of the last year we transferred principal authority to the homeland security, so the general is here and he can

provide the questions and answers as to whether or not china won the government line number two, north korea perpetrated this and number three the question which is is if that lifeline remains in effect and another attack occurs or is occurring as we speak how do we deal with china? obviously it is behind the scope of the hearing but i think it is an important one of will china be part of the solution actively or are we to continue basically dealing with sanctions over the country that seems almost immune to sanctions because they are almost immune to outside hard currency except when they sell conventional weapons and/or nuclear secrets and use that to gain a hard currency that is where the challenge is how do we get china as an open partner and that's where i had that line of questioning.

>> we now go to mr. ted of florida. >> thank you mr. chairman and john, and i appreciate you being here. i want to go back to 1994. what was the intent of the agreement was it to get away from nuclear proliferation and get into energy production in north korea? >> it is the denuclearization to make them abandon -- >> so they entered into the framework with the united states and that broke down and they kept building the nuclear capabilities. at what point were there signs that we knew they were not staying true to their mission and getting away from the nuclear proliferation and getting away from energy production? what were those signs? >> we had credible evidence that they were continuing to pursue

the programs despite entering into the arrangement with us. >> i'm asking you these questions because we didn't respond in a timely manner and i want to do with parallels there are between north korea and where we are with iran right now so that we do not make the same mistake. do you see any that we need to pay attention more closely to make sure we don't make that same mistake? >> i'm not in a position to comment specifically but i will note as we discussed earlier with the chairman we have made some important lessons on the agreed framework as far as the process and i think that this is causing us to move much more cautiously because we want to make sure that when we resume the negotiations that we are going to actually achieve lasting progress and not repeat

the mistakes. >> that's what we have to do so we don't make the mistakes with iran. >> what is your feeling on that as far as what we learned with our negotiations in korea and where we are with iran? >> thank you for the question. that is out of the scope of my expertise. >> i will come back to that. i have other questions here. one of these goes along the line of what mr. isa was saying. i can't imagine them being able to act alone on this and i don't know if it is right to say that i would see china acting as the puppeteer or north korea being the puppet or the stooge being directed by china. do you feel the same way in this? >> thank you for that question sir. at this point i don't have any indication or information that would indicate anybody but those that have been attributed to --

>> what do you feel on that? >> i don't have any information on the ongoing investigation but i can say that while china and north korea are allies, i don't think it is correct to say that everything that it does it does with the chinese instructions. >> but knowing their limited ability on the internet they have to be working with somebody i would think. how about you, ambassador? >> i think that's a very important question and a question that our experts should be looking at very closely to determine whether the requirements of the sanctions were meant by virtue of the fact that they used the ip and located in china but i would agree that there is no indication that the government knew about the attack or in any way condone the attack.

>> one last point and this goes off of my colleague. he was talking about what constitutes a cyber attack and at what point do we deem it an act of war? how many people need to die from it or how much damage these to happen to a country? these are things that need to be answered so that there is a definition of what an act of war is because right now i see a grey area no one is willing to commit and i think that it would be good for the american government and the american people and improve the national security if we drew some lines in the senate if you cross this line this is considered an act of war. what is your thought on that, general? >> that has been defeated in the colleges for many years and as a graduate of the war college i believe we should have that dialogue. >> we don't need any more debates. i think we need to define it because the day is coming with what we are seeing.

how about you? >> i'm sorry. what constitutes an act of war .-full-stop site my area of expertise. >> i'm out of time so i will have to have used the those of you with to the record. >> thank you mr. chairman. >> thank you and let me go now to eliana, the chairman emeritus for the committee. >> thank you so much mr. chairman and gentlemen. ..

i just read a little snippet of parts of what it entailed were traveling from cuba to north korea in containers filled with sugar, quickly melting sugar. any meaning officials stopped at the canal and the north korean captain attempted to commit suicide. he didn't try to commit suicide because he feared u.n. sanctions or he feared u.n. sanctions. he feared the revenge of kim jong-un. now, i want to know why we don't sanction cuba for 18 and abetting the north koreans, and why didn't we work with the u.n. so that the u.n. could impose

their sanctions? you correctly point out ambassador kim, sanctions are imported. this is what the u.n. response was. this is the city council committee, four-page strongly worded memo. that's what cuba got. it said, the concealed cargo of arms and related material to include the hazardous cargo is not declared on the ship's manifest, and the cargo was hidden under 218,000 bags of raw sugar. but boy, they got really tough. they said, the committee encourages all member states to remain vigilant regarding their obligations and responsibilities to inspect suspect cargo to prevent prohibited items going to and from the dprk comment to ensure the relevant national implementing instruments, blah, blah, blah, blah, blah. in regard the committee draws the attention members states security resolution -- my golly.

