the committee now reconvenes. the chair recognizes the gentlelady from ohio, miss beatty for five minutes. >> thank you so much mr. chairman. let me just say to director watt, what a pleasure for me to be here. i noticed you looked at me and saw the big book and list of questions. in full disclosure, director watt was my mentor. i recall him always saying to me, read everything and always have good questions. with that said, let me just say on a very serious note how much i appreciate the work that you and your team, that you are doing to protect all of my constituents and constituents across the country with housing and those regulations. but today i would like to lend my voice to one of the questions that we've heard from both side, centered around membership into the federal home own bank.

related to the september fhafa ruling revising membership requirement of fhlbs. . . >> and what they want to know is since they don't hold mortgages --

they being the ohio capital fund -- that that range from 1-10% depends on the type or the asset size. when that goes into effect, it would cause them to terminate their membership with a federal home loan bank in cincinnati because it doesn't hold mortgages. so would you or your team give any consideration of doing an evaluation on the impact of the burden to community development financial institutions of a less severe remedy than loss of membership? >> we, we are looking at every aspect of this. we've got, as i indicated before approximately 1300 comments in response to the proposed rule, and we're going through them. our preliminary analysis

indicates that despite the fact that there are 7500 members of the federal home loan bank system now, only 50-100 of them would bed adversely affected -- would be adversely affected by the rule. and that's not to minimize the value of that 50-100, but we, we are -- that's definitely one of the factors that we will take into account. >> okay, thank you for that. mr. chairman, may i ask unanimous consent to have the letter from the ohio capital finance corp. entered into the record? >> without objection. >> thank you. the second question i have goes to amway. i am very honored that ranking member maxine waters asked me to be involved and to chair that committee. you certainly know through your organization having amway prior

to dodd-frank that there are different regulations. with dodd-frank they now have the whole issue of transparency reporting back to the public on the numbers. diversity is very important to me for a whole host of reasons. but can you briefly share with us what you're doing since you came under the recovery act of how you are being transparent and sharing the diversity through amway? >> well, there are statutory reporting requirements and we, obviously, are complying with those. but more importantly, what we've done is tried to take a look at how to make the amway office an important ingredient of our organization. not just keeping numbers, but embed them in decisions that are being made. and in the selection of our director of the amway office, we

found somebody who had transactional background not just amway background, so that we could get that person involved in the kinds of decision making that would have some impact on diversity. >> thank you. >> the gentle lady's time has expired. the chair now -- yes. >> unanimous consent to enter into the record an article that ran in "the washington post" on the disparity and wealth between black -- [inaudible] >> without objection. >> thank you. >> the chair now recognizes mr. tipton from colorado for five minutes. >> thank you, mr. chairman. and, director, thank you for taking the time to be able to be here. i'd like to follow up, actually on a comment that ms. beatty was just making in regards to our federal home loan banks. you'd made a comment earlier in our conversation here to my colleague from oklahoma mr. lucas, that we were

following statute in regards to establishing some new rules in regards to membership in the federal home loan banks. and i'd like to follow up with you on that and looking in through the bank act it does not address a minimum level of mortgage loans. that is not cited. and i guess my concern over this issue is ms. beatty and, i think, mr. lucas both spoke to these issues. my particular state of colorado we have over 200 community banks, credit unions, insurance companies, they're minutes of a federal home -- they're members of a federal home loan bank. and these institutions do responsibly utilize thely liquidity that is provided in order able to deploy credit in agricultural production, small business formation, community development. and they do this currently in full compliance with federal home loan bank act and the congressional intent, as i read it, and true the exist -- through the existing programs.

under this proposed rule issued on september 12th it has the potential to be able to decrease federal home loan banking system membership, and have you quantified the potential impact that that may have on rural america right now? because while we may have pockets of prosperity in the country, rural america is not feeling it. >> as i said in response to representative beatty, our preliminary analysis indicates that only 50-100 of the 7500 members would be adversely affected by either the 1% requirement or the 10% requirement. there is a statutory rumor. the question is whether it will be applied only when a member becomes a member of the bank or whether it will be applied on an ongoing basis. that's really what the rule addresses. the statute clearly sates that

you'll have -- says that you'll have 1% of assets in home mortgage loans. that has been in the past applied only at time of becoming a membership, not on a continuing -- a member not on a continuing basis, right? so we're looking at whether that undermines the purpose of not to require it on an ongoing basis not just a one one-time basis, right? >> right. and what i would like to be able to, i guess, express is in washington a smaller amount is often trivialized. in some of the small communities that i represent i have 54,000 square miles of colorado. if one of those banks happened to be in that 50-100 that would then be shut down, it'd be a reasonable assumption obviously, that we weren't going to be able to extend credit in that local community because

it's going to be a small community. >> we certainly take that, we will certainly take that into account. >> yeah. that's going to be critically important, i think, for us because our communities truly are struggling on, under those -- what we feel are overregulation coming in out of the federal government. so thank you. with that i yield back, mr. chairman. >> do you want to yield to the chairsome. >> chairsome -- chair? >> [inaudible] >> mr. watt, i just wanted to follow up on some questions i had for you for the next minute. is it fair to say the gc is based on risk? it's risk-based right? the gc is risk-based? >> [inaudible] >> microphone. >> will it be only risk, will it be accumulation of capital, will it be -- >> today is it -- >> yeah. but one element is definitely

risk, yeah. >> so are you charging more than the risk for the gc? because some would argue that in our assessment if you have a credit score of 740 and you put you know 40% down, you might be paying a little more for your risk, and if your credit score is, you know 650 and you only put 3% down you get a little subsidy based on the risk of the gc. this is, actually, from your data. >> well -- >> do you disagree with your data? >> no, i'm not arguing with the data i'm trying to put it in a frame here that -- >> i'm going to have to gavel myself down in a second. so i guess maybe you could think about this and maybe we'll have a chance to come back to it. are you charging more on the gc than the actual risk, or are you undercharging for the risk? or are you hitting it just right? and i've got to -- >> well, one of the things that

a lot of people on this committee have been advocating is that we charge more than risk so that we can attract our private capital. so, i mean -- >> and i -- >> you want to meet yourself in these arguments -- >> i don't want to abuse the gavel. maybe we can come back to it later. the chair now recognizes the gentleman from texas mr. williams, for five minutes. >> thank you, mr. chairman. and thank you director, for being here today. we've covered a lot of ground. appreciate your service. i'm a privet private sector guy, and i'm one of those that believes the private sector's the answer not the federal government, to a lot of the issues we have. i do want to say one thing. you'd mentioned earlier that you had had hard time with your employees, with fannie mae and freddie mac because of the fact they weren't sure what their future might be. i heard you say that. >> uh-huh. >> and i would just say welcome to the private sector. the private sector's going through that every single day wondering what their future is

as moms and dads so forth. so that feeling is not alone with your group of folks, it's all over our country because of government regulations. my first question would be this: what is the treasury doing with the money they get from the gses every quarter? if the treasury spends the money now they get from fannie mae and freddie, won't they have to tax more in the future to meet the normal losses that could be coming in? >> i can't answer that representative williams, because i'm not at treasury. we sweep the money to treasury it gets applied to the deficit it gets applied to operate government operations. i don't, you know, i guess the argument is should it be doing that or should it be building up a reserve a capital reserve of some kind. and that's just -- but that's not a decision that i can make. >> i think the concern is we've got such a big deficit, and it's

going in the hands of the federal government, you know, where's it going. also just to kind of help me understand a little bit like i say, we've covered a lot of ground today. what's the average credit score to a 3% customer? >> i don't know that i can tell you that off the top of my head, representative williams. >> okay. what's -- and we may have covered, i heard a figure earlier of 2%, but what's the foreclosure rate in the, in your portfolio? percent to the total? i heard a figure i thought at 2%. would that be right? >> i can tell you that if you'll let me get to, um -- >> and while you're looking at that, when do you decide to foreclose? at what, i mean, how far, how far behind payment? how far past due are homeowners before you say we need to foreclose on this piece of property? >> well, there's no, there's no fixed answer to that.

