long-term problems with the education system and let other mayors step up to the plate, and we will work with them in that regard. we know that the earlier students somewhere a classroom, the more punt -- students enter a classroom, the more opportunity for success they have. therefore, we've committed $1.5 million to phase in pre-k for 4-year-olds, and we're excited about that. [applause] we'll invest another $365 million this year in pre-k for 4-year-olds, but we also want to take the next step and we want to start designing programs not for 4-year-olds, but for 3-year-olds. [applause] all the studies say the earlier you get them in the better. let new york be ahead of the curve by enrolling 3-year-olds who are now making some of the largest cognitive and behavioral gains. [applause] we're going to start this with a

$25 million for pre-k for 3-year-olds. we know mentoring programs work and make a big difference, and we know that there are citizens who want to help and will get involved in mentoring. new york once led the way in mentoring which has now become an international phenomenon and was started really right here in the state of new york which birthed the idea so others could learn from us. i say we should once again lead the way in mentoring, and we will. we're going to set up a mentoring commission and it will be led pro bono by mrs. matilda cuomo. [applause] stand up. [applause] .. mrs. matilda cuomo.

my mother worked on mentoring for many many years and she's now doing it all across the world and she's made a great difference. let her help new york because it all starts at home, mom. pro bono. you understand why it's pro pro bono. christopher will subsidize you. we propose if we pass these reforms -- and this is an ambitious reform package and i understand there are going to be political problems for people on both sides of the aisle and they will be besieged by lobbyists and i understand the political consequence of what asking u to do in making these reforms. but if you want to really invest in the system, they make it the right system, i don't ask attack

-- taxpayers to throw good money after bad. let's make the hard choices once. let's stand up for the kids once. and if we make these reforms, i am prepared to make a very large investment in education. by our formula for this year which is in the budget our education formula would have the budget go up by 1.7% which is $377 million. that's what we agreed to last year in the budget when we took the personal income growth formula. so by our existing budget, it would be a $377 million increase. if the legislature passes these reforms, i propose a 4.8% increase in the budget, a $1.1 billion investment in

education because it will be the right education system. [applause] again, that's if we actually stand up and pass these reforms. public safety 9/11 marked the beginning of our war on terrorism, not the end. if anyone doubted that, paris was reminder to all of us and if not paris the terrorist groups are metastasizing all across the world. it's actually worse than it was in 9/11 and it's only continue to get worse. terrorist have evolved and they have adapted and we must do the same. this fall we doubled the national guard port and into a police and state police in key areas because of the heightened alert. given the recent attacks overseas, i believe we should continue our surge levels with state troopers, 300 national

guardsmen in areas where they have a potent presence which will cost the state $40 million but i believe it is a worthwhile investment to keep new yorkers safe. [applause] >> we will be conducting a security review of our state's counterterrorism capacity. indeed a airports, train stations, port authority state police on how they are coordinating and how they coordinate with local authorities and were asking ray kelly the state special buyers on homeland security to do that for us. [applause] this year we will be investing $15 million to open the nation's first emergency preparedness college in the country. it will be in albany with a satellite campus in oriskinay. literally, the first homeland security college in the united states is going to be right here

in new york. [applause] >> we propose create a $15 million of storm online system to coordinate federal, state and local emergency response is and efforts when it happens. this is an online system that when is the snowstorm, when is the hurricane. a town a village accounting can go online and get a status of what they need. we can track what they need. it also tracks the costs so that we would later go back to fema for reimbursement, we have an actual record that was done at the same time. we are also going to be training all local emergency personnel in alberni -- albany so i kind of strain on the same emergency protocol. the towns, villages, the counties the state. everyone is trained under the same protocol and everyone knows what the other people are doing.

in a weather emergency we need the right equipment. we've learned that the hard way a number of times. we proposed investing $15 million in snowplows to keep our roads open. one of the reasons we close roads is we can keep up with the amount of snowfall. if we had a higher number of snowplows we could actually keep up with the high rate of snowfall. and i think it's a worthwhile investment. also emergency vehicles and we want to equip the states fleet with gps so we know where they are at all times and we know how to deploy them. government reform. we talked a lot about what we can do today, what we have done what we need to do. we is us. we is the committee that they call government. and the more people trust

government the more people trust us the more capacity we have to do good work. and we need to continue to restore the public's trust. it's an unending process in my opinion. let's pass real campaign -- let's pass real campaign finance reform, let's pass public financing, let's pass a pay commission to reduce the influence of money in our government and increase the amount of trust. [applause] our social justice agenda has several points. number one we are proud of the reforms we've made to the justice system, including closing more prisons than any time in our history. [applause] but new york is one of only two states in the united states where 16 year olds are treated as adults for criminal responsibility.

one of only two states. a 16 year old who gets convicted of a crime is now put in state prison at 16 years old, and state prisons are no place for a 16 year-old, and in expectation -- [applause] and any expectation that you're going to put a 16 or 17 year old in a state prison and you're going to rehabilitate them or you're going to teach them or they're going to come out better than they went in is totally unrealistic. last year we convened a panel on how we should right the injustice. this year the panel came back and said let's raise the age of criminal responsibility to get 16 and 17-year-olds out of the adult prisons without being hurt and not help.

[applause] and let's have a set of facilities and systems for 16 and 17-year-olds. in terms of -- sorry. in terms of justice the promise of equal justice is a new york promise and it is an american promise. we are currently in the midst of a national problem where people are questioning our justice system and they are questioning whether the justice system really is fairness for all and whether the justice system really is colorblind. and that's not just new york. it's a problem all across the country and it's a problem in reality and it's a problem in perception. if it's a problem only in perception, it is still a real problem because people have to trust the justice system and the

trust has to go both ways. that unity has to trust and respect the police, and the police have to respect and trust the community. and we have to restore that trust and that respect, and we are proposing a seven-point agenda to do just that. first of all a statewide reconciliation commission on police and community relations so we can have a dialogue community by community where the community can talk to the police and the police can talk to the community in a safe situation and a safe setting with frankness and candor to work through issues. number two, the state should help police forces statewide recruit more minorities into law enforcement. the more the police force looks like the community they are policing the better job the

police can do. third, we believe we should -- [applause] third, we believe we should provide race and ethnic data on police actions statewide. we have nothing to hide. transparency works. let's give people the actual facts. number four we need to do everything we can do to keep our police safe. these are dangerous dangerous jobs, especially during these times. we should fund replacement vests, body cameras and bulletproof glass for patrol cars in high crime areas. [applause] fifth, district attorneys may issue a grand jury report or a letter of fact explaining proceedings if there is no true bill on a police fatalities so people know what actually happened in that proceeding and

in that grand jury. sixth i will appoint an independent monitor who will review police the cases where a civilian dies and no true bill is issued, and independent monitor can recommend a special prosecutor be appointed. the independent monitor should have access to the grand jury information which will be protected, but this way the independent monitor can actually make an intelligent recommendation because they will have all of the evidence and they will have all the facts. i think these seven points will go a long way towards restoring trust, restoring respect both ways, from the police to the committee, and the community to the police. and let's start now. we will be working on this over the next several months but it's a good start. [applause]

>> that is our justice agenda, and as i mentioned it is a work in progress and we will be working with all parties. women are still not treated equally to men. we must pass the full 10-point women's equality agenda. [cheers and applause] it's been too long. new york state now has more schools being investigated for sexual assault than any state in the nation. 11 colleges being investigated on how they handle sexual assault, believe it or not. this is just wholly unacceptable and it's repugnant to our basic belief that women have equal rights and that we protect women equally. let new york take the lead in protecting these young adults and these students. last fall, suny chancellor

zimpher past a really leading proposal which requires affirmative consent for sexual relations to ensure, and ensures a woman's access to law enforcement. all too often when a woman is victimized on a campus, the recourse is campus police and the tendency is to keep it private because it's embarrassing or the university and all too often justice is not done. the statistics show one out of four young women will be sexually assaulted while she is in college. one out of four women. and the rate of reporting is in the single digits.

and to make matters worse the experts believe it's a small number of men who are committing these acts but a high level of recidivism because they are not being reported, and that is the trap that we are in. so what we did on suny campuses, women need to affirmatively consent and then women are assessed of their rights. they can go to the campus police or they can go to the local police or they can go to the state police. and they can treated as as a crime that it is but it's working on suny. it has been working on suny. we want to make it a law that covers every college in the state of new york, and we want to be the first state to do that. [applause] we have more homeless today than

ever before in the history of the state of new york and that is just and integrates -- said a disgrace. we want to increase our homeless budget by $403 million, a 20% increase in light of the increased in homelessness. on the numbers, this is what the agenda looks like and this is as simple as the budget is. we discussed before when it's done right, the budget is a fairly simple exercise. the state of total, the budget would go up 1.1.7% of total. we have a 2% spending cap so we are under the 2% spending cap at 1.7%. state agencies are at .6. that means state agencies are basically flat. parks state police, department of transportation, et cetera. they're basically flat. they are flat because we give a 3.6% increase the medicaid,

which is the formula amount, and it anticipates the 4.8% to education. for us to afford a 4.8% increase in education, and 3.6 on medicaid and state under 2% the rest of the state budget basically has to be zero. and that's our budget. 0% increase for the agencies, 4.8% for education 3.6% for medicaid, and it comes out to 1.7%. the new initiatives that are within the state budget, which we went through in how they're funded property tax renters really is 350 million affordable housing is 150, suny, cuny increase in homelessness,

start-up ny is 50 million, not-for-profit i love new york those with initiatives we just went through. they are funded from the normal state budget. this year we have a settlement funds of $5.4 billion. these are funds that were basically a gift from above. they were settlements with law enforcement agencies where the state received a penalty. it comes out to 5.4 billion. our proposal for the 5.4 billion is as follows. $850 million is money that we of the federal government for discrepancy in past billings, which we've been working through four years but it's going to come out to about $850 million. we would spend 1.5 billion on upstate revitalization. those are the three

$500 billion revitalization grants to three regions upstate new york and then 3 billion on infrastructure and other investments. the other investments are as you see here, through a stabilization fund protects the toll for one year and invest in the happens the -- tappan zee high-speed broadband come up state hospitals which are in terrible need of repair and reconstruction. for mta stations for the bronx parking garages for long island and westchester for the long island railroad, government efficiency grants, upstate response upstate ports the state and the southern tier firm went initiative comes out to the $3 billion that is resolve settlement fund. that is the budget in a nutshell

and the state of the state in a nutshell. one last point if i might one of my colleagues who is innocent women we were talking about this outline of these issues the other day. these sentiments said well this is going to be really hard because these issues are not new york issues. these problems are all national problems and that is true. failing schools are a national problem. struggling older cities is a national problem. questioning of our justice system is a national problem, so he is right. they our national problems but he's wrong if he thinks that we can't solve them. because, my friends, that is precisely what we do here together as new yorkers, and that's what new york has always done.

[applause] new york is the state that leads and it always has. we were the first state to stand up for freedom of religion. this day passed and emancipation law before abraham lincoln was even born. we passed the first has reform to guarantee living conditions in tenements. we passed the first law protecting women's property rights. albany county, first done in the nation that allowed women to sit on juries, right here in albany county. [applause] that is new york because while washington fights and dreadlocks we find compromise and we move forward.

why? because washington defines itself by their differences, and we define ourselves by our commonalities. because their politics divides and our politics unite. that's the difference between albany and washington, because we have a different belief. we believe in community and we believe in the concept that we are all connected. we don't believe we are all individuals on our own. we believe there's a connection that binds us, that there's a cord that connects me to you to you, to you and that cord we use a fabric and when one of us is raised we are all raised and when one of us is lowered we are all lowered. and those are not just words. that is the way we live. that is the way we operate. the lieutenant governor was talk that the snowstorm in buffalo. seven feet of snow.

it was an impossible situation. it overwhelmed everything, and people from all over the state dropped everything and came to buffalo to help. it was a national guardsman i went up to the national guardsman to shake his hand to say thank you. and he said governor, you don't remember me. we met in the north country. no need to say thank you. you came to help us when we had hurricane irene. there was a plow truck from nassau county and i climbed up on the step and i shook hands with the plow truck driver. i said how long did it take you to get your? 13 hours to drive a plow truck am nassau county to both will. i said, wow you know, we are so grateful. and he said, no governor. everybody came to us when we had hurricane sandy. everybody came and we are just we paying the favor.

new york city set up 100 -- [applause] new york city mayor de blasio, sent up a 100 firefighters and all of the equipment. and the same thing with the fdny. i said thank you for coming. and the firefighter said after 9/11 when the entire world showed up to help us the new york way is one for all and all for one. and i thought you know what? it is that simple. and it comes down to that simple wisdom and the buffalo coins we made for the people who helped earn buffalo say exactly that. all for one and one for all. and that really is the new york way. and it really is the new york

credo. the power of we. the power of we. putting their differences aside, fighting the commonalities and coming together. that's how we have been governing. because we believe despite our differences, at the end of the day we are one state. we are upstate come down state, but we are one state. we are democrats republicans but we are one state. we are gay straight but we are one state. we are black, we are white but we are one state and that's how we govern and that's how we come together and that's how we forge an agreement, and that's what makes this state so special and that's why i am so honored to be the governor of this great state because the problems are not any one region or any one person. a young girl who sleeps and homeless shelter tonight is our daughter or the farmer and the southern tier who is struggling to make ends meet --

[applause] that farmer is our brother. the child that lives in poverty in rochester today is our child. that's how we govern because that's how we live. as usual, the man who said this best was a new yorker and a former governor. he was a statesman and he was a visionary and he was a giant. he was your friend and he was my father. and he said and i quote, those who made our history taught us above all things the idea family, of mutuality, they sharing of benefits and burden fairly for the good of all it is an idea as essential to our success, and no state or nation that chooses to ignore its troubled regions and people while watching others thrive can call itself justified.

we must be the family of new york feeling one another's pain, sharing one another's blessings, reasonably, equitably, honestly, fairly, without regard to geography or race or political affiliation. my father was right then and he is right now. that is the new york spirit. that is the new york essence. that is what makes us special and makes us the greatest state in the nation. that is the philosophy that has brought us four years of balanced budgets and four years where the state has seen more progress than in the past 40 years. and that is the philosophy that's going to take this state a new heights with the good work of this body. working in partnership, working together and working with respect for all of us. we are going to make this state a better state.

and pop wherever you are and i think i know where for all the ceremony and the big house and all the pomp and circumstance, please don't let me forget what makes new york, new york. thank you and god bless you. [applause] >> with the snow shovel to the nation's capital, the senate gelson for what is expected to be a light legislative day. they will begin with an hour of morning debate.

no votes held today. on monday the senate will begin work on a bill requiring annual third party reviews of mental health and suicide prevention programs within the veterans affairs department. a final vote monday expected at 5:30 p.m. eastern, and work next week on the bill funding the department of homeland security passed the end of february. let's go live now to the senate floor k. on c-span2. the president pro tempore: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. almighty god, sovereign of our nation and lord of our lives thank you for infusing us with the confidence that you order our steps each day. give our lawmakers courage and a

strong resolve to glorify your name, as they trust the unfolding of your loving providence. as they remember what you have already done to bless this nation, inspire them to march confidently toward tomorrow's difficulties with a total dependence on your power. may they recommit themselves each day to faithfully fulfilling the awesome responsibility you have entrusted to them. lord be their strength and shield this day and always. we pray in your mighty name. amen.

the president pro tempore: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god indivisible, with liberty and justice for all. the presiding officer: under the previous order, the senate will be in a period of morning business with senators permitted to speak therein for up to ten minutes each.

mr. hatch: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. mcconnell: madam president? the presiding officer: the majority leader. mr. mcconnell: are we in a quorum call? the presiding officer: yes. mr. mcconnell: i ask consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: i move to proceed to h.r. 240. the presiding officer: the clerk will report the motion. the clerk: motion to proceed to calendar number 5 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 send a cloture motion to the desk. the presiding officer: the clerk will report the motion. the clerk: cloture motion. we the undersigned senators in in accordance with the provisions of rule 22 of the standing rules of the senate do hereby move to bring to a close debate on the motion to proceed to h.r. 240 making appropriations for the department of homeland security for the fiscal year ending september 30, 2015, signed by 17 senators as follows. mr. mcconnell: madam president, i ask consent the reading of the names be dispensed with. the presiding officer: without objection. mr. mcconnell: i ask consent the mandatory quorum be waived and the vote on the motion to invoke cloture occur at 2:30 p.m. on tuesday february 3. i further ask if the motion to invoke cloture is agreed to, all postcloture time be yielded back and the senate proceed to a vote on the motion to proceed to the bill. the presiding officer: without objection.

mr. mcconnell: madam president, the senate's passage of the keystone jobs bill is great news for the american people. now the senate will soon turn its attention to a few different matters. first we'll be voting on a bipartisan measure that's been championed by the chairs of the veterans and armed services committees. we lose thousands of our heroes every year to suicide, which is a tragic situation and senators mccain and isakson are leading efforts to do something about it. their legislation would provide more of the mental health and suicide prevention support our veterans deserve. the measure already passed

unanimously through the house of representatives. now we hope for a bipartisan outcome here on the senate floor. the same should also be said of a second piece of legislation we'll consider. it's a debate that will challenge our colleagues on the other side with a simple proposition. do they think presidents of either party should have the power to simply ignore laws that they don't like? well our democratic colleagues -- will our democratic colleagues work with us to defend key democratic ideals like separation of powers and the rule of law? or will they stand tall for the idea that partisan exercises of raw power are good things? the house-passed bill we'll consider would do two things. fund the department of homeland security and rein in executive overreach. that's it. it's simple, and there's no reason for democrats to block

it. madam 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:

mr. sessions: madam president? the presiding officer: the senator from alabama. mr. sessions: i would ask consent that the quorum call be dispensed with. the presiding officer: without objection. mr. sessions: madam president we're told that next week we can expect that the department of homeland security appropriations bill which fully funds the department of homeland security and includes the law enforcement priorities that were agreed to on a bipartisan basis in the house and i think will be approved on a bipartisan basis in the senate hammered out in the appropriations committee will be a part of that bill and it will be coming to the senate. the house of representatives has, therefore voted to fund homeland security in

essentiallilyessentiallythe ways the president has asked for and that democrats and republicans agree on. it's not a bill liked by everybody. but we have to do those things. we have to fund all the departments and agencies of our government and this one is one of those. the -- yet we now have a statement that our democratic colleagues are going to block the bill and they apparently intend to say that republicans blocked the bill and that somehow republicans didn't fund homeland security. that's apparently the message that they're going to try to promote. they're going to say they want a clean bill. and what does that mean? what does a clean bill mean? is it a bill that funds the

immigration and nationality act as was passed by congress some 500 pages that funds the officers and enforcement officials who carry out those duties every day? does it fund those? yes, it funds those. what is it that people are complaining about then? what is this clean bill that they want to see? well, i would suggest to you it's not a clean bill that they want in reality. they want legislation that will fund action by president obama that violates the immigration and nationality act actions that he's taken through executive amnesty. that's the problem that we're dealing with. apparently they believe that the president of the united states, who doesn't agree with the way

immigration law was written the way it's been carried out now for 20, 30, 40 years he's not happy with that. he asked the congress to change it. congress says no. he says, i'm going to do it anyway. i'm going to create right across the river from washington and i'm going to lease a building that will house a thousand new workers -- new workers. and those workers are going to be there to process and give a legal status, work permits social security participation medicare participation to 5 million people who according to the immigration and nationality act are unlawfully in the country. and are not able to work and businesses cannot hire somebody that's in the country unlawfully. how much -- is there any country in the world that says it's

appropriate for a business to hire somebody who entered their country unlawfully? what kind of logic can support such a reasoning? so the president is not an imperial master. he asked congress. congress said no. so he wants to go ahead and do it. and our democratic colleagues are now telling us that they are not going to support funding of the homeland security because the congress -- the house of representatives bill and the bill that i think will have a majority in the senate won't fund this building, the thousand people and all the other activities that will be needed to execute this unlawful, unconstitutional executive amnesty. it's through the looking glass. i mean, what world are we in? i mean, i was a federal

prosecutor for almost 15 years. you enforce the law. you don't enforce what some president says he'd like to see done that's not lawful. and, colleagues, this is so serious that the immigration and customs enforcement officials their association filed a lawsuit and they challenged the action of their supervisors telling them not to enforce plain immigration law. they went to federal court. has anybody ever heard of that before? this is the equivalent of the f.b.i. for the immigration service. these are first-rate officers. many of them have been there 20, 30 years and they say you're asking us to unenforce the law. and they've challenged it in court. i've never heard of anything like that before. the people in charge with

enforcing the law having to go to court to keep from being told not to enforce the law. it's just amazing. now, this bill will not deny a penny of funding. it will not deny any funding for any program activity or action that's authorized by law. it does not deny funding for any of those programs that are actually authorized by the laws of the united states. in fact, it says, spend the money, mr. president. on enforcing and following the law. you cannot spend money unconstitutionally to advocate and create a system of law congress rejected, an unlawful activity. now, the congress of the united

states is not helpless whether it confronts the president. colleagues, we've got to get out from under our desks here. are you afraid to say to the president of the united states we don't agree with there and we're not going to fund this? is that the world we're in? are we hiding under our desk that the president may go on television and attack us because we won't agree with his ideas? surely not. surely not. so the congress has the power to appropriate money. it goes back to the historic development before america became a nation that the parliament took over the power of money from the king. parliament passed the laws, not the king. and we adopted that and we created a constitutional order instead of a king to decide how we operate.

and the parliament, the congress of the united states was empowered to handle the money. and what obligation, colleagues, does this congress of the united states have to give the president of the united states money top undermine the laws of the united states? what power does he have to compel us to do so? zero. we should dot right thing an the right thing is to say mr. president, we're willing to consider reform of imdpraition -- imdpraition laws, but we didn't aproof this approve your bill. we're going to continue to work to improve immigration law and make it better and serve the national interest of the united states not special interest, not activist groups, not big

businesses but the average working americans' interest. that's who we're going to serve in this process. so why are we afraid to push back on that? it's just amazing to me. so i don't think we will. in fact it's sort of remarkable that this is a bipartisan position that the president has overreached. i'm not going to quote the names of senators. i'll be a little bit courteous at this point and just quote some of the statements from -- these are all separate democratic senators in the last few months when asked about this executive amnesty by the president. a lot of senators have never been asked. they have -- probably, thankfully they weren't asked. this is what one senator said. "but the president shouldn't make such a significant policy

change on his own." another democrat senator: "but executive orders aren't the way to do it." another senator: "i disagree with the president's decision to use executive action to make changes to our immigration system." another democrat senator: "i'm disappointed the president decided to use executive a action at this time on this issue as it could poison any hope of compromise or bipartisanship in the new senate before it even started. it's congress' job to pass legislation and deal with issues of this magnitude." absolutely correct. it's congress' duty to do this. what about another democratic senator? "i worry that his taking unilateral action could in fact enflame public opinion change the subject from imdpraition to the president -- immigration to

the president. the i also have constitutional concerns about where prosecutorial discretion ends and unconstitutional authority begins." a wise quote i think. another senator: "i have concerns about executive action. this is a job for congress. it's a time for the house to act." another democratic senator: "the best way to get comprehensive solution is to take this through the legislative process." well, i would say colleagues, why -- why would any senator democrat or republican when the very integrity and the constitutional powers that have been given to congress are eroded in a dramatic way by the president of the united states,

why would we not want to assert congressional authority? it's important for our constitutional structure in my view. well there we are. we had hearings in the senate on these issues and on the new nominee for the attorney general, and the new nominee says that she supports and will actively work for the policies that the president established. the attorney general is the chief law enforcement officer in the land, and they take an oath to see that the laws of the united states are faithfully executed. i believe strongly in this. i don't think it is a close question. it's not a close question, colleagues. the president's actions are

unlawful. they execute a policy that's detrimental to our ability to ever establish a lawful system of immigration in america and they're against the wishes of the congress, who've rejected this proposal, and they are overwhelmingly in opposition to the views of the american people as poll after poll has demonstrated. what is it? the american people have no role in their government? they can't expect their members of the senate to vote for legislation that follows the law, instead of breaking the law? aren't they frustrated already that our people, our congress is not following the law and they're frustrated with the president's failure to follow the law? i think they are. and, of course, i'd like to note

that president obama himself said 20 years he did not have the power to do this. he said in may of 2008, "congress' job is to pass legislation. the president can veto it or he can sign it. i believe in the constitution, and i will obey the constitution of the united states. we're not going to use signing statements." and another time he said, "ultimately, our nation, like all nations has the right and obligation to control its borders and set laws for residency and citizenship and no matter how decent they are no matter their reasons the 11 million people who broke these laws should be held accountable." october of 2010, "i can't ignore laws that are out there."