this is all that happened. when they were shipping makes everything else under melting sugar, and to talk about the sanctions and how important they are, yet treasury department looked the other way. it was like that ship just came magically from cuba, phantom ship, violating all kinds of sanctions of u.s. and united nations, and there was no penalty to pay. so we wonder why north korea does what it's doing and why it is in cahoots with other rogue nations. so i encourage you to be a little tougher. it takes two to tango. north korea was not shipping is on their own. and lastly, mr. chairman, i know i am out of time but i have been very concerned about this and with former ranking member howard berman, we asked for an investigation of the transfer, u.s. origin technology by the u.n. world intellectual property

organization wipo to north korea and iran. and it was clear that this administration did nothing to prevent wipo from transferring sensitive dual use technology to north korea and that it has not taken the threat of technology transfer seriously. incredibly after wipo director-general frances berry known in which all the organizations transaction with north korea in 2012 in violation of u.n. security council resolution, wipo and again ran a controversial mission to north korea last june. and has been less than forthcoming with details about that mission, yet not only was he not held accountable, he was once again reappointed in may 2014 as director-general of wipo with little resistance from the obama administration. we just look the other way. what of it going to do to prevent use technology and u.s. taxpayer dollars from being transferred in the future when

we have that kind of an attitude? we don't have much time but i just, you don't need to answer. but just sanctions are important. we need to implement them. a strongly worded memo from either the treasury or the u.n. is not going to do the trick. it's not going to stop anybody. thank you, mr. chairman. >> thank you. in adjourning here, let me thank our witnesses but let me also say that mr. engel and myself look forward to working with state and treasury. we're going to bring this legislation up again that we passed into the senate last year. i want to try to move it fairly quickly, so we will be meeting with all of you. and i think that frankly a lot of these actions against north korea have been very long in coming. and for those of us that urged a more robust response, we want to make certain the tools are there to do it, do it effectively and cut off the hard currency for

the regime. so we'll be in contact with you. thank you very much for your testimony. >> thank you, mr. chairman. [inaudible conversations] >> president obama and british prime minister david cameron held a joint press briefing at the white house earlier today. the two leaders discussed u.s.-uk relations and issues of importance to both countries. you can see the news conference tonight at eight eastern on c-span. here's some of today's briefing. >> i take this very strangely and i don't question the good faith of some folks who think this might be helpful but it's my team that's at the table. we are steeped in this stuff day

in, day. we'll make these judgments blindly. we've been working on this for five, six, seven years. we consult closely with allies like the united kingdom in making these assessments. and i'm asking congress to hold off, because our negotiators, our partners, those who are most intimately involved in this access that it will jeopardize the possibility of resolving providing a diplomatic solution to one of the most difficult and long lasting national security problem that we face in a very long time. and congress needs to show patients. so with respect to the veto i said to my democratic caucus colleagues yesterday that i will veto a bill that comes to my

desk. and i will make this argument to the american people as to why i am doing so. and i respectfully request them to hold off for a few months to see if we have the possibility of solving a big problem without resorting potentially to war. and i think that's worth doing. we will see how persuasive i am but if i'm not persuading congress, i promise i'll be taking my case to the american people on this. >> the big picture is very clear. the sanctions that american european union put in place have had an effect that has led to pressure. that pressure has led to talk of those talks at least have a prospect of success. i would argue with the president, how much better is that any of the potential outcomes? that is what we should be focusing on the budget and to directly. yes, i have contacted a couple of senators enemy speak to one or two more this afternoon but not in any way as british prime

minister to tell the americans in what it should or shouldn't do. that wouldn't be right but seemed to make the point as a country that stands alongside america in the final negotiations that is the opinion of united kingdom that further sanctions or for the threat of sanctions at this point won't actually help to bring a talks to successful conclusion and that could fracture the international unity that there's been which have been so valuable in presenting a united front to iran. and i say this as someone who played quite i think a strong role in getting europe to sign up to the very top of sanctions including oil sanctions in the first place. and i would just simply make this point. those sanctions have had an effect. to those who said if you do a review even if you start discussing with the iranians any of these things the sanctions will fall apart. the pressure will dissipate. no one will be up to state acted. that has demonstrably been shown

