step in 2017 or two steps, one 2017 or two steps, one now which we can bite off what we can chew and get done and make us competitive and then the rest of it done in 2017. >> what 2017. >> what are some of the ones i should go away? >> i'm not going to get into that. >> oh come on. >> no it doesn't help to getting to the goal of comprehensive tax reform to do this on an anecdotal basis outside of showing what the new system were trying to get to. were truck we asked everybody who cares about this to understand that our goal is a better tax system for america and more probe growth system with lower tax rate that make us more competitive globally. in globally. in the context of that, consider the end result. when we go to this anecdotal tit for tat yes to this, no to that without showing the comprehensive version, it's counterproductive to getting it done. >> how do you reassure companies that you get to that angolan that it's worth them taking the

long view when there may be some things are gonna go way that they really want. how do you do that? given this congress and the situation that we haven't necessarily accomplished. >> first of all we have to look when an election before we run on this. i believe and obviously have been involved in these things, we need to tell people who we are, what we believe in what will do for elected. then when you win the election you have the obligation and the mandate to do that. i do believe among other big issues, is comprehensive tax report form. it's a matter of economic survival and form. it's a matter of economic survival and competitiveness. in 1996, we did it in the rest of the world followed suit. it triggered a round of tax reforms and now were on the receiving end of that to where we have the worst code in the industrialized world. we need to kick off a new round. >> what you think, of those ideas you mentioned which do you

think the administration is likely to work with you on? >> we do talk with treasury quite a bit about international conversion and extenders. there are active conversations about how do we get that taken care of. there's also a component about the fact that if you convert from a worldwide system to an exemption system there is sort of a one time, slug of money that comes into the system and there are folks that want to see that as the highway trust fund solution. i believe there's a way of doing it to make sure it doesn't deter any type of tax reform we want to do as well. we are discussing exploring the possibility and if we can find common ground on that piece which we see consistent with tax reform. we want to do something that is not bad policy and not inconsistent with tax reform in the next session of congress. >> can you do something that balance the interest of both?

>> that's what comprehensive tax reform is all about. unfortunately for us, we don't have an administration that sees it that way. they want high-tech rates on individuals. i do believe in a better political climate which is hopefully in 2017, we will be able to, there's lots of other ideas out there, but we want to spend 2016 exploring and encouraging these ideas. yes it will be lowing those rates across the board so you have a more parity and you have parity. we used to have that. >> what's the timing on this? everyone knows were in the midst of the 2016 presidential election. >> it's going to be 2016 presidential election. >> it's going to be this summer and fall. as we go through the summer we will continue exploring the international and in the fall is when i, if we do something on

the extenders we want to do this as soon as possible in the fall. and look what happened last year. we had until december 11 to find out if these provisions were being extended only to see if they went away and december in december 31. that is not predictability and certainty. we want to address that as soon as we can. >> are you going to spend your time in 2016? your predecessor spent years going through all of these which were very bipartisan. they were coming up with what you would call and i would call a very traditional path of tax reform. the idea that you broaden the base and lower the waste. what we do have out there right now is as you said, whole bunch of candidates on both sides talking about major changes. can you talk about some of those? what are some of the ideas there? >> the way i look at this is

that kind of outside the box thinking should be encouraged. i'm very thankful for dave camp and the work that was done. not only the intellectual work but the scorekeeping work in the nuts and the bolts work that you have to do to do tax-writing and tax reform. were building off our knowledge base of that work. the bases we see it in 2017 is at the very least we do garden-variety tax reform like you say we see the top tax rate should be no higher than 25%. that's the base case from our perspective. what does that look like with respect for the rest of the world? that would put us in the world? that would put us in the middle of the pack. that's a lot better than what we are now. we are the highest rate in the industrialized world and that's not even the s corporations were talking about.

then can we come up with a leapfrog plan that leapfrogs the rest of the world that shows we haven't even more superior tax system that is better than the rest of the world. kind of like what we did world. kind of like what we did in 1996. given the fact that our size of gullett government relative to the size of economy around 20% of gdp is something someone would think we could come up with a better system that would a better system that would not just be in the middle of the pack, but would rival anything else that anyone has. you want to found your company in america and keep your business in america and manufacture your products in america. it makes sense to america. it makes sense to do that and we become, because of our intellectual property and our workforce in our currency where you want to be an american firm.