"i'm president. the i'm not king," he said on october 25." i'm president i'm not king. i can't do these things by myself. we have a system of government that requires the congress to work with the executive branch to make it happen." well even king george couldn't act contrary to the laws passed by parliament. he goes on, "i just want to repeat i'm president i'm not king. if congress has laws on the books that says that people who are here that are not documented have to be deported, then i can exercise some flexibility in terms of where we deploy our resources, but there's a limit to the discretion that i can show because i'm obligated to execute the law. that's what the executive branch means. i can't just make up the laws by myself." close quote.

well that's a -- how true is that? that is absolutely correct. there are 20 of these. and we will be talking about that as the weeks go. what do scholars say? the scholars say that this action is lawful and that congress should fund it and that we have an obligation to fund it or the president has a right to demand it. jonathan turley, who is a shapiro professor of law at george washington university, nationally recognized constitutional scholar testified before congress many, many times most often as a democratic witness who has said he supports president obama and voted for him he said this: "i believe the president has exceeded his brief. the president is required to

faithfully execute the laws. he's not required to enforce all laws equally or commit the same resources to them, but i believe the president has crossed the constitutional line." he said that again yesterday at the judiciary hearing on the attorney general. he says, "this goes to the very heart of what is the madisonian system. if a president can unilaterally change the meaning of laws in substantial ways or refute -- refuse to enforce them, it takes off-line that very thing that stabilizes our system. i believe the members" -- he's talking about members of congress -- "will loathe the day that they allow this to happen. """this will not be the last president. there will be more presidents who seek to claim this same authority." close quote. well i think that's pretty

significant, professor shapiro a supporter of president obama personally and has been a frequent democratic witness before our committee. professor nicholas rose enkrantz of georgetown university law center in his testimony yesterday before the senate judiciary committee said this -- how simple is this and how true this? "rather than declining to comply with a duly enacted statute the president has decided" -- let me repeat that, because it's -- this line is pretty insiteful frankly. "rather than declining to comply with a duly enacted statute"--

statute"-- the i.n.a. -- "the president has decided to comply meticulously with a bill that never became law." what a statement that is? and it's absolutely true. he went ton say "congress has repeatedly considered a statute called the dream act which would exempt a broad category of aliens from the immigration and nationality act." the president favored this dream act, "but congress repeatedly declined to pass it." i.t. not init's not in the code. it didn't pass. he goes ton say "once again the president does have broad prosecutorial discretion and broad discretion to other executive resources but in this case it's quite clear that the president is not merely trying to conserve resources. indeed more to the point" --

let me skip to this next line. "to put the point another way the president shall take care that the laws" -- capital "l" -- "shall be faithfully executed, not those bills which fail to become law. here in effect the president is faithfully executing the dream act, which is not a law at all. rather than the immigration and nationality act, which is the law of the land. the president cannot enact dream act unilaterally, and he cannot evade article 1 section 7 by pretending that it passed when it did not." close quote. how much clearer can you lay it out? this professor is simply telling the truth. there is no other way to look at

this in my opinion. and exong is congress is being challenged at its very core by this action. and the result of this challenge will have constitutional ramifications and will have ramifications as we consider the relative powers of the executive, legislative and judicial branches in the years to come. it's not a little matter, colleagues. it really is an affront to constitutional order and we have a duty, no matter what we feel about this amnesty that goes well beyond dream act amnesty, we have a constitutional duty to defend the integrity of the congress against an encroachment of monumental proportions by the president. that's the fundamental issue that we'll be dealing with when people complain about the funding bill for d.h.s.

david rifkin, who served two presidents in the white house counselcouncil, and elizabeth price foley, wrote an article recently in "the wall street journal." it just hammers and devastates the arguments that the president is making this favor of his executive a.m. necessary city. -- executive amnesty. they say this. "by announcing a global policy of nonenforcement against certain categories, mr. obama condones unlawful behavior weakening the law's deterrence impact and allows law-breakers to remain without fear of deportation. these individuals are no longer deportable though congress has declared them so." and they conclude with this

statement, colleagues, that we need to consider. i believe this concluding statement -- their concluding statement is accurate. i think it's pretty much indisputable. and if it is accurate then congress has a duty here a duty to stand firm. and this is what they conclude. the president after months finally extracted from the office of legal counsel of the u.s. department of justice a memorandum that allows basically what he's trying to do. it's been heavily criticized. legal scholars say it's a poor, poor analysis in a whole lot of ways. in fact, it's an unacceptable analysis. so this is what the authors of

this recent opinion piece in the "wall street journal" said -- quote -- "the office of legal counsel's memo endorses a view of presidential power that has never been advanced by even the boldest presidential advocates. if this view holds future presidents can unilaterally gut tax, environmental, labor or security laws by enforcing only those portions with which they agree. this is a dangerous precedent and cannot be allowed to stand." so this is what is at stake. this is what is at stake. and this blithe statement that we just -- that the democrats intend to oppose, even going

forward to consider the legislation that the house has sent us, to consider the bill that funds the department of homeland security, they intend to block that through the filibuster. this is what senator barbara mikulski has reported by "congressional quarterly" said last night apparently. senator barbara tells "c.q." that democrats will block the senate from proceeding to debate the d.h.s. spending bill over immigration riders." close quote. have this made that decision? surely not. surely we should move to the bill. and if they're unhappy with what language the house put in, offer an amendment to take it out. have the right to have full amendments consistent with the rules of the senate on this

legislation. they can offer amendments to strike the language in the house that simply says we're not going to fund unlawful executive amnesty. it's a pretty stunning thing that we're dealing with and we'llen confronting next week. i believe it's a position that's untenable. it's untenable constitutionally. it's untenable lawfully. it's untenable because it's contrary to the will of republicans and democrats on the house and senate who oppose the president's action. and it's untenable politically because overwhelmingly the american people reject it. i'm flabbergasted that we're now hearing that the democrats might

not even allow the bill to come up on the floor. what does that mean? then i suppose they will say mr. republican congress, you're shutting down homeland security. why, i would ask. well because you're putting in language that says the president shouldn't go off and create and endorse and support and fund changing of the law of the united states that congress hasn't changed. and we insist that you fund his activities and give him the money that he needs to carry out this project. and congress says, no, we don't want to do that. well, we opposed it and we won't pass the bill that funds homeland security. well that's a bad thing to do.

the american people won't like it that you don't fund homeland security the republicans may say. and you know what our democratic colleagues i guess will say? no. you shut the homeland security down because you kept the president from doing his activity. and we're going to accuse you of not funding homeland security. and we're going to say you placed the nation at risk. and the president is going to accuse you of defunding homeland security. and he's going to accuse you of putting the country at risk. and you know the media they're on our side and they're going to report it that way. and you turn on your television at night and they're going to say to the american people republicans didn't fund homeland security. and you're going to lose. look we're not through the

looking glass yet. give me a break. that's not going to sell. and the american people are not going to buy that. and the press is not going to shield for this kind of story. it's going to be clear who is not funding homeland security. it's going to be clear who wants to create a lawful system of immigration and to fund it in an effective way and serve the national interests in this fashion. i just feel strongly about it and hopefully this won't happen. hopefully this blog last night is not going to be the position of the democratic party. i just read what seven or eight of them who said they don't approve the president's action, why would they vote not to even go to a bill? and remember, if the bill comes up and our colleagues don't like

this language in it, they can move to alter it or strike it. let's vote on it. and sometimes you win in this body. sometimes you lose. we lost many times many on the republican side, in supporting the keystone pipeline. now we're told the president may veto the bill that had well over 60 votes and many democrats voting for it. well is congress going to say we're going to ignore that and ask the law enforcement officers or the other officers to ignore the president's veto and pretend the law passed when it didn't pass? of course not. and neither can the president. we are coequal branches and the president does not have authority and the right and the power to enforce a law that never passed to grant amnesty to

people who are unlawfully here. but he goes beyond prosecutorial discretion. as i said, i've been a prosecutor a long time. it's not prosecutorial discretion to give someone unlawfully in the country a work permit a photo i.d. as they intend to do, a social security number the right to participate in social security, the right to work to take any job in america. what job are they going to take? who's offering an jobs of any numbers today in america? not many. so aren't these individuals that are here unlawfully, now they'll be able to go to the trucking

company and take a pretty good trucking job. or maybe it's a forklift operator. or maybe they want to work for the county commission. i asked the attorney general nominee two days ago in a hearing, would the department of justice sue a business who said, well we got job openings but we're going to hire those people who have green cards or came here lawfully and have a lawful staw but we're not -- and have a lawful status but we're not going to hire somebody who has this temporary presidential amnesty. are you going to sue them for some sort of violation of rights? she said she didn't know. they might. and basically said they might sue them. so this is a real danger. the truth is, colleagues, we don't have enough jobs in america today. we've got the lowest percentage

of americans actually working in the working ages that we've had since the 1970's. it's dropped steadily year after year. there's no doubt that if you bring in more people into our country than we have jobs for it does make it harder. also an excess of labor pulls down wages and things aren't really getting better. wages, median family wages since trefn -- 2007 are down $4,000, a stunning amount. wages in december, last month in america dropped five cents an hour. this idea that the congress is on track everything is wonderful is not so wonderful for average working americans. their wages went down, not up, as we've been told is happening.

this is not going to help. it's going to make that situation worse. but fundamentally we need a lawful system of immigration that we can be proud of. and somebody needs to be concerned, first and foremost, about the people we represent the people that are here, the people who have emigrated here lawfully. their wages are down also. in some cases even moreso. in fact, they are often competing most directly from, against unlawful evidence. so i would say this, this is not the right way to do it. we're going to continue to talk about this. i believe the congress of the united states, once this is really understood what's

happening, will listen to the constituents of america. they will decide first and foremost our duty is to create a lawful system of immigration that's fairly enforced, that we can be proud of and serves the interest of the american people, the national interest. that's what's being overlooked here. people are coming from abroad and they want to come to america, and we've always had the most generous immigration system in the world. and we believe in immigration. but it should come lawfully, and they are -- the congress should help create a system that supports a lawful entry into america. the council that represents customs and immigration service

officers recently, just january 22 of this year, issued a strong statement. they say that dedicated immigration service officers and adjudicators and uscis are in desperate need of help. the president's executive amnesty order for five million illegal immigrants places the mission of uscis in grave peril. close quote. has anybody been listening to them or do they just listen to big business? do they just listen to activist groups? they just listen to lobbyists politicians with their political schemes to win elections? is that what they're listening to. they're not listening to the officers who carry out the

duties. last fall the same group represents the theers government workers. ken palinkas, a very able leader said this -- quote -- "making matters more dangerous. the obama administration's executive amnesty like s. 744 that he unsuccessfully lobbied for would legalize visa overstays and cause millions additionally to overstay, raising the threat level to america even higher." it goes on with many other points. madam president, i thank the chair for the opportunity to speak. i'm very, very worried that our democratic colleagues are making a mistake. i think the right thing in this new senate, where majority leader mcconnell has allowed more votes in one day than the

republicans got from senator reid the entire year last year. would he probably doubled the number of votes this year than we had all of last year. the democrats are saying we're not even going to go to this bill that would fund homeland security? and if 2003 don't go to it, then homeland security is not funded. they're going to block going into a bill that would fund homeland security. and senator mcconnell is saying you can have your relevant amendments and if you don't like the language the house put in in that says the money can only go to loft activities, you can offer an amendment to take it out but if you don't have the votes you lose. that's the way the system should work. i thank the chair and would yield the floor. and note the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call:

mr. mcconnell: madam president? the presiding officer: the majority leader. mr. mcconnell: i ask further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: i ask unanimous

consent the senate proceed to the immediate consideration of calendar number 8 s. res. 35. the presiding officer: the clerk will report. the clerk: calendar number 8 senate resolution 35 commemorating the 70th anniversary of the liberation of the auschwitz extermination camp in nazi-occupied poland. the presiding officer: without objection, the senate will proceed to the measure. mr. mcconnell: i ask that the committee-reported substitute be agreed to, the resolution as amended be agreed to, the preamble be agreed to, and the motions to reconsider be made and laid upon the table with no intervening action or debate. the presiding officer: without objection. mr. mcconnell: now madam president, i ask unanimous consent the senate proceed to the immediate consideration of s. res. 59 which was submitted earlier today. the presiding officer: the clerk will report. the clerk: senate resolution 59 raising awareness and encouraging prevention of stalking by designating january, 2015, as national stalking awareness month.

the presiding officer: without objection, the senate will proceed to the motion. mr. mcconnell: i ask that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be considered made and laid upon the with no intervening action or debate. the presiding officer: without objection. mr. mcconnell: madam president, i ask unanimous consent the senate proceed to immediate consideration of s. res. 60 submitted earlier today. the presiding officer: the clerk will report. the clerk: senate resolution 60 supporting the goals and ideals of observing the national slavery and trafficking prevention month from january 1 through february 1 2015, to raise awareness of and opposition to modern slavery. the presiding officer: without objection, the senate will proceed to the motion. mr. mcconnell: i ask the resolution be agreed to, the preamble be agreed to and the motions to reconsider be made and laid on the table with no intervening action or debate. the presiding officer: without objection. mr. mcconnell: now madam president, i ask unanimous consent that when the senate complete its best it

adjourn until 4:00 p.m. on monday february 2, following the prayer and pledge, the journal be approved, the morning business 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 and that the senate then be in a period of morning business with senators permitted to speak therein for ten minutes each until 4:30 p.m., equally divided in the usual form. i further ask that the senate then proceed to consideration of h.r. 203 the hunt clay save act under the previous order. the presiding officer: without objection. mr. mcconnell: on monday the senate will vote on the bipartisan house-passed bill on veteran suicide prevention, that chairman isakson and mr. blumenthal reported last week and we're moving quickly to send it to for his signature. that should be the only vote on monday night. 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 4:00 p.m. on monday, february 2.

conservative leadership does in fact warm my heart. after foot putting considerable thought making another run for president. i have decided it is best to give other leaders in the party the opportunity to become our next nominee. let me give you my thinking. first i'm convinced with the help of people in this call we could win the nomination. finance calls me clear we have

more enough funding to competitive. with a few exceptions our field political leadership is enthusiastic about a new race. reaction of republican voters across the country was surprising and heartening. i know early poll numbers move up and down a great deal during the campaign. we no doubt have a strong position. one poll out just today shows me gaining support and leading next closest contender by nearly two to one, also leading in all four early states. so i'm convinced we could win the nomination but i fully realize it would be a difficult test and a hard fight. i also believe with the message of making the world safer, providing opportunity for every american regardless of the neighborhood we they have in and -- live in and working to stop the grip of poverty i would have best chance of beating haven't wall nominee but that is before the other contenders have had the opportunity to take their message to the voters.

i believe one of our next generation of republican leaders, one who may not be as well-known as i am today one who is not yet taken their message across the country one who is just getting started may well emerging better able to defeat the democrat nominee. in fact i expect and hope that to be the case. i feel that it is critical that america elect a conservative leader to become our next president. you know that wanted to be that president but i do not want to make it more difficult for someone else to emerge who may have a better chance of becoming that president. can't imagine how hard it is for ann and me to step aside, especially knowing of your support and the support of so many people across the country. we believe it is for best of the party and the nation. i've been asked and will certainly be asked again if there are any circumstances

whatsoever that might develop that could change my mind. that seems unlikely. accordingly, i'm now organizing pac or not taking donation i'm not hiring a campaign team. i encourage all of you on this call to stay engaged in critical process of selecting a republican nominee for president. please feel free to sign up on a campaign for a person who you believe may become our best nominee. i believe a republican winning back the white house is essential for our country. and i will do whatever i can to make that happen. so all my supporters, friend, and family who worked tirelessly and loyally to support my campaigns in the past, ann and i will always be deeply appreciative. what you have already done is a tribute to your patriotism. we're overwhelmed and humbled by loyalty to us. the generosity of spirit.

and by your friendship. god bless you all and god bless our great country. bye-bye. >> before this morning's call with supporters mitt romney first shared his decision in a call with a small group of advisors, some of whom have been reluctant to support a potential rival until they knew of his plans. "new york times" reports that mitt romney's announcement marks, quote, the beginning of a day of reckoning with his would-be rivals. he is scheduled to have dinner with mr. christy this evening according to two people with knowledge of his schedule, suggesting mr. romney may throw support of his political operation to mr. christy. that of "the new york times." coming up tonight here on c-span2 some of our continuing coverage of state of the date addresses across the nation beginning at 8:00 p.m. eastern. south carolina nikki haley, new york governor andrew cuomo and nebraska governor pete rickets. colorado governor john

hickenlooper inaugural address will follow up and end up with alabama governor bill walker with his state of the state address getting underway at 11:05 eastern. if you missed any of this week's confirmation hearings for president obama's nominee for attorney general loretta lynch, watch her testimony at sunday 10:00 a.m. eastern on our companion network c-span. >> keep track of the republican led congress and follow its new members through its first session, new congress best act sercs on c-span, c-span2, c-span radio and c-span.org. >> here some of our featured programs for this weekend on the c-span networks. on c-span2's booktv, saturday night at 10 on "after words," correspondent american urban radio april ryan. sunday at noon on in depth our

three-hour conversation with walter isaacson, whose biographies include ben franklin albert einstein and international best-seller on steve jobs. an on american history tv on c-span3, saturday at six p.m. eastern on the civil war, boston college history professor heather cox richardson how the cowboy during recocks became symbolic of a newly unified america. sunday evening on american artifacts we'll tour a house that was the headquarters of the american red cross and learn about the life of its founder clara barton. find the complete television schedule at c-span.org. call us what you think about the programs you're watching. email us. comments@cspan.org or send us a tweet at c-span halving comments. like us on facebook. follow us on twitter. >> in about ten minutes or so we'll take you live over to the

wilson center in washington for discussion on the future of yemen after the huthi take over originally scheduled to be on c-span3. it will be here on c-span2, 12:15 when they get underway. yesterday homeland secretary jeh johnson spoke at the wilson center. his focus was national security threats. >> very quiet. good morning. good morning. this is very good. i'm jane harman president and ceo of the wilson center and delighted to welcome secretary jeh johnson here for the second time. in the front rows we have the wilson center cabinet, council and corporate counsel members.

we have them i although haven't found him yet general keith alexander. we don't have general keith alexander. >> there he is. >> where is he? >> he is right there. >> there he is. >> jane, you don't recognize him because he is wearing a nice suit. >> no, i said that the last time i saw him. he said he rented it for the occasion. we're supposed to have walter isaacson who is the president and ceo of the aspen institute. but we will have him later. and michael chertoff, former dhs secretary, co-chair of the aspen homeland security group. i'm the other co-chair. michael here yet? no. members of the aspen homeland security group. some of them are here. members of the aspen security advisory council. i'm also a member of that. i'm a total dhs groupie and many and current and former leaders from homeland security and many dear to me from past lives. when secretary johnson was first nominated some didn't know what

to expect. didn't know how, coming from the defense department he would approach the broader homeland security mission. well today, little more than a year later, no one would think twice about his leadership. secretary johnson has more than won the trust of washington, of law enforcement around the country and of his department staff. he is a rock star at this job. he is has led dhs through stiff challenges focusing on major strategic priorities like, cyber, addressing with compassion the child mike brandt crisis. and first and foremost protecting the homeland bense a very sophisticated terror threat. the threat we face today is very different from the one we confronted on september 11th. it is less hierachical, more diffuse, many ways more innovative. that is the new.

new jihadist across organizational lines. some have cyber skills. some have social media savvy. many are young. many tragically are western. our enemies are making dangerous connections in syria and may soon in yemen as the country struggles to taken main order. ibrahim al-asiri, we face the most talented bomb-maker al qaeda has ever had and he has targeted western aviation before. even if we were to stop every foreign fighter we're threatened by radicalization at home. here dhs operates in a challenging gray area where radical beliefs which are protected by our constitution can become violent action, which is clearly a crime. very difficult to find that gray area to intervene. our society like all free societies protects freedom of thought and that includes radical thought. but inspires how to build a bomb in the kitchen of your mom is

not in my opinion free speech. stopping the digital spread of dangerous ideologies in partnership with faith communities and law enforcement is as crucial and as difficult as it has ever been. if all this weren't enough dhs tackles some of our nation's other thorniest challenges immigration, disaster response just to name two. it's a law of work on one plate. one of j.'s first trips as secretary of homeland security was to the port of los angeles which, with the port of long beach is the nation's largest container port. surely the challenges there are huge. i joined him on that visit my former congressional district and we did a helicopter flyover. then the marine layer rolled in and we were unable to land. what a met at that far for the -- metaphor for the dhs

mission, navigating through the fog. of course we persevered and so has dhs, ably led by jeh johnson. it is our honor to have him at the wilson center for the second time to address the state of homeland security. please join me welcoming secretary of homeland security, jeh johnson. [applause] >> thank you very much, jane. good morning everybody. let's try it again please. good morning everybody. >> good morning. >> i want to start with a family photograph. from 1966. you won't believe this. yes, you want to see this, jane. >> yeah i do. i do. >> this is me and my kid sister in 1966. i was eight years old standing

next to my dad's 1966 buick convertible. the most striking thing about the photograph is that as recently as 1966 a private, everyday family of tourists like ours could drive our car on to the ground of the u.s. capitol and park it with no inspection or prior notice, just a few feet from the building. this is the same spot today. the public parking lot is gone, replaced by a few black suburbans, police vehicles and heavily armored, heavily armed members of the capitol police. sadly there are threats to our homeland security today that did not exist in 1966. the department of which i am secretary is responsible for addressing those threats. a year ago i stood here and spelled out my vision for the department of homeland security. i was then new to the job.

now a year later, i am here to provide a progexpress report on our efforts with the benefit of a year's experience. i thank jane harman and the wilson center once again providing me with a forum for this speech. jane harman is a wise supporter advisor and mentor. in this town people like here mean a lot to people like me. we could not govern without you. thank you and the wilson center for everything you do. on new year's day i wrote out a set of new year's resolution for senior leadership of dhs. at the top of the list were things that go to the manner in which we conduct business and deliver homeland security. the reality is that dhs is a very large conglomerate of 22 components that is only 12 years old. we are large, bureaucracy. we are still finding our way, but we are headed in the right direction. first, over the last year we

have filled almost all of the senior level vacancies that existed in our department. just prior to the time i took office a year ago, the department of homeland security had no secretary, no deputy secretary and vacancies at a number of senior level positions. we now have a secretary a new deputy secretary, a new undersecretary for national protection and programs directorate, suzanne spaulding a new undersecretary for intelligence and analysis general frank taylor a new undersecretary for science and technology dr. reggie brothers, a new commissioner of customs and border protect, a new director of citizenship and immigration service, leon rodriguez, a new assistant secretary for immigrations and customs enforcement, a new chief financial officer and a new director, a new deputy director

new deputy administrator of fema, a new inspector general john roth. new assistant secretary for legislative affairs, brian debalance, and new assistant secretary of public affairs, tanya bradshaw. we are actively working through slates of candidates to fill vacancies that arisen last year. permanent director of secret service and a new administrator of tsa i see the last one, john pistole back there. good to see you again. we are restructuring the whole manner in which we make decisions within the department of homeland security. in april i directed a unity of effort initiative which has brought about a more centralized and integrated process for making budget decisions concerning budget requests, acquisition, strategy and other department functions. we are moving away from decisions made in stovepipes. as part of this initiative we create ad joint requirements council, asking of senior

leaders from dhs components to identify and recommend invests to maximize efficiency. we have also realigned seven major dhs major headquarters functions to consolidate like functions and promote efficiency of the next as i said here last year we're committed to greater transparency. government transparency breed credibility and confidence. government secrecy breed suspicion. one of our executive actions that the president announced on november 20th is to direct our office of immigration statistics to collect maintain and report consolidated dhswide data on the number of people we apprehend, remove return or repatriate every year in a manner that can remain public. we are again too stovepiped how we collect and report this information. i applaud chief fisher back there, making public border

patrol's use of force policy last year and the independent police executive research forum about use of force by border patrol, two documents long sought by the media. the deputy secretary and i are on an aggressive multifaceted campaign to improve morale within components of dhs. in october of last year, we restored the secretary's awards program which has been dormant since 2008, to recognize more than 3 unhad employees who have made outstanding achievements across dhs. next dhs is one of 16 departments and agencies on gao's so-called, high-risk list. we're on a path to get off of that list soon. indeed gao informed us that our interactions with it serve as a model for how other federal agencies work to address gao's

high-risk designations. we have improved the department's responsiveness to congress. this despite the challenge of, depending how you count, 92 committees and subcommittees of congress who claim an oversight role over this department. members about congress on both sides of the aisle including some of our biggest critics, have taken note of our increased responsiveness. finally, and this is my favorite one which i learned about yesterday, earlier this week we in the judgment of the center for plain language, the department of homeland security has gone from worst to first among federal agencies in our ability to communicate in plain language. one of my personal passions. in these challenging times management reform is itself a homeland security imperative. now here is where we are on the substance of some of our

important missions. i said here a year ago, as long as i'm secretary counterterrorism will remain the cornerstone of the department of homeland security's mission. 13 1/2 years after 9/11 it's still a dangerous world. and in 2015 we must recognize that we have evolved to a new phase in the global terrorist threat. today the terrorist threat is more decentralized, more diffuse and more complex. we are concerned about the so-called, foreign fighter who leaves his home country, travels to another country to take up the fight there links up with terrorist extremists and may return home, whether it's this country or one of our allies with a terrorist extremist purpose. we are concerned about terrorist organizations new, slick and skilled use of the internet to publicly recruit individual to cubbing attacks within their own

homelands. aqap no longer builds bombs in secret. it is now publicized its instruction manuel and called for people to use it. we're concerned about the domestic-based threat lurking in our mid so-called lone wolf, who may become inspired by this extremist propaganda on the internet and who could strike with little or no notice. what are we doing about this in 2015? first as everyone knows we're taking the fight to these groups in places like iraq and syria. our intelligence community continues to detect terrorist plots at their earliest stages. domestically the fbi investigates interdicts and prosecutes terrorist plots in the homeland. in response to the recent attacks in paris ottawa sydney and elsewhere and the public calls by terrorist organizations for attacks on the west i directed that the federal protective service increase its presence at federal buildings in