not to be true. so the pressure is still there, and as the president said if the iranians said no, and there is no deal, and by all means let's sit down and working with extra sanction to put put in place because i think we're absolutely united in the simple thought which is a deal that takes iran from nuclear weapons, is better than i'd iran having a nuclear weapon or military action to prevent it. in the end it comes down to that the simple choice. so what i do what i can to help as one of the countries negotiating, so i will. [inaudible] >> it's i think the way the president put it i wouldn't disagree with. it's very hard to know what the iranian thinking is about this. i am the first bridge commission 35 years i think to me with an iranian president with an iranian president, it is the cartoon of what the thinking is. it is a very clear offer there which is to take iran away from

a nuclear weapon and to conclude an agreement with them which would be mutually beneficial. that's what should happen. >> you can watch the entire news conference tonight on c-span at eight eastern time or anytime online at c-span.org. >> here are some of our featured programs for this weekend on the c-span networks.

>> tuesday night, president obama delivered his state of the union address. live coverage at 8 p.m. eastern including the president's speech, the gop response deliver by newly elected iowa's senator johnny ernst and your reaction to open phones live on c-span and c-span radio, on c-span2 watch the president's speech and

congressional reaction from statuary hall in the u.s. capital. the state of the union address live on c-span c-span2, c-span radio and c-span.org. >> and c-span cities tour takes booktv and american history tv on the road traveling to u.s. cities to learn about their history and literary life. as we can partner with comcast for a visit to wheeling, west virginia, spent i wrote this book "the wheeling family," there are two volumes. the reason i thought it was important to collect these histories is wheeling chance formed into an industrial city the latter part of the 19th century, the early part of the 20th century, and it's kind of uncommon in west virginia in that it you a lot of immigrants from various parts of europe here in search of jobs and opportunity. so that generation that immigrant immigration, is pretty

much gone. i thought it was important to record their story to get the members of the immigrant generation and ethnic neighborhoods they formed. it's an important part of our history. most people tend to focus on the front in history, civil war history, those periods are important, but of equal importance in my mind is the industrial period in immigration that wheeling had. >> wheeling starts as an outpost on the frontier. that river was the western extent of the united states in the 1770s. the first project funded by the federal government for road production was the national road that extended from cumberland maryland, to wheeling virginia. and when it comes here to wheeling, that will give this

community, which about that time is about 50 years old the real spurt that it needs to grow. and over the next 20-25 years, the population of wheeling will almost triple. >> watch all of our events from wheeling saturday at noon is turn on c-span2's booktv and sunday afternoon at two on american history tv on c-span3. >> next, challenges facing middle and working-class americans. senator mike lee leads off the session. also a pen with members of the house of representatives, and commerce are newly elected senator tom cotton of arkansas. the heritage foundation hosted the event this week and is releasing a book in conjunction with this summit.

>> [inaudible conversations] >> good morning. appreciate everyone's patience. welcome back. had a great day yesterday. we would like to welcome everybody was watching us on c-span, especially our heritage action set know all across the country. we had nearly 12,000 online viewers yesterday. grateful to her fortitude in there. and hashtag for the so social media, the number one poker hashtag in the nation yesterday, whatever that means. the theme for this summit and the book we've released this week is opportunity for all favoritism to know but our goal is to shift the policy conversation to advance ideas

that ease the burdens on working families and create new opportunities for all america. objective that heritage action is not just advance the right policies. it is to see results. it's to build an america where freedom, opportunity, prosperity and civil society flourish. the second part of our theme, favoritism to none. which space to the pernicious role interest groups play in our politics in washington, d.c. there's been much talk of late about the need for conservatives to move beyond the intramural disputes that defined the last supper years in washington it has been a participant in those fights on the right heritage action has a different view. well-intentioned debate amongst conservatives about who we are and what we got to be doing is not something to be feared but indeed it is main event goes on college campuses are the ones were too tender to do with the pernicious effect of the standing viewpoint. rather than a distraction grappling with the tensions impulse to send right is a misrepresentation to building an opportunity agenda. it is necessary for conservatory

to address the court challenge would've prevented it from govern successfully in recent years. the fact is that both of our nations political parties have found flaws in the dna. the left had several flaws. first as margaret thatcher famously said eventually you run out of other people's money. we are saying that across the country as governors confront the challenges of paying for promises made to teacher genius other public sector unions and median cost of the social safety net. secondly, and, unfortunately, in the real world good intentions do not inevitably lead to good results. we are seeing this as result well-intentioned policies that are failing those their intended to serve from the 50 year old war on poverty to the human turn crisis on our southern border which was caused by the president's lawless amnesty. finally, the left is the -- i cancan understand how to experience your local dmv might make sense to someone raise with harry ford concept of choice.