i mean, we get concerned if somebody gets 30 days behind payment. we get more concerned if they get 60 days. we get more concerned, you know? at what point you quit working with a borrower to try to get them back current or alternatively make a decision to go to foreclosure is a very complex set of determinations. so i don't know that i could give you a rule that would apply across the board on that. >> and what's your, what is your foreclosure percent to the total? >> you got me off on -- >> well that's all right. i think i heard 2%. >> let us provide that information in writing. >> provide that to us. >> we have, we have the information about the loans since meltdown, we have it overall for the whole history

we have it prior to the meltdown. i just i'm not finding it. >> that's fine. you can get that to me. and another thing, too, when you -- of course, equity's important to everybody. we want everybody to have equity and, of course the bigger the down payment, the more equity they're going to have going in. there are some people i guess, that can't afford a home and do you advise these people as such that possibly now is not the time to buy a house, maybe to buy a home? maybe they need to go another direction? is start with renting or something so that they can -- >> when i was practicing law and when i was a member of congress, i used to give that kind of advice but i don't have the opportunity to give that kind of advice nor is it my role to give that kind of advice. fannie and freddie don't make loans. we buy loans off of lenders' books -- >> right. >> -- and guarantee them and put them into a secondary market. so there's just not opportunity for me to be engaged in those kinds of discussions with

borrowers now. but, i mean, there are thousands of people when i was practicing law i would say you can't afford to make a mortgage payment, you shouldn't be a homeowner, yes. home ownership is not for everybody. >> well, i appreciate you being here. i hope that one day we can get the government out of out of the homeowner business and get it back in the private sector where it belongs. purchase i yield -- mr. chairman, i yield back. >> the time of the gentleman has expired. chair now recognizes the gentleman from maine mr. poliquin. >> thank you mr. chair. thank you very much for being here, director watt. i understand from your background you spent a little bit of time in new england and i want to thank you very much if advance for rooting for the patriots. not that we'll need it, but on sunday i appreciate it very much. >> i'm sorry, i can't make that commitment to you. [laughter] >> i was hoping we'd start off on a good foot mr. watt. [laughter] everybody that has been listening today, sir,

understands that fannie and freddie are in conserve to haveship, and we, of course, understand that your organization is, in fact, the conservator. i've also heard you say today, actually several times, that one of the roles you are playing in this role if i'm not mistaken is to be sure to the best of your ability that talking fannie and freddie are safely and soundly managed such that we keep the credit flowing to those who want to buy a home and are able to buy a home and also to protect hard working taxpayers. i'm going to be very honest with you, mr. watt i have a little bit of a concern. if you look at fannie, this is an organization that is connected to our federal government, has been created by our federal government, that is responsible for $3.3 trillion of home mortgages and they use our hard working taxpayers to backstop those mortgages. i'm also concerned that freddie mac is also putting the u.s. taxpayers on the hook for an additional $2.2 trillion.

now, my other point i'd like to make if i'm not mistaken 2014 fannie and freddie together were responsible for holding 51% of all home mortgages in america. and thatting being the case, sir would you agree with me that fannie and freddie are large financial institutions? enter absolutely, they are large financial institutions. >> good. dodd-frank as i'm sure you know mr. director, requires nongovernment, large financial institutions to hold substantial amounts of capital in reserve in the event that something goes wrong. now, i i am not here advocating that those capital requirements for nongovernment entities be increased. however, don't you think it's appropriate, sir that fannie and freddie especially, organizations of this size that are backstopped by the taxpayers, also ought to live by the same rules that our

nongovernment football -- financial institutions when it comes to capital requirements? >> i don't know that that's my decision to make. whether i agree with it or not -- >> well, you're the director -- >> you know, when i testified in the senate i said in response to a question i don't have any personal opinions anymore. >> well you -- >> every opinion i express now is an fhfa opinion. so i try not to express those personal opinions. >> well, i appreciate that very much mr. watt. but with all due respect you're in a position of a great authority. you're the regulators for the gses, and i would like to beg to differ with you a little bit that your opinion is greatly appreciated. and what i'm trying to get across if i may is that we have two very large institutions that do not abide by the same capital requirements as other nongovernment institutions around country. i might also add, if i may, that if you're looking at fannie mae

with $3.3 trillion in assets -- and this has been said here before -- they have roughly $10 billion in assets, but they're asking the taxpayers to backstop $3.3 trillion in loans. now, if you're looking at freddie mac, excuse me, you're looking at freddy mack, they have about 13 billion in assets and a backstop of $2.2 trillion. so i think we could both agree, i hope so that these are organizations that are grossly undercapitalized and represent one heck of a risk to the taxpayers if something goes wrong. would you agree with that sir? >> i have two responses to it, one of which i've already given which is i didn't set up the preferred stock purchase agreement. i didn't -- i wasn't even there when it was created so i'm living you under that. i can't change it without -- but the second response is you all

can change that. everything that you just talked about, you can change by doing gse reform. >> mr. watt, everybody wants a healthy economy. and the taxpayers in our district of maine were some of the hardest working most honest people you could ever meet. they want to make sure they have a government that works for them ask not against them and i happen -- and not against them, and i happen to believe that accountability in all stages of government, all levels of government are a good thing. i'm very concerned about these large institutions that are highly leveraged with very little capital that's requiring the taxpayers to backstop them when we have interest rates at historic lows, historic lows with a rise in interest rate that could cause a problem with the housing market and also our economy, wouldn't you agree that it makes sense to take a look at -- >> time of the gentleman has expired. a brief answer please. >> i think i've already answered your question to best of my ability to do it,

representative. >> thank you very much, sir. >> that was brief. chair now recognizes the gentlelady from utah ms. love. >> [inaudible] there we go. i appreciate the opportunity to meet you here today. >> nice meeting you. >> i just wanted to say as a former mayor, i've had to ask myself three questions before making any new commitments or changes or going to a certain direction, and that is, is it affordable, is it sustainable and is it my job? one of the questions i have in your studies, did you determine how many people the lowering of the standard was going to help? >> you're talking about the 97% product, mayor? is that -- >> i'm talking about getting the standards to the 3% payment. did you determine how many people this was going to help get into homes, how many people it was going to hurt? did you have any -- >> we had some projections that it would be a very small percentage of the overall portfolio of either fannie or