major cities this united states. we continue to taylor and enhance our security through every appropriate method. for example the visa waiver program we offered to 38 nations is a valuable tool for international commerce and travel of. it is a program that must continue but there are ways in which the security of the program can be improved. to enhance security while maintaining the integrity of the program, last november we identified added information fields to the electronic system for travel authorization or esta to learn more about those that travel to the united states from countries for which we do not require a visa. we're considering further security enhancements to the program. we're engaging our allies in europe and elsewhere to encourage them to maintain and share travel information about individuals of suspicion. we're sharing more information and training with state and local law enforcement. >> welcome to the wilson center

i'm jane harman the president and ceo. i personally as member about congress visited sanaa yemen a few years back at a more hopeful time and met with leaders of opposition parties. certainly many of us over the years have wanted yemen to turn out right. today we will see what people a lot more informed than i think about all this. i want to express my specific gratitude that mohammed al basha is here today to represent his country and his embassy. thank you very much for coming and to recognize many wilson cabinet council and corporate supporters in the audience. as i'm sure many of you know our own embassy in sanaa which i did visit, has closed though i hope it will open again soon. in a region increasingly compromised by terror yemen's partnership has been vital to our country in combating some of

the world's most dangerous extremists. we hosted president hadi here in 2012 when the outlook was so much brighter. the u.s.-yemeni relationship was strong. sectarian conflict has done serious and it is fair, serious harm and it is fair to worry now that civil war could make yemen the gulf's own syria. of great concern is that iran's own leaders suggested they intend to wield the huthis like another hezbollah against sunni rivals although a more complicated story. i know that because i was talking to robert worth about an hour ago and he will tell you it is a more complicated story. it is essential yemen not become a casualty of proxy conflict. the idea of a regional war between shiites and sunnis is exactly the narrative that isil and al qaeda used to recruit. again the situation may be more complicated and there may be a

way forward that will surprise and impress us. without a solution for strife and insecurity, extremist could hatch in yemen the dangerous collaborations they started designing in syria. imagine if ibrahim al-asiri would connect with foreign fighters holding clean western passports. that is very interesting a call to the mosque. an inclusive political solution is vital. that is what we sought for years. we've seen in syria the terror groups thrive in a crack assume. we've sown -- vacuum. we seen legitimacy and depend on respect from all communities. this is first and foremost a yemeni crisis. everyone understands. that the west doesn't have all the answers. certainly not. or even a counter narrative that is adequate to persuade some kid in the boonies of yemen to not

strap on a suicide vest. too many yemenis never had contact with the u.s. except via drone. without dictating solutions the united states should provide the support yemenis need for solutions they choose themselves. that's how to win the argument and the peace. we're thrilled with the panel we assembled today to frame the challenge and i would like to introduce our moderator, robert worth, who will introduce the other panelists. robert is a public policy scholar with the center's middle east program. he is also worked as beirut bureau chief for "the new york times" and contributing writer for "the new york times" magazine. you probably saw him on page a-1 of the times last week with his article, entitled "at risk of fragmenting, yemen poses dangers to the u.s.." that's for sure. he will guide us through a

thoughtful conversation on the region today. before turning this over to robert i want to recognize the fearless leader of our middle east program in the center seat here. i want to thank hala bringing both scholars and programs over the several years that educated so many of us. so please welcome robert worth. [applause] >> thank you, jane. for people who have been writing and thinking about the huge thinks for years it is a really strange thing to be at a panel conference in washington, d.c. about them. i remember in i think 2007 or 2008, in a trial of yemeni journalist who was on trial for having supported the huthis. back then there were this strange, very opaque rebel group up in the northwestern corner of yemen. even talking about them got you in trouble. now they essentially run the country. and the past two months we've

seen a lot about them in the news. i will just briefly review. they have been gaining strength for years now, especially since 2011 but in september the huthis overran the capital sanaa commanding important government sites and forcing the rivals to flee including ali musan, for years and year both a rival and to the president and a key military leader who had been an important part of the war, intermittent war against the huthis that lasted from 2004 until 2010. then in the fall we saw more and more violence by al qaeda in yemen. terrible bombings in the south and in the capital. in january there was an attack on a police academy that killed 38 people. in january also the kouachi brothers carried out their attack on "charlie hebdo" in paris and al qaeda in yemen or

al qaeda in the arabian peninsula, as they call themselves claimed credit for it. at least one of those brothers was trained in yemen. and then just like last week, it was, we had classes outside president hadi's residence in sanaa and huthis came in for who are concessions and stepped down, possibly calling their bluff. so yemen is rudderless and all kind of questions arise that i hope we can address today. i will just mention a few of them that interests me. what exactly is the iranian role? jane alluded to that. but what should the united states do and what can the united states do? i think diplomatic options are very limited at this point. do the huthis hope to control the entire country and did hadi's resignation a miscalculation on their part? what is the huthi political and social agenda? that has been very opaque a number of years. some of their spokesman call

them liberals, revolutionaries in the 2011 sense but their core leadership is said to be much much more conservative. how serious now is the threat of southern secession and what would it mean given the fragmented state of the south? i ask that partly because the question arises, can the huthis manage the southern issue at all? so i want to introduce our panelists. we have peter sauls barry, based in yemen for reuters al jazeera and foreign policy's. done excellent stuff on the finances of yemen and huthis and iranian role. charles schmitz, to you son university and scholar at middle east institute. worked on yemen for many years. muhammad al basha from the yemeni embassy here in washington d.c. who has a lifetime of experience to draw

on. and we'll start with peter. >> okay first of all thank you very much for having me here this afternoon. most people who watched yemenll tell you that it's a very, very complex country. it is very complicated. what we'll try to do in the next ten minutes is make it a little bit more complicated if that's okay. i'm going to talk about how we've gone over the past year from the end of the national dialogue conference which almost exactly coincided as an anniversary, of the first year of the end of the national dialogue with hadi announcing his resignation. how do we move from the euphoric moment a year ago to the point where we have no president, no prime minister, no government and no real understanding of who holds the balance of power in yemen. the answer has a lot to do with separate yet intertwined issues of coalition building and of

negotiation in yemen. when we look at yemen we tend to see it as lawless state. a place where there are no laws. we see intractable actors who are incapable acting outside of self-interest. while that is broadly correct, there are rules within yemen. there are rules of procedure. rules of operation. what these have to do with our building enough power for me my group, and the people around me with other people who i may not be idealogically aligned with but where we have common goals or we have common foes. what we've really seen over the past year sips hadi announce end of national dialogue is the emergence of a coalition of different force who is have had several aims in common. the people i'm talking about really are people from the northwest of yemen. people who always really held the balance much power in the

yemeni state. those are the huthis about who we heard a great deal but we actually know very little. we have the former president and the hardcore around him within the gpc, the general people's congress. his party which has been the traditional ruling party in yemen and then we have tribal groups and smaller armed groups in yemen who for a long time have lived in tribal areas controlled by people loosely affiliated to coalition of forces of conservative tribal islamists and military leaders who we talked to, talk about often as isla. it's a little more complex than. that realistically for those who know about yemen we're talking about ali as the first armored decision. he is connected with the muslim brotherhood. in 2011 he came out in support of the revolution as did isla yemen's main sunni islamist political party. and as did the hashid tribal

confederation. a confederation of tribes led by who have been seen as being converts to sunniism. although that again is vast oversimplification. in the alialamar tribal areas, a lot of people for a very long time people were unhappy the way they were treated by tribal and islamist leadership in the area. many people in yemen resented meanwhile for a very long time the treatment of various different groups by ali-mason a very powerful military general. many people see isla a force for good, not for bad in the country. you have agree groups. -- three groups. you have "people" pissed off. you have people owe lows posed to mason, for historical reasons

and huthis re-established their presence over years. the state and solid regime fried to oppress and crush them. since the ouster of saleh, what we've seen emergence of new narrative which is quite telling of coalition where they talk about how this coalition of conservative forces the islamist tribes the isla and alley mason were really guys who led fight against them between 2004 and 2010. there is some truth to that but certainly not the whole story. saleh has been very very angry of course the last three or four years about the fact he was effectively thrown out of party by people who had been part of his regime a number of years, this same conservative bloc and what we've seen the two groups come together first and fores most to get rid of these guys. secondly to try to alter the outcomes of the national dialogue conference to create an

outcome more amenable to their interests. what wee saw over the past year is the huthis first gaining position by taking over tribal areas, key geographical positions in the north of the country. that got very little interest in the international media, this small militia. by the time they reached san'a, they gained support at ground level, they built things up from the grassroots and managed to work out a nice coalition with saleh, who had a great deal of influence over the military they were in a very very strong bargaining position but the issue here comes the second point that i made at the beginning which is, a lot of time in yemen what we're used to is people positioning. people starting a fight then pulling back and working out a deal for themselves and when they reach the outskirts of sanaa, the expectation was this coalition of forces would then bring things to a pause, work out a deal and bring themselves into politics. instead we saw fighting break

out and we saw the huthis and saleh in coalition. i will argue working to make sure that this coalition of conservative forces, isla the tribes, ali mason and military units around him no longer posed a threat to them in the longer term but they were so successful they ended up taking over sanaa. what we've seen since then is this issue for them of being strongest possible bargaining position and not really needing to pay any attention to the outcomes of this national dialogue conference this 10-month series of peace talks that were held in yemen and ended just over a year ago. now that was the first time the huthis had participated in national politics. they got a lot of concessions out of it but certain things within the national dialogue conference. for example, a decision to move toward a federal model of governance that they weren't very happy with. but at that point they weren't in a bargaining position to really push back. so they came out publicly and

started complaining, particularly their politburo political arm in sanaa started complaining very loudly about the decision to move toward a federal model of governance. what we've seen over past year they're building up to a point where there is no balancing opposing force as long as they are in the various people who decided they wanted to get rid of this conservative bloc. that brings us more or less where we are today. but now we're seeing them in this very interesting position where they're overreaching. where their collision of forces is such position of relative strength, there is no other force that can really counterbalance them they can do more or less what we like. i think they're getting a little bit too excited but they're also making some pretty bad moves. when we talk about what happened last week it is being described as a coup and in many ways i would argue what we've been seeing in yemen since june

july, august of last year is a slow-burning coup. is a coup in slow motion where people gradually taking over apparatus of the state. each time they get to a new point, they realize they can go a little bit further, what we saw last week was overreach on the part of the huthis. i think also possibly the beginning of a split of the coalition of forces that has allowed huthis to be most visible element of the takeover of the states. the draft constitution was finished in decent. around two weeks ago the chief of staff to the president was bringing that draft constitution to a committee formed during, at the end, rather of the national dialogue, to have them look at the draft and pass it so it could be put to referendum. the huthis were led to believe that this draft constitution contained provisions for six regional federal states which is something that they oppose deeply and they decided to abduct the chief of staff.

in return, the president and the head of sent the presidential guard out on to the streets of sanaa in order to reclaim the city and the huthis again retaliated. what happened after that is actually largely down to conjecture because it is important to remember that the huthis are not the only people in sanaa. my understanding and no one will really get the right or wrong answer. yemen is deeply -- good information is very hard to come by but my understanding you had issue of two different groups. really saleh loyalists encircling various areas including the national security bureau and political security office as well as the presidential palace and the home of the president and the huthis feeling they also had to step in and this really points out the issue and the point we reached at where you have these two groups where neither wants to be seen being behind the other and

egging each other to go a little bit further, a little bit further. now that hadi resigned which they didn't want they want ad weak president in place. they wanted someone who they could dictate terms to, they find themselves in position it is possible for saleh he feels is amenable to interests in place. we have two conversations going on. one about a presidential council negotiated by the unu.n. with the various political party at the moment. we also have this question of existing constitution in yemen which according to saleh's party means that the speaker of the house, a saleh loyalist becomes interim president if hadi is removed. and huthis are pushing for their own version of a military council. we're at a point where interests are diverging. what we're likely to see in my mind coming months is new positions. people trying to work out their relative strength to each other and strike a bargain internally. that is where we're left at

today. >> thank you peter. charles. >> i i want to do a little bit more with the huthi who are they where do they came from? let me make a couple of key points. i think one the huthi is a changing organization. it is not the same thing it was when it began. and i think it's it's also not, itself sure what it is at this point and some of the confusion comes from confusion within the huthi movement. so just to start the huthi movement really began as a college students defensive revival of zadiism in the late '80s and early '90s. and they from there, they were counteracting inflowses coming to saudi arabia and from the republican government

wahhabiism and sala if iism up in the north. at some point, hussein huthi coming from a political party formed after unity got involved and he was one that militarized group. everybody in yemen is militarized. he said we need to take a more defensive position. is the one that provoked president. he came up with the chant death to america, death to israel curse the jews, long live islam and that chant is not meant to be anti-american. it was meant, it was meant to stick a thorn in the side of the president who at the time after invasion of iraq was defending the u.s. embassy, was defending his relationship on war on terror with the bush administration. and so. really the thorn was to say we

are ought then i cannily yemeni. we don't serve foreign interests. we're not bee olden to wahhabis in saudi arabia and we're not beholden to the americans. we're ought then i cannily yemenis. the thorn worked. the that's when the conflicts begin. the to introduce dynamic in the movement, now the movement is dealing with tribal and military relations up in the north. they're successful. they're successful largely because the yemeni military is split in itself and fighting each other as much as they are fighting the huthi but this gains them a lot of creditability within yemen as a force that can stand up to the saleh regime. everybody upset with the saleh regime as peter alluded to the huthi began to create a coalition of those rejecting the main components of the saleh regime and they gained lots of support. it is important to recognize that. a lot of people rejecting huthi

rule supported the huthi in the fight against the saleh regime and supporting them in the national dialogue as well. then the, as i see it the saleh regime, it had three phases. -- failures. two big failures was the south and far north. both are regions subject to war. both are regions that lost war. both are regions that saleh couldn't bring into his coalition. he couldn't bring them into his network and and so they remained outside. two large areas of yemen outside of saleh's coalition network his political work putting pressure on. then the final straw is the regimes splits in two with the defections and we have the arab spring. and, the national dialogue which of course is internationally backed by the gulf states principally but also the u.n., of course u.n.-backed and united states and of course europeans

are backing this it basically holds the saleh regime together where it basically has split in half. it brings them together again. through the mechanism of the national dialogue it brings or tries to bring the southerners in and brings the huthis into the dialogue. that is the transition period from 2012, to 2014. and there saleh they participated in national dialogue and major focus of the national dialogue as opposed to southern hiraq, saleh fully participated and could make decisions and they came up with their stances and whatnot. the transitional got failed. the transitional government failed largely because of competition going on underneath, the power blocs underneath were fighting each other rather than governing. so you had saleh and his supporters and then you have

islac. they are feeling very good they feel like they will win next elections and they're feeling power and there is lot of institutions trying to gain influence and institutions in order to position themselves best for coming elections. government basically doesn't happen. if you ask ordinary yemenis the government is gone has been gone since 2011. people often ask me, is the yemeni state goings to fail? i would say how would you know it if it did because there is no state? that is the way yemenis have felt for the last -- that gradually built you will up to a point where people had little interest in the national dialogue. they felt it was irrelevant to their lives. security situation was very bad and economic situation is very bad. there is a lot of resentment against the whole process. i, my point to january 2014 where it seems to be ansar saleh took a new stance. they took aggressive stance.

look this intergovernment is going to fail. it will not be able to pull off a transition. we'll step in and shape it directly. and i, this is the point where i, the question of its relationship with iran, comes in. i see this is the one place where the iranians have had a big impact and that is funding. in yemen in order to build coalitions you have to pay people. yemen is poor country. not coming from taxes. there is nothing to fund a movement. that is the big impact they had in my view. it begins then. they take the salafi place there, nobody paid attention to it. these are long enemies. got rid of them good. then they moved down to emran. that is a key place because that is the seat of one of the key units of ali maxon's supporters m military, islac was big and

the family leadership of the tribal coalition was there. i'm red line. never take it. they took it. support with tribes and they moved further south and they moved, they move into sanaa. now. when they take sanaa they see themselves portray themselves as revolutionaries. we are revolutionaries. we are continuation of the 2011 left revolution. we are here to implement the national dialogue. we make sure the national dialogue happens. that the outcomes are enforced. they set up ministries overseeing them. they went in and replaced incorporated police forces and incorporated themselves into the military and like this.

they very much need the national state. this is what i call the physician friend sick behavior. this is the learning process they're going through. they are, they want to have all the guns in the north. the guns in the north were turned against them. they're very insecure. they want to be the biggest gun in the north. so they are now. they have taken it. they have taken all the guns. they got ahold of missile divisions in the south of sanaa. they have scud missiles even now. so they have all the guns now. but what they didn't realize is that they they didn't seem to have it in mind they would also have to govern and in yemen there sort of power, assertion of power. when they went in and blew up all the headquarters of islac party, this is the way it goes in yemen. in 1994, islac blow up all the headquarters in the south. payback. they're getting all their houses blown up.

and they saw that and this is the way they understood power. they were going to blow up their opponents house. take the biggest gun, whatnot but they forgot the other part is the state and the state is important in yemen. it is not just all these coalitions of tribes but the state is important and state's important because the state brings all of yemen's diverse components together. and, at this point the huthi have totally alienated everybody because they came in as forces they were going to build the state, when they were actually, you know undermining the state. they are ones going in and doing things by force rather than by, by process, by institution building. so they have alienated entire southern and eastern area. and, they stepped back. now, right now, the-making part somehow try to incorporate themselves into a broader state. the key factor for me the key thing i'm looking for right now. is not what is happening in sanaa but what is happening in

the east. because military forces they have amassed that irforces. islac and tribal forces and others amassed their forces of the saud cities have a red line they amassed their forces. they are backing for these forces. if that comes to war, we're looking at big civil war. key is the oil is out there. that is where the oil is that. the tribes turned it off. they have stopped flow of oil. will it be negotiated settlement or military one? if it is military one, huthis win initial battle but lose the war. it will be a lot of blood. if they keep it in the political process i think there is still hope for future of yemen. >> thanks charles. >> hello. good morning. humbling to speak after peter and professor charles. difficult times. i mean we're at at point where i remember my first meeting with

bovi was about the huge chris years ago. we sat downtown scratching our heads. what is this move? is it next hezbollah in yemen? was it something originating in the country. i will be very short in my speech. i would like to engage the audience more than talking. i will give you updates what's happening right now. yesterday at the end of the fourth talks that the envoys are hosting in mozambique with the various political players it seems we're heading towards a presidential council. there is agreement by all the players on the presidential council but there's a problem with the number of representatives in the council. the time frame. how long would the council stay in power? >> what are the priorities for the council? how are we going to process this council? is it going to go through the

parliament or will it be by political consensus? it seems that there is a lot of divisions to the point when we actually walked into the building i was informed that the gpc pulled out from the meeting and they pulled out because they want to ensure this process goes through parliament and parliament there are two articles, 115 and 116. so the president had, resignation would be accepted at this point. president's resignation has not been officially accepted. so legally speaking he is still the head of the state. he is not on active duty or commander-in-chief but legally he is still the president. at article 116 will give power to parliament and speaker of house where the two deputies will be commander-in-chief and within 90 days we'll hold elections. haraq pulled out today too. they are frustrated. seems when the huthis besiege attracted a lot of southern officials in the capital and a

lot of people personally tar petted president, prime minister chief of staff were southerners. southerners feel the huthi movement was looking down at them. not giving them that respect they should be getting. the sala if is of course -- salafis have historical problems with the huthis. one day they're in one day they're out. gnp seems like they're moving along with the huthis with regard to the presidential council, but the situation is fluid. it is changing day by day. i mention because i want to make sure people understand. this is not a shia-sunni war in yemen. has nothing to do -- this is political crisis with political resolutions hopefully. i hope to representatives of of factions involved in discussions today. they said there were all problems but reassured me they're moving toward a political resolution. no one wants to pick up guns and fight because like professor

charles said huthis and others know they would kin short-term battles but long term to one will win. my personal advice for the huthis looking at history of yemen not a sing get group was able to manage and control and dominate the country. if you use force it is not sustainable. why did we end up this place? peter and charles mentioned a lot of the points. i will quickly do some highlights. i think the first one in 2011 the former government the former elements started acting as opposition although, they were still in the government. then you have the opposition of, traditional opposition powers started, to act, continue to act as an opposition. so you have everybody was in the government acting as opposition. nobody was really, it was confusing. talk to top officials certain things to do with my job. people were acting like opposition. no, you're decisionmaker now. you make the decision. not them you're the them now.

the second problem is mistrust. everybody mistrusts the other side. even within the parties, even within the factions. the they are point was the -- the third point was strong loyalty clan and party and to the faction which i think unfortunately due to the weak identity of the state of the country that the smaller identity always dominated how people looked at things. people always loyal to the clan and tribe and to the party more than anything else. in ndc, one of my big criticisms we discussed from point one is the federal regionalism issue. that should have been discussed at phase one. that not the last phase. devil's ad cat, people say they want to leave that at end because it was such a difficult topic. they don't want to start with it because it would ruin the process itself. the silent majority, majority of yemenis are silent majority.

they're not sure what to do. traditionally they would look forward to speak about their position via elections. at this point i think as professor said charles, in 2013 if they ran elections probably dominated parliament. i don't always agree but at this point we don't know who would dominate elections. two months ago perhaps huthis would have dominated. i think at this point people are frustrated with all the parties out there and people are just sick and tired of everybody just trying to push an agenda that is not, doesn't have cohesion. so, what troubles me is that we're not looking at the bigger picture. the bigger picture is yemen is heading towards economic crisis serious fiscal crisis has already begin. i always say we're not it is very hard to define it as a failed state or dysfunctional state. it's a yemeni state. that show it is, that is how it

works. it will become a failed state the day we're not able to pay salaries. the day soldiers don't get money and public servants stop and refuse to go to work. last week i pressed a lot of my colleagues even under gunfire went to work and continued to offer basic services and continue doing what they're doing considering circumstances. others won't do. that shows resiliency of the people. the huthis at this point today dominate the scene in most of the northern provinces, especially in the capital. the big challenge is in the traditional areas and regions where i come from. they have strong popular, came to the point people saw what happened, people are like never mind about. that we're not, we'll be aligned with them. and the south i think the south, today this morning armed

groups tries to seize battalion and they pushed them back. everybody see what the huthis did as an example of setting precedent. this is how you should do violence capture properties, capture bases and that is going to work. because it will be the status quo and everybody apparently international community is -- they will just play along. in the long term what i fear is, if, is the huthis are not able to form a political consensus, in managing the transition period or what's remaining from the transition period, the gcc and saudis are not going to be strong supporters of any huthi-dominated government. they made that clear. today the gcc made a statement supporting president hadi and rejecting any possibility of presidential council. then international community, the core of the huthi argument is the pnp, peace national

participation agreement but international community sees that as an agreement between president hadi and with the huthis and if president hadi is no longer in the picture then pnp will not be as important as gcc initiative, as u.n. security council resolutions as the national dialogue conference. the national dialogue conference is something we could rally people around at this point and not just focus on. each faction focuses on a certain initiative or political agreement that would serve them the best but i think the national dialogue i think is something we could work on economic crisis and last three quarters we lost $600 million from the oil and taxes from other parts of the country and that 60% of the government revenues comes from oil. donors pledges to yemen at this point out of the seven -- 7 point, plus, bill dollars pledged to yemen, we have absorbed less than 38%.

there is still 60% of the donor money there. money is there but people will not invest in this situation. regional diplomat described it to this to me. i'm sealing a building collapsing and you're tell me to invest in it. my sense is telling me that would not invest in this building. let the building collapse and rebuild. my counter argument but yes, but if the building collapses there are neighbors around the building. when the building goes down it will damage the neighbors too. it is not a clear-cut position and a vacuum. there is no security vacuum. seems the popular military and police are managing security of their areas. . .

i always advise journalists don't rush into coming out with a statement and positions, that it does settle down the next 40 hours. we are going to have a very good idea of what will happen, why the police started, we call it expanded national congress which reminded me of the general people's congress in 82 were brought different fashions under

one umbrella and is trying to find legitimacy. at this point this congress is pressuring all the political players, you have 14 hours to come up at the solution otherwise we are going to step in. thank you. >> okay, thank you two while three of you. a lot of great detail. what i would like to do is backup a little bit and i would first ask the panelists to discuss further and then we will have time for questions from the audience. so one thing at would like to press a little further into these really are what do they want. you have all said something about that. while hamid that. baha might come you mention it's not really affect area problem. it has not historically been a problem in yemen yet it is clearly an issue. who did these come from not only

babies, but also their origins to profit. who were kind of an aristocratic group in old yemen pre-62 yemen and the imams. and the houthi's have taken not in made it kind of a new ideological soup out of it with elements of hezbollah, all kinds of accusations that i think are mostly not true but certainly some people have converted to shiism up there and that is adding to the uncertainty about it. they are clearly pragmatic in some ways then that is a good thing. a lined with abdullah is not in the eyes of many people a beautiful thing but it shows they are willing to negotiate. why are they against the six

regions under lissome plan? i am interested in knowing all so whatever we know about how they make decisions on what some of the long-term goals for yemen are. before i press you guys individually the second question is maybe simpler, but possibly of higher priority for a lot of people here. what are the u.s. options in this context? they seem to me to be awfully limited. we have the potential as you are saying for a serious civil war in yemen. we have the serious forces in bob rebbe, who are seriously opposed to the contrary. the saudi thing clearly inflexible at this point. who is going to bridge this gap in as the u.s. at this point have the diplomatic dexterity to do that? so first question first.

peter, maybe i can ask you because you have written a little bit about this question of how they make decisions, how they feel about federalism what are their goals. >> so i think the important thing to remember what the houthi the leader of the movement was not the guy initially seemed as being the big man among the houthis. he was a very young man when his older brother died and he was eventually ascended into the leadership. at the moment he dies in 2004 that is actually false. another local tribal leader who was not part of the houthi family did not do very well in the next two wars. it was only during the next war when the field commander was put in place. he is this quiet young guy very scholarly, very religious, but doesn't really have the charisma of his brother.

we have only really see him as a personality, someone appearing on tv, developing into someone who is a good public speaker and makes coherent sense over the last two to three years. so what we have got a someone who's taking over his brothers reigned largely on the basis that he is a decent field commander and he's a smart guy and he can bring people around him. there is a circle around him that we know very little people he trusts very much and generally limits people who have not gone out with the movement that we call the houthis. and the houthis are pretty religious. anyone outside of that layer is to a varying degree much more pragmatic in the coalition of forces be seen taking over northwest yemen over the last three four years has been this on mixture of people who are ideologically on the side who identify as people who can work with the houthis and our tribal

guys can work with these guys. so you've got the guys working with the houthis. what i've been told by a number of different people is low people will work with the houthis as long as they serve their interests. the second they start screwing up and people start associating me with this group, i'm going to walk away in the houthis are going to be left in a small core group. what they've done is build up a strong coalition of forces. again, you have got this young guy is very isolated from the outside world, even more so now gets his information from his field commanders, not a call who are ideologically on page within. it feels a lot like they have moved on a day-to-day basis and then make a policy on the houthi. it's important to remember. >> you could very very briefly addressed that and then we are running out of time so we will need to take some questions.