you can of any color you want as long as it is black. it makes no sense to somebody who grew up on itunes. those up on the right are not without our flaws to continue with the primarily the party of limited government must confront the first challenge taught in college political science courses, the challenge of specific benefits being granted to those who can leverage the fuel cost. this is in for example, at boeing think of the export-import bank up for reauthorization of the summer. but i think is vastly good of of its loans to the well-connected companies, ge, boeing caterpillar. the rest goes to oligarch, drug cartels in latin america the largest billionaire in australia. you get the picture. the party of limited government to succeed him as well politicians come to washington to be given access to the levers of power and stink to the principles of limited government upon which they were elected to they must do that while raising millions of dollars for reelection. the path of least resistance is obvious.

grant the carpet to someone. contemplate and a marked. talk the talk but don't rock the boat. the biggest road block undermining efforts to construct a true reform agenda is the political establishment's preoccupation with kenny the concerns of the well-connected special interest with a strong preference for the status quo. that tennessee is everything the tea party most presents about the washington status quo and it's what tea party minutes of congress are trying to sheikh up. think that the government agenda means to the political establishment to do. think about the first priorities congressional leadership has articulated for this new session. the keystone xl pipeline, repeal of the medical device tax. none of them need much to working families struggling to get by in the obama economy. a reform agenda means more to us than heritage action. rolling back some will overreach in k-12 education and curbing college costs by changing higher education accreditation system.

it means reforming our tax code and getting the car got a place they but with hard-working americans live in three serving congresses place in the balance of powers by giving it approval authority for high-cost administered regulations that paper the well-connected. why aren't more d.c. conservatives rowling around ideas like these? the answer is simple. it upset the status quo that it is so comfortable to those on k street who have the votes and power. and the cozy alliance between the government and the insurance industry in the lobby stops writing big checks. what purpose does our tax code have not been sent by special interest lobby for a car that? it's not enough to fight for opportunity. if you're not willing to fight favoritism. is not enough be against favoritism if you don't have a vision of how we can create opportunity. no elected officials do more to achieve both at our speaker here this morning.

mike lee and body that which is right about public service. he disagrees with orthodoxy without being disagreeable. is a vision for empowering people to soar and to achieve both, and stands up and fights for it. mike's lets the agenda would deliver opportunity for all an favoritism to none. it includes the header education reform and college opportunity act, the energy freedom and economic act. the national right to work at the transportation department act. mike has been in the foxhole with conservatives. conservatives will stand with them every day of the week in the years to come. there's no one better position to lay out the outline that real opportunity agenda that doesn't take favors. i'm honored to introduce senator mike lee. [applause]

>> thank you very much. it's such an honor to be with you this morning. and thank you, mike needham, for everything that you and others here at heritage action do and for hosting this important event. i appreciate also all of you for coming to participate in this. i'm always delighted to have the opportunity to come to the heritage foundation. i'm rachel today it's not raining. i don't know why but almost every time i speak of heritage foundation it seems to rein. it's not a big deal. but office is only about a block and half away from you, but it always creates kind of a mini crisis when it rains today i'm supposed to speak at heritage because i insist on walking over most of the time because i have a fit bit and then out access and getting more steps under don't want to use -- lose the steps by writing a car. if we walk over with a good umbrella a strong reign will end up getting soaking wet. long story short, i'm grateful today that it's not raining.

i know we have had several new strong, committed conservatives sworn into the u.s. senate just in the last few days. i'm thrilled about that but i have to admit i still really miss my friend jim demint. he has been an inspiration to me and continues to be my friend to this day. a few years ago i started talking to him in pretty lofty terms and i started encouraging him to one day run for president. and i have to say this is not exact to what i had in mind. [laughter] i didn't say jim, run for president of heritage foundation but perhaps that's what he heard. but in truth i'm glad jim didn't take my advice. he's done a fantastic job at the

helm of heritage foundation over the last couple of years, and this policy summit, and other events like it, are a testament to his leadership, his commitment to a positive vision for america. and he has brought so much to this foundation. and i have to say also, i am very glad that is two-year ban is now over. what a mean by that is when somebody leaves the senate they are barred for two years from having any significant input on anything that's going on in the senate. so for the last two years every time i see my friend jim demint, it's about all i can say to them is a little. can say hello. that's a nice tie you have on. that's where the conversation ends because almost anything after that is inhibited by law. but i'm glad that is finally over and a the look forward to having more policy discussions with jim demint.