freddie, and i probably have those percentages but not the actual numbers. >> okay. so a certain a small percentage this was going to help bringing down these fees was actually going to help get into homes? >> yes, uh-huh. >> so, obviously we talked about some risk and risking the taxpayer dollars. you have no guarantee, is it fair to say that you have no guarantee that the people that are going to get in and borrow will be able to get into homes that they can afford and not default on their loans? >> i don't think we're ever in a position to guarantee. we make responsible decisions based on risk assessments and i can guarantee you that we have made a robust risk assessment. i don't think you could guarantee that anybody could pay a loan if they paid 99% down because something might come up next week that would prevent

them from doing that. so this is not about being able to guarantee it -- >> okay. >> -- it's about assessing the risk and likelihood of it -- >> okay. >> and we've done what we can to minimize that risk. >> so when i ask those questions, the reason why i ask those questions is because when we get into risk involvement and asking myself is it affordable, is it sustainable, is it my job, we realize inevitably we've actually taken a lot of the rusk out of those decision making. i believe i believe that utah believes and the majority of hard working america believes that if washington bureaucrats actually asked those same questions, we wouldn't be in the financial crisis that we are in today. as i've witnessed as a mayor, i have actually seen how these heavily involved government policies have actually hurt many cities and their abilities to thrive and to grow. we have watched homes being built and actually seen those homes a year later completely

empty, is and hard working fam lues lose their credit and their ability to get into a home. so that's why i ask those questions about how does this actually help hard working americans get into a home and be able to sustain a future? too many times i'm afraid these government-backed programs that help, that vow to help and protect hard working, poor americans is actually done -- has actually done the opposite and hurt those it's vowed to protect. if the administration or as you would say independent regulatory agency go down this road of bigger government policies and getting involved more in what the free market should be involved in, i just want it on record that as hard working americans start losing their homes that you remember warning today. i've been in the trenches of this. i've actually seen this happen. i'm not taking a 60-foot view of what's happened i've actually been a mayor, and i've actually

seen my city have a really hard time with the housing market, and i don't want to go back into that direction. this is an area where i've said this is not about the hard working americans trusting you to do the right thing, it's about you trusting hard working americans to make decisions and do the right things for their future. i yield back the, my time. >> if you're about to yield, would you yield to the gentleman from wisconsin? >> yes i will yield my -- to chairman duffy. >> appreciate the gentlelady for yielding. mr. watt, going back to my previous question, the gse which we were talking about that was risk-based is to make sure heir not losing any money, right? you're trying to find that balance to go, boom, what's it cost? i'm not trying to trick you. this is a pretty simple straightforward question. >> it's a straightforward question, but it's inconsistent with the approach that a number of people have used that we should do. >> i'm not asking --

>> -- using gfes to attract private capital. if we raised them to that level, we would be making a bunch more money, but is that an appropriate thing to do -- >> my question for you, mr. watt -- >> -- an appropriate purpose -- >> i'm not asking about anybody else. you're trying to get the gifi to hit just right. you're not trying to bring in extra money to lose money you're trying to the hit the nail on the head hit the gifis right on, or are you trying to make money or lose money? >> well, we certainly don't want to lose money that i can assure you. >> are you trying to make money? >> but i think it would be more appropriate to wait until we come out with what we are going to do on gifis articulate the reasons that we are doing it -- >> but this is -- >> and then you'll see what where we come out. >> but, mr. watt -- >> right now i don't have an opinion about this things you're

asking -- >> you don't know if the gifi if you're trying to set it a little bit high or than the actual cost or if you're trying to hit it right on? you can't tell us in this committee today in. >> representative duffy, if i knew that i wouldn't be studying the issue. i mean, we're -- that's the reason we're going through this extensive study. >> okay. so what is the goal? >> to keep from applying my own opinion about that. >> what is the goal? >> our agency is research based. >> what is the goal? >> and we're going to apply the research that we have to that -- >> not trying to trick you. is the goal though so let's take reality aside for a second is the goal to get the gifi just right? whether you can or not, in theory you want to get it just right where you're not making any money, you're not losing any money, you're charging for the services consistent with the risk and other factors that you referenced. >> one of the purposes is certainly not to lose money. we're not trying to set a gifi that's going to lose money.

now, are there other factors in addition to covering the risk and breaking even that should go into setting the gifi? that's a question that we are evaluating in the agency at this point. >> but the intent is to look at all those things and try to hit it just right correct? not make any money, not lose any money, but take all those factors and get the number just right. it's a pretty simple question. i'd imagine the answer is, yes that's of course what we're trying to do here. we're going to get it just right. >> gentleman's going to need to wrap up this line of questioning. >> so very quickly if you take a sweep for the affordable housing trust fund of 4.2%, right? you're going to sweep that money, it's not a tax, you're saying. but if you hit the gifi just right but then you sweep 4.2 basis points away to go into the affordable housing trust fund you're actually now below the cost of your risk. and so the taxpayers are going to bear that cost. >> representative -- >> or if you -- hold on a

second. if you go above the actual cost of the gifi, you're actually charging then the end homeowner an extra fee to drive money into the affordable housing trust fund. either it's taxpayers that are going to pay or those with a mortgage who are going to pay. but someone is going to pay. to come here and say it's magical fairy dust and no one's paying this money isn't being forthright. taxpayers on the hook or mortgagees are on the hook. i would ask if many watt agrees with that -- if mr. watt agrees with that. >> i've tried to answer question as forthrightly as i can. with the size of our portfolio, i don't think we could ever set gifis to just break even. that would, that could never happen. so if the question is are you setting just to break even the answer is no, we have of to have some margin even if we

don't take anything into account at risk. >> mr. watt and you're a very good lawyer, and i can recognize that and i appreciate it, but you're not asking my question, and i think you know what it is. i yield back. >> and i don't understand the question. >> we'll allow the two hours to perhaps have this conversation online. the chair now recognizes the gentleman from washington. >> be thank you, mr. chair. director watt let me add my voice of congratulations to all those that have been expressed today. much much deserved. you'd indicated in your written testimony, and it's been alluded to that on the 22nd of december you approved a merger between the federal home loan banks of seattle and des moines. mr. lucas, by the way, i believe that's the first, is it not? >> it is, yes. >> i'm going to confidently predict it won't be the last. mr. lucas also referred to the concerns among many of us in congress about the new membership rules which i don't

want to relitigate this, but i want to state for the record and you and i had a private, semi-private disagreement about this. i think both fhfa and congress is missing an opportunity here to take a step back and re-examine just exactly what the role of the federal home loan bank should be going forward. >> be clear, that's exactly what we're doing in this evaluation process. we've got 1300 comments. we're going through every single one of them before we make a final determination of what the final rule is. so we're in that taking a step back looking at all of the input that we have received. just because we put out a proposed rule, a proposed rule is not a final rule right? >> it's not specific -- >> so we're doing exactly what you're suggesting. >> it is not the specific rule i'm focused on, it is the larger issue of what role do we want the federal home loan banks to