>> sure. i describe the houthis strategy into words. why not? it is very simple and it's not complicated and this is why the houthis, and the young above the movement and we are students at traditional public policy when we look at the houthis, they don't fit in because there's something new. as we look at houthis put it this way, a lot of people right now are having trouble working with the public committees are dealing with them because when we look at the evidence population, 20 million, and they are from these young kids hoovers six years were under the barrage of artillery and tribal and government forces. so these are common in the words

of the former houthis official said this is the monster you created. these are the sons of warfare. these are the people who lived here for years and i've never seen the inside of the school or university or clinic or hospital appears that the government, the people of yemen the international community i think for god for so long and they kept evolving and the houthis and the clan became something like the pope. a figurehead that people rallied around. and this is what we have today. we have a struggle between the two main factions of the movement, the popular committees , which is the military wing of the movement and then you have the members and people you could work with

at this point on the military side of the movement is dominating. when you mentioned the saudis earlier, the saudi's are very sent to dave, but for a good reason. beyond the houthi of movement, killed saudi soldiers with saudi weaponry. this is a very sensitive topic to them. at the end of the day, we all need to no longer pretend that the houthis is a problem that is going to vapor into the air. it is a part of society we need to learn how to coexist with them. >> i have to ask you to be brief. >> lenny make a couple of points. one, on the houthis you stop or see your talking about, they don't all support the houthis. it is not a sectarian thing in that sense. as all religions go through evolution a few things they

have done, for example the shura in front of the prophet, that is not traditional cd practice. but they are doing there is sort of establishing their dominance. they show by celebrating the dominance. it is on-the-fly little bit. it is evolving. >> great, okay. questions? go ahead. >> thank you. my question is to your last point about the role of fear ran -- iran and when did the houthis convert to shiism? could you address the issue of the role of iran ms especially hussein hootie who lived in iran when saleh chased him out. as you mentioned for the first

time in yemen's history they celebrated all shura industries this year. could you please talk about the role of iran and is this going to be a proxy war inside yemen? >> has come a couple points about that. the iranians want influence and they don't care who it is. they deal with communists. they deal with student actors. in 2011 you could just raise your hands and get a ticket to tehran to go for training. you know, to have a good time. so, it is not to shiism is not to determine it. you know when the houthi conflict first broke out in 2004 we sympathize with our oppressed brothers. we want to defend our oppressed shia brothers. but to shiism was a small part of it. the actual practice as the deism

assure that there are some people have converted the iranian pa but it's very much an indigenous practice and it's not replicating iranian shia summer sun and light. my quick take is the houthi are going to what to do and they were under the gun in the north and they are going to make sure they've got the gun for the future. if the radiance that now, they would say yes. it is a houthi agenda that doesn't have anything to do with the iranians. >> by reynaud with the wilson center. we've talked about are ran. we have not talked about saudi

arabia, for a country where there is no money essentially and whatever money comes from the outside here can you tell us more about that. the >> i will be very simple. without saudi support and the economy will collapse. >> but may add one more thing about it. you know in 62 after the revolution, the saudi's were backing these guys the houthi. not the houthi, but the zadis. the first thing was the saudi is asked to come talk. they will deal. they want to make sure that i can then -- yemen is not a security risk for them. they will deal with the houthi. the houthi to the invitation

when they have the time to give proper respect to the words and the brothers will comments hair busy later and that is what the saudi's did not want. so you know nowadays built-up therefore says in backing the tribes in the east and they may support others in a succession as move. they are moving in all the ways the houthis don't want them to move and that will exacerbate the tensions inside the country. but they are doing it to open a bargain to make sure the houthi know they are not dealmaking in town. this is why the conflict is key because i would suspect that the eastern desert tribes are not going to have the final word and not. saudi arabia will have a big word in the way that is settled, the way the issue in the oil is settled and that is where the houthi and saudi arabia will begin to trade horses. >> in the message i was being given when i last yemen in

december was loud and clear. the houthi was taken over the capitol and they said why would we spend the money on arms and say it is going to fall into the houthi's hands. number two, these guys need to pay. they need to pay a political price for what they've done and the saudi position of sanders at last i checked was we are not going to give any money to yemen. they've given $4 billion to the country as a minimum since 2012 and it still broke and their position as when it happened. we can pay the price of a collapsing yemeni economy because the houthis will pay the price of the collapse. >> a question from the overflow. this is for mohammed. to what extent are members of the southern independence movement, for many faction included in the current negotiations and increased call

for certain actions, particularly in aden, been addressed? >> the houthis when they moved into the capital empowered iraq. this means that iraq is still stuck at this point. they're different factions are still competing. they don't have a unified voice. one of the things that dated to houthis and effective movement is the hierarchy discipline, regime and goals. and i think the movement at this point is react in more than actually working on a plan. there are daily events for various clashing between iraq terrorist and the military. but the houthis are trying to work with the iraqis. everyone is behind the barrier of security and we are seeing the country at this point, seen

it devolving into four groups. one group is pro-houthi the other group is anti-houthi. the fourth group is kind of like like -- we have more challenges more issues to work on. why are we still miss political crisis situation? >> let me add one quick thing on that. recognize most of the government officials in the salad are loyal to happy. they have the greatest. he became a hero by resigning analysis areas. he is now galvanized the anti-houthi. iraq see houthi as a trader. >> we have one more question. >> thank you.

a former diplomat at the yemen embassy. we have the key issue here. the minority want to demonize the country with a movement and they want to impose their agenda and their private entries on the population. we were so close to solving the yemeni problem or the dialogue in the outcome of the national dialogue. 70% or 80% of the population with the outcome of the dialogue with the six region system. nobody has answered your questions why they don't want the federalism. why houthi doesn't want federalism. thank you. >> yeah, i will jump in on that one. the issue on how to divide -- they are not against a federal

state. they are for a federal state. that was an issue that was not resolved at the national dialogue. the southerners wanted a division of the two former states in the north rejected that. he said that would lead to suggestion on transit fashion. so president hadi appointed a committee and they made it out. the reasons were definitely designed to want, divide iraq and the houthi movement was weakened by it because it was caught off from the water access to the red sea and the jobs as well. the way up was divided up had what they wanted was to have them to draft and a committee that had the power to amend it. that is what they wanted. >> it is also an useful bargaining tool for them with the rack. one day we have seen since they

took over as the constant outreach for a iraq. they are also trying to bargain with iraq and say you get your one region, but you don't get a full on stay. >> one thing that i think is also the international community is sending a clear message that he was involved in this process and we are not supportive of this process. >> okay. i think that puts an end to it. thank you so much for coming. [applause] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> in presidential politics mitt romney announcing he will not run for president in 2016.

sharing his decision earlier today in this brief conference call with supporters. >> good morning everybody. this is mitt. let dean again by letting you know who was on the call beside anne in me. several primary states are on the line. and here in new york city and on the phone are people who think or how to build a new team as well as supporters on the past who have been kind enough to volunteer their time during these liberation states. welcome in thank you. your loyalty and friendship been desired to see the country with new conservative leadership doesn't fact warm the heart. after putting considerable thought and to make another run for president, i've decided it's best to best to give other leaders in the party the opportunity to become the next

nominee. let me give you some of my thinking. first, i am convinced with the help of the people on this call we could win the nomination. the finance calls made it clear we had enough money to be more than competitive and with few exceptions, our field political leadership is ready in using a stick about a new race and the reaction of republican voters across the country was both surprising and hard mean. i know the early poll numbers moved up and down a great deal during the campaign but we have no doubt we would've started in a strong position. one boy yesterday shows me gaining support in leading us a contender nearly two to one. also leading in all the states. i am convinced we could win the nomination, but i fully realize it was then difficult task in a hard fight. i also believe what the message of making the world safer, providing opportunity for every

american regardless of the neighborhood they live in and working for poverty, i would have the best chance of beating the eventual democratic nominee. but that is before the other contenders have had the opportunity to take their message to the voters. i believe that one of our next generation of republican leaders, one who may not be as well-known as i am today one who is not yet taken the message across the country. one who is just getting started may well emerge as being able to defeat the democrat nominee. in fact, i expanded hold that to be the case. i feel that it is critical that america elect a conservative leader to become our next president. you know that i wanted to be that president, but i do not want to make it more difficult for someone else to emerge you may have a better chance of becoming a president. you can imagine how hard it is for anne at me to step aside,

certainly knowing that your support in the support of so many people across the country. we believe it is for the best of the party and the nation. i have been asked and will certainly be asked again if there are any circumstances whatsoever that might develop that could change my mind. that seems unlikely. accordingly, i am not organizing a pac or taking donations. i am not hiring a campaign team. i encourage all of you on this call it to stay engaged in the critical process of selecting the republican nominee for president. please feel free to sign on a campaign for a person you believe may become our best nominee. i believe republicans winning back the white house is essential or our country and i will do whatever i can to make that happen. so to all of my supporters friends and family, who worked

both tirelessly and loyally to support my campaign in the past, anne and i will always be deeply appreciative. what you have always done as a tribute to your patriotism. we are overwhelmed and humbled by her loyalty to ask him your generosity of spirit and by your friendship. god bless you all. and god bless our great country. bye, bye.

>> a don't have their frontal lobes to actually reason the cause and effect of consequences, of actions are not very clear to them because their frontal lobes are not at the ready. they are not readily accessible. the connections can be made as quickly for split decision making. don't forget, a lot of hormones

are chancing in the young men in women and the brain hasn't seen these yet in my and so you hit the teenage years. so the brain is trying to learn how to respond to these new hormones that are rolling around and locking onto receptors and the synopses of different types. it is trial and error and this contributes to this roller coaster kind of experience that we watch his parents. >> next come in the senate transportation committee looks at challenges facing the nation's freight rail transportation system and its economic importance for industry and american workers. witnesses include rail officials from three areas of the country. the hearing is just over two hours. [inaudible conversations]

[inaudible conversations] >> -- a great panel here to talk about railroad issues. as 2013 and 2014 freight rail delays and challenges highlighted, rail service is absolutely critical to nation's economy. south dakota farmers scrambled to find rail cars as delay shipments increasing shortage challenges for the record-breaking wheat, corn and soybean crops that we have had in our state. however those delays are not just limited to the north-central united states. they also extended across the country and impacted every shipping sector and industry. hinckley, the centers relatively mild weather provided some improvements, but there is still work that needs to be done. i was pleased that in genesee wyoming, south dakota's eastern

road has joined us for today's hearing. i look or two-income dave brown, chief operating officer of genesee wyoming which is the largest cluster by robert dover the railroads about the opportunities and challenges of the rcp another railroad space. for automobiles coal ethanol agriculture, rail services goes from garment factory to consumer marketplaces across the country in the globe. u.s. department of transportation notes that freight rail moves 40 tons per person each year. as a nation, we rely on cost efficient timely service to good food, good service progress on a daily basis. the private amp or structure that makes up our free will system is costly. as all tracks and equipment required mean it's an investment. the nation's railroads invest in new track, sightings locomotives and car resources with the goal of serving customers. class one railroads and short lines alike face increasing demand for prompt, reliable and

safe service. 2014 for freight traffic increased to 5% over 2013 novels and we should seek solutions to foster deeper and stronger freight rail network to meet the increasing demand. the federal railroad administration proposed or vitalized over 15 new safety rules since the passage of the rail safety improvement act of 2008 and many regulations will take effect in 2015. not only of the positive train control of ptc looming with december 1st deadline, but the d.o.t. expects it to be published around may of this year. although the ptc deadline is quickly approaching, it remains unattainable. to the end of 2014 browse invest over 5 billion ptc and make sector spend billions more in the coming years. they begun installation of the radio towers, locomotive technology and other ptc infrastructure but full compliance with the statutory requirements cannot be achieved by the end of this year.

the fra and government accountability office have documented events tech in logical and programmatic challenges of implementing ptc. as a result, d.o.t. has reported the deadline will not be met in a software proposal to ensure the benefits of ptc are realized. i look forward to working with colleagues in a legislative fix to ensure we can set a more realistic implementation timeline or this important safety improvement. i'm also closely monitoring proposed crude by well requirements. i've expressed concern as well as to the d.o.t. about the unintended harm that could result from the proposed rule. the d.o.t. estimates the rail rules could cost nearly $6 billion it acknowledges it would increase network delays are not of service time for rail equipment. without question, we must improve our nation's rail on the unconcerned by that the unattainable deadlines it proposes. there are very real impact on

federal agencies unreasonable and many times unachievable deadlines. among other things amid the d.o.t. issued a proposed rule without analyzing the potential tank car shot capacity needed to retrofit or replace over 100,000 d.o.t. 111 tank cars. shippers have raised concerns about a 10 car shortage with the disruption of energy supply transportation if d.o.t. finalizes this row within unattainable deadline. i look forward to working with my colleagues, stakeholders and secretary of transportation on a realistic timeline for such a phaseout. while safety can it should be improved, wizardly due not to build an systemwide delays and congestion like we witnessed during the past year and a half. our transportation network connects rail to track. delays and burdensome regulations and failing infrastructure disruptor nations economy and cost jobs. we must work together to find workable solutions. in addition we must ensure the surface transportation board which is tasked with resolving

railroad disputes and rub of mergers can provide effective and efficient oversight to the rail industry. this committee is a great deal of work to do in addressing safety in addition to passenger rail reauthorization spirit i hope members would bring forward thoughtful solutions as we address these challenges. i would like to turn out to my distinguished ranking member from florida, senator nelson. >> thank you, mr. chairman. did you know that most of the witnesses are from florida. three. three of the five. and just like your state is so dependent upon railroads so it is so many of ours date in my state of florida actually developed a railroad. it was henry flagler that brought his railroads about.

and as he brought it down the east coast of florida, so developed florida. set back in the old days when henry flagler with ring and as far south as a place like saint augustine, he would build a hotel which is now the flagler hotel. it is a part of flagler college in saint augustine. the oldest continuous settlement in the united states, by the way. we are celebrating 450 continuous years. and then he would move it or their south and build another hotel. palm beach, the breakers, a place that the two gentlemen to my right has been many times. [laughter] >> i would say to the senator of missouri, how does he know that? >> as i know the pattern of other senators who like to come

to florida. and so, it used to be said in the old days the old-timers in florida back in the early part of the last century would say that all of the natives which are called florida crackers, of which i am one they live off of fish and alligators during the summer and they would live off the tourists during the winter. as flatley would bring them further south. so i am going to submit my statement for the record. you have covered most of it. i would say the u.s. department of transportation estimates that the tonnage of freight moving by rail is going to increase by 88% through 2035 and if we are going to handle this future growth, we

have to improve starting today and some recent events highlight the challenges that we are going to have to overcome. in the past year high demand and a harsh winter has resulted in several delays in several parts of the country. who railroads have responded by investing record amounts to expand capacity, to expand equipment and to hire more crude. so i want to hear from our witnesses, do you think the situation is improving? i want to hear about what you think about the industry's progress on safety. rail is already one of the safest ways of moving people and goods. but there are challenges.

positive train control to prevent collisions and enforce speed restrictions. first recommended read the ntsb way back in 1969 while positive train control will even make this industry even safer. and so, we've got a lot to do. mr. chairman i will short-circuit my comments so we can get right into the witnesses. >> thank you, senator nelson. i appreciate the important role the rail played in the state of florida. i've got the family ties as a mentioned before in this committee to railroading us a kind of made their way across the country and in our state of south dakota. we have a great panel to talk about some of these issues today and i want to welcome all of you. thank you for being here. we've got mr. franklin agro

vice president of csx transportation. mr. dave brown as i mentioned earlier is the chief operating officer genessee wyoming wrote services, which serves south dakota. mr. bill johnson is the former director report miami and former chair of the florida ports council. ms. michelle teal is the multi-mobile director of the missouri department of transportation and we have mr. chris strong who is here on behalf of the fertilizer institute where he serves as president. thank you so much for being here. we look forward to hearing from you and will start on my left you're right with mr. lenegro. >> good morning mr. chairman, mr. ranking member and members of the committee. i'm franklin lenegro at csx and chairman of the aar ptc interoperability committee. thank you for the opportunity to appear today. i'm here to represent as well as the rail industry and safety is the highest priority of every

american railroad in preserving the safety of our workers communities where we operate and the safety of rail passengers and the overriding factor in the thousands of decisions that make everyday. our steadfast safety has resulted in dramatic improvements. since the year 2000, the freight train accident rate has fallen 42%. one way we achieve improvements through the consistent investment in infrastructure and new technologies. america's revesz investment in $25 billion annually to ensure the safety, reliability and efficiency of the rail network. the last six years we've been investing in tcp technology known as positive train control or ptc. ptc is not a single system come to a large number of subsystems linked together. components are designed to stop a train before accidents occur. the rail safety improvement act of 2008 requires railroads to install ptc by the end of 2015 while mainland tuesday transfer passengers are certain toxic

materials. ptc is designed to prevent accidents and for specific situations. trains traveling beyond allowable speed trains traveling beyond authority trains traversing a misaligned switch and trains entering the work zone. to do so ptc must determine the precise location, direction and speed of trains to one operators of potential problems and stop the train at the operator does not respond here this is not an easy task. such a system requires the creation and emphasize creation of complex topologies to analyze variables. as you imagine, it depends on the train speed terrain number and distribution of locomotives and the number of empty freight cars on the train. ptc must take these factors into account reliably and accurately in order to safely stop the train. the task of deploying ptc in the united states includes equipping

23,000 locomotives with computers designed to know exactly when to take control of a trained and bring it safely to stop. completely rebuilding tens of thousands of miles of road of systems with the ultramodern ptc system. a .35000 sensors to commute his status as signals of which is to the ptc system complete in a geospatial survey of 60,000 miles of rail and the structure. building a nationwide communication system defined for the requirements of ptc in developing the precise data requirements of ptc. in each railroad ptc system must be interoperable with each of the 40 railroads developing ptc on their mainline since locomotives and trains frequently operate on the mainland of another. in all these areas revesz have made significant progress. they've also overcome regulatory challenges. for example in 2013 the fcc

required all new ptc communication towers undergo statutory review. this requires significant engagement with the state historical preservation society native american tribes and others. resolving this issue and the installation of towers by more than a year. next to the efforts of those involved in the efforts of the committee, we believe this issue is now behind us. as at the end of 2014 csx has invested some $1.2 billion on ptc and we expect to spend more this year. the freight rose together has spent i billion dollars to date and expect to spend at least 9 billion before ptc is fully operational. it's important ptc delivers the functionality while ensuring safety and efficiency of rail transportation. two principal risks illustrate why it is so important we take the time necessary to do this job right. the first great risk and safety. and in the church system could create safety had word.

candidly, we still find critical defects in the key pieces of software received and suppliers. second, in a mature system could an abrupt the free flow of rail cargo and passengers across the united states, which would impact our recovering economy. the railroad string committed to implementing ptc as quickly as possible in a manner that ensures safety and efficiency of the railroad network. despite the railroads best effort and progress today, ptc will not be completed this year. thank you, mr. chairman. and for your support for ptc attention. >> thank you mr. lonegro. mr. brown. >> good morning mr. chairman, reagan never know if the members of the committee. many missed davida brown. i was appointed chief operating officer in 2012 and in this capacity overseeing management operations of the 116 euros

owned by g&w. it is forever was in the u.s. canada australia, netherlands and belgium. in the usb on to class regional railroads and 105 class three short line railroads located in 39 states. based on the diversity of the short-lived holdings we believe we are able to offer a perspective on safety and efficiency of the industry. outside to address for areas for consideration by this committee within the focus of this hearing. first chart line and regional rebel safety. second, infrastructure challenges facing short line railroads. third, the answer to created for shoreline regional railroads associated with the ptc mandate and forthcoming part of the short-lived and regional railroads as part of the rail freight network. like the ray road industry as a whole, gw railroads pitcher magically improve safety performance over the past decade. we become an industry leader in safety through an intense multifaceted approach that focuses on culture of safety.

as a result of this culture 101 of 113 gsw with zero fra reported injuries, which had frequency rate safer than any class one railroads in nearly six times safer than the shoreline industry average. we believe the same attention to detail required to eliminate injuries translates to every area of operations, resulting in freight service for our customers. our objective is simply for every g&w railroad to remain injury free everyday. 86% of short line shipments are interchangeable class one railroads demonstrating independence between railroads in the class on carriers. this demonstrates the network major of class one, two and three rebels. if they cannot handle the same way as its class on connection the utility of the short-lived

service to its customer suffers. the speed and weight limitations are most often do to purge structures. limiting speeds can ensure safe operations over these lines, but that not address the cause of leadership and since lower speeds based on the customers dependent on our short lines. since 2004 congress has provided a short line tax credit to help railroads improve their lines, replace rail and upgrade bridges ought to serve customers with more competitive service. since 2005 the credit has spurred 1.5 billion private investment in road infrastructure. the credit was extended last year with support from 15 members of this committee. unfortunately, it expired on december 31st 2014. i strongly encourage the senate to renew it to encourage the private sector during 20 team to invest in regional railroad infrastructure improvements.