those of the kinds of things we think about so at the very least we are going in a better direction if we can get the kind of government we seek to get. good tax reform that makes us competitive or something superior and were going to spend 2016 looking into all of that. we'll do hearings that. will do hearings and research and examine all these things while we encourage people to put their ideas out there. we are in listening in research mode right now. >> corporate integration those are all ideas that are out there. all these kinds of things that we want to encourage a robust conversation a robust conversation on. again it's about america leading, america becoming a place where we have faster economic growth, more mobility more and more opportunity. one opportunity. one of the biggest goals is the tax system. >> can you do, when book came into office when bush came into office, they cost money. they were not deficit neutral.

can you do that in environment today with the deficit what it is and if you can't, can you do a tax reform that is aggressive enough to get you to the place you want to be? >> i think the answer is yes. >> yes you can do it? yes you can sell the public -- >> yes. we improved a couple of our tools that we used to write tax use to write tax bills this year. number one we improved our modeling capabilities and were still refining that which is the arbiter of these things to the point where we actually now use economic modeling that looks at how the economy response to tax changes. go figure, human beings responds to tax changes. go figure, human beings respond to changes in government policy. until this year we never took that into account. we used static scoring in the past and now we use macroeconomic scoring. we do that now so we make

smarter decisions. second the revenue target that has been traditionally used sets the revenue target much higher than the law actually is. we believe in what we call current policy revenue target which is reality. let me give you an example, the r&d credit. that gets renewed every single year. our friends on the other side of the i'll say they're always in favor of doing that. they'll even renew it for two years at a time but the moment you say will let's just make it permanent so we can actually plan for this, they say oh no, you have to go raise taxes on somebody else. so what you're there saying is you have to raise taxes on other hard-working americans to keep it even for everybody else. we believe if these are provisions, r&d credit section 179 that we intend to be

permanent, then let's just call it what it is and be honest with ourselves and make it that. that gives us the kind of revenue target combined with better scorekeeping rules that are more reflective of reality that we think help us write better legislation than we've been able to do in the past. >> is and what you're talking about in somewhat of opposition you have not just democrats but some republicans now who have embraced the idea that you need to be using the tax code more to reward middle-class families? at least that's on a personal side but it bleeds to the corporate business side as well. what you're talking about is a path of people that are going in a different direction. >> there are. i a different direction. >> there are. i believe in limited government. i'm more libertarian on this issue. it's your money. the way these conversations turnout is we want you to send your money to washington and

then if you engage in behavior we approve of, will let you keep some of it back. i'd rather you just keep it in the first place. it comes from the people who made it and who earned it. decide for yourself what you want to do with your money because it's your money. i believe in a more economic neutral tax system because number one for freedom sake and liberty sake but also for growth's sake. i believe that is how you get to the most progrowth of economic policy. the best way to help families and people get out of poverty and reignite the american idea of economic is growth. you don't want to leave any growth on the type table. that's why our texture and principles are profamily, progrowth pro- business creation. that's the school of thought i generally come from. >> some of the more powerful people in the country. >> don't fight for the city the

little tiny pieces that will be good for it here, think about the broader goal here, think about the broader goal of getting rates down and having comprehensive tax report form. think about the broader goal of getting america to a more competent competitive system. you might lose this particularly carved out benefit which is a far more competitive tax system which means faster economic growth and it makes it more likely you want to stay in the united states company instead of being taken over or having temptations from shareholders to invert. that is invert. that is what i asked people to think about. >> did you hear all that? >> questions from the audience. this one congressman asks you to be her into your soul.

>> that assumes he has one. no i'm just kidding. >> were about to find out. imagine you see an opportunity to purchase another company in your industry and it happens to be located in the u.k. as part of that transaction you can save a hundred million dollars or increase your increase by 20% by doing so. you feel compelled by a fiduciary to consider this on behalf of your shareholders. what would you do? stay patriotic or fulfill your fiduciary duty. >> stay patriotic and give us a chance to fully fix our political system so we'll have our cake and eat it too. you will be an american company whose enjoying a better tax system because we will have fix this mess before it gets out of control. we talk about this and they are

rocking and rolling over there. i think there's a lot of lessons to learn by us. we are trying to apply these lessons. we lessons. we do not have the political plans aligned like we need to to fix this. you have to know this is our highest priority and we are moving in this direction as fast as we possibly can. i would say play the long game with us and don't go for the instant gratification. that is what my soul says. [laughter] >> i would hesitate asking what the cfos might do. beyond the need to reform the federal tax system there's an issue regarding state taxes and their increasing need to grow revenues states art changing their rules resulting in instances where we are double taxed on the same revenue. is this even on washington's radar? >> it is and we see it. it's a a sovereign state making do these things if they want to. i've long thought that if we lead, no lead, no longer do we lead the world but we can also lead the states.