play in this new world that doesn't look like it did when they were created in 19 32 or thereabouts. >> but congress has made that determination. that's not a determination -- >> which is exactly what you said to me earlier during our semi-private disagreement. i think it is something that you could do to advance to us policy proposals. i also think that it is an issue that members of this committee could well take up and ask the basic questions what role do we want them to the play? is it strictly housing? is italy quiddity? are -- it liquidity? is there other ways -- but that's not really my question. i do have a question. my question does relate to the approvement merger, again which i don't believe will be the last. i had communicated to you in correspondence deep concerns held by people in the region about the continuing commitment of any merged regional bank to invest in housing also

communicated to you concerns about governance also communicated to you concerns about operational issues. because, after all director watt, this is a five time zone federal home loan bank region now. and we repeatedly asked for the letter setting forth the terms and conditions. we've been repeatedly told we cannot have it, we cannot know what those are. i want you to know that as that relates to sensitive financial matters, i completely understand. but i do not know what the compelling public good what compelling public policy good is served by withholding information about how we will proceed with respect to the concerns that have been brought to you by many in the region. >> during the pendency of a merger for us to be putting out information that is still in the process of being discussed and negotiated i think as an independent regulator would be

irresponsible. i'm sure every one of these things will be addressed. but, i mean, we have a fiduciary responsibility, we have a trust responsibility as regulator here not to put out information that could jeopardize the discussions, and i hope you understand that. >> well i acknowledge and embrace your fiduciary responsibility issues relating to housing, investment and governance and operational issues that allow for access. i don't personally believe they fall within that realm. >> i ask assure you that the merged federal home loan bank will be held to the same high standards on those issues that we have held the two independent banks to right? so we're not going to relax the standard just because the standards that we expect of them just because they are a merged

bank. >> knowing as you -- >> you can be awe sure odd of that -- assured of that. >> knowing you as i do, i would expect no less sir. one last question. insofar as both freddie mac and fannie are under conservatorship. insofar as you are moving pretty quickly toward a common securitization platform can you identify any compelling public benefit for these two entities other than it is status quo to be separate as opposed to one? >> well, you know there's a -- that's a public debate that i think should be had. there's a value to competition because it makes both enterprises better. we have aligned fannie and

freddie's practices on a number of issues that were important to the public policy objectives. but i think there is some value to allowing them to compete on things that don't have a public policy imperative to them. so i guess -- but we have aligned them on a number of issues. >> i would take it that quality of service would be an example of that. >> well if you, if you talk to one of them as opposed to the other, they will tell you that their quality of service is higher than the other one depending on which one you talk to. but we -- it's important for them to continue to compete on the quality of the service that they deliver. that's one of the things that it

is important for them to compete on. >> it seems arguable to me -- >> we don't want them to be competing on a race to the bottom to extend more and more irresponsible credit, you know? there are a whole range of things that we don't want them competing on, and there are some things that we continue to allow them to compete on. >> so it seems arguable to me whether or not that been fit trumps the economies of scale given that for all practical purposes we own them both with that i yield back the time i do not have and thank chair for his indulgence. >> the chair now recognizes the gentleman from arkansas, mr. hill. >> thank you, mr. chairman. director watt t, once again, it's nice to see you. thank you for appearing before the committee for ab extended period of time -- for an extended period of time. i think back to one of my favorite engravings in the city of washington which is on the national archives building which is "what's past is prologue." and so i'm having a terrible flashback from a very, very bad movie listening to this

discussion today. in 1984 when i was a staffer over on the senate banking committee staff fannie and freddie had about 1 in 400 loans that had a ltv of 3%. then when i came back the government in 1990 and was at the the treasury that had moved to 1 in 10. and then at the height of the crisis, it had moved to 1 in 2.5 or 40 percent of the loans in their combined portfolios were at that low down payment. and at the same time that psalm direction took -- that same direction took place in the debt to income ratios as well. so i just want to be on record with you that i share the concerns of many on this committee about this decision to lower down payment rates notwithstanding counseling and fico scores and private mortgage insurance. my question to you, i want to turn back to a line of questioning that mr. duffy had.

and on this subject of the preferred stock arrangement with treasury, for you to accrue money for the housing trust fund, pay it out potentially in the housing trust fund, did you seek a waiver from the preferred stock arrangement with treasury to do that? >> no, i did not. >> and so it's purely on your judgment that, from reading the statute that you've taken that money out of the system and not swept it to treasury? enter well, there's no money -- >> well, there's no money to sweep unless there's a profit at the end of the year. >> right. >> and there won't be any swept if there's not a profit. >> right. but you're taken the decision to sweep money if there is a profit. >> well -- >> i mean, to the housing trust fund. >> you mean put it -- yes. >> right. >> yes. unless doing that would put them into a into a deficit situation. yes. >> right. but did you seek approval from

treasury to do that? >> no. >> and don't you think that since they are the opener of that preferred -- the owner of that preferred stock on behalf of all the taxpayers you should have checked with them first before taking money into the housing trust fund before sweeping all the profits into treasury? >> no. >> and tell me again i know you've covered some of this ground before, tell me again why you believe that's the case -- >> why i shouldn't -- >> yeah, why you believe -- >> why i shouldn't get treasury's approval? >> correct. >> because there's nothing in the preferred stock agreement under which we operate that addresses the housing trust fund, and so we're not violating the terms of the preferred stock purchase agreement in doing this. we're just simply complying with the law. and that's, you know, so there's no reason for me to get treasury's approval for that. >> it just seems like when we own the shares of that company as the taxpayers that we should want to have all the proceeds

until there's a change, a structural change made all the earnings of company outside the core business operations any profit that's left should be sent to the treasury. >> that is still the rule, and -- >> but you -- >> i keep reminding you i wasn't there when these preferred stock purchase agreements were negotiated. if they had put it into the agreement, then i would be obligated by it. but there's no provision in the agreement that requires my me to get approval to fund the housing trust fund or to comply with any other law that is in existence. so i'm, i didn't get the approval. >> but you were there and took the decision to take money away from the sweep and put it in the housing trust fund. that was your decision to do that. >> i made the decision to reverse the temporary

termination of contributions to the housing trust fund yes. i was there for that. >> thank you very much. i yield back. >> gentleman yields back. no other member is in the room to be recognized so, again, i wish to thank director watt for coming to testify before us. our former colleague former and sill current friend of this -- still current friend of this committee. without objection, all members will have five legislative days within which to submit questions in rig writing to the chair which will be subjected for written responses. all members will have five legislative days within which to submit extraneous material for incushion in the -- inclusion in the record. this hearing stands adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> today white house budget director shaun donovan discusses the president's fiscal year 2016 budget request at a hear