after the very historic victory that republican party won in november, and the great enthusiasm that has followed in its wake this summit is i think exactly what conservatives need. a time to refocus our minds on a series of challenges facing our country, and to share, discuss and debate our ideas on how we can begin to solve the same problems. there are many pressing issues that deserve our attention and require action by us. so many in fact that it can sometimes seem very, very difficult to keep them all straight. but as i see it there is one issue. one challenge facing the american people today that rises above all the rest in terms of its complexity, in terms of its magnitude, and in terms of the

rest of the consequences, the reach of its consequences, how far they extend. directly or indirectly, it affects nearly every other public policy issue you can think of and should therefore be placed squarely at the center of our reform agenda. if you haven't figured it out by now, that issue is the family. it's increasing importance and its declining stability. and i believe it may be the single defining issue of our time. the family is the first and most important institution of our society. and it also serves as the foundation of american exceptionalism. regardless of what you think the ideal family structure is or what do you think there is a single ideal family structure at all. our family is where we learn

first, the very first and the very deepest lesson that conform our behavior and shape our personality for the rest of our lives. these things continue well into adulthood, proud of adulthood, throw the rest of our life. as one author put it the family is the nursery of the next generation. more than just the provider of material protection the family is the shaper of human character. everyone's primary source of human and social capital. skills and habits like empathy, self-control and trust facilitate our pursuit of happiness. by teaching us what it means to live with the duties and obligations towards others, the family for business for citizenship and teaches us how to live as members of our community. the family has always been the

linchpin of american life but today more than ever the health of the family is indivisible from the destiny of our great nation. this is the result of the two trends. first, profound economic and cultural changes over the past several decades have dramatically altered the structure and patterns of family life in america. economic shifts, starting in the 1970s, sort of transformed the labor market requiring new skills to get a good job paying a decent wage. as jobs in manufacturing industries dwindled and the service sector rose to replace them, economic value of the family, and they social of human capital that it provides, has dramatically increased. likewise extraordinary advances in technology transformed the american workplace. rerouting the pathway to economic security through college or an apprenticeship or

a job training program. suddenly it wasn't just recent high school graduates who needed access to some kind of post secondary education. it was also working moms and dads trying to acquire the skills they needed to compete for good jobs in the new economy. meanwhile, following the cultural shifts of the 1960s there in merged a new pattern of family formation. throughout our history the shape and character of families in america had continually shifted and changed to a degree mirroring the twist and turns of american life. but there was one feature of family life that had remained constant. most young adults formed their families in the same sequence. first came love, then came

marriage, then you know the rest. today, however marriage is often the last step the final step that parents take when forming a family. and it is increasing the step that is foregone altogether. alongside these changes there was a second trend or you might say a non-trend, the absence of a trend occurring at the same time. as american families approach the new economic challenges with their characteristic boldness and optimism. washington d.c. responded with this characteristic lethargy and dysfunction. while american the world changed around them, lawmakers in washington, from both parties, clung to old outdated policies as if they were security blankets. leaned in close and refusing to relinquish them. for all politicians good

intentions, this has not been a victimless offense. today, too few families are forming, forming with or without children. and too few families are remaining intact. while marriage rates fall and divorce and cohabitation rates remain high the number of children raised by a single parent has nearly quadrupled in the last 50 years. and far too many of those families that do form and to remain intact find themselves squeezed at every turn by an out of touch federal government that often seems blind to their struggles, to the struggles of family. as wages flatten for lower and middle income workers, good like health care and education sal rapid inflation and government driven inflation.

as the economy put a premium on knowledge and skills our outmoded higher education policy only made it harder and more expensive for students both young and old to get the education they need economy demanded. as the climb from poverty to the middle class grew ever steeper for fragmented families, welfare policies actually came to penalize low income americans forgetting jobs or for getting married or for getting raises. and as social science continually reconfirms our deepest intuitions about the primacy of family life, washington has singled out married couples and parents for unfair burden in the tax code. we have transportation, labor, and housing systems that make it harder for parents to find decent jobs. to get by without to full-time incomes, or make it home in time for dinner. and we have a dysfunctional