that's why c states like our states which has done a lot of good, having a competitive tax system. we want to encourage a competitive tax system and keeping government lean and paid for. that just shows you where the growth is going to go. >> are you looking at the states for any idea of what you do? are there any states that you say wow, we should do something like that? >> i talked to governors quite often about healthcare and court rulings and other things like that. on tax reform because there's such reform, because there's such an international component to this, it's not something states are as worried about. it's really more something we are discussing. >> i have more here. are there any more questions from the audience? so explained to me the notion with the reduction in tax rates to businesses offset. >> what i described kim underestimating more accurate estimating and accurate revenue

targeting, and the benefit you get from lower rates, hopefully at the end of the day it ought to make everyone better off. this is the current system we have today were you trying to make your effective rate down because the statutory rate is up here. it still affects decision-making and capital allocation. it affects a lot. we have to get that rate down. we have to broaden the base of income that is taxed so we don't have a huge revenue loss. it's just that simple. you are all cfos and you know exactly what i'm talking about. all i would ask is that this indulgence to know that maybe your finances are rigged around this particular tax benefit or that benefit or expenditure, but no but at the end of the day we just want to get the rates down in the first place. you don't

have to go through this convoluted process to get some of your money back by contorting your business planning in through these tax systems. we should have a system ideally that is neutral so that if you make your business decision based on what's best for your business not based upon what the tax laws tell me i ought to do. that's what were trying to get to. that's why i say we should all be for that. >> if democrats win the white house in 2016, what's the probability of major tax reform? >> that's reform? >> that's a good question. >> i don't know the answer to that question. >> want to take a guess? [laughter] >> look, i don't think the country wants a third obama term. i don't think the country wants a third term of blowed 2%

growth, poverty stuck at 45 million people, american losing its standing in the it standing in the world, our military being weekend, the regulatory state pumping out unpredictable regulation after regulation and wages being flat like they have been. i don't think a people in this country want a third term of that's why i'm confident that we will be able to prevail and get the kind of government we need to fix this mess. we need to clean it up and fix the debt crisis that is still on the horizon. get our tax system and a good state and cleanup the system so that it is predictable and get this economy out of the ditch that it is in and go affect the attacked the root causes of poverty. i think we can prevail over that

and we will. i don't want to go the other direction. >> how does the gop convince the public that lower corporate tax rates are low are good for them when corporations are thought of as the big bad wolf? that is a tough call. now we are looking into the soul of companies. >> lower tax rates across the board, not just corporations. if we do this and make it a war against each other than we won't win. jack camp was my mentor and he taught me politics so to speak. we will not win if we try to tap into fear and envy and anxiety. we will win if we show people a clear solution-based approach using our principles and how it's being applied to problems today. we get hope, aspiration and if we go and pray on the class

warfare thing, we shouldn't even bother trying. if we explain these are the necessary need to a a better future and a more competitive economy, i think we will do fine. >> is it better to try to pass some form of reform this year or wait until the president leaves? >> the problem we have is that businesses don't pay corporate taxes, they pay individual taxes. when you have taxes, they pay individual taxes. when you have a white house that will not allow those individual rates to be lowered, you will exacerbate the disparity between the two kinds of firm. that's not something we want to see happen. we want to reform both sides of the tax code. that in large part is why i don't think you will have that kind of tax reform done right now. that's why were spending our time, hopefully it will pay off on trying to clean up her international rules, get our tax bills that deal with

end-of-the-year problems extenders dealt with and what other kind of reform can we do to help get us in the right direction toward tax reform that doesn't involve the rates and differentials. >> lastly, unless is a question from the audience, if 50% of taxpayers pay no federal income tax, how do you convince them to change tax law? >> based on growth, opportunity, what it takes to get america back in the lead. >> not everybody is always there. people move but don't we want more growth and more jobs and opportunity? don't we want america to be leading the rest of the world or do we want to be following? look at don't think people want us to be a welfare country with a debt crisis. they want to see a vibrancy in this country again. they want to see growth again. they want to see they have a