anything the senate budget committee. live coverage begins at 10 a.m. eastern on c-span3. >> keep track of the republican-led congress and follow its new members through its first session. new congress, best access on c-span c-span2 c-span radio and c-span.org. >> now freshman north carolina senator thom tillis speaks at the bipartisan policy center in washington, d.c. for its agenda setter series. senator tillis talks about his goals, the congressional agenda for his first term and lessons learned from working in state government. this is about 45 minutes. [inaudible conversations] >> good morning everyone. welcome to -- i guess it's good afternoon now -- welcome to the

bipartisan policy center. i'm bill hoagland senior vice president here with the center, andst my pleasure to welcome you all here in this afternoon to kick off our new agenda setters series. for those of you who may not be familiar with the bipartisan policy center, we were established in 2007 by four former majority leaders of the united states senate senator bob dole the late howard baker, senator tom daschle and senator george mitchell. and is just on a personal note i had the pleasure and honor of working with all those over my career in the united states senate as a staffer. we're watching this -- we're launch. ing this series today at the beginning of the new 114th congress. our goal here in this series is to explore timely and compelling and impactful issues in policy making and politics throughout the 2015. each event will highlight

policymakers in decision making roles and some like today who may only recently have been placed in that role of putting forth innovative thinking about how to solve critical issues that challenge the country, indeed, the world today. we are pleased to have senator thom tillis with us for this inaugural event. you have his bio. elected in november, senator tillis is the junior senator from north carolina. senator tillis is being joined by my boss, jason grumet, the president of the bipartisan center, to please join me in welcoming senator tillis and jason to begin this discussion. jason? >> thank you very much, bill, and welcome all, to the gunning of our ageneral dash -- to the beginning of our agenda-setting series. couldn't be happier than to start this series with you, senator. i am confident that you will be one of the most influential new members of the class of 2014,

and i think we have an opportunity today to talk a little bit about your policy but also just about some of the ideas and commitments that you bring to this work. there's a lot of discussion today about opportunity and the challenges of opportunity in this country. and i think there's nobody who i'm aware of who has been elected in this last cycle who really embodies the possibility of this country more than you. i'm sure most people know this but senator tillis graduated from high school and immediately went to work in a warehouse as a records clerk to begin to earn the resources for a college education. put himself through college. while he was doing that, he worked at a number of esteemed institutions. in his mid 30s he was already an executive at pricewaterhousecoopers and ibm. so i think the spirit of hard work creating opportunity in this country is certainly something that you can speak of not just in theory, but certainly through experience.

the senator's public service career has really followed that same kind of deliberate path. started out at the pta. then he joined the cornelius -- >> eight years ago. [laughter] >> -- north carolina board of commissioners. 2006, house of representatives in north carolina. he was chosen by his colleagues to be the speaker of the north carolina house and served from 2011-2014. so there is a passion for public service and an ambition that i think the country greatly needs, so we welcome you here to the bipartisan policy center. i want to spend about 20 minutes asking some questions, and then we're going to turn it over to the audience. and i think i'd like to get started with an issue you spoke quite a bit about in your campaign, and that is what you were hoping to get into. that there is kind of obstructionism here in washington which is, i think, standing in the way of a lot of the public interest. you were a management

consultant, so how would you turn place around? turn this place around? >> i guess the thing i can look back to is what i've done as speaker of the house, and when i came in as a freshman in 2007 i actually ran against a two-term republican incumbent in 2006 who was the award getter of all the conservative organizations in the state. but the fact of the matter is he wasn't very effective and that's why i decided to run against him. it wasn't people who got the ribbons, but people who got the results. so going in the legislature, i spent a lot of time my freshman year -- it's really nice being irrelevant. it's great being a freshman because you can really spend time just finding your way around. and that's what i'm doing now and trying to build relationships that i think will be helpful on both sides to have the aisle. i was mentioning to you before we started that i've spent most of my time reaching out to

members of the democratic caucus ask meeting with them one-on-one -- and meeting with them one-on-one. i've met with seven or eight now to speak with them. i do the necessary research to know where they are on policy issues. i had a great breakfast with one of the members earlier this week. i said i've read your background with your history and i'm absolutely convinced that on 80% of all the issues, you and i are going to be in disagreement. [laughter] but there were some things that i thought could provide us a basis for us working together. and started having those kinds of conversations so that you build those relationships. and recognize up front and don't mince words when you're clearly going to have different objectives. but i think now that's what i'm trying to do. i'm trying to get back and forth to the capitol without getting lost. i'm doing that a lot better now after a month being passed. but just understanding the process and finding ways to also help my leadership who is absolutely committed to regular

order and to getting the senate functioning again. if anybody doubts it, just take a look at the number of votes we've had over the past month. and i think that that's good for both sides even among members of the minority. i've had several discussions saying they're just balad to be able -- glad to be able to get out and vote. even if their amendments are going to be defeated, that they get the opportunity to put them forward and have the discussion is healthy. i just want to be a part of the group that's coming in that's really getting the senate to move again, beginning to get it to function because i think we'll never go as quickly as i would like to go and as quickly as maybe i did in the house, but i think we can make great progress, and a lot of that will be on a bipartisan basis. >> i think you made a number of important points, be i the one i really want to drill down on is during the one issue of the keystone pipeline no matter what anybody thinks of the importance of that issue, you had an opportunity to participate in three times as many roll call votes as the entire senate through the entirety of 2014.

and i just wonder if you can build a little bit upon what that means in terms of the chemistry of the place. you're on the floor you're voting, you know, there were some harsh exchanges, but how important was that to start to build some of this kind of camaraderie? >> i think it's enormously important because if you think about it and your in the -- and you're in the minority, if you know that you're going to have an opportunity to have things heard, then you're going to be more lakely to check -- likely to check your partisan tendencies in the interest of maybe moving these things further along. so i think that the sense that i'm getting from the members that i've met with on the other side of the aisle is they're optimistic about actually having real work done that they can have a meaningful role in. ing i was speaking with senator franken, senator whitehouse, senator merkley heitkamp and tester, all of them. i think they all genuinely

believe they may actually be able to get more done under leader mcconnell than they got done under senator reid over the last couple of years. and i believe that to be true. and i think that that serves as basis for us working together, moving things along. there's a lot of things we do here you can try and make partisan if you want to, but you could probably attenuate the policy to where you can get things done. maybe not as much as i want done certainly not as much as the minority does, but progress. >> touch on a couple of the issues where you think there's some potential to build some momentum both with your colleagues across the caucus and also with the administration. >> you know, i think if you go down -- my bias really is towards regulatory reform. we talk about tax reform a number of other things that we want to do, but i think if we really go back and examine some of the problems that we have with regulatory overreach and really expose some of these areas whether it's epa or labor, any number of areasinging in

a -- areas in a very focused way, then you can sit down and say these regulations may have made sense in a vacuum, but they do not make sense in the context of how they've affected businesses today. so let's work on that. let's just claw back or refine or clarify regulations that we know will help businesses expand. and if we can do that and start having a more positive, sustainable impact on economic activity, it makes a whole lot of ore things that -- of oh things that we have -- of other things that we have to do that are going to have some basis in our ideologies to have people disagree, it makes it less likely we'll go there because we'll have a more thriving economy to do some of these things like tax reform. but i think if you take a look at the issue of sequestration i think most people realize it was now probably a bad idea. we all have to remember when we first implemented it, we all thought it wasn't going to happen -- >> it was designed to be a bad

idea. >> it would never occur, and now it's become common place. i think that's an area where you can work on it. i have not looked at the president's budget. i don't necessarily know if his path forward is the path forward that we'll embrace, but i think that there are a number of people on the other side of the aisle who think we have to do a better job with how we do budgeting, and that sequestration is probably something we should join together, get rid of and get to the task of responsible budgeting. >> you're a aaa senator. you are on three a committees, agriculture, armed services. how do you think the republican caucus is going to reconcile two very strong passions? one is a strong defense and strong commitment to national security, and the other is a strong commitment to budgetary responsibility? how do you see that playing out through armed services?