criminal justice system, one that tends to keep me reformed nonviolent offenders languishing behind bars while their sons for stock seeking father figures in the streets for years and years at a time. i could go on and on and i know that the scholars in this room would go on and on as well but the point is that these are not stressstresses put on the family by the free market. no. nor are these stresses put on the family by globalization or by income inequality, or even by corrosive trends in popular culture. no. these trends are the products of sporadic government policy that are imposed on american people by politicians. politicians in washington, d.c. who respond to change by doubling down on the status quo policies that we know already don't work. this is not how a government of

by and for the people is supposed to work. it's not have that kind of government is supposed to conduct itself to our economy and society are constantly changing. the governments job is not to micromanage or resist those changes that remove any barriers acing the american people as they adapt to them. as lincoln and so wisely counseled, the leading object of government should be to lift artificial weights from all shoulders, and clear the path of laudable pursuit for all especially for working moms and dads who the status quo is so consistently leaving behind. study after study shows us that a strong, it's not just one of the major institutions through which people pursue happiness. it is the one institution upon which all others depend.

economist from harvard and cal berkeley recently published a report, find the going up with two married parents is not just one factor among many acting a child's economic future. it is the strongest and the most reliable predictor of upward mobility. more than a racial or economic composition of a child neighborhood more than school quality and more than income inequality family structure is the most powerful indicator of a child's ability to climb the income ladder as an adult. and what's the true for the children of married parents applies also to their friends and their neighbors, too. the greatest contribution of this particular study is that it shows that low income kids are more likely to succeed whether their own parents were married or not. so long as they grew up in a community with lots of married

two-parent families. in other words strong families make strong communities. my home state of utah is a testament to the family connects us to and prepares us to succeed in the networks of opportunities that exist all around us in american society. across the state with a growing prosperous economy with some of the highest rates of upward mobility in the entire country but, in fact, in the entire world. we have smart, efficient government operating alongside what is a very active and faithful voluntary civil society. and we have what may be the most successful private welfare system in the world. but none of this would be possible without strong family. none of it. not coincidentally, utah also has the highest percentage of married parents household in the

country. but we don't really need social science data to tell us that strong families bring us stabilizing, supportive force to their communities. we've known it and we see it all of our lives. this is not to say that the only way to lead a happy fulfilling life is to grow up and be raised by your married imam and dad. nor is it to say that single parents were anything but wholehearted heroes who deserve anything less and the adoration support and respect of a government that has forgotten them for far too long. there's always going to be a diversity of family types and structures in america. and policymakers should not try to artificially re-create the culture of the 1950s anyone that might try to re-create the economy of the 1950s. we must meet american where she

is. but that doesn't mean that we shouldn't promote the arrangement that is best for children and adults, and for america's very future. for the family it is much more than a socializing unit. is an incubator of human flourishing. it's an incubator of personal and economic success. the data on this is clear. the future of our society openly depends on the on his noble parents across the country trying to make ends meet in a society, economy and political system that increasingly rigged by washington against them and their children. washington has left those families behind for far too long. it's time for conservatives to remember those forgotten families. in word and in deed in our hearts and in our agenda.

if they conservative movement anthony majority in the 114th congress truly want to be pro-growth and pro-opportunity our agenda most first and foremost be profamily in every sense of the word. and not just on some issues but on all of them. everything we do in congress out to be informed by the struggles and opportunities, challenges and aspirations of today's working american families. take, for instance our higher education policy. our current system empowers colleges and universities to rather relentlessly raise tuition costs. it stifles the development of bachelors degree alternatives and it saddles aaronson students and parents who are students with excessive debt. right on cue president obama is

calling for even more taxpayer investment in this failing system. this is never the position of the left to keep the status quo no matter how broken it might be exactly the same. just spend more money on it. but why should americans settle for tinkering around the edges or spending more money on it fundamentally broken system? they deserve real reform that fixes the underlying system and makes higher education more available and more affordable to those who need it the most. nontraditional students who have been locked out of the current system like working parents deserve to be able to use federal student loans and grants to acquire the skills they need at a price that's right, and on a schedule that works for them. once we start looking at our nation's challenges through the lens of the family, solutions

naturally start coming into focus. for example we know that breaking the cycle of intergenerational poverty depends on breaking the energy shortage cycle of fatherlessness. here, family structure affects economic outcomes. but we also know that the causal arrow goes in the other direction, too. many of the men retreating from marriage today are not doing so confidently. they are defiantly rejecting tradition, and they are not just in the abstract decided that they want to define tradition and embrace postmodern values. no. for many of them a retreat from marriage is a constrained in secure choice, driven by a basic lack of social and economic