ptc implementation is led by the class one industry and has not yet addressed areas of serious concern to the smaller railroads. the vast majority of implementation has been done by class on carriers and suppliers without consideration to the financial and physical constraints of the revesz. little attention has been given to the new ptc systems that will interface with connecting operations refer to as interoperability. the majority of short line will be required to implement ptc are doing so because of interaction with the class one b-bravo. while they created ptc exemptions for certain short line operating actuations short-lived rows have no plans on how to apply these exemptions to actual situations. in addition to this effort and cost associated with urge singh and installing ptc in short line railroad locomotives, the technology being used requires ongoing technical support and maintenance largely unavailable

on short line railroads. the difficulty in acquiring the support could be significant. clearly there's not enough time between now and december 31 of this year for this to happen and i encourage members to develop a fixed period of expansion of existing deadlines and clarify the exceptions of railroads as it relates to class on operations and implementation requirements. from a shoreline perspective it's amazing how focused one becomes on superior customer service when you only have a futures earth, customers must provide the payroll. our part of the overall industry is highly capable of providing the first mile, last mile service safely and efficiently. to that end i asked the members to consider the following. appreciate and understand the significant role bareboat players heart of the u.s. real freight network support extension of the short line tax credit and allow continuation of

expanded reinvestment of private capital back into the regional railroads across the country here to understand economics and financial resources of short line and regional railroads are limited and recognizes the burdens of regulation that mandates like ptc fall heavily on small railroads. thank you. >> thank you mr. brown. mr. johnson. >> mr. chairman, senator nelson of members of the committee on commerce, science and transportation. my name is bill johnson. it pleasure to speak with you today. i'm speedy to you this morning is a former director of where miami and former chair of the ford ports council. i'm also today currently serving as my community's director of water consumer, one of the largest public utilities. i stepped into the raw state level as florida's new secretary of commerce and ceo of enterprise florida. throughout my 35 year public service career, which is largely

focused on infrastructure development i've seen firsthand the impact of infrastructure on the ability to thrive economically and of course the need to properly connect existing infrastructure at the local, state and national levels. i strongly believe in order for these types of infrastructure projects to move forward, there needs to be partnerships with rabid sector and of course participation on all three levels of government. when i became director of poor man in 2006, we were faced with the reality of an aging infrastructure that did not meet the needs of the growing seaports and a changing economy that depended on regional trade is a key job generator. while south florida is known worldwide as the cargo gateway of the americas to remain competitive, our region needed to address challenges posed by the panama canal. where miami is the second-largest engine in south florida, second only to the airport contributes 30 billion

annually to the local national economies. port miami supports 225,000 jobs annually, both directly and indirectly. it is project of the new infrastructure being completed at our ports including the deepening of the channel to just 50 feet lot more than 30,000 new high-paying jobs over the next several years. i was a these are high-paying jobs. the average job with high school diplomas over 50s thousand dollars a year. however in addition to deepening the channel to accommodate the container ships, port miami had to address the challenges including how to move goods on an office work, linking south florida to markets on the east coast of north america. our approach was to implement a three-part come with senator nelson is aware of a three-part development strategy to focus on capital improvement projects and investment that would support cargo growth and not only by

virtue of a deeper channel, but also projects such as the newport channel rao stronger acquisition of superposed screens. i'm briefly going to touch them all. how they can or cannot to make our port is stronger, more viable port. the u.s. army corps of engineers is hard at work to deepen our channel 250 feet. the project will be completed on time this summer. summer 2015 making port miami the only port south of norfork virginia on the east coast at that depth, the same as the panama canal. in fact, miami will be at a 50-foot up in the sand. the dredge project is supported by the bullpen completed to accommodate the container vessels and acquisition of the world are just trains. this allows us to load and unload containers timely and efficiently. senator nelson is very much aware there has been an

important introduction of a new project last summer that is the construction of port miami tunnel. this is our port of the highway system and provide for lanes under this and a with a seamless connection with no traffic signals to allow us to move our container increased icelanders in and out efficiently. this is a successful project because as a public-private partnership that involves all three levels of government. federal, state and local peer the project open on time and under budget. it shows what can be done when the partner in an open fashion. vehicles nontravel from our port to something in the range of 26000 vehicles a day using the port miami tunnel. importantly for this committee the restoration of on dock rail and this is another great example of americans working smart. this is a public-private partnership involving all three levels of government. national government state and local. today from port miami with our partners that for the east coast

rail, ftc and senator nelson referred to henry flagler, be utilized same route system mr. flagler brought to florida back over 100 years ago. israel improvement allows us from our port to connect to over 70% of the american population from our port from one to four days. within four days we continued to chicago, the heartland of america at less cost via rail. a huge -- it was in partnership with washington, state government and local private sector partners. on dock rail is part of the growth strategy and no port i believe can be successful without on job real. real is essential to the movement of goods and people in america. our new at the seaport partnership allows shippers to reach over 70% of our entire nation's population one to four days. it's a win-win. in summary, port miami is the most ambitious in its 100 year

history. it is all about, dvd. it is all about the ability to reach markets faster and safer. we believe the new connections to asia with expanded can now can help all of us grow our trade. global trade and free movement should be at the forefront of economic element at the local state and national levels. this depends on rao vital to the nation's commerce and supporting our economy. the system demands proper planning and investment to keep freight movement expeditious and cost effect is. infrastructure project to improve the network of the region and niche in moving goods attributed to the entire economic growth in many ways. we all know those jobs and a wide range of logistics jobs on and on. the bottom line for me we need

to continue to support a smart investment in our rail system. thank you, mr. chairman. >> thank you, mr. johnson. ms. teal. >> thank you, ranking member thune and senator nelson. thank you is not a blunt and senator mccaskill for your support of transportation. i am so pleased to be here to share the state experienced on freight rail safety, efficiency and commerce. situated in the center of the united states, missouri is the crossers furnishes railroads. missouri is the worth most real intent the state annually carrying more than 420 million tons of goods. nearly 20 million additional tracks here with the need to move the same amount of freight on our highways in missouri. we had more than 4800 miles of track, 3000 public rail crossing and six class one railroads routing within the state. we are also proud to have two of the top three rail terminals in

the country. kansas city terminal railway is the second-largest terminal in the country. approximately 250 free-trade movement occurred at ttc every day. missouri is home to terminal railroad association of st. louis, the third-largest terminal in the country. at the missouri department of transportation, safety is our highest priority and we do everything within our ability to make our transportation system as safe as possible. when we recently saw crude oil shipments increased missouri river safety inspectors worked with the railroads and the federal reserve voted minute haitian to make certain those receive our highest attention. the rise of railroad movement also spurred to increase road safety inspection staff. at a time when resources are as heirs, this decision demonstrates modoc's commitment to the safety of our citizens.

in missouri we value our strong relationship of the nation and the third-largest terminal railroads. we know missouri's terminal railroads are an important national asset of any significant amount of great including hazardous materials. they allow multiple railroads to use common infrastructure, thus maximizing efficiencies and minimizing environmental impacts. amtrak and the state-sponsored missouri river runner passenger rail service, contracted through amtrak also use these nationally significant terminal route roads. six passenger trains traversed each day. as mentioned earlier, approximately 250 freight movements occur every day which is obviously driving our nation's economy. ..

and $2 million a year for maintenance, in kansas city low. so to get some scale to this missouri's cost to fund the entire passenger rail service between kansas city and st. louis is about 9 million a year. the service operates on kansas city terminal for only about six of the entire 250 miles of that passenger rail route.

so while we agree ttc helps improve rail safety. we don't believe modoc and amtrak should be required to bear the entire cost considering the volume of house of burgess and other commodities in these population areas. modoc set response which amtrak and another to the fra regarding this issue have attached both of those letters to my testimony as well. you'll see in our letters modoc sounds ready -- standridge work with the fra with railroads amtrak and lawmakers to address this important issue. we know there'll be an ongoing and dynamic discussion that we hope ultimately leads to more informed and more importantly a more equitable method of implementing ptc in our nation's largest rail terminals. again i'd like to thank you for the opportunity to share our views on this important topic, and reinforce that the missouri department of transportation stands committed to improving

the safety of our entire transportation system. thank you. >> y. mr. jahn. >> thank you, mr. chairman ranking member nelson, and members of the many. we appreciate the opportunity to talk today about rail issue surfaced to the fertilizer industry and agriculture depend on safe, reliable and cost-effective rail service. in fact, nearly all fertilizer shipped in north america such as the real transportation system at some point. the delivery of fertilizer in a timely manner is critical for the 2 million american farmers who produce enough food to feed our citizens, and generate over $400 billion annually in economic output. in fact, 40-60% of the crop yielded to directly to fertilizer. it's vital this committee understand the availability of efficient rail service is not a seasonable issue for agriculture. our industry works to support farmers 24 hours a day, seven days a week. this year production volume of production in the industry

couldn't possibly be transported just two times a year during the spring and fall planting seasons. in fact, this takes place year-round. our members have relatively little storage, et cetera they don't have reliable rail service, those plans have to shut down. just as the railroad industry has changed the last 35 years farming has as well due to advanced agriculture. so, for example, last spring and may 2014 the country as a whole went from 29% of acres planted to 73% acres planted. that's 40 million acres planted in a two-week period. so as farmers rely on the robustness of the transportation system, especially the railroads now more than ever and to give our reliance on rail service the fertilizer institute supports policies that will promote greater competition between railroads and improve the efficiency and effectiveness of the surface transportation board.

for example, last spring he has be required us to track fertilizer shipments. is transparency help improve service that desperately needed it. however, we are concerned the recent sba order establishing temporary reporting requirements and the board proposed rulemaking our permanent reporting requirement do not include separate tracking of fertilizer shipments. given out importance to agriculture and the timely delivery and application of fertilizer we feel it's appropriate to include in that permanent reporting notice. farmers at the april 2014 stb hearing testify to that fact. we are also concerned about other issues that affect rail service. for example the new crude oil tanker car standards proposed by dot could have the unintended impact of crowding out capacity for maintenance required for other cars. further, the proposed speed restriction for high hazard by

mobile trains which do not include fertilizer could add significant congestion to already overburdened network. moreover, it's likely the trains under the rulemaking a significant number of cars that do not contain flammable liquids. we are also concerned about the deadline for deploying positive train control which we've heard a lot about this morning. as you all know this covers tens of thousands of miles of track. and while we are very strong supported efforts to deploy ptc and financial safety, we want to make sure it does not erode the railroads commitment to the common carrier obligation to transport toxic hazardous cargo. the reason for that is rail service is vital to the transportation of anhydrous pneumonia which is used as a drug application fertilizer in the midwest. it's also used in a production many other types of fertilizers and as others have said before today rail is, in fact, the safest transportation option for

anhydrous oberlin. we want to make sure that those 30,000 tank cars that are transported annually, want to make sure to continue to have the right to ship over the rails. because it takes for trucks to replace one rail car. that would not be possible to do in a timely manner. so in conclusion i want to thank again the committee for allowing us to be here. our partnership with the railroads is crucial in helping feed a growing world and we depend on the safe reliable and cost-effective service. we want to work with the committee, the surface transportation board and our partners within the railroads to make sure that that happens. thank you. >> thankthank you, mr. jahn. and thank you to all of you for your great testimony. senators we will start with five men around and see where it goes, and how much participation we have and probably have time to do another round of questions, to be on how many people shall. i want to start with you, mr. brown. as you know south dakota's

genesee & wyoming property, eastern railroad which i allude to earlier hands-off significant portion of road traffic to the canadian pacific which is a class one railroads. during the early months of the transition following g. and w.'s acquisition of the line and were challenges in managing power car resources and and effectively handing off trains. my question is how do short-lived managed service with class one railroads and how does that very among class one railroads? >> certainly we have agreed first of all we are a customer of every class one railroads, as a shoreline holding company. we are a customer of every class one. we also our partners. in the case of rcp and d. our partnership as a star that operation come we managed very much multiple interactions per day basis but we look at ourselves in our various railroads as an extension of the class ones into the first mile

last mile environment for example, in south dakota which is a fantastic operation that we successfully began last year and it has progressed well and we have seen there were some challenges as we started that operation. there often are as we integrate a new property into the portfolio of railroads that g&w owns. so we establish strong communication channels operationally so that every day there is times a day we are planning for locomotives and family cars are going to develop for our customers. we purchased and brought into that railroad over 2000 cars of our own in addition to the cp had previously supplied to the railroad when it was part of their network. so we have brought our own for locomotives, brought this into that operation. and we had over 180 south dakota's to operate that

railroad, and they've done a fantastic job of, yes or. >> i'm sure he have to be careful about what you say in terms of your interchanges with the class ones, but are there differences between class ones? >> certainly. >> you interact a lot. >> everyone of them. so yeah every class one. there are differences. i understand the networks having formally worked for two class ones and having been well a coin with the rest of them. so there are differences. i see that there's a lot of attention in the class ones, all of them in terms of enhancing the capacity, improving their validity. advancing results that say they're being successful in improving everywhere we can connect with them. it's progressing well. we all know last winter was off the scale as far as its impact. that's largely been recovered. >> we. >> we are glad to see

improvements as well. mr. lonegro, there are disruptions in the rail network that have cascading impacts and the question is how could better manage major bottlenecks like the one in chicago that impact the fluidity that mr. brown alluded to the anti-rail system? and then as sort of a more perhaps specific question, how railroads change their point for severe winter weather events like the one we are experiencing in the northeast right now? >> thank you, mr. chairman. in terms of chicago clearly chicago is the crossroads of all of north americans railroads. it's the most efficient way to interchange traffic from west to east and east to west so it's a natural place where already would come together as it has been historically. chicago is a situation where congestion on anyone railroad can impact of the railroads. there are also a series of switching carries with in chicago that make connection between railroads that don't naturally or physically exist.

chicago last winter summit from the same challenges mr. brown just spoke of in terms of the winter as well as the additional volume we all experienced starting in the second quarter of last year. there are two ways i think to look at chicago. one of those this investment. when you look at the create projects of great public-private partnership, multi-projects which help both fred where words as those passenger railroads and the individual investment of many railroads as we all look to make our interchanges in our individual rail networks as efficient as possible. there are a series of committees that are operational committees on the ground every day in chicago. we call it the cdc of come, the chicago traffic coordination office. which have members that sit on the coordination office and their job is littered to try different from ones of chicago to the other side of chicago day. they've gone into a very revised series of what they call operating conditions changes to

the if anyone railroad gets in trouble that we would have to bring forward a plan to alleviate the congestion if they're unable to do so. many of the railroads pitching and begin to divert traffic to alternative interchanges. there is a lot happening right there. and try to put together blue-ribbon panel to look at the class ones that put together a retired executive panel to look at ways to improve chicago fluidity. many of us have looked at alternative interchanges. we just open one with the bnsf emmitt smith borough which is northeast of st. louis so if we do get into a situation with traffic needs to be diverted from chicago doesn't have to go to chicago at all we do have alternative gateways that can reduce the congestion in chicago. to your winter question. last winter took many of us by surprise, probably the worst winter in 30 or 40 years. we have winter every year just question of how extreme it is how much snow how much gold there may be.

we did dust off of plans and make sure they were each as up-to-date as possible. it's making sure we have the supplies of the right components for freight cars and locomotives and rail that are temperature sensitive. everything that we deal with by and large is a steal and steel reactor temperature both extremes on the low-end and high-end. we also have invested in new equipment, switch eaters and jet blowers. it's in essence how we clear the railroad of snow and ice to make sure that the equivalent of the exit ramp off of the mainline remains fluid. and then he gets down to communication making sure we understand where certain traits may be in trouble in getting crews add additional power to rescue a train that might affect a locomotive failure or track failure or carve their. >> thank you. if any of you can't do it at chicago, i know that is a lot being done. my time is over. i've got some ptc questions but

am sure my colleagues will get to those. senator nelson. >> so, mr. lonegro, you also been trying to input positive train control. there's been some complications. what can we do to help you and how does the extension figure into that? >> certainly this committee plays a major when introducing legislation to extend the deadline for ptc. we are appreciative of the committee and certainly your sponsorship, cosponsorship and senator thune and senator blunt's sponsorship of the extension that you introduced in the last session and look forward to continue that discussion with you in this session of congress. the extension will be used for the following. the next handful of years three years or so will be the continued deployment and infrastructure side to the 30,000 locomotives i mentioned in my opening testimony 23,000 and the tens of thousands of

miles of signal replacement we have to do in order to bring it up to the type of technology that can interface with positive train control. so the hardware deployment will continue significantly in the next three years. certainly the software is not yet in its final form and we look forward to working with our suppliers to try to get it into final form. in some respects that merely starts the process of testing in a laboratory and then testing and field in order to make sure that it works in operating environment. the safety and efficiency of that. i think it's important to remember the amount of money and the dedication little late at csx with 1000 people working on ptc, the industry has thousands of people working on positive train control. they have made their grit and their life's work and wrote to deliver this technology for the safety of our workers and our communities and that pass through on our railroad. >> mr. johnson you started the

interactivity and come activity of rail to the port of miami -- come activity before you did the tunnel. the tunnel for trucks the rail obviously for rail. share quickly your answer with the committee why the rail connectivity was so important. >> without rail port miami literally could not grow. this is true for a number of ports. miami is at the end of a long peninsula. miami port everglades as well. both have had rail improvement. you've got a major road corridor, i-95. it is heavily congested. for port miami to grow from just under 1 million continue to 4 million, there's no way to move the product. the success for port miami in the billions of dollars that have invested, without rail you

don't need a billion dollar port tunnel. you don't need 50 feet of water. the ability in this nation to move this product through an intelligent road system and a rail system is vital, whether it's the port of l.a. in long beach, whether it's the port at miami. without that interconnectivity you cannot connect your port to america and then globally. this is a global trading environment we live in. so rail is really the heart of it all. senator commission know i made a very well-known the linchpin was securing federal support which we did with former secretary of transportation lahood. it was, in fact, that the building to a can partner with washington with our state government, and governor, and of course, local and the private sector partner, a true when for my poor. i think it is a win for america. interconnectivity through rail. >> by the way i might point out to our colleagues, that was a part of the much maligned

appropriations bill that was trying to give and economic jolt to the country from the deaths of the recession, back in -- depths of the recession. back in 2009. mr. brown, i have been out on a couple of your railroads, and even the fact that we've got some real problems with fiery crashes with oiled fingers on the class one and then you passed that over to your short line railroads. what are these challenges of transporting the crude for the shorelines? >> and i would suggest that it is somewhat unique in the short line world. we certainly support enhanced

take our safety standards that are currently underway. we have come over all the g&w owned properties we've established some safety protocols and precautions, and based upon the type of hazards measures that are transported over those unique properties, their volume as well as the existing level of maintenance of the infrastructure. so what is unique in the sense that our railroads do very in the level of maintenance of infrastructure, depending on traffic density, car waits your we talked about i mentioned rail conditions as well as a bridge structures. so we just look at where say goodbye real my the operate across the g&w on the railroad and we enhanced our infrastructure maintenance as well as apply operating protocols and procedures for safety.

>> 's thank you senator nelson. i have the following order. senator blunt, cantwell, gardner was no longer with us, and mccaskill. senator blunt and then senator cantwell and the double shot from missouri, senator mccaskill. >> all right. so ms. teel, thank you for being here again. i think this is the second time we have had to testify in a couple of different issues in the last year, and we all appreciate you being here. senator mccaskill and i particularly do. on the amtrak route in missouri that is state sponsored, was the status of positive train control now as it relates to the department of transportation? >> cell right now we operate that service on mostly union pacific's rail line. so union pacific being a class

one railroad is installing the ptc at their cost. where we're running into a situation is with the terminal rare roads, if they are in a tough spot. we are great partners with the terminal railroads. in fact, mike mccarthy, the president of st. louis, the terminal railroad association, is here today and were also great partners with the kansas city terminal. they are in a tough situation because were it not for the passenger rail activity, it would not be required to install ptc. so they host us and we'll have a funding source to pay for ptc. in fact, every year it's a challenge just to get the $9 million when you to operate and track because we don't have any dedicated fun in the state of missouri for passenger rail. so to come up with an additional 20 plus million in capital, an additional ongoing maintenance for that small section in both of those terminal rare roads is

going to be a real concern for the state of missouri. and possibly impact the future passenger rail so we are really concerned about that in particular with regards to those railroads. >> has the deity given any guidance on what you can or can't do or what the terminal railroads have a to-do? >> amtrak has worked very closely with those terminal railroads. we contract with amtrak, and amtrak contracts with the railroads and they've been working closely have to figure out how to pay for this, but ultimately the way the law and interpretation is today, those responsibility are going to fall on the passenger rail portion because of the class three railroad exemption of ptc. >> so the responsibility would fall on the terminal railroad or on the state as this bunch of amtrak? >> the state and amtrak. amtrak has some national routes

that flow through both st. louis and kansas city terminal's ear then we have the state-sponsored rabbit is back and forth between st. louis and kansas city. so breaking those into a proportion to each amtrak and the state of missouri would have to pay their fair share for the portion of ptc that is impacted in those terminals. >> mr. lonegro, is the topic generally, i know you can tell from senator nelson's comments and senator thune's comments and many others on this panel that we've been concerned that the government itself has been one of the obstacles to meeting the deadline. where will railroads generally be by the end of 2015 and what would be a reasonable deadline now that hopefully the fcc and others are working with railroads to actually get this accomplished? >> for a couple of questions embedded within that i'm sure

you know. in terms of the government, sort of the fcc and the tower issue we confronted last year in going back from about mid-2014 to mid-2013 was a major obstacle that we have since overcome. we are working with the fcc on what we call the tower, the antenna height waiver which we are looking closed within. we need that to get to the fcc and then the are some cross-border issues between the united states and canada that have to get resolved also. in other words, if a train is coming in from canada, in order for it to be ptc enabled when it's the boundary between canada and the united states it has to begin to converse with ptc while it is still in canada. we have to get to that cross-border issue. at the are a level we meet with in quarterly and discuss issues but i think the dialogue has been very can't -- fra. as the you all know when congress passed the rail safety act about one page of that legislation was positive train control, and it is turned into

hundreds if not thousands of pages of regulation which just became final in august last year. so some sixers after the legislation was initially passed we finally have the recipe from a regulatory perspective on what we are required to do. >> on the tower side and fcc your railroad particularly is impacted by that am i right on that? >> we are impacted by it but the industry has about 20,000 towers that had to go through the process, the majority of those are in the western u.s. we certainly have our fair share but it pales in comparison to what the western railroads have to put -- >> my last question as my time runs out is is the fcc now doing what the need to be doing for tower siting to happen, or are we still looking at an obstacle there? >> we're still looking at an obstacle only because a recount has certain documentary requirements. we have to do field surveys the documentation together, get to

the fcc the state preservation society and american tribes in order for them to review it. so every tower everyone of those 20,000 sites has probably 100 days or so review process that it has to go through. there still will be obstacles based on the streamlined process process. >> the question i didn't get answered enemy been unfair but how long do you think it will take your railroad to comply with the ptc? >> if everythineverythin g goes well, and that's a huge caveat i know to the answer our plan is to take us to 2020. >> thank you chairman. >> thank you, senator blunt. senator cantwell. >> thank you, mr. chairman thank you folding this important hearing. earlier of look at the numbers in attendance and i would think save the senator from florida i bet you washington exports more product from every single state that was represented here this morning, from fossil fuel products of agricultural products. where the second largest port

now with a combined seattle-tacoma alliance. and so ports are us come and freight, and freight movement is critically important for us to keeping our competitive advantage and it's also very important as relates to the growing market outside the united states, the doubling of the middle class around the globe in the next 15 years is a great economic opportunity for the united states. i do want to make one note your comments earlier. my viewpoint on the real core issues that we should go back. administration should get those new recommendations implemented. i say that because with the 44% 44 times increase in the number of rail cars carrying crude in the last six years, my constituents are now seeing these trains through every major city in our state just because of the way they enter the state and go out to the refineries. they are literally hitting

spokane to the tri-cities go through vancouver, up through tacoma and seattle, and up to the refineries. so these railcars are going through every major population center. seattle is now debating whether they want to make some new requirements keeping the commuter trains and israel trains which go in in the same time as at various points in times, make rules regarding the. it's a very big issue for us. i am anxious for them to act and just want to make that point. for our panel today and i would say, thank you i do hope we play commerce committee a bagel in service has petitioned issues as that debate happens on throughout the senate and throughout the house. i feel like argument has some very important roles to play in safety and security on those so we look forward to that. i wanted to ask our witnesses again because freight is so important, mr. johnson or mr. lonegro, about the flotation of the freight mobility -- implementation board recommendations and how what

would your recommendation be on how will we move to get those recommendations adopted by congress so we can improve our competitiveness of the infrastructure? >> typically your ports are going to approach it with real partners -- rail partners. the port of miami we really worked closely with florida east coast rail because they are truly our partner. so we are looking for their advice, input. we have our governmental folks of course work with us on issues in washington, but we are concerned in terms of implication of cost delay. so the big thing for us is making sure that on the regulatory side of things obviously don't become overburdened some but also that there's a focus on really supporting the necessary dollars for the infrastructure.

that really is the key for us. and the programs that have happened historically, and senator nelson hit on that the tiger program was really instrumental particularly for our ports. that linkage between rail and we secured 23 million at a tiger to mac for real. without that tiger grant, the project would not happen. the state of florida pumped in 11 we. my private partners put in money. so to me as a former port director the focus, the regular stuff is important that we are focused on that infrastructure plan and how we make those funding decisions happen. i think it's too public for most ports in america. >> for getting those recommendations government. mr. lonegro? >> yes ma'am. i think in terms of the partnership that we talked about,, the shorelines our major partners for class one railroads, 20% of our freight unit originates or terminates on a short line.

csx serves 70 east coast and gulfport's comments is certainly the ports are big customers and partners for us as well. certainly the funding on both of those constituents is going to be really important. our job is to work with their customers to develop properties where they can cite the rail facilities whether they be at the border and deport or manufacturing as that comes back on shore which is a wonderful thing for us. and then to provide great service. one of the things that was a challenge in 2014 was doing exactly that. we hired thousands of people that can run trains. we have invested over a billion dollars in locomotives. we believe we have a good line of sight into good service this year. regulatory certainty is an important thing for us. balance of the balance regulation on the economic side will keep that imbalance. so thank you. >> thank you, mr. chairman. >> thank you, senator cantwell. senator gardner. >> thank you, mr. chairman and

apologize for my absence as i can a small business committee extras. great have you all with us today. in your testimony today and the written testimony of talked about the need to improve safety on our rail systems which congress passed a law for the purpose. you've talked about the efforts made to respond to the law. we've heard about a number of technical barriers that a delayed the rail companies the ability to test and implement technology at the end of your deadline. all of us are strong support of railroad safety and safe rail system, and i know everyone here is as well. what i do knew too much about today and i'd like to get into a more is another type of safety and the deals also with our national security. that concern being the issue cybersecurity. safety technology requirements from the law basically requires a computer to overall human air when operating a train as i understand. when this happens in the system

or the rail line shuts down until the problem is solved. as we hear more about cyber attacks on the country i'm concerned that not getting enough time for this technology to the operator could bring we invested open our rail lines up to cyber attacks and other concerns. in the name of safety is there an issue we are not addressing that could, in fact, make our rails less safe? >> thank you, senator. i believe that we are working on cybersecurity in the realm of ptc. we have what is most well-known national labs that's looking at it from an event third party perspective to make sure that the cybersecurity challenges are accounted for. as i know you are a lawyer, cybersecurity is always a defensive measure, and so every day there are new ways either nationstates or individuals can't attempt to infiltrate whether it's governmental, business, or personal accounts

and technology. i think the important thing in the ptc realm is that the data transmissions and the communications networks are encrypted with state-of-the-art encryption. certainly the messages are sector is anything else we are able to transmit today. the other thing i do think again it's important to note where you talked about technology coming in and taking over control of the train. the only interface of ptc is to the braking system. there is no throttle control by the system for positive train control. the failsafe mode for positive train control is to bring the train to a stop. >> in your opinion on if anybody else would like to address the question, please feel free to. in your opinion is there adequate time to provide the kind of testing you are pairing out? >> no, is the answer. sorting out against a december 31, 2015 deadline. the security element, the safety elements of being able to test

all of this and to hire smart people to try to break into it are certainly things that we will do but you can't do that until the system is complete. >> mr. chairman, i yield back. >> senator mccaskill. thank you, senator. >> as you can tell my voice is not what it should be which is a cause for rejoicing in many places around the country and in this complex. so i will not spent a lot of time questioning today. i want to associate myself with comments and questions of my colleague, senator blunt. kind of have a number of questions i will submit for the record. about issues such as the transporting of crude which is one of the reasons i support the pipeline. one of many but it's one of the major ones that transportation of crude across my state is an everyday occurrence and something we are concerned about

concerning overall safety. this issue is complex, hard and i just want to stay for the record that it is unacceptable that we would disrupt passenger service in missouri over this issue. it's unacceptable. we have tens upon thousands of people that rely on the trains in missouri. it isn't like the northeast corridor but it is essential in my state. and so i would like to see everyone knows that congress is going to probably adjust its deadline. and i would like to be a more realistic target for the deadline which gives us time to try to work this out among the various players that need to wait and and help year. this can be all want and try to they can all be on modot, and, frankly, the question is whether or not this is the right way to put all of that responsibility there. because of what the rule currently states.