>> well, i i think it may make for an interesting mix in terms of the strategy going forward. i think that you're going to see people at the extremes of the ideological spectrum with opposed to things -- be opposed to things that folks maybe center-right or centrist in their thinking, the people who oppose it may be on the extremes of either one of our caucuses. so what we have to do is figure out how we get into the middle. we have to be realistic about numbers. we have to be realistic that we don't have a veto override. if we had a veto -- if we had a supermajority then obviously, we'd probably do things differently, perhaps. i think at the end of the day we have to take a look at not only what it takes to send legislation to the president's desk that can withstand a veto but also the policies that the american people want to see. but we're not -- we're looking to get 60-plus votes and to do

that i think we're going to have to be very patient in our approach. and i think that we've got so much pent-up demand on the part of the people that voted for us a very excited base of people back home that are calling me about a thousand times a week already to try and figure out how to really prioritize things. but i think that, you know, we're early into the process now. we're worried more about foreign policy issues. we're worried about the iranian talks and a nuclear iran. we've got all those things that are all moving at the same time and i don't yet know how they kind of, how they fit together and how they will either create coalitions or significant differences between the two conferences. >> so a tough issue on defense budget. north carolina obviously very significant presence from the military. and i believe there's a hearing tomorrow in armed services looking at the issue of military pay and pensions.

it's said by some that our military's basically become a pension benefit health care company that occasionally fights a war and that the current trends are such that we're going to have to address those personnel issues which obviously, people feel very passionate about based on the great appreciation we have for our veterans and folks in active service. you see room on that? how do you see engaging that? >> i think you've got to go back to the bigger issue of overall spending. and we had a panel of generals and one admiral last week and we were talking about sequestration and the need to repeal it. and i said i believe that we need to do that because in my day job as a partner at price waterhouse i would have never come gone into an organization and implement anything remotely similar to sequestration to reduce i spending.

you've to understand the organization to, you've got to figure out where the efficiencies are. so my question to the general who said that sequestration was producing a devastating impact on our armed services i said let's separate sequestration from the more fundamental policy. do you believe that the department of defense and our armed services are operating at 100% efficiency? and, of course, the answer is no. so then the question then becomes how do we really reach a point where some of the things that we're talking about that some may argue require more spending are better and higher use of existing funds? i mean, we've got to be more systematic in our approach to understanding whether it's pensions, whether it's weapon systems, regardless of the category are we actually spending it to its best and highest use? ..

>> bipartisan policy center agrees with that view. we will bounce around a little bit. >> i didn't read the background either so i'm glad to do that. >> on agriculture in judiciary committee in a couple of priorities or ideas you hope get into the conversation this year? >> with agriculture i believe i'm the first senator from north carolina to be on the ag committee since jesse owens but it was one of the committees i requested. it's an $80 billion industry. it is an industry that is poised

to grow if wimbledon of the right kind of policy. some of that is promoting trade. it is also continue to promote and fund research so we get more productivity out of our agriculture sector. and i didn't hate to sound like a broken record, but regulatory reform is first and foremost one of the things we need to deal with. if you go out and to talk to these farmers they will do you a litany of nonsensical regulations that really do not provide the value commensurate with the cost of these farmers. and on trade. we've got to get trade right. we got to expand opportunities for agricultural exports because our farmers are prepared to do it. some of them are making headway. a lot of people don't realize just how successful north carolina has become as an exporter of sweet potatoes. even europe would like them. they didn't even eat them until about 10 years ago and now the

uk, we've got about 120% increase in sweet potato exports to the uk. europe is opening up as a morgue. we need to go out there and figure out how do we help them provide access to more markets and then how do we eliminate the regulations that literally make no sense? it's not just environmental regulations. it's workplace regulations sometimes immigration policy comes into the mix, a number of areas we need to shortlist can identify the most burdensome regulations and systematically remove them. on judiciary it has an enormous oversight. we've had the first confirmation hearing last week. it provides a very important oversight function and we're trying to sort out right now i will personally use that as a vehicle for certain things that i think need to be looked at within the department of justice. >> sweet potatoes anything you

can boil is a sure thing in the uk. [laughter] think about some other options. >> down in the south it is anything you can fry. [laughter] challenging issue that comes withhave been working on quite a bit, immigration. nexus between judiciary and ag has a lot to do there. the debate was i think movie in a constructive conclusion of ideas and then it just unravel the. now think we are years back into angry rhetoric on both sides. do you see anything that can bring the debate back together? >> well, you know, i think the problem is that at least from afar when senators or members of congress have tried to get together on immigration reform they let it go beyond a scope that i think keeps enough people on board. i personally believe that we should focus first on border security. and the reason that i believe

that is that if we can come up with a credible way to reduce the growth of the illegally present by bush in her first we establish some credibility with the american people, but even more importantly destabilize the problems we do need to go back and systematically address. and i think when they go about doing that it's going to put people out of the cupboard sewn on both sides of the although we have to be realistic about immigration reform that doesn't embrace either of the extremes the points of view that are out there right now. and i think you do it in an iterative fashion but i think the biggest problem people are having is there thinking that one single legislative matter is going to solve immigration, the immigration, illegal immigration problem in this country. but there's a very long well documented bipartisan history of failure when they tried to do that. so now i think we need to do it any more systematic way.

start with sealing the border and then begin to look at the illegally present population and determine how you actually come to some sort of closure on it. it's not going to be done in the bill, not going to be done in a year i think if you can map out a strategy and then start explaining to the american people my supporters and my detractors exactly how you would go about doing it. but first and foremost i think you take a lot of the issue out if you draw the safety and security issue by sealing the border. i don't think it's necessarily through the conventional thought about ceiling just the southern border. i think it's relationships with mexico, i think it's sealing mexico's southern mexico border. once you do that i think you build on that credibility to address the population that is here. >> i'm going to ask one more question so you all can think about you might jump in here in a minute.