shot at the american idea which means the condition of your birth doesn't determine the outcome of your life. people shouldn't be stuck in their current situation in life and put up with it and tolerate it. that's bunk. that's it. that's bunk. that's not what we do in this country. let's talk about how we can get to everybody can get to where they want to go in life and equip them with the opportunity. we believe opportunity. we believe in equality of opportunity not a quality of outcome. different outcome in different goals. one speak to the principles of this country and give us the opportunity and the great story, the american idea. we were four people in ireland and were thriving. everybody has these stories. that's what this country is and i think people still care about that. >> thank you very much. [applause]. >> on the next "washington journal", the implications of the emmanuel amc church in south carolina.

clearance page will join us. we will also take your facebook comments, tweets and phone calls. with a dedicated line for charleston residents. "washington journal", live every morning at 7:00 a.m. inns eastern on c-span. >> the faith and freedom coalition to. speakers include 2016 president candidate, jeb bush, former new york governor george pataki. it's live at 9:00 a.m. eastern here on c-span2. >> now from the wall street journal annual meeting of chief financial officers, discussion with white house budget director sean donovan. he spoke about the odds of getting a deal can read guarding the debt ceiling and a

government shutdown. this is 30 minutes. >> there's a boy bond that has other prominent parents. his father, michael, just recently became a u.s. citizen after living here since the early 60s. >> that's right, 53 years here in the u.s. >> that's amazing. i want to i want to bring up a word that you don't like all that much which is shut down. harry reeves talked within the last week about warning of the possibility of a shutdown. that's obviously bring behind everything else that's going on at the moment. there's an impasse about spending. i could summarize where it stands but i'd be interested if this is really heading in the direction where we could possibly see a set shut down because the

division can't be overcome. >> i'm not going to rule it out. here's why. we have this word in washington which is sequestration. a word that no other human being has ever heard of outside of washington. two translated it is basically that cuts to the budget that were supposed to be so terrible that they were going to bring everybody to the table to make a deal. it was going to be pain that was equally shared on defense, nondefense. it went into effect, it was terrible for our economy we lost 750,000 jobs. republicans and democrats came together and fixed it through a marie ryan deal a few a marie ryan deal a few years ago. what's happening this year is unless congress acts sequestration comes back on october 1. that is really what the fight is about. >> it's sort of a ticking time bomb out there. >> exactly right. the president is exactly clear.

he tries to be very clear about what our bright lines are in these negotiations so we can create space for where there may be a deal and so the president said, right when we put out our budget in early february, he's not going to accept a budget that locks in seacrest ration. there's six more years of sequestration and i think everybody except that if we don't get a deal in the midst of a heated presidential campaign that we won't get a deal. he's not going to accept a budget. the translation is that he will veto bills that are written at this sequestration level, and at the same time, there are some that are saying will let's fix the defense budget. let's also fix the nondefense budget which is everything from the state department to homeland security to veterans administration.

it's also education infrastructure, basic research in all of those things that would be hurt if we just fixed the defense part of the budget. >> so the president is okay, in some ways of raising defense spending. >> he actually believes that sequestration is bad for national security for the defense of the homeland. he is and he agrees with the republicans that we ought to do something there. he also agrees with an increasing number for publicans that believe we should be doing something on the nondefense side. side. something that gets lost in this debate is that we want to fully pay for whatever we do in discretionary spending with long-term cuts defending on what we call and that's where our fiscal problem is long-term. right now the discretionary spending is at the lowest level it's been in decades. that's not where our fiscal challenge is. the fiscal challenges really on the longer-term entitlement programs that are mandatory. mandatory. what we want to do is just what congress did a couple years ago.

with this so-called marie ryan deal we want smart savings -- you say this could all lead to a government shutdown in the fall. what are your odds that that actually happen or we see something resembling a shutdown question mark. >> i think the odds are better than 50-50 that we get a deal because we are hearing more and more democrats and republicans come out and say that it's the right thing to do. speaker weiner said just a few weeks ago he was open to a deal. i think the problem is what we don't want is this governing by crisis that we see all too often in washington. we washington. we want to get started right now. in fact we are working with democrats to stop the progress

of the appropriations bill literally this week because we think that is a key signal if congress said we have to stop this charade that were proceeding on right now and get to a real negotiating level. a real negotiating level. but i hope we don't do is leave it to the fall when there's a crisis. whether it's a shutdown or whether it's a shutdown or a last-minute deal, that's not good for anyone. >> i want to get to corporate tax reform. let's bring up the first question if y'all have your ipad handy. what rank does your biggest concern from a corporate point of view when it comes to the federal budget? i don't know if we have it will pop up here in a second. complexity of the tax code federal debt lower people only going for three? complexity of the tax code seems to be the winner.