so i hope we can get quick action on ptc the late bill and/or to give more certainty to the environment in missouri so we can make sure that we have and continue passenger rail service. i apologize for my voice and i was but the rest of the questions for the record. thank you, mr. chairman. >> thank you, senator mccaskill. senator fischer. >> thank you, mr. chairman. everybody up here as some health issues today, so i apologize as well. mr. lonegro could you talk a little about your overall capital investment plan and what might happen to the plaintiff government did things to either restrict your revenue or change our regulatory structure based on how much revenue that you generate? >> thank you senator. certainly all class one railroads are spent at record levels, both because of the growth that we've seen as well as making sure that we run a safe and efficient rail network.

as luck would have it we just released the details of our csx capital plan to our customers. one of the things we've done the last few months is truly opened up a transparent dialogue with your customers around service as well as around the capital expenditures. rail as you know is a very capital intensive business. we're going to put in 3 million tons of hours, 3 million crossed eyes can rebuild 95 locomotives by to our newest, spend 100 new ones on technology. and the people $5 billion capital plan have anything to support in a 300 million is for positive train control. additional regulation generally cost money and certainly having some balance in being able to look at what i will call the aggregate weight of all the regulation i think is an important thing and certainly as you get into reregulation topics come anything that constrains the top on will ultimately constrain the ability for us to

reinvest in the railroads. >> when we look at the stb revenue adequacy standards, that will affect your ability to invest in the future? >> it could. it depends on sort and all railroads meeting that revenue adequacy test, and certainly looking at the future growth opportunities that we have. if we are unable to build capacity in order to handle the additional growth, then yes, it could. >> and just one question on the ptc that you've been asked about on the regulations. what are the challenges that you see in getting it installed? we have heard some that congress has highlighted, but what do you see as that? when it is finally deployed, what are the challenges that you will be facing? >> so a fair interpretation of the question would be what have we been doing in certainly

designing the requirements -- >> and how are you going to be to do it? >> absolutely. we literally started from scratch. many people have testified that positive train control theory has been around for a long time, and it has. it's certainly did not it wasn't able to comply with the requirements that we received as part of this. and so the most mature piece of software was the onboard system, and yet we haven't received a final version of that to be able to comply with these requirements. so the software has been a challenge. every railroads information technology infrastructure is for a different. like the dispatching systems are all different, and those have to be integrated in such a way that they can speak the limit of ptc. the railroad signaling infrastructure which runs a very safer road has to be replaced to get up to the modern technology that ptc represents. so we are investing literally

billions of dollars in replacing prematurely in many respects the signaling system to the communications infrastructure we literally have built as an industry our own brand-new radio network. we are all blessed with cellular technology but as you know especially in more rural parts of the country and out west, cellular is not a ubiquitous communications vehicle. so we had to invest in our own radio frequency in order for that to happen, making sure that it is safe and secure to the earlier question that we have is an important thing from an i.t. perspective. moving forward what are the challenges? the challenges are technical and scale. because of the reasons i just mention. mentioned. some of the regulatory hurdles we have had and may likely account in the next handful of years. take care and feeding of the system will be expensive. when you for us at csx will spend at least $1.9 billion on ptc. the majority of the isn't a new

signaling system technology and retrofits to locomotives. much of that is hardware and software. that has to be replaced every so many years. the support of assistance we procure from other people the maintenance cost every year. hundreds of millions of dollars of incremental cost every year will come to the railroads in order to continue to support this technology going forward. >> do you think it is wiser to look at seeing the implementation of this on a regional basis, or do you think we're going to reach a point where we're going to be able to flip a switch and have the whole country lined up? >> i don't believe we will switch -- flip a switch. this technology needs be faced and. there are people that need to be trained, so specifically crude basis that run our trains the engineering, will be co-main is the one and many patients as signals, workforce and they'll all have to be trained on this. we have 32000 people in our

company, 80-90% of the self will have to be trained on the positive train control, so the training element of things, all of the timetable can what we used to run the railroad will have to be updated. the dispatching system is the railroad by segments. those segments have to be cut over into ptc. so we see a very methodical phase-in to this hopefully starting with i will say some of the easier territories or less dense traffic territories first and ultimately getting up to places where interoperability will be of a significant magnitude, think places like chicago are you so irreverent that are coming together, washington, d.c. and northern virginia will be similar in that vein. >> thank you. thank you, mr. chairman. >> very quickly, mr. brown, mr. lonegro come you said 120 for ptc. mr. brown, wendy you see your railroad being -- >> in our situation of courseware to work with all the class once. every class one has some unique qualities to what they are developing. although very similar but some unique qualities.

so it depends upon the class ones completion of the projects. i really can't give a date without having any class one come to the table with how they see come as mr. lonegro mentioned, the phase-in of their systems. everywhere we interface with the class one is phasing in its system. were within phase-in our system. so it very much depends upon the class one timetable. >> thank you. >> thank you, mr. chairman, and thank you for holding this hearing today. i represent the state of montana. we are home to over 3000 miles of railroad track, and we move a lot of products. in fact, we are heavily depend on railroads for our ad industry. agriculture is our number one industry in montana, $5 billion a year. for example, 80% of our wheat crop is exported overseas. so it's a connection from the rail to the port that allows us

to grow our businesses back home. we've had a lot of success in growth served in the energy industry as well. a lot of coal trains go by it's not just the north dakota experience. if the bakken's bills into montana's will. today i met with a montana grain growers. i literally came from meeting with him to this hearing. they ship over 130 million bushels of wheat to the pacific northwest terminals each year, and we've had some constraints and have been working with our rail carriers. but it should be noted today we'll be having the keystone pipeline more amendment votes and hopefully get the keystone pipeline passed in the senate. did some quick math. the keystone pipeline, dolby oil coming into an on ramp in baker montana. what that means overall for the supply chain is the equivalent of 4000 rail cars a month, and that's just montana oil that will come in. there will be one more avenue into overall complex supply

chain to allow us to may reduce some of the constraints that we see right now in real. so yet another argument for the need for the keystone to allow us to more efficiently transport our goods to market. mr. lonegro, realize you do not have operations in montana but i was a supply chain guy back in my days with procter & gamble, and the complicated nature of logistics in forecast and so forth. we've had some real capacity constraints in montana. it's a byproduct of economic growth which better to have constraints probably than the next excess capacity nevertheless constrained to have you addressed real capacity issues when you look at solving some of these challenges? ..

into the mid-atlantic and northeast. not only did we have forecasted growth we also had a 20 step module on the part of the railroad so what are we giving about its? when we got to the plate in the second quarter when we believed it was going to be sustained rather than pent-up demand from the harsh winter we began to pull a lot of letters to hire

more people. it takes between six and nine months to go to somebody you hired off the street to get qualified in the operating service and so that length of time when it was pretty significant we hired about 2,000 people last year and we still have half of them in the pipeline which will come out of the job training so the crews are imported and locomotives are an important part of the equation. we have 400 more locomotives into the fleece last year accommodation of leases in storage again the seasons ebb and flow they might be in the service or storage so we took all of those out of storage and then we issued a purchase order for 300 new locomotives in the two-point something million per

copy. >> we see the first 75 of those throughout the first five or six months this year and there were 100 next year and we had a program that was pretty significant with 100 more out of that and 150 units out of step repair program so we literally will have another three or 400 in the service this year on top of the locomotives we put into service last year. >> what metrics do you use to measure customer service? >> jane powell is a measure we looked at both internally as well as allowing the customers to have the verbatim comments.

the service mr. brown talked about in his opening statement was one of the highest scores that we saw certainly the network because of the factors we already mentioned we saw degradation. >> we arrive on time the velocity, number of cars on the line. we have a measure called [roll >> it's been resources. if the growth had had been as good as it was italy are already thankful the economy is growing but at the same time when we pull the customers did we do this all the time we pull the customers and ask what you see. >> the tide is expired. >> thank you. >> senator from massachusetts. >> thank you mr. chairman. in massachusetts there

massachusetts there's nearly 1,000 miles of track that supports millions of dollars of goods that move in and out of the commonwealth each year and we need to continue to invest in infrastructure the infrastructure and modernize for the first 21st century. safety is also paramount. passenger trains and looking at the tracks as free-trade has carry hazardous materials. the sanctity must be sacrosanct and i look forward to working with the committee's on the important safety issue under the jurisdiction. it's come at an increase in of an increase in horrible accidents.

2014 was a record year for spilling oil with 141 unintentional releases. they polluted groundwater destroyed up the property and had a citywide evacuations. the train derailed and exploded in a small canadian town just miles from the main end of the border killing 47 people and destroying much of the town. we need to make sure that we do everything to avoid another catastrophe. he adopts new rules to address the retiring to pose a danger to the citizens in the community is they have the transport in july of 2014 we are still waiting for the final rules that it

endangers and that the standards both in the retrofitting oil cars that go to the new ones for the tank thickness and the length of time how long they have to refurbish or build new cars. but the speeds and the roots that they take, all of us are in the rulemaking and i think it is critical to get some servitude in terms of what the new rules are going to be. so just a question to the two of you carrying 2.2 million barrels of crude oil derailed in alabama igniting and spilling oil all over the surrounding wetlands.

last year the train derailed in virginia and spilled 30,000 gallons of crude oil into the river. what is your idea to make sure the safety of oil carrying the cars has been made so we can give assurances to those? >> we have some safety precautions in the protocols not just where we handle it at all hazardous materials under the various railroads. they have the testing that includes the track geometry testing that's been enhanced number of inspections that we do and change the visual inspection protocols.

the particular commodities are being handled on the railroad and we have several that do that. so with a full slate of initiatives, precautions and protocols, we believe that we have advanced the safety of the operation and therefore the focus on the prevention and future incidents of the time. >> understanding the volatility is part as part of this equation. the standards and we look forward to continuing to work with the regulators to reach a balance. we do worry about the builders capability that that will have on the building of other cars that are currently in the portfolio that would have an impact on the commodities. there's a homogenization between the rules and making sure that

the international travel by rail should be supported and we have a heavy increase on the train to secure meant rules to make sure any train that is stopped is not left unattended in a securely tied down like you've referenced in the canadian incident a couple years ago that was tragic. making sure we have a balance of the safety and security put forward on the test to make sure that we are routing them through the set of standards we have reduced the speed voluntarily to maximum of 50 miles per hour or the network of 40 miles per hour through the urban areas however the modeling work that we have done indicates going below that could cause dramatic impacts more broadly.

it does occur making sure everyone understands the commodities they were dealing with as well as how to handle the situation versus something that might happen on the roadway to further on the point of the standards. we have shrunk that dramatically we've issued the slow orders orders that if orders of have to slow down and happen to go over the piece peace that has been detected by the inspection technology. as the chair and i would say anxious to rule -- >> i'm anxious to do that because it is now my turn to ask questions. apparently because i went to

senator markey first in the senator manchin from massachusetts. >> thank you very much mr. chairman. virginia as you know is a real state and we may not be there to be honest with you that we have 2200 so we appreciate the opportunities. that being said i look at different things in the pipeline senator markey just mentioned into some of the in some of the concerns we have and the dangers of making it safer but with the pipeline iab leave and everyone here believes it will be built we just don't know when it will be built. that being said how is it affecting the railroads because i know to be able to handle 800,000 pills a day the pipeline

will take that away from the revenue and you will be building up the infrastructure for that. is that the model or the plan or how do you all prepare for that? if i could ask everybody to chime in here. >> thank you, senator we are supporters in west virginia as you know. the industry by and large is growing. it would grow nearly 100% by 2025 so there is ample growth in many different markets in order to handle the capacity that we are building and we are forecasting growth in many markets not simply in the crude business. it represents somewhere between two to 3% of the volume. >> you don't see that being a threat to the plan and the investments that you're making anyway. do you feel the same way?

>> very similarly we see growth in the market segments and diminished volumes in other segments over time that we are preparing for. >> so it isn't against the old pipeline. you think it is basically they worked together? >> certainly we would like to move most of it but there are refineries on the east coast which i'm sure we will still need and we look forward to continuing to serve them. the other thing come infrastructure such as highways and waterways projects for infrastructure we've been able to streamline up through the legislation and for some reason we were not able to streamline the process for the rail and they are still very costly, very time-consuming. do you all have a way that you can try to give us some help here so we can help you all streamline the need that we have for infrastructure including the rail?

>> it's been extended over a period of time and just here in 2014 we use a lot of potential investment. >> includes the return on investment hanging in the balance when you don't know how the tax credits may apply. >> what is the time consumption in the permitting process is at 1%, 5% or more? do you have any idea if it is adding a significant cost? spinning at adding a love of cost to the infrastructure that of the infrastructure that we build is because customers need that infrastructure to generate additional capacities are that we can handle the additional volume and so to the length of time it takes and the amount of money that we pay the lawyers and the consultants to help us through the process, any reduction in time and the amount of documentation in the review process it has to go through

will help us put that infrastructure in the ground more quickly. >> if anyone can chime in on that to make the deadline. you will spend 5 billion so far? tell us and if you are repeating i'm sorry that any quick solution to that with extensions do you meet? before they are all said and done i was asked a question by the chairman and about how long it would take in order to complete and i suggested that with a large caveat is that everything goes well from here on out. so we are looking forward to working with this committee introducing legislation.

>> just as the senator was talking about it is west virginia, minnesota also has a love of train service. in fact we had a record $6.8 billion of agricultural exports in 2012 which is actually 13% increase over the previous year and it's continuing to go up. we are the fourth largest agricultural exporting state in the country so you can imagine we care a lot about the great rail issue and we are proud of the work that is going on in north dakota and it's helped to bring down the cost of oil and the cost of manufacturing so that's good. but we also have a lot of need for the rail and is awaiting that is going to balance as well as our increasing agricultural market and i truly want to be

leave that the way that we've got him out of the downturn and the b. that we now expand the economy is by bringing more goods to market by exporting to the world. we've learned we have a steady domestic economy but the way that we truly expand us by getting these goods to other markets and making things in america and that's why i care so much about this. our farmers traditionally held an advantage over the producers like brazil and argentina due to the rail and because agriculture is the largest user of the transportation in the u.s. the service believes that we saw the ways that we saw last year resulted in a lot of cost increases and its damaging but i'm concerned about is making it less competitive with these other food producers. so what do you think that the impact would be on the domestic agriculture with american export markets turned to producers like brazil and argentina? >> it would be significant.

as you said in some ways it is leading the economy and we are very quickly going from a world that has 7 billion people to the year 2050 we have 9 million people and they will all want to have agriculture provided that for them. we are very concerned while the investments have been talked about today they are spending billions of dollars. but we see that unfortunately they are not that adequate in many areas to meet the demand in the number of different areas we would like to see more focus on the agriculture space and that's why lester of the surface transportation board required reporting. >> and has that been helpful we worked on that -- >> we appreciate that and it's interesting how effective sunshine and transparency can be in terms of motivating productivity. and do mentioned in terms of the

peak capacity, one thing i would like to note is in 2014 we were very close to the peak volume and everybody expects the growth again this year so we are looking at a network that has been strained anytime there is a challenge whether it be flatter, record harvest etc. it is tough for that network to respond so that's why we are supportive of the efforts to try to address that that ahead of time rather than after the fact. >> some of the markets we have seen some improvement and we want to keep that up and some of the shipments that had to go out with the issues in northern minnesota because the lakes freeze at some point and we we wouldn't be able to get the shipments to the support and we also had some improvements with the propane that we were worried about. so i know the companies are trying to improve this but it's been a growing problem and we

want to make sure people understand the importance as we go forward. another challenge to the implementation i know from my colleagues that is about the implementation is that the fcc must approve the citing construction and replacement of the 25,000 communication towers and i know i wasn't here for the question because there was a little confirmation hearing going on for the general and the judiciary that i but i wanted to follow up on something that he touched on with you and that is following the announcement last year that last rate railroad could begin using the previously constructed poles, something that we advocated for. do you think that would help streamline the approval process? >> appreciate the support for the streamlining efforts and exemption for existing towers that was certainly very helpful and brought the number down to the 20,000 that you referenced.

we can send 20,000 through it at all times. the preprogram comment and post program, and time frames. coming from the porch perspective. we are trying to coordinate it on the multimodal way. how do you think we better align the planning from the federal government. what's been going on. >> thank you senator.

my testimony focused on the importance of connectivity and clearly global trade is part of the economy and we will continue including agriculture having the rail and intermodal at the end of miami is important that we have partners because they are the ability for us to go from an alley in containers to 4 million. we have the other infrastructure without the ability to move the products you can denomination highway system. we can't grow double or triple volume so it has to get into the heartland of america and that is where connect to the jacksonville.

the number of ports including miami and the funding. not just within the country but clearly the ability to connect to the global world. often times rail is the missing link that is a vital piece and as i stated in the billions in the port of miami would have been for months. of the 50 feet of water makes no difference whatsoever without having that connection. >> do you want to go back to the judiciary.

i introduced the tax credit in the year 2003 as a house member i apologize for the inability to reach decisions regarding the extension of other tax provisions in any kind of a timely fashion to provide a level of certainty and inability to make better decisions about investments. this hearing and this committee is focused on the transportation and safety aspect of the rail. what does 45 g. do that allows you and other short line railroads to be more safe in your operations? it is thought of as an infrastructure investment but i assume that there are consequences that the money that you spend on infrastructure as a result of 45 g. meaning that there is an ability to support other efforts within your company in regards to the safety. is that a fair assumption and

would you describe it to me? why does this matter? >> it is actually very critical and it allows -- we have a limited amount of b. can invest in the property and some of the railroads are challenged because of the low density. they serve important customers but ultimately it is a very low-density customer. often it is the customer in a rural area that would have the ability to have the service provided to them. so it allows unlimited capital dollars to be spread further and certainly those capital dollars are invested based upon the important upgrade its infrastructure from the safety perspective. so as we prioritize our investment each year in our infrastructure, which you're certainly basing that upon the improved safety through improved infrastructure, integrity, bridge upgrades. it might be taken from 263,000

weight limits to 236000. they safely and efficiently over the short line often again. throughout the entire transportation network. while 35 g. is important for providing greater efficiency it also has a significant consequence to the ability to provide safety if that's true? >> the vast majority that we are investing in is upgraded bridges and things that improve the integrity of the infrastructure and been absolutely goes to the safety first. >> the intention that we will introduce the extension of 45 g. in the next few days.

it certainly matters in the places like kansas where short line railroads become such a significant component to outfit agricultural goods it costs to market. in the effort it is easy to be bipartisan than it is to be supporting missouri that operate in kansas. if i and my staff can be of help to you and the terminal circumstance in kansas city please ask us to help in ways that we can't. kansas city is for what occurs in the state and it is growing on the kansas side as it is in

intermodal facility that what happens at the terminal is critical to us and i would be glad if you have something to tony this morning i appreciate your support very much, senator and i look forward to working with you. >> let me ask some questions about the circumstances that we found in kansas. the utility companies expressed some concerns about access to cold. our grain elevators expressed particularly a year or so access and the culprits and the explanations in the explanations that were provided is that they are being used for transportation for oil and therefore less available for grain and coal. i assume the suggestion is that there's there is more money to be made in oil than any of those

projects. i'm interested in knowing if that is an either or situation that is true and if you -- this is probably another question for the kind of things that we are calling. but is there a decision made based on the commodity and i would guess there is a consequence now to the declining oil prices such that the circumstance you may have been in with the shortage is less of a problem today than it was maybe that's the benefit of the customers prices that may be slightly lower to be hauling more fertilizer. any thoughts about how the structure affects your ability to provide services otherwise to agriculture and states clicks.

they don't handle the agricultural commodities are generally covered, so it is all different types of equipment. we certainly are an effort to have the available supply of cars either through the class one partners or those that we provide ourselves and the customers to be able to move the amount of the commodity that they would wish to ship and as that grows, we try to keep pace with additional equipment throughout the various market segments. so, it's in terms of the oil business we know that it has lessened greatly we have some of those cars in a storage status they all move in different pieces of equipment and specifically the grand majority of those are privately owned and

not by any of the railroads. so we don't our case than to any particular customer. there are different prices depending on different commodities and what the market will bear based upon the alternative means of transportation risk etc.. they were within the network so we look at the cold network and the grain at work and things of that nature but they all utilize the same base and the same locomotives into the same track infrastructure so it's important if not impossible to give the priority to any one particular commodity over another because you know if for example we have one commodity that wants to move at 50 or 60 miles per hour the commodity that might move slower he grades the network capacity for everybody. so we tried very hard to balance under the common carrier obligation to balance the way

that we treat all of the customers to make sure we have a government and resources necessary to handle today's demand and tomorrow's demand. >> thank you very much mr. chairman. as a new member of the committee i've learned more about the free system that we have in the country in ways of the week and improvement. for the relation to michigan specifically and our understanding is that she can present somewhat of a challenge to the railroad industry because we are a peninsula basically so in terms of the cycle time particularly in northern

michigan they are up in the central michigan and northern michigan service in just a few customers as i know as your bread and butter as you take their product and try to get them into the markets. so come if both of you can comment on the cycle time and i know that in our conductivity and other lines that service michigan have been a challenging is that something that we need to be aware of and does it perhaps impact michigan more than other states as the geographic peninsula? >> certainly last winter with the class one interchange partners lease all the cycle times increase over the entire national network.

as we talked throughout the testimony there was a period of time in 2014 is exacerbated by the additional volumes that came into the class one networks in particular. to the point we see the additional draft come to the railroads. obviously has that been disaggregated to other locations we waited for the economy in michigan to come back and it's nice to see that it has come and

we are putting the investments in to the grand rapids which we have their we will see michigan will improve as the broad network into certainly the cycle times that will be instrumental in that. we have new business that is interchange between the canadian railroads which will flow through the lower peninsula in michigan so we look forward to having of a traffic run through the bases continuing to invest the resources as well as the infrastructure. >> one final question you mentioned in the impact of the positive train control systems into the cost associated with the unique customer base and i nine mentioned before the grain elevators. there may be a few customers.

we talk about how they are disproportionately impacting the lines. most of the railroads do not require them to be installed overall. there are hundreds of interactions in the class one where it will be installed on the line and maybe we crossed the cross the line to the point we operate across so those are the areas where there isn't much clarity on exactly what would be required to do. in terms of equipping the commode & in terms of other infrastructure requirements that they fall to one of our shoreline properties to the point that it's possible that just that capital-intensive requirements on the particular shoreline pushes it into an economic situation that isn't viable. so, it is that critical in terms

of michigan, it is relatively a minor issue. and again, just centers around interactions with class one installed routes. >> thank you. yield back mr. chairman. >> thank you mr. chairman. certainly in the state of wisconsin we have experienced some of the service disruptions from a number of factors whether the increase in the freight for the transporting oil the result of those service instructions have been called for the greater involvement by the surface transportation board. other potential government interventions. i would like to put it on the panel personally as somebody that utilizes the services for 31 years i would have a great deal of concern to the federal government getting involved in starting to allocate who should get what but i just want to get all of the witnesses in terms of the pros or cons by the

government as opposed to the private sector taking care of it and i will start with you. >> the railroads produced prior to the temporary order that came. we produce measures which go to the flood fluidity published on a weekly basis and so you do have a good understanding already prior to the temporary order in the rulemaking about the fluidity of the network. that said, most of those are giving to give you a snapshot and the retrospective. in the additional dollars based on where we saw the volumes in 2014 months ahead of the temporary order so in terms of

spurring action by the railroads, we had already taken the action and recognized that we needed to invest more to do the service or the customers. >> i concern is if the government got involved is the incentive for the investment that might be reduced. would you be concerned about that as well? scenic the challenges that the government begins to pinpoint where that investment would occur. i mentioned earlier it is a network of networks and assume it is difficult to see the investment should go through a potential favor commodities when we are trying to serve a multitude of commodities and literally have hundreds of thousands of cars on the system. in the customer base to make those efficiently brushless bureaucracy. >> absolutely. >> as a customer what are your thoughts on that? >> from my perspective having

been inside the government for 35 years, what i learned is that what i've seen and what i've learned is that the success comes through the partnership in the private sector and having run the port for eight years which is a 30 billion economic engine to the community, one of the things to make it successful to move things forward we try to get the government out of the way and one of the problems whether it is at the national level, in washington or the state level or local success comes where you are able to truly partner with your private sector partner and all levels of government and really to understand what are the rules one of the frustrations i find in government is we tend to get weighed down. we can't find ourselves out for all of the rules and regulations so i think it is a problem at all levels including in my own local government.