and that is reflecting back on your campaign which was a remarkable campaign, not only your success but you know, this, i don't know if everyone else does, the most expensive senate campaign in history. my understand is about 115- 115-$120 million. we've got a lot riding on your heavily invested individual. >> two-thirds of it was writing all the other alternative. [laughter] >> good point. >> i'm sorry. >> of the overall resources though i think about 90 came from third-party sources and recognizing the supreme court's views on money and speech and the limitations therein any thoughts? did that work perfectly? any thoughts how you can, assuming you will be doing this again in six years how you can improve on the system? >> you know, i think that the

that third party money is our reality. i do think there's something to be said for some level of increased transparency and disclosure. i know that gets people nervous on both sides. i was having this discussion with senator whitehouse last week actually turn the votes and, but and in a strange way i think it's one of the reasons the fact that about 80 million of the 115 million that was spent was against me ultimately work against my opponent. and i think that people absolutely got burnt out. i woke up on wednesday morning the day after the election and i got misty eyed when i saw a toothpaste commercial. [laughter] because, i mean four-year the first negative attack ad that was run against me was the week after thanksgiving in 2013. $7.5 million by third parties on

the other side of the aisle before the primary. but, you know, i think it's a reality. i think we have to do probably a little bit more to disclose the sources, but i'm not one that says it all needs to be shut down. i think the supreme court has spoken so that what you try to figure out maybe through disclosure we change a lease the way they go about communicating things. because it's really just some ugly stuff out there. there were things done by third parties who were ostensibly supported us that i was uncomfortable with. but i do believe that at the end of the day, north carolina is a microcosm of the u.s. electorate. it's center-right state centerleft state that will define the issues. i think that the unaffiliated which are the growing, you know the growing segment of the voting population, gets turned off by the.

so the third parties who use it as a tool may find it more often than not in a swing state like north carolina it may work against them. >> we have about 15 minutes. we really have shocked audiences here at the bpc but if you could raise your hand. with a couple of mike vax running around. let us know who you are. we have one here and one here and there's a mic. >> good afternoon. patrick wilson for the babcock and wilcox company. good to see you, senator. one of the questions the president just got today, i will pitch to you because i think it's timely and that is what do we do about tax reform? under this is an issue you talk a lot about in the campaign. given what you said about the regulatory burden on american business, having used businesses burdened by the hyatt -- highest corporate income tax and what makes it hard. i'm wondering what you think the prospects are of trying to take care of that in this congress? >> i think the challenge we have

here are two very different perspectives between, on tax reform between the president and the current congress, the leadership of the congress. he did tax reform in north carolina. not in her first term but in her second term. we simplified it. we went from 44 and our tax burden the 16th. a lot of that was through supplication but it was also through a half billion dollars in spending cuts so that you can actually with tax reform it's not only changing the way the tax code works. i think most people are assuming there will be a reduction in the tax burden. what i have heard from the president, i have not read his budget proposal sounds more, as much focus on how to derive more revenue from an economy that a think needs to have more money still moving through the private sector. that's what i feel strong we need to work more on policies that can improve economic

activities so that you can make tax reform an easier thing to deal with. never going to be simple because i will tell you as i told everybody in north carolina, everybody is for tax reform. everybody for broadening the base. everybody is for lowering the rate, except for everyone wanting that one exception that is right righteous for the sector that they happen to represent. very, very challenging. it's almost impossible to do without bipartisan support for super majorities or both people, both parties in charge of both ends of the street. so i think tax reform committee, i think sweeping tax of one this year, i'm not speaking to the leadership. i've not had a discussion with them but it seems unlikely to me because of the challenges and because the president is coming at the summit very different different perspective, one that raises revenue. that's not one that i happen to support. i still believe that we have a debt that we have to deal with.

so reducing revenues, even if you are to reduce spending you've got to come up with a credible way to start retiring the debt. so even if you reduce spending, it raises a question about how much of that would actually translate into reduced tax burdens. we've got to spend time looking at that and figure out if we have similar philosophies in both the house and the senate. and then sufficient support from the minority caucus to get us through. i would handicap it as a big challenge of this year. the other problem you have is a political one. the tax reform to me is something that has to be implemented at least a year before an election. when we did tax reform we took, we had a six seven and 7.5 personal income tax system in north carolina. we simpleminded, brought it down to five points 75 it would also

lower the sales tax by a penny, or 20% if you look at the base. but we knew that if we implemented that and going into an election year, the people were not going to believe that you actually had a reduced tax burden. and you you would have not, you would have basically been exposing yourself in the political cycle. we implemented it last year so this past april people saw the benefits. they saw that their withholding was either lower or their refund checks were larger. well, you can't implement something in january of this year or july of next year. and i think go through a cycle where the american people would absolutely be able to see that it benefited them. please got to work on time as well. >> another question in the back. and the mic is being run to you hence the word mic runner. >> i'm joanne lynn from the

center for elder care. you're also on the senate special committee on aging and wanted to have you comment a bit on that. you faced doubling the number of elders in the next two decades one of the biggest challenges for the country and north carolina has a very interesting experiment with primary care and pharmacy and on the other hand our dependence on families is becoming really pretty thin as families are smaller and more dispersed and poor. so what do you see as the priority for your service on the special committee on aging? >> i'm excited to be on the committee, and i'marticularly excited to follow the lead of senator collins as the chair. i have not spent a lot of time talking -- we had an organizational meeting last week, fastest committee meeting i was ever in actual. we voted on the budget and got back to of the votes. literally lasted about 10

minutes. there's a lot of things that we need to work on think could help bend the curve and provide more resources. i, for one, have a personal interest in alzheimer's and dementia, because i personally experienced that and i went back and took some courses on it to become a better caregiver for my grandmother was diagnosed with alzheimer's at a relatively young age. but investing in research, some of the things that are making the cost of providing support to elders higher than i think it necessary has to be something i'm very interested in. learning more about and finding out how aging ways into that. i think when you get into the discussion of entitlement reform, a number of other things, i think people come up to me had a lady come up to me and western north carolina. she said i couldn't support you because you're going to end medicare. and i said, ma'am, i'll be

honest with you, i talked my mom about that and she said i couldn't do it. [laughter] you know, i think part of what we have to do is recognize a promise that's been made after but, goes back to the discussion on pension reform and a number of other things. how do you do things in a way that fulfill the promise that you made and give me be the next generation of people enough time to deal with a new, more sustainable model? and i think most reasonable people if you communicate it -- i'm 54, so i would probably be a part of that group that may have to look at medicare and social security a little bit differently than let's say people who are in, you know for a five years away from possibly qualifying for one program or another. but i think that we have to look at that. so first we can reduce the fear of among the seniors by bush in the general there people out there in part because a lot of the third party money spent who

honestly think it's all going to be taken away. and i think we had to go and tackle that, and aging plays a role. there's a number of other committees that would fall under the jurisdiction by do think that and other reform is something we've got to get series about because i'm afraid that are promises that they made that we can't keep in current course but it's causing a lot of concern among seniors who view it as critical to their life. i look forward to working on it and sing have aging ways into it. no, the committee i guess. >> we're time for a couple more questions on this site. >> the madison coalition. i believe you may be unique, and correct me if i'm wrong, you may be the only former speaker of the house who was just elected to the senate, and that get you a unique perspective. i do wonder what you think of