what's your view on that? >> :

what you try the planet your business lives, think about think about the government trying to plan infrastructure investment with months at a time extensions of the highway trust fund. >> how active are these discussions?

>> i think the i think the thing to watch for there are good discussions happening particularly as the trade debate has been front and center as we move to the next big issue it will be around corporate tax reform where we can have bipartisan cooperation. if you look at what we will happen, there is an extension until the end of july. the hope is that there can be negotiation around the basic framework and then an extension of the highway trust fund through the end of the calendar year to give time to really put together a comprehensive package under this tax reform. >> so many pots playing out at the same time the trade fight the fight overspending, sequestration the highway funding bill. and there will be possibly

at the end of the fiscal year some possible shutdown. even in that setting you can continue to move forward. >> look, sometimes bigger is easier. what i mean by that is that if you pull together if there's some kind of a deal sometimes it's easier to get all that done together. the hard thing everything -- everybody agrees that we can bring the corporate rain down as part of the process. and that we can make the tax code simpler. the problem is that one of your making the tax code simpler is taking away somebody else's benefit. so it is really where the rubber hits the road on what are the provisions that you are going to be eliminating to get a certification that politics it's hard. i would say to your audience

if you believe this is something we ought to do is a as a country we are going to have to stand up and be willing to give up certain tax breaks that may benefit us narrowly in terms of a particular industry, product for the larger good which is to get a simpler tax code and lower rate command that really is the goal. not easy command that is where the rubber with the road we start talking about the specific loopholes or provisions that we will get rid of it. >> you talk today and a lot of times in the past about the real concern being a longer-term deficit picture. our debt to gdp now is something like 74 percent. the norm before the recession was under 40. i think the hope is to get it done, something like 70.

the cbo came out with a report saying that by 2048 we will be over 100 percent. >> that is if we do nothing and the pres.'s budget but actually take steps that within the ten year window would put it not just on a stable path but declining path which is a key step in and bring it down significantly further and the subsequent decades. a couple things we have to recognize. one is, even a cbo numbers are substantially better than they were just a few years ago. why? healthcare costs are growing slowly. if there is a single driver on the cost side more important than anything else the deficit picture it is healthcare costs, and that is why all the progress we have made with the affordable care act, with healthcare costs overall it's made a huge difference. in the year 2020 we expect to spend about $200 billion less on federal health care

expenditures than we expected just a few years ago command that is how dramatic just that small change can be in terms of cost. and there's a lot that we are experimenting with that could pay huge dividends and bring down the debt dramatically in the outer years. we also have to recognize the population is aging and we have too few workers per retiree with the baby boom happening. as why immigration reform is one of the most powerful things we can do. immigration reform would bring down the deficit by about 1 trillion which is a a critical step that we can take to rebalance our demographics. >> i was hoping in the time remaining we might talk a little bit about the cfo. in the meantime i would like to bring up, we had one other audience response question if that could come up and will overlap a tiny a tiny bit.

if you could change one thing and washington's fiscal management it would be -- and we will have to wait and see what it will be let's see if let's see if he has the time ticking down here. divide bipartisan budget process. simplify the simplify the corporate tax code cut the federal deficit, reduce the overall tax rate. can start. yeah. a strong desire strong desire for that. >> tax reform. >> good. help us get a deal done this year. i would be great. >> again, the again, the federal deficit came in a pretty distant 4th and that one. but i don't know whether you would draw a direct correlation between the way that you have to deal with interest within the rather large federal government. >> are talking about my children.