but the state of florida has taken a lot of advances over the last four years regardless of the political affiliation democrat or republican and one of the things they focused on is how can we be more business friendly and creative environment in florida? mind you i am stepping into the top salesman of the state and my new role is for the secretary of secretary of commerce of the state and so one of the things we will sell is the fact that we are a business friendly state so we are concerned about the environment and obviously the importance of education that we are also concerned with making sure that we do not overregulate and that is a big way to solve the community to the state. >> i would just kind of echo what he said as well as for example mr. chairman, where we started the new operation in 2014 the start of operation did

require the canadian pacific to conduct regular communications about the fluidity that specifically required to say how many locomotives and how many cars were interchanged over the new interchange that was the point that we began operating. we as part of that process we voluntarily established the regular communication ourselves so we could make sure that they understood the level of the communication happening between the two companies. they understood the amount of of cooperation that was required and that was occurring in order to successfully begin operation and we are all talking about the same facts. so the process occurred over the period of a few months and it got to the point there wasn't much to talk about.

as they come to them about a specific operation whether it be congestion or a startup operation as in our case they have the information they need to respond and hopefully we are successful in how we do that is a positive story and it turned out to be extremely positive, so that is a good involvement. >> thank you mr. chairman. >> thank you mr. johnson. i would agree with the senator from wisconsin when it comes to having the government mandated the investment. what we saw last year is the greater need for transparency about where those were in the supply and those sort of things which is helpful because we have literally williams and millions of dollars at stake and our

economy when you can't get the transportation in a timely way. and so we have introduced a bill that would focus on the process reforms and would allow the board members rather than waiting until it becomes a crisis, so i will look forward to working with our colleagues on the committee on something that makes sense. on the critical issue. how is the freight transportation, i want to thank all of you for being here today and focus for a moment on the safety issue as it concerns the folks that work on the track and

the workers that are out there and take the issue at risk so often late last fall the national transportation safety board issued an in-depth report on the loss of the 15 workers in 20131111 on the railroads in on the transit system and they made the recommendations as you know across the industry to the federal railroad administration. the devices that will protect us in the course of the work at the depth.

it shows how this issue can be a matter of literally life and death. it's an agency of government to act on the recommendations especially for the workers who are often the most endangered and there should be consequences for the failure to act in protecting the workers at national in scope and i would like to ask each of you to begin with to follow the recommendations of other

commonsense measures that should be taken. >> we opened up a dialogue as a part of the positive training control mandate and met with them several times both in terms of the departing chairperson as well as the new chairman and as a part of that it has been a healthy diet unique code -- dialogue in account of the locomotives and the trackside and one of the four main pillars is to protect the track workers when they have established the authority along the main line into that territory will be sacrosanct in the positive control world where. in the form and we call them into would have the authority to allow the trade capacity or not.

they would understand the root cause in many of these accidents they've published for a number of years and determine whether or not that makes sense for us to deploy. the number of investigations that forward it makes a lot of sense to us. you mentioned the cameras and the redundant signals that the positive train control is

critical to the safety strategy and many of the tragic incidences most recently with positive train control wouldn't you agree? >> isn't it unfair to the railroads that have made advances to the positive control mandate? >> with all due respect i would be surprised. you may remember the california delegation had proposed a 2012 deadline as a part of the delivery shines and clearly that was a reaction to the tragic accident in california at the

same time that agency metrolink had committed at that time which was 2008. they just recently announced that they will only be in testing in 2016. so, we are all working as diligently as possible and companies can show the will and commitment by the number of dollars they spend and the number of people they allocate to the people working on it every day in the industry and the billions of dollars we are spending in order to deliver justice quickly and safely and efficiently as possible is testament to that. >> my time is expired. i don't know whether any of the witnesses have answers to that question but i think you mr. chairman. >> i think the senator from connecticut and want to thank the panelists for all of your

great responses today. we will keep the record (-open-paren you weeks but i appreciate everybody being. participated. we look forward to dealing with the issues under the committee jurisdiction. so, thank you again and with that, the hearing is adjourned. [inaudible conversations]

good morning everybody. let me begin by letting you know who else is on the call. there are a large number of people who signed on to be leaders in the finance effort. in addition to state political leaders from several different primary states are on the line if you're in new york city and on the phone are people who have been helping me as well as supporters from the past to fit kind enough to volunteer their time in the deliberation states. welcome and thank you. your friendship and the fire to see the new conservative leadership doesn't fact warm the heart. after putting considerable thought and making other runs

for president, i decided that it's best to get other leaders in the party the opportunity to become on the committee. first, i am convinced with the help of the people on the call, we could win the nomination. the finance calls made it clear we would have enough funding to do more than be competitive and with few exceptions the field of political leadership is enthusiastic about the new race and the reaction of voters across the country was both surprising and heartening. i knew that the early numbers moved up and down a great deal that we would have no doubt in the position. one shows me the next contender in all of the early states. but i'm convinced that we could win the nomination. so that's when we realized that it was a difficult test in a hard fight.

i also believe with the message of making the world safer, and opportunity for every american regardless of the neighborhood they live in and i would have the best chance of being the eventual democratic nominee that's before the other contenders had the opportunity to take their message to the voters. i believe that one of our next generation of republican leaders, one who may not be as well-known as i am today, one who hasn't yet taken the message across the country, one who is just getting started may emerge as being able to bitter defeat the nominee. in fact i hope that to be the case. i feel that it's critical that america elect a conservative leader to become the next president. you know that i wanted to be back next president but i do not want to make it difficult for someone else to emerge from a

have a better chance of becoming the president. you can't imagine how hard it is for me to step aside especially knowing your support and the support of so many people across the country. but we believe that it is for the best of the party and the nation. i've been asked. if there are any things that could change my mind seems unlikely. accordingly i'm not organizing the pack were taking donations. i am not hiring a campaign team. i would encourage all of you to stay in the critical process of selecting the republican nominee for president. please feel free to sign up on the campaign for a person that you maybe need to become the next nominee. i believe a republican winning back the white house is essential for the country and i will do whatever i can to make that happen.

so to all of my supporters, friends and family that work tirelessly to support my campaign we will always be deeply appreciative. you've already contributed to the pitcher for some and we are overwhelmed and humbled by your willingness to us and by your generosity of spirit and by your friendship. god bless you all and god bless our great country.

the senate energy and natural resources committee hears testimony on liquefied natural gas permitting. the house this week house this week passed a measure expediting the process. witnesses at the hearing included the street representatives and an energy department official. this is two hours.

>> thank you to the members and to those on the panel for joining us. as you know, we have had kind of a busy week on the committee. the senator and i have had a few hours standing up in the chamber trying to get the keystone bill through and our hope is that we are on the final run of that but i appreciate the committee members coming of it earlier. we initially notated this for 10:00 thought and effort to try to get through this important hearing and then attend to the business on the floor we bumped it up a half an hour answer to the witnesses, thank you for your accommodation as well. we appreciate it. i want to recognize that the senator who is the lead bipartisan sponsor of the act will have some remarks so i'm going to keep my comments brief this morning.

i want to recognize and congratulated them and us the cosponsor to appreciate all of the work that you've done to get us here. i've long argued that experts have natural gas should be expedited to the united states to the friends and allies overseas and made the case in my energy 2022 years ago it again to the more recent papers one called the opportunity to join the global gas trade as well as signal to the world renovating the architect of the energy export. going from the upstart that i fully support the bill we have in front of the committee i think it speaks a culmination of years of legislative work in the congress and i can remember when senator who introduced in december of 2012 lead out of the concept that exports are members should receive expedited

treatment and as the proposals came forth more and more countries are added to the prospective list ukraine japan india and eventually the entire world trade organization. just yesterday we voted on the on the wto amendment as part of the ongoing keystone xl debate. last year the legislative activity turned to the approval process. we solve the proposals to saw the proposals to give the department a time limit for authorization of the licenses with the clock starting at a various point after the final authorization after the peak filing and so forth. many colleagues cosponsoring the legislation were involved in the effort as was our former colleague and member of the committee senator mark udall. i think that we would all recognize that this legislation in front of us is a compromise and almost by their definition they are in perfect in certain

ways but i do think it is the result of some very serious work by very serious people coming together to try to address an issue and i think my colleagues for all all but the sun to come together on this. with that i will turn to my ranking member for her comments. >> thank you for the hearing and as you said we are on the floor on a pretty serious policy discussion and we are having this hearing this morning. i think it is obvious to everybody that we are the two female committee chairs but we also have female staff directors and i think the fact that we are having this hearing in the shows you we are capable of multitasking when it comes to the policy. so anyway it makes for a busy day. after this hearing, we are here to discuss s. 33 and that is a bill to seek accelerated more certainty to the process of determining the natural gas exports and whether they are in

the public interest as we consider the bill and how to discuss if we are interested in taking advantage of america's the abundant natural gas and its ability to help transform our economy. it was only ten years ago when we were discussing how we would need to import natural gas and how many terminals we would need to build to meet the growing demand. but it's increased by 36% and we are reversing the flows and turning those facilities into export facilities. the members are looking for ways to help speed up that process and i appreciate that they are doing so in a way that respects the critical process maintains the legal requirements to receive the public interest determination and i would note that the department of energy recently changed the process to improve the new projects and the

goal was to speed up the overall approval process so as we are considering whether the legislation was interested in finding out whether these issues had been addressed is the new revised process actually working in the five months since the department of energy adopted its new policy to the issue for the separate approval for the export facilities of the 37 applications were the experts do not and they've been filed at the department of energy and currently 32 are pending. so we must consider whether it is the best way to evaluate those projects into second what are the policy implications for the deadline i'm sure that we will get into the discussion in the determination about the public interest. the fixed deadline isn't necessarily always the best come in the applicant's best interest as well. the h. and can't be made in 45 days but it can be made in 60

days or 90 days. it would be unfortunate to get turned down because of the timeline laid out rather than in the public interest determination and third is it appropriate to make the decision before the process essentially because right now they start the public interest process after the federal regulatory commission approval is issued and the bill would require the department of energy to start its process after the process is complete, but the approval requires more than just the review and the process includes a robust public comment. co to that exciting of the facilities of these are all important questions that will have a hearing out of chair thank you so much for getting the colleagues a chance to be here to discuss this issue. i would say besides the five members who have the support for the legislation and the sum of it as i said has already been

implemented, we have great concerns about what is the impact of this and as it relates to the pricing in the midwest and the natural gas. i see from the hydro state i'm always aware of how energy is the lifeblood of the economy and how it builds over and over again and i just want to understand how this will impact also our big industrial users in the impact area so anyway, i look forward to having questions from the panelists that are here today to testify. >> i want to note for the record that senator was also added as a cosponsor to the bill and we appreciate his involvement as well. as i mentioned, i will now turn to the senator for brief comments this morning before we go to the witnesses as the cosponsors of the bipartisan delight would like to extend that courtesy. >> thank you very much for holding today's hearing on the liquefied natural gas export

legislation. two weeks ago the senator and i introduced that permit in certainty and transparency act. this bill would expedite the permitting process for the export to the countries that do not have the free trade agreements with the united states. it would require the secretary of energy to make a final decision on an export application within 45 days after the environmental review process. in addition the bill would provide the legal challenges to the expert projects. finally it requires the exporters to publicly disclose the countries that are being delivered. the bill and sure as the secretary will make a timely decision on the export application's and that the legal challenges to the projects will be resolved expeditiously. in short order will give investors greater confidence that the expert projects will be permitted permitted in the build. our bill is carefully crafted and it is a bipartisan

compromise. it is cosponsored by five democrats and five additional republicans. it is nearly identical to the legislation, the house of representatives passed yesterday with the support of 41 democrats. like the house companion bill offers congress the best chance to do something meaningful for lng exports. study after study will create good paying jobs across america in states like oregon, florida, new mexico and wyoming is also reduced the nation's trade deficit that currently stands at $39 billion. it would even help president obama .-full-stop his goal of doubling the nation's exports which he said five years ago this week. finally they offered a means offer the means to bring about change throughout the world. exports will increase the energy security of the key u.s. allies and partners throughout europe and asia.

experts will provide an alternative source of energy to the countries which russia ruthlessly exploited and it will give them energy from iran. the conclusion i would like to thank the senator for your leadership and his leadership on this bill. he's been a great partner to work with and i would like to thank the senators capito, herman, members of the committee as well as heitkamp, then it coming udall and to me. finally i would like to thank the witnesses for their willingness to testify and i look forward to that stability. thank you madam chairman. >> thank you for your leadership on this issue and the senator as well. >> thank you madam chair for holding this hearing. and i want to say i very much appreciate the work of the senator and the staff in working with us putting together this bipartisan bill and i am incredibly pleased to join my colleague senator gartner,

heitkamp and portman in sponsoring this bill. it doesn't get much more bipartisan than that. as the sheer mention our bill follows vertically to the work in the last congress of the last congress of the former colleague senator mark udall and in the house also by house also by the new colleague senator gartner. my home state of new mexico some of you know ranks second in the nation right now and gas production. the main gas producing region is to stay in the northwest part of the state. the good news is we have large reserves of natural gas. however the current surge in gas production the gas production has decreased prices to less than $3. negatively impacting the economies of the domestic gas producing regions including northwestern new mexico.

i support the measured and cautious approach being taken by the secretary and the assistant secretary at the department of energy it makes sense to complete the review of an application for exports to the country's only after the review has been completed. recent studies show the industry can fully support the modest levels of export with minimal impact on consumers while boosting the nation's economic output and jobs in the states like senator barrasso and mine. i cosponsored this bill because i believed it would help stimulate job opportunities for my state gas industry while fully preserving both the environmental safety reviews and the determination of the public interest including the authority to approve or deny applications to export. though the bill allows them to continue to independently review each application, the rule also

provides much-needed additional certainty and predictability to the industry to market lng to the non- countries in europe and asia. the bill will also provide much-needed transparency by making available to the public the countries to which it has been deliberate. thank you again for loving this hearing and wanting this hearing and i look forward to hearing from witnesses today. >> thank you. now we will turn to the panel and we will begin this morning with mr. smith and just go down the route. i will introduce everyone at the outset and then we will move for five minutes of the presentations followed by questions from the members here. we first of mr. christopher smith who is the secretary for the fossil energy at the department of energy. he's the president of the industrial energy consumers of america. welcome to read mr. martin who is the president and ceo of

america's natural gas alliance. mr. ross eisenberg with the manufacturers and the last panelist this morning is mr. david who's the director of the eurasian energy future initiative. welcome to each of you and with the fact we can begin assistant secretary. >> thank you ranking member cantwell and members of the committee i appreciate the opportunity to be here to discuss the department of energy program regulating the export of liquefied natural gas. ..

a i told you that by focusing our efforts on the projects that have completed that we viewed that would help us to make our decision-making more effective and efficient and that it would allow the department of energy focus on those projects that were most mature and, therefore most likely to be constructed. since the announcement of the new procedures work has completed its decision-making process on to project. the department probably issued a licensing decision for each of those applicants and dental

department approved five points 74 doing cubic feet a day and support the lower 48 lng from four proposed liquefaction facilities. we have issued a thorough orders that can stand up to the scrutiny they are sure to receive and we've done it within days of the projects getting signed off from ferc. ferc. i believe the stems with our commitment to act expeditiously and effectively in addressing the departments responsibility under the natural gas act requirement. in conclusion, madam chair, i pressure the committee's interest in discussing this very important issue with the department of energy and i look forward to this discussion. we understand the significance of this issue as well as importance of getting these decisions right. with that i'll be happy to answer any questions the committee might have. >> thank you mr. smith. mr. cicio. >> chairman murkowski, ranking member cantwell and members of the committee thank you for this opportunity to do today. my name is paul cicio, and i'm

president of the congressional energy consumers of america. we are an industrial consumer advocate. ieca is not opposed to lng exports. however, today there is no energy public policy decision more important than whether or not to improve and lng export facility for 20-30 years. the reason is that all risks associated with the export of lng fall on the consumer. the larger the lng export volume, the larger the cumulative risk. australia has over a 200 your supply of natural gas which is more than twice that of the u.s. yet today because of unfettered algae exports domestic prices have tripled because the australian government itself failed to protect the consumer. manufactures are shutting their doors, power plants are converting from gas to call and we do not want to see that happen here.

and if long-term. if policymakers do not fully complete the natural gas act. the d.o.e. sponsored report illustrates that lng exports create winners and losers. it explains how higher natural gas prices can be expected have a negative affect on output in employment, particularly by sectors that use large amounts of natural gas, and that is us. figure 12 of our written testimony is directed from the report and shows the export result in loss of labor income wages. capital income and indirect taxes. combined, these accelerate wage disparity. the net economic gain at its peak is a meager $20 billion in 2020, and declines from there. the bottom line is that the bulk of the population is negatively impacted to the benefit of a few, raising questions about how it can be in the public

interest. despite this the report was used to justify several export application to india was in the congress passed the natural gas act and they did so with two things in mind the cost of algae exports to consumers and implications to trade. congress understood that unlike so many other tradable products, natural gas is different. because consumers do not have to substitute and it is not renewable. congress felt a responsibly to act on their behalf to protect unknowing consumers who does not have the ability to understand the long-term implications of lng exports. for this reason the natural gas act includes a provision, called the public interest determination that it is completed for each application to export to nonfree trade countries. however the government accountability office september september 2014 report says that the d.o.e. has not defined public interest. that is a glaring omission is

not a legal issue. if the d.o.e. is not defined public interest, how is it that they can make informed decision on behalf of 72 million natural gas consumers? and 145 and consumers of electricity. without a definition of public interest how much public hardship can be inflicted before the d.o.e. denies the next application? the definition of public interest is not a macroeconomic number like the so-called net economic benefit number of the report. the real definition of public interest was blinded by justice brandeis. produces the most good for the most people. finally the natural gas act provides for ongoing monitoring and adjustment to an elegy an education at the natural gas act specifically anticipates that adjustments to lng exports would be in the public interest when it states that d.o.e. quote me

from time to time after opportunity for hearing and for good cause make such supplemental order in the premises as it may find necessary and appropriate unquote. so the natural gas act creates an obligation for the d.o.e. to monitor and to do economic impact assessment at regular intervals to be sure that exports do not on the economy and jobs long-term. however contrary to the natural gas act the d.o.e. has stated that it does not plan to monitor impacts and make such a just and. to not do so implies that u.s. policy is designed to protect the capital investment of lng exporters and not u.s. manufacturing assets. in closing we urge the support of this committee to conduct oversight and require the d.o.e. to conduct rulemaking to define public interest create up-to-date decision-making guidance, to condition

applications for monitoring conduct economic assessments outrigger intervals, and be prepared to protect the public. we urge the d.o.e. from refrain from further approvals until such time it makes these necessary rule-making spirit thank you. >> good morning chairman murkowski, ranking member cantwell, miller's of the committee. and thank you for the opportunity to appear before you this morning. america's natural gas alliance strong support estimates are as a means to salvage a timely concert review process for algae export facilities. this will send a strong pro-interest doctors didn't investment community and declared message to our allies and adversaries of the u.s. is determined to play a leadership role in global energy markets. even the sheer magnitude of u.s. shale gas resources, there's no question that our nation can be a global energy leader without sacrificing our domestic advantage. now is the time to seize this opportunity.

while some raised concerns regarding supply and price, the markets and experience speak for itself. as recent as 2009 u.s. energy information administration forecasts natural gas prices would rise to $13 by 2035. just this year, last year in 2014 and in multiple independent projections and eia put the figure below $6. if we look at what prices are today, it will be hard to get there. in fact, right now in the dead of winter peak season for natural gas demand, prices are less than $3 and even lower if you're in pennsylvania. the markets are screened for new and diversify demand outlets for natural gas to lng exports offer prime opportunity to send critical signals to the market that these outlets are on the way. this will help maintain and grow production or nation can take a pinch of the promised our shale gas for our economy environment and energy security. the u.s. is now the world's leading producer of natural gas.

put this in context, the u.s. consumes 26 trillion cubic feet of natural gas in 2013. the most recent supply projections show a range of technically recoverable gas using today's technology from 2200, to more than 3500 tcf. the remaining uncertainty around natural gas supply is where's the top? asked the county continues to advance, reserve estimates continue to grow. as a result public and private sector experts agree the u.s. has enough natural gas at reasonable prices to sustain substantial increase in domestic consumption and significant levels of exports. global market dynamics will limit oversize over export opportunity and the number of facilities that ultimately receive financing. as a result eia projects natural gas exports will account for less than 10% of demand for u.s. natural gas by 2040. those same global market dynamics also underscore the sense of urgency.

lng facilities cost billions of dollars into excel or years to construct. unless we act quickly to provide greater certainty in the approval process we missed the opportunity to become an integral player in international markets. far from competing with domestic interest lng export markets will strengthen the u.s. economy. already is his experience in manufacturing researchers thanks to the ready at the output of abundant, affordable natural gas. what is less likely notice the natural gas liquids the natural gas liquids the natural gas liquids done with the natural gas are an essential feedstock in many industries led by plastics and chemicals. simply put, more dry gas production for export means more natural gas liquids for american manufacturers. as of this week the chemical industry alone has identified 220 announced projects representing $137 billion potential investment, all linked to natural gas. as mortgage screened for demand from exports provide a win-win

opportunity. of course, lng export terminals are one aspect of energy infrastructure. timely approvals of new and expanded pipeline projects also require the priority attention of policymakers at all levels. as several members of this committee know firsthand, and this is particularly to in the northeast were expanded pipeline infrastructure would help consumers unlock the kind of natural gas opportunities we see flourishing in so many parts of the country. thanks to the bipartisan cosponsors of s. 33 for working to ensure america's competitive advantage. i appreciate the committee drawing attention to these issues and look forward to our continued work together to build this energy revolution into a sustainable economic manufacturing and environmental success story for the nation. thank you. >> good morning, chairman murkowski, ranking member cantwell and neighbors of the committee. on behalf of the national association of manufacturers the largest industrial trade

association and the united states i am pleased to share our views on as 33. this is a bill that we support. two years ago i had the privilege of becoming for me to talk about the exact same issue but to talk about today. at the time the department of energy place all license applications on temporary hold while it studied the impact of supporting algae. that study forecast the u.s. would gain net economic benefits from doing so. nam urge the committee that the remark will find equilibrium here and that exports of lng should be governed by principles of free trade and open market. name also urge d.o.e. to provide license applicants and upward bound decision as expeditiously as possible to avoid market distorting barriers to trade. some witnesses at that the hearing took the opposing view calling it the question the validity of the deal he -- the d.o.e. study's findings quote-unquote fettered lng export and skyrocketing natural gas prices.

fast forward to today. the doomsday predictions have just not come true. proved natural gas reserves increased by 10% in 2013 setting another new record. we don't have anything even remotely resembling unfettered lng exports with only five of the terminals out of 37 are under construction. the overwhelming numbers of economists who've looked at this issue have all repeatedly concluded the lng exports and a strong domestic manufacturing sector can coexist. as of last night the spot price for natural gas to $2.92 which is a full 38 cents lower than the day i was here to testify two years ago. throughout the nation's natural gas boom as part manufacturing come back. study after study continued that manufactures investing in the united states thanks to competitive abundant and secure supply of energy. manufactures in arkansas california colorado, iowa louisiana, maryland, minnesota,

nevada, new york, ohio oklahoma, pennsylvania, texas, utah, virginia and many others are already taking part in the lng supply chains to support the terminals that are under construction. in maryland they will create 14,006 under jobs in manufacturing and other sectors across the supply chain. $12 billion in the past project which is quite possible the largest capital project in louisiana history will support the livelihood of up to 18300 louisiana residents and peak construction and i wish of nearly 5400 louisiana workers over eight years. there's actually 14 individual parishes in the state of louisiana that have fewer than 6400 residents employed. the project supply chain contains 54 manufactures in 17 to the states and this is just the tip of the iceberg. asas many other manufacturers across the u.s. have made investment in own business to position themselves to go to spain in lng exports. we applaud the d.o.e. for take a hard look at the inefficiencies

in its own process and trying to fix them. while decisions have been quickly after the new procedures were in place, we once again find itself in a situation with the approvals are starting to lag. a project to receive additional progress far back as 2013 now approaching the end of the fourth month of deliberations on a final license. and damn believes s. 33 lng permitting certain transparency act is both timely and warrants it. it is to bipartisan heavily negotiated bill ensures the free end of the market place rather than bureaucratic inertia will govern international trade by providing a 45 day deadline on the d.o.e. to approve or deny pending lng export applications but it does not impact the environmental or safety study that ferc and other agencies are required to conduct. notice of any of the relevant regulatory requirement. by eliminating unnecessary delays the bill will protect against running afoul of our international obligations under the wto.