the idea that sometimes bipartisan cooperation is easier to achieve among speakers and senate president of different states than it is among members of the house and senate in washington. and you talked about this problem of regulatory reform this widespread concern around the country due to voters don't like what they see. what do you think of the idea that in the same way that states got the congress to propose the bill of rights to limit federal power that states could do what five state legislative chambers have already done, which is to urge congress to propose a constitutional limitconstitutional amendment called the regulation freedom and to require that congress approve major federal regulations instead of having it dictated by the bureaucrats in washington? >> i say there may be something to that because we think what's happening now, we are trying to

disallow regulations. it's very consistent with what we did in north carolina when we came in 2011, our first path to regulatory reform was to require a business case for the regulation so that their cost, whether it be taxpayer cost or cost when industry, to be commensurate with the benefit whether it's workplace safety or environmental improvements whatever it may be. and in many cases there will be i think a valid argument for but that is his case has to be developed and as the consultation with the legislature in north carolina. so we consistent with exactly which were talking about. and i think that until that could potentially be put into place at the federal level, you can kind of use that as we to go back to their thinking there is and say, let's talk about how these regulations are affecting your state, your constituents

for no great gain, and use that as way to build some bipartisan support to repeal some of the revelations that is simply gone too far. but it's worked in north carolina. i don't believe there's any coincidence over the last four years that north carolina's economic activity that is outpacing virtually every other state in the southeast. i don't think it's any coincidence that north carolina for the first time in 10 years is ahead of south carolina on unemployment. i think it was through some of the systematic approach we've used for responsible regulatory reform. and incidentally and it's not always clawing it all back. it's doing it in a reasonable fashion. north carolina is the first state in the nation to tackle coal ash pond issues and putting forth the regulatory framework to do that. we've got all the stakeholders together, environmental organizations, utilities, other power countries edited we got it right and we balanced the

regulation. there was a lot of people who were concerned because we had a coal ash bill on the river that we just overreach. i refuse to allow that to happen. i said we want to use the same framework that would allow the regulators and north killer that they have to follow, for us to sing with a policy to solve a problem, but not just all of a sudden run these private on emotions and maybe the pressure we're getting from certain special interest groups, and we got to a good policy and a belief that regulatory policy is one that will ultimately be adopted by other states. >> another question right here. >> senator, i was curious about your views on the transparency. i represent the recycling industry. last year we asked the government for doctors to the government said no, for you the documents. the government said that you have to pay for it. we were back and said that you told us to foia and.

the question we have this doesn't make any sense especially for the cost that is now being put on us have to pay for these doctrines. what can be done to improve the situation regarding transparency of documents for the business industry? >> well, i think we have to do a lot. we also have to be mindful that there are people out there who abuse these requests as well. and so you've got to balance, it's very difficult to do. we dealt with this in north carolina. after i became speaker we had a transparency -- we had document requests for just an unbelievable number of areas that we had a little or nothing to do with so they seem like they were just part of a chess game that was being played for is a legitimate request for transparency. i think we need to figure how you can do it. what sort of oversight or maybe

even independent review of requests to try and get to what the motives are. and then if somebody wants a document give it to them but then they have to be a cost with it so you're not clogging up the system. my concern is a lot of times legitimate request may be very revealing, very important american people and i don't have an answer for it i do think it's a problem added you think that sometimes even congress can't get the documents that they want. i was just watching c-span, watching a house member complaining about documents that a congressional panel has requested that they can't get. i feel the pain of people wanted to get information they think the important that they can't get. >> final question right over here. and the senator will be in town for the next six years so you all have a chance to follow up.

>> imh rate advisor with the british embassy, so we appreciate your sweet potatoes over in the uk. >> i more. >> when you talk much agriculture you mentioned the need to expand exports. i were to ask you about your views on trade legislation started with trade promotion authority to negotiate but also specifically the trans-pacific partnership and then the european negotiations as well. >> i think tv is an area where we may end up having an opportunity to work on a bipartisan basis -- tpa. when you saw the president mentioned that in the state of union, he probably got more of a positive reaction for our side of the than his own. i think it's critically important. i think tpp is critically important. i think trade agreements are working out with europe are critically important particularly for agriculture. i mean the world likes american products. they think it's one of the safest food sources that they could have access to come and i think we need to build on that.

north carolina has a tremendous opportunity to grow its agriculture sector to 100 $120 billion if we were able to have more access and lower cost access to other markets. >> and i would support it i would support the tpa. >> i want to thank all of you for joining us. i think you certainly got a sense that we have a new senator in this town who is both eloquent and substantive, usual you can get one or the other but it's wonderful when you have it in a single package. >> can i share one little -- just to give you an idea about where my bias is what comes to regulatory reform. this dates back to i was in the minority still so i was the minority whip, would've been around 2010. and i was having a discussion because i really do believe that you can get regulation to a point where you preserve the environment and to keep the workplace safe. you can do all that. we want this.

there's no republican her i hope that there's a republican or democrat here who has run for office so they could destroy the environment or make sure that children can't drink clear water. doesn't make sense. it's a matter to the means not the ends. i was having a discussion with someone and we are at a starbucks in my district, and we were talking about certain regulations where i felt like maybe you should allow diseases to opt out. as long as they indicate through proper disclosure, for advertising, through template literature, whatever else. there's this level of regulations that maybe maybe get on the books but maybe you can make a market-based decision is whether they should apply to. and she said, you know i can't believe that. she said opting out. and at the time were sitting back at a table that was in your the restrooms and one of the employees just cannot. she said, for example, don't you

believe that the degradation that requires this gentleman to wash his hands before he serve your food is important and should be on the books? as a side effect i think it's one i can illustrate the point. i said to i don't have any problem with starbucks to choose to opt out of this policy as long as they post a sign that said we don't require all employers to wash their hands after going to the restaurant to the market will take care of that. [laughter] and so, i mean it's one example, but then let their own decide. that is probably one where every business that did that would go out of business but i think it's good to illustrate the point, that that's the sort of mentality we need to have to reduce the regulatory burden on this country. one of the most regulated nations in the history of the planet. and i think if we go about in a commonsense way, that that solves a lot of problems. there may be other big problems we're talking to eminently more easy to solve.

so thank you. >> i'm not sure i want to shake your hand. [laughter] express appreciation to senator tillis for joining us today. thanks. [applause] >> [inaudible conversations] >> the u.s. senate is about to gavel in, and lawmakers will debate a bill designed to help prevent suicide by veterans and those currently serving in the military. a vote on final passage is set for noon eastern today. the senate is back in session at

2:15 p.m. eastern after the party lunches and then at 2:30 p.m. lawmakers will hold a procedural vote on whether to move forward with the house passed homeland security bill which includes provisions to block president obama's executive order on immigration. the house is taking up a bill that would repeal the health care law and replace with an alternative. you can see live coverage of the house on c-span, and now live to the senate floor here onorder. c-span2. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. eternal god, every good and perfect gift comes from you alone, for with you there is no variation or shadow of turning. help us to place our hope in you and remember how you have