opportunities. so our profamily anti-poverty agenda must account for both sides of the coin. in addition to eliminating policy obstacles to family formation, we must build an economy that works for america's forgotten moms and dads so that they're free to embrace rather than subtly encouraged to retreat from marriage. we need to repair our broken criminal justice system so that reformed offenders can return to families and neighborhoods that need them. we must open of our transportation system so that we're investing in infrastructure project that benefit working parents and connecting where they want to live to where they need to work rather than advancing the agenda of special interest in bureaucrats in washington. and we must restore competitiveness and diamond is a to the top of our economy by reining in federal predatory regime -- dynamism, that stifles

and jade of startups while coddling well-connected corporate incumbents. conservatives often get criticized for putting too much emphasis on the family. but at this point with the amount of social science, evidence behind is on our side there's no denying that the critics haven't exactly -- have it exactly backwards. the real problem is that we don't think about the family enough. at least not in the right way. you see, it matters a great deal how we think about the family how we discussed the family pick and and public policy contact. too often conservatives talk about the family in disjointed terms as if it had two separate and distinct meanings. because we understand it profound effect on character formation, most conservatives instinctively appreciate and celebrate the family as a moral

institution and, therefore, look at it solely from that standpoint. but rarely do even acknowledge much less embrace the family as an economic institution. sure we talk a lot about the quote-unquote working families, but this doesn't do justice to the contributions america's families make to the american economy. many moms and dads are workers, yes, but we all know they are much, much more than that. so the challenge for conservatives and progressives is to embrace a new definition of a family that uses and transcends these two meanings. we need to acknowledge that the family is both a moral institution with economic implication and an economic institution with moral implications. we can no longer afford to pretend as if the family were strictly a moral issue while

insisting that poverty unemployment and unequal opportunity are strictly economic issues. they going to economic consequences of family structure isn't the polite non-judgmental thing to do. it contradicts reality and distorts our public policy debate. and ignoring the way economic conditions influence families, how they are formed, whether the remaining intact leaves us blind to the opportunity as policymakers have to strengthen the family by strengthening its economic foundations. family breakdown especially with america's most vulnerable communities is not for us to judge, but to try in every way we can to help repair. this work this work that remains ahead of us must be done with great sensitivity and tremendous compassion.

and we pray it must also be done with liberals. but it must be done. the american family is always changing, but our nation's dependence on the family never will. they are what make us good and they are also what make us great. the heart of american exceptionalism is not bankers in the boardroom for politicians at a podium, my parents helping the kids with homework after dinner at the kitchen table. in the battle of ideas it's easy to forget what we are really fighting for. and for whom we are fighting. washington too often forgets the family. we forget that economic growth and strong national defense are not the end but the means to the happiness of the people. the real work of american is not

the projection of power or the accumulation of wealth a humble heroism of storytime soccer games and visits to grandma's. we must remember that the most audacious entrepreneurs in america are not the high-tech ceos in silicon valley. they are a young couple at an altar saying, i do it in the most important investment in our nation's future are not issued on wall street. but are sleeping in their mother's arms at the maternity unit of the local hospital. building a new conservative agenda reform around these moms and dads and kids remembering america's forgotten family is the path to restoring the greatness of our great nation. thank you very much. may almighty god continue to bless the united states. [applause]

>> the senator has time for one or two questions. [inaudible] accused him of doing a lot of this on purpose the whole ideological slant of the left is to destroy families, to destroy society as we know it to destroy morals to destroy the glue that holds everything together. so blame them for it. make them targets because you have to have a villain otherwise you don't have a narrative. they are the villain. why hide it? they are your enemy. >> i understand the point and the sentiment. washington is full of lots of different kinds of people.

you may disagree with me on this but i believe that most of them including most are at the absolute opposite end of the ideological spectrum from me don't subjectively intend to hurt people. that maybe people were mistaken about what's going to hurt and what's going to help, so that's one reason why i tend to try to not vilify those on the other side of the aisle. i think they'll mistaken most of them at least have haven't outcome in mind that is positive, even if that outcome was unlikely to be breached. the other reason why i tend not to take that approach is that this is not a problem created by only one political party. my political party has contributed to this. if nothing else, by acquiescence but also in many instances by