it will provide a clear resolution to test any questions surrounding the approval of the infrastructure necessary to allow the export of a product and that's a principle the domestic manufacturers strongly support. developers looking to build an eligible silly must subject itself to basically running a goblet of a long complex and multifaceted permitting process. at a minimum they should be able to rely on some amount of certainty that once that's gone through the process emceed all the permits and approvals that the d.o.e. will quickly decide on a final license to export. s. 33 provides this is certainly while ensuring all of our mental laws would be complied with to their fullest extent. manufactured support s. 33 and i urge the committee to approve this legislation. thank you. >> and finally mr. koranyi. >> thank you, madam chair thank you ranking member cantwell, members of the committee. i'm honored to appear before you today to discuss the lng permitting certainty and transparency act, geopolitical

applications. i will make three brief points in support of the act. point number one, european energy security as a matter of national security for the united states. mr. putin continues its aggression against ukraine it threatens the transit and acumen as a whole. energy depends -- of key allies especially in central and eastern europe. as a hungarian, i witnessed firsthand the devastating effects of the 2006 and 2009 gas crises in the region. we cannot be sure that another cut off does not happen. if not this year then the next. for the more compromising energy security and corrupting the energy sector are at the heart of moscow's strategy to divide our alliance and render it ineffective. opec deals with the kremlin question the country's ability to conduct an independent foreign policy that is both in the national and in the allied interest. this is especially unnerving as the european union needs

anonymity to uphold or extend sanctions against russia. a critical element of an alex energy could serve for the aggression. lessening aggression is vital. the good news is that europe is finally stepping up to the plate. but europe cannot succeed without the help of the united states. europe has access to multiple sources of gases such as allergy supplies, yet in addition to the rest associate with supplies from russia, current and prospective type supplies from both the south and the southeast face their own challenges due to the turmoil in north africa and across the middle east. most lng supplies outside the u.s. are not without risk the the lng exports such as nigeria and yemen are facing terrorist and insurgent activity. producers such as egypt and indonesia have to grapple with increasing domestic demand that limit the export capabilities. qatar, the biggest lng producer

debate, it's tankers have to present to the strait of hormuz and the suez canal, both potential liability. meanwhile, u.s. lng supplies do not face geopolitical qualm's. u.s. lng would provide reliable and competitive alternatives to the allies in central and eastern europe are it would introduce much-needed leverage the global gas market, complement measures forcing gas in a competitive manner and cindy critically important message of strategic reassurance to a region that is under the most series -- since the end of the cold war. point number two but even if another single drop of gas makes it to europe, which i believe is a very unlikely prospect and use energy exports will nevertheless essential to approve european energy security, clean that a degree in the u.s. lng is admittedly no panacea. in and of itself it will not solve europe's energy security problems know what push russia

to its knees. it would put downward pressure on gas prices accelerate the interconnection of the european gas markets well before or even in the absence of a single american gas molecule reaching europe. that is because lng markets are global. markets are shaped by the future expectations, and the mere existence of a credible alternative will incentivize infrastructure development and put pressure on the dominant supplier. lng terminals enable both greece and lithuania recently to secure substantial price discounts. and then finally unhindered use energy exports in general and lng exports in particular, are critically important for the credibility of the united states foreign and trade policy. but historically the u.s. has been promoting transparency and open markets and opposing resource nationalism. to the great benefit of the

whole world. introducing that transparency into the export licensing procedure would be critical to bolster trust in america's global leadership. thank you, madam chair. >> thank you all of you, this morning, for your testimony, your comment. we greatly appreciated. we will now begin questions from the members. i would ask members to be sure to limit your time to five minutes as we've got a lot of folks to get through. and we've got votes that are theoretically going to begin around 11:00. mr. smith, i would like to start with you. weeding through both the written testimony and the comments that you provided here this morning you have outlined the steps that d.o.e. has taken that really get us to a point where there is

less time between the approvals. i appreciate what you've done with the realignment. your testimony states that this legislation is quote not necessary. now, this is not saying that you don't support the legislation. i certainly understand that you have come again under your leadership and with secretary monets you issued several final authorizations. and again i appreciate the comments and the direction you are taking but i think we here in congress need to be thinking long-term. secretary moniz has made clear he wants to work through this process but i worry that perhaps a future secretary of energy might not be as favorable to lng exports as we have seen coming

out of the secretary and the administration. so the question that i would ask you very directly is whether or not you think is 33 as it is written is workable and achievable? >> well, thank you, madam chair for the question. first of all we understand the intense and interest of this legislation and, in fact, as i listened to many of the comments that have been made here in opening statements we share many of these drives, and many of these core values of transparency, efficiency of making prudent public interest determination. i think what a lot of, in terms of what we want to accomplish and we understand the intent of the legislation. in fact, the changes the department has made to our internal process have been a long exactly the same lines to make sure we are making good solid public interest decisions that withstand scrutiny.

so we think we are currently moving in that direction and we're using the current statute in a way that protects the public interest. that said your direct question about the workability of the legislation that's being proposed certainly if this legislation is passed as is currently written, the department will be able to accomplish the mission. we will as always accomplish the letter and spirit of the law. we believe there is a solution we will be able to comply with. >> i appreciate that. what you are time it is you can do it. you have been doing it. 45 days is workable. >> yes, senator. again, if this is the legislature that is passed and it's current form, we can comply with the regulation. >> i appreciate that. let me ask you a question regarding lng and alaska. as you know the facility there

on the kenai peninsula has been exporting lng since 1969. some forget that alaska has been engaged in export business for a long, long period of time. and granted he said in small amounts but it has been a process that has been without interruption. it's been the longest export contract that we've had in the country. so i think it has laid the groundwork most certainly for things to come. of course, we also have a bigger project, the alaska lng project that i believe merits a conditional authorization from d.o.e. on the basis of what the department itself has described as these unique features of an alaska project. not only will the project required electrification facilities but you've got 800-mile pipe that we are dealing with. so the question for you this morning is whether it is d.o.e.'s understanding that this

legislation would in no way affect alaska lng's eligibility for a conditional authorization to export to non-fda countries? and before that s. 33 will in fact, impose a 45 day deadline for the project to receive a final authorization after it is completed the environmental review. >> thanks for the question. i have actually visited the north slope. we have a keen understanding of the opportunities and some of the challenges with all those projects. it is my understanding that we've already stated that we have held the right to do a conditional authorization for projects coming out of alaska. it's my view that this bill as written would not change that. we would still have the ability to issue a conditional authorization for both of these projects, particularly the north

slope project which has some additional complexities that might require additional authorization. in addition, as we read the laws currently written, it doesn't appear to make any distinction between the lower 48 and alaska in terms of that time limit that would impose on the department. >> thank you but i appreciate that and also appreciate you going up there and spending some time. thank you and i will turn to my ranking member. >> thank you, madam chair. i like natural gas juxtaposed what we're discussing on the floor which i think is a dirtier source of fuel. and a different like exports but i like something even better than those who. i like cheap domestic sources of energy. so i think part of this discussion is how we ensure that we are going to make sure that the u.s. economy takes best advantage of this i've a bunch of different questions. maybe i can queue it all up and you guys can go from there. mr. durbin, if you could just talk a little bit about the

domestic natural gas market and some of the other uses that are going to come into the picture like heavy-duty fleet trucks and the potential for the maritime industry your we are very very excited about the transition of the maritime industry to natural gas as a fuel source. again to comply with environmental issues in places like l.a., long beach at all up and down the coast. so how do we get that right? mr. cicio what price point impact your business? during the enron crisis, and begin those are very exaggerated rates, but the aluminum industry and several other mineral industries just had no choice of price fluctuation and guess what, those factories shut down forever. these long-term contracts get locked in on export at very, say a preferential rate for a long period of time because the nature of those contracts. and in the domestic market sees this fluctuation based on the international market not locked

into long-term contracts. what price point do you start worrying about the impact the industry? my guess is it's a lot narrower than people might imagine. in the door shut and the fact is not open again and it's not like you turn the lights back on. this is what we saw in the northwest, aluminum plants shut down forever and ever okay? this is very important to midwest industry. and the third point is, mr. smith, i just don't know what happens when you get this list and you say okay, here we are and we are not done. deny it. is that denied like niger back at the bottom of 100 permit lists, or denied in like maybe two years i will think about you again? my question is i think the denial part of this legislation is a good idea in concept but i think what it might actually mean on projects that really shouldn't be denied is an interesting question to i wonder if you have a thought? so quickly if you can answer that that would be appreciated.

>> to start with where the markets are for natural gas going forward. it's fairly clear. there are some good projection with the into demand increase will be. we think there may be some additional opportunities as an industry but nonetheless first the power generation. no question we will continue see power generation marked the second is industrial and manufacturing. and again petrochemicals would be a huge part of that not only because of the dry gas itself because of the natural gas liquids that we are producing and that's been increasing. third is in transportation. over the road rail, marine. i will tell you even if we're wildly successful, it barely moves the needle as far as demand goes to we are pushing for. we want to see it happen everywhere we can but that's not huge demand draw and then exports of cars. >> my energy intensive consumers consume about 75% of all the natural gas of the entire manufacturing sector.

their operating costs range from about 20% energy as much as 80% of the cost of making anything from plastics, chemicals and fertilizer, cement, steel aluminum glass. there's two parts to that question. there's no specific price point but first on the table is the fact that natural gas is subsidized and regulated in so many countries across the world that is kept at a low price. for example, china made by last year they bought lng at $16 but they were providing that gas to their nonresidential consumers manufacturers, at $1.78. are right? so when we look come to this issue, we're looking not short-term. we are looking long-term because the fact is there are uncertainties okay in the domestic market in terms of what price point can producers produce gas, okay?

no one forecast the price drop of crude oil. that was a surprise. that's impacting investment in oil and gas going forward. that will impact the supply. no one forecast it. so we can answer the question of what is the price point but what we do know is from 2000-2008 the price of natural gas increased by over 200% in the united states. that was over a 20% increase per year. and over that timeframe time frame we lost 44,000 manufacturing facilities. now, those plans shut down not entirely because of energy. but i have those types of companies and they were a major part of the plant shutdowns. >> thank you. maybe mr. smith can get us a longer answer. i mean a more ominous a pretty big question. our time is over, but we can either get a short answer and a longer written answer.

however, you want to proceed. >> very quickly. >> i'll give a quick answer but i think it's important to decide and we look at each one one of these applicants we're looking at each on a case-by-case basis. each of the orders is a long, detailed document that we've endeavored to write in good, clear commonsense english that has to address all the points that are made via the intervenors in each of the cases. we get very very to comments some strongly pro, some strongly against. and depending on the comments we get went to address each of those comments and make make our public to commission a variety of factors. what we would do subsequently to that would depend on the individual case. there's not a rubberstamp, not a particular answer that comes out of the spreadsheet. it would depend on the case. >> thank you. >> thank you. i'm not going to turn to senator barrasso followed by senator heinrich, going a little bit out

of order with the early earlybird rule, and then next in order to those who have based on when they return to the committee. >> no, no, no. i understand that. i have said that we would go to the sponsors of the bill for the questions and then go to those who are next in line which would be senator stabenow after that. >> thank you, madam chair. mr. smith, following up, all you correctly state the s. s. s. 33 as the at grade regulatory assurance to the application, for the exports, and as you said the department to assure the goal of transparency and certainly a process. one of the areas that we disagree at it is the department he said is committed to acting viciously by don't think we've got those results because the d.o.e. has given final approval -- expeditiously.

there are 33 export applications pending with the d.o.e. i doesn't have been pending for more than two years, an additional 13 have been pending for more than a year. could you explain this discrepancy we are seeing? >> thank you, senator. first of all i concur as we understand the legislation there is some agreement. in terms of how the process only operates, the way the department is operate is there are two important things a particular exporter needs in order to build a plan. they need to have -- they have to be able to build the plant and they need authorization for the department of energy to export the molecules. those together create a project. our process now says that we look at an applicant after it's completed that ferc process to demonstrate they can build a plant safely. in that aspect we've moved very quickly, central sms these

projects have come out of the queue or after the ferc process. we've moved fairly quickly. indicates the one of the applicants we acted the next day, within 22 hours or so i think we've demonstrated our intent certainly is to move quickly, but we also have to move in a way that is judicious and write these words in a way that withstands scrutiny they are sure to receive come and there's a variety of views that we have to balance. >> is it fair to say the department of energy would be able to comply with a deadline that is set in the bill? >> that is my view. >> thank you very much. mr. koranyi, it's my understand their toilet countries now that import 40% of the gas from russia. we have a list of those. in your testimony stated the united states is an excellent position to improve liquidity on the global lng market thereby improving conditions for central and european countries to access lng, and it accelerated process you going to sit down to export

licensing would put downward pressure on gas prices in central and eastern europe, what even a single molecule of american gas might even reach europe. could you further explain how u.s. lng exports can help european nations even if u.s. lng is actually not shipped to your? >> thank you senator. that's an excellent question. actually it already has because the mere fact that the united states no longer imports in large part of lng amounts actually put downward pressure on european prices already. one of the reasons why they had to renegotiate, long-term natural gas supply contracts in europe and in central and east europe as well is that these countries built up lng terminals come and have access to the global energy market. and because supply some qatar

from nigeria, from other places that were supposed to go to the united states into debt in europe and put downward pressure on prices. this is already happened in the past couple of years. looking for is our additional quantities on the international gas markets, lng markets, it will put a further downward pressure on these prices especially if central and eastern europe managed to complete its market integration and integrate well into the rest of the eu so there is a single unified european energy market. >> mr. eisenberg you stated the overwhelming number of economists that a look at this issue include the department of energy itself have all repeatedly conclude that lng exports and a strong domestic manufacturing sector can coexist. could you expand on your comments? >> thank you, senator. that's an excellent point. i've read most of the studies. i'm not an economist. i know a lot of are sport once and i've read most of them. the list is pretty long but they have all been basically come out

to the same place, which is nera report deloitte, baker institute at rice, brookings. they'll come to the same spot. if i could read you something from the updated -- nera updated. the last page has the title of u.s. manufacturing renaissance is unlikely to be harmed by lng export. they say our analysis just there is no support for the concern that lng exports even in the unlimited export case will disrupt chemicals for manufacturing renaissance in the united states. at the end of a we're seeing this in real life on the ground. everybody is winning. >> thank you, madam chairman. >> thank you madam chairman. mr. durbin, i want to start, you've heard the claim that u.s. liquid natural gas exports could result in the kind of insulated lng prices that we've seen in

australia or that australia has experienced. could you talk a little bit about come and explain to the panel, while -- why the ostrich example is not directly analogous to the u.s. markets, particularly in light of the dramatic differences in market size of? >> i appreciate the question and i would say it would be like comparing apples and oranges. i'm not sure they're even both fruits. if you look at the size of economy, we are more than 10 times greater our production of natural gas is more than 11 times greater. the infrastructure that we have in the u.s. we're being able to produce natural gas, there is no comparison which allows us to produce the gas at a much lower cost to the real important point is right now what australia is expressing because they are exporting literally 50% more than 50% of what they're producing, they are exporting. even in the most in the eia

projection so we will be exporting only 9% between nine and 10% of our production in 2040. i think there is no comparison to make and no threat that the united states would end up experiencing the same type. type. >> my understand is our market is roughly about 40 times the size of australia, and we're talking about much lower levels of over all exports, greg? >> that's correct. >> mr. smith come on want to turn the real quick. if it were enacted, this legislation is passed and signed, would you expect our bill to change the number of applications for exports to non-fta countries that eventually would be approved or disapproved by d.o.e.? >> thank you for the question, senator. i think would be impossible for me to determine based on the language if this is going to impact the number of final applicants. the applicants on the condition

of the time, et cetera. so i would the mere from making any predictions or forecast because these are case-by-case a valuations that we make. >> as you know our bill also requires d.o.e. to publish the list of countries that receive shipments of liquid natural gas. do you have a view as to whether or not that would be important information for the public to have access to? >> we think that more transparency is good. so we endeavored to create a process that is open, that is transparent, and makes all this information available to potential interveners. so we think that is important. >> great. i'll have one less question for you and then i will yield back the remainder of my time. one of my interest is making sure we continue to grow jobs

while sort of reordering our energy infrastructure to recognize the challenges that we have with carbon pollution and climate change. natural gas has sort of unique place within those changes. we have limited capacity right now to do electrical storage for example, but natural gas allows us to seem together different sources of energy a more real-time. much more effectively than old-fashioned coal generation just because of how fast you can wrap up and down the turbine. do you want to talk a little bit about your thoughts on how relatively don't natural gas prices that we've experienced with current policies will affect the ability to deploy those other sources of clean renewable energies? for example, solar and wind power. >> thank you, senator. so i will focus on the natural gas portion the technology

program that i oversee. one general comment i would make is that these are long-term important and the cato challenge. so we don't manage the technology programs based on a short-term fluctuation of the futures curve. we think these are important existential challenges the development of the technologies that will drive the clean energy economy of the future. all of these solutions from wind to soar to natural gas and hence geothermal, nuclear, they remain the core and important parts of the department of energy's technology program. that said we've seen big fluctuations in natural gas prices that have come from a variety of sources and that is something we have to take into account. we look at the importance of the price will look public interest determination. to impact the price for consumers, on manufactures and a lot of the issues you've heard on the panel. that is something we are focused on the we think that is very important. but over time as you look at our research and develop programs, not only in the area i managed

which deals with fossil fuel but throughout the department of energy, we have the commitment to make sure we're pushing those technologies here in the united states to be important for the clean energy of the country in the future. >> thank you again. >> thank you, madam chair. i thank the ranking member. i thank the witnesses for being here today. i'm pleased to be here and also be a cosponsor of senator barrasso's bill. many people think of the shield them as agreed in the western states like senator barrasso's home state of wyoming but that is not the case as we know. the eastern united states and my home state of west virginia have been blessed with vast shale gas reserves and we're just discovering how massive they are. if i could illustrate the point for a few minutes. let me share a few facts from the december 2014 department of energy report on oil and gas reserves in the united states. in 2013 west virginia surpassed oklahoma to become the third largest shale gas reserves state. west virginia has the second

largest discoveries of natural gas reserves behind only pennsylvania, and, in fact, a full 70% of the 2013 increase in proven gas reserves is because of west virginia and pennsylvania in the marcellus shale play. with more than enough gas to power both in the dutch renaissance back home in west virginia and to export liquefied natural gas, supplying lng to our friends and allies increases their depends on the often hostile regimes in the middle east and russia as we heard from the testimony. and the result will increase our own national security. not to mention a huge economic boon to certain areas of the country and certainly my state of west virginia. i'd like to start with a question for mr. smith briefly. as you know the lng facility in maryland has received a finding of no significant impact on november the fifth of 2014. that was nearly three months ago. can you give us an idea of when the d.o.e. expects to provide final approval of the lng

application? >> thank you for the question, senator. under our current process we move on these applications in the public determination once they've completed the ferc process. that includes all of the deliberations ferc has to make including the final notice for rehearing in the process. we watch these as they go through the ferc process. it's our expectation that would be concluding probably in the february time frame. so depending on ferc finishing the process that would allow us to move forward with our final determination. >> thank you. as we all know the estimates of what the actual reserves are is sort of a moving target. it starts slower and it seems to be expanding greatly. i like the way mr. eisenberg framed it, that everybody is winning. but i'm curious to know from you, mr. eisenberg and mr. durbin, as these estimates

of the vast resources change how do your projections on the economic impact that will have in job creation manufacture resurgence, how does that change in your estimates, and how closely are you monitoring that as we look at what the vast reserves actually provide? >> our policy and, frankly, the will of the manufactures that i speak for is to have a stable, secure and consistent supply of natural gas. because we use it not only for electricity but also feedstock for the many things we do. that's a lot of what i do for a living. that's basically, we need to keep an eye on the policies that are coming out of washington to make sure that manufactures can still continue to do what do what they do. and so obviously yes the supply matters significantly. we are now staring at a

situation where d.i.a. every sillier tells us we have more and more and more. so we are very, very optimistic and continue to be optimistic. >> mr. durbin? >> in my written testimony i show a chart that d.i.a. puts in their, showing the difference in the projections on reserves from 2009 through today. i mentioned that. the point is its dynamic. every year it's increasing but i think what's really important about this and even this morning pia put out a new paper a new report, i should say a statement talking about the vast increases in f-18 crackers and propane facilities altered by natural gas liquids that are being produced with these reserves. >> right. we are seeing that in west virginia. i should mention that the brazilian chemical manufacturing company is looking to sign a major cracker in west virginia, which will have major residual

economic benefit to the region and hopefully a resurgence of our chemical industry which was very, has shrunk quite a bit over the last supper years because of the usage of the natural gas is as feedstock. i understand, mr. smith, just quickly when you're looking at, i think my time is up and a note he are under -- as a good former husband i know i should quit when the red things comes on. thank you. i will learn to talk through it eventually i'm sure. [laughter] >> we like that part in it senator stabenow. you are more than welcome to this committee. with that we will turn to senator stabenow and i think you. >> thank you, madam chair. this is a big deal here. we have this great new resource for us in america and that's giving us an edge that we haven't had in a long time in other areas, and how we make the decision is really, really important. i appreciate very much the different states perspectives but this is a big deal.

i want to first say to mr. smith, thank you for d.o.e., not only taking seriously the need to move forward but understanding that you need to update your study on economic impact for america. and the fact that you were doing that, and i don't know why we wouldn't wait for that to happen if we want to make sure we're doing this the right way. but i want to thank the secretary, and thank you for doing that. we know jobs are created when we built export facilities, right? but we also know according to the charles river associates that we, using natural gas to increase american manufacturing output is twice as valuable to the overall economy as just jobs in general. and creates a times more jobs than exporting. so i don't know why we are not very concerned about what mr.

cicio is saying. you are the end-user right the guys who buy by this. you're the guys who buy. you here and you're buying it for a national consumers we also have a whole lot of consumers that are concerned about heating oil and costs and so on. so the consumers as you said are taking all of the risk on this. i would like you to expand a little bit more on this from the standpoint of leveraging this great resource. i get it from an oil and gas standpoint. you want to sell to the highest user, price, get that. take it for $16 rather than american producers at four or five. i get fat. but from an american standpoint what i am hearing, mr. cicio nursing china buys it for $16 lash and turns red and subsidizes it so, therefore, it's a $1.70 another think $1.70 and you're paying $16. so how is that a good for americans jobs?

i'm desperately concerned about manufacturing jobs and getting that eight times leverage your for america. and i want a china first post which in afraid this is. i want an american first policy. so if you could speak to that end and also on a strategy, to me is not the size of the country. it's not the government handles the issue which is exactly what this bill does. this is australian light in terms of the bill. and i am very concerned that i appreciate differences but i have to say to me, folks will look back and decide what were we doing here in terms of americans and american jobs. >> thank you for that question. when we come to this issue we are not thinking short-term come and take a look at the nymex and sank $3 prices after the next several years. that is not the point. we are looking out long-term

and there's references to how much gas we have, okay? we look at 10 years out. and when we look at the eia technically recoverable resources, we have a 58 year supply. we don't have 100 year supply. so in terms of jobs you are correct. we can take that gas and create a times more permanent jobs that if you export that gas. we recently looked at the permanent jobs created iv export terminals. in the job is a good job, make no mistake, but construction jobs are short-term. these terminals, the seven terminals, first up create 1890 permanent jobs. and when that gas goes offshore come it's gone okay? all we're doing is let's emphasize that we need to be looking long-term, and each

approval puts new demands on the marketplace but every study says the same thing. it will increase the price of gas and increased the price of electricity. we cannot forget that there's two parts. we are going to understand that, as i said earlier manufacturing is subsidized in these countries that we are competing with. the real world. we have to be -- it's not just the price we're paying here in the united states that matters to manufacturers to compete around the world. we need to come to this with great care. for those of you who feel that we never have to worry about affordable supply of natural gas, then you should be all for putting in place the full implication of the natural gas act that has these cautions, ongoing review of these terminals, these applications monitoring, and the d.o.e.

having a requirement to revisit that and be sure it is not impacting the economy. if you feel we have so much gas then you know then that triggered will never happen. so you should be supportive and not afraid of fully implementing the natural gas act. >> senator portman? >> thank you, madam chair. appreciate your having dissented and thanks to the witnesses for giving us great testament. i represent ohio which is a state that didn't used to be viewed as a great natural gas producer, now we are thanks to marcellus shale find and also utica. most significantly you did the right now. we are also proud of the carriage. i appreciate the fact that national association of manufacturers is here supporting this bill. the chamber of congress supports this bill. i am a cosponsor because of look at all the alternatives and i think this is the best balance. to senator stabenow's point d.o.e. does have the ability to

review these claims and approve or disapprove based on the impact to the american economy. that's in this legislation but it is a balanced approach and that's why so many manufacturers are supporting it. also i would tell you ohio, does a lot of manufacturing for facilities including lng export facility. i noticed into testimony talked about industries because fight in the ways and means committee ohio based manufacturer that involved in the lng supply chain. it will help manufacturing as well. i do think it's important we have a balance in the legislation. i am interest in the legislation because of a broader interest that ahead. i think israel toward reaching we have in this country is putting us behind in so many ways. back in the good old days when you get a green light to produce something, make something, move forward with the project in the united states of america quickly. now we are ranked 41st in the world in dealing with construction permit category by the world bank. we are getting worse. of the country are getting

better. germany is something like number eight. south korea is something like number 12. capital is flowing in different places around the world and not tenure because of the time it takes to permit something. yesterday i introduced legislation that we also introduced last year that is bipartisan, a balanced approach to to get at some of this permitting. senator king is a cosponsor. he has an incredible background have been a governor but also in the private sector. what i like about this is it doesn't take away d.o.e.'s approval authority but it doesn't have to do it within 45 days. i push it what mr. smith said today about the fact this legislation can be implemented via dv that that's enough time givengive in the run up to that to be able to understand whether this is an appropriate project or not. the legislation we introduced will help more broadly. this is specifically with regard to lng exports but i think it's part of a bigger effort we've got to undertake in this congress. consistent with the 2006 and

2012 transportation bills our legislation pretty much mirrors that in terms of how the permitting and have a litigation work and so far mr. eisenberg, let me ask you a question. can you speak more on the importance of the requirement in the bill that d.o.e. does approve or deny these pending permits within a 45 days of the completed nera review? mr. smith indicated he can read lived at the ice and you would agree a deadline would keep the apple time to review the application. but also is giving investors some certainty that these projects will be completed correct? >> that's absolutely correct thank you. we poll our members readily and i want to be clear about who we represent. we represent 14,000 members and that small manufacturers medium-size and large energy intensive manufactures are also represented by mr. cicio's group. we are for predatory certainty for free trade. ..