affirmatively acting to put policies in place that have hurt families. so yeah, i see the point but i think where we can go with that is put even more emphasis on the fact that once we recognize that we have a system that is broken as it relates to family, those who will defend the broken status quo and cling to like an old tattered security blanket are on notice and are resisting things that would help the american family and, therefore help the american people. >> wait for the mic to. >> thank you for coming by senator. given i think the common sense notion what you're talking about is real and true about families and their importance, how much support for those ideas and how much support for the fact that there is a problem with that

families are treated and supported, that problem is exacerbated by government policies, how much of the recognition defined in washington in the senate and therefore, how much sentiment deeply there is for taking some action to fix it? >> these things are difficult to quantify. but i wish it to be a mathematical formula or numerical answer. i would describe it as small but growing. there is a small and growing level of awareness within washington the fact that this is happening, but it's going rapidly because the social science evidence continues to mount, and the social science evidence that is virtually unrefuted as far as i am aware in terms of this discussion of the fact that the single biggest

predictor, the single most impactful factor upward mobility is the existence of a married parent household. and if you have that that's the best gift that you can give to your children. and so with that as the sort of kernel of truth that lies at the center of what we're trying to do as awareness of the continues to mount i think we will see increasingly that so many policies emanating out of washington are undermining that. when you look at the fact that for example, we have the marriage tax penalty, a marriage tax penalty that has existed for years and that congress actually made worse two years ago the fact that we have for a long time had something in our tax code called the fair tax penalty which i discussed previously at

the heritage foundation in which i could take another 15 minutes to discuss right now, where we basically punish parents through our tax system. so from those tax would policies all the way to something as mundane as the way we fund transportation infrastructure projects in this country, that hurts american families. because in making it more difficult to fund road construction and maintenance, we make it more difficult for people to find housing that's close to where they want to live and close to where they need to work. so all of these things puts stresses and strains on family, some more directly than others. and now that the social science evidence is mounting i think we as a congress are more likely to be more aware of it. especially as we draw come as a

link of some of these some of these public policy threats to the family. some of which are relatively obvious like the marriage tax penalty. some are less obvious but understandable like a parrot tax penalty, and some of which take a couple of steps before you can fully comprehend them like the transportation funding problem that i described. >> thank you, senator. [applause] >> thank you, senator. we appreciate your leadership. ladies and gentlemen, we're going to put straight into the conversation on k-12 education with luke messer. >> okay, great. we are excited for this conversation but we're going to spend the next hour or so talking about education.

congressman luke messer is congressman from indiana sixth congressional district who was elected freshman class president and he came in. so he appears i will look up to him and he's a very well-respected guy in the group. users on the house committee, on budget, foreign affairs education and workforce. is a six generations user, national public afford fiscal does become a strong national defense and traditional values. yesterday senator cruz called school choice the civil rights issue of our generation. today where going to go deeper into our discussion about education reform. congressman messer passionate about the issue. we are very proud to be working very closely with them on this issue. his status causally on the phone with our staff with lindsay and her team who have been really deep on this issue and his critics introduced a bill providing full title i portably which allow states to make funding streams follow students to the school of choice.

we are very proud to work with him on this, and thank you for his leadership. please welcome him to the stage. [applause] >> -there. thanks tim. as tim mentioned i am congressman luke messer and i want to thank you for being here today to talk about the importance of equal opportunity in education for every american child. or as we commonly call it come school choice or by growth in public schools and i was raised in a single parent home by my mother in rural indiana. i had no chance of going to a private school when i was growing up. but i didn't need to. my mom worked 40 hours a week plus overtime at the delta faucet factory to put food on the table. i was blessed with great teachers and an active parent who cared about my future. but too many kids don't have

that. they are locked in failing schools, falling behind, and frankly, losing faith in america. in fact last year only 64% of americans surveyed said they still believe in the american dream. that means more than one-third don't come and that's the lowest such a result in nearly two decades. the question is why? we've all seen the numbers paychecks are shrinking, the middle-class is getting squeezed, folks are working harder and their wages are stagnant. the cost of necessities like making dinner and going to the doctor just keep going up. as my good friend jim jordan congressman jim jordan from ohio often says right now the middle-class sees the rich getting bail outs bases before getting a handout and they feel

like they are stuck in the middle paying for both. so who is advocating for working americans? as a party, as a movement, as a cause, the answer to that question needs to be us. we have two champion solutions that help working families succeed. so once again, they feel in control of their own destiny, and continue to believe in the american dream. that fundamental idea that your future will be determined by your ability and your integrity and your work ethic, not by your zip code. this is heavy lifting, and i am remember an old joke by yakov smirnoff. many people know he was a comedian in the 1980s. he was a russian who came to