>> we can get to that. to come up with a budget to craft a budget dealing with the equivalent of a debt ceiling or the end of the fiscal year had sequestration's. i'm interested in the advice you might be able to impart on working with these conflicted interests. >> i think that one of the most challenging things i see not only my experience in the public sector but the private. i worked for mike bloomberg in new york city as a health commission as well which is an interesting sort of joint public-private experience in some ways. and and private sector experience before that. i think what is often a challenge, and is particularly true here is true in the private sector as well that it is easier

and not easy and budget math, but easier to show what the financial bottom line is. what overspending, what our tax rates. it's harder to have a clear picture of what we are buying. it's a pretty good at measuring the buck. pretty bad at government. what are you actually -- what of value are you getting for the money that your spending. one of the things that i try to do throughout my career is to figure out how you measure performance in a way that you can link to the financial picture. i felt like that was a real challenge after the private sector to look at productivity, think about how you were goes, what is a quality product and if that

is on the private sector is particularly challenging in the public sector. i often don't think we know what success looks like in the public sector. being clear, creating measures and then linking them to financial performance it's not going to solve the political challenge alone, but let's face it, we have a fiscal deficit and the trust deficit in government. if we can show better what it is we are actually producing, the value we're producing whether we are pushing the mission of what government is out to do i think we can win over a lot of people in the country and get past some of the partisan. >> if you could highlight one area some sort of metrical deliverable. >> i'll take an example that i work very closely on a home --@had. when the president came in office veterans were 50 percent more likely to live on our streets to be homeless.

i think there is broad political consensus that we should not have folks who are serving our serve our nation and the military sleeping our streets, what agreement. the problem the problem was we did not have a clear set of solutions about that. and so i worked with folks to put something together hud, had stacked process. we looked place by place where we were driving down the numbers of veterans on the streets, getting them housed. four years we reduced homelessness by a 3rd and street homelessness by 43 percent. that is real progress. what is happening is

actually, congress is willingly on a bipartisan basis putting more money into the veterans homelessness. there are other examples like that where few can be clear about what success looks like a measure of relentlessly you actually can build some sense of bipartisanship. >> did you want to jump in? i have more questions. it is interesting to hear you talk about creating the metrics by which you can measure success the bang as you put it. how do you rally a very dispersed large organization like only be which is representative try to consolidate the national

government or hurt. how do you rally all of the diverse thoughts about how the money should be spent around a budget in one direction? understandably congress is thinking about the decisions something likewise of what the cfos are doing. a diverse, the money. >> first i think there i think there is no substitute for actually creating a process where people have their say but i also think back to the.i was making earlier my general experience has been that if somebody understands the reason why your making decisions, if your actually saying, were not going to put more money in the

program and use the reason why it's not producing results in the same way that this is. hear them let them be part of that process in deciding but what i i have found is if you do have a clear way of saying here is why i'm making this decision and here's the evidence that is going to be a lot easier to create consensus command for people even if they are happy to walk away from the table understanding why that decision is made and feeling like they can do something about it. i can take my program and try to make it better for try to improve it in ways that maybe next year i'll have a better shot. and and you know, the problem in washington is often that has a fight against the sort of retail nature of politics for folks focusing just on their district rather than the larger picture, but i think the president has really

tried to bring that since we we're going to focus on what works, drive money toward what works and be able to show clearly that is how we are making decisions. what i have found is that it is not going to create perfect consensus that will make it a lot easier to get by in. you have to say no a lot. i'm sure you all do as well. having that ability to.to something and say here is what i am basing my decision-making on objective and focused on our mission makes a big a big difference. >> a lot of this was resolved in the past or has been resolved politically. does this suggest that omb is kind of adding to the machinery of analysis you can get range of programs presented to you and detail

the groups on each of those the way that some of the cfos might for divisions of the company? >> that is exactly all role. we're the analytic infrastructure within the federal government. you know, we have the beaver budget and the emperor management. we have created we have created a performance infrastructure for all of the agencies and government. priority goals that each agency is required to set that we are tracking command we are linking that to budget information to be able to get both the bang and the buck. >> that buck. >> that has always been the role. as government programs expand, does omb have the capacity to deal with the ever-growing demand for that kind of analysis that might have otherwise in the past been handled? >> look, it's fair to say that we can only focus on a

share of those decisions. part decisions. part of what we're trying to do is create a similar culture within agencies to build the analytic capacity within agencies, to have agencies, to have performance management be an important part of what agencies themselves are doing so that it is both doing it ourselves but not just, you know, this is clearly adversarial where we are seen as the judge and jury. we will be less successful. if we can build a culture of performance management inside agencies that we have a better chance of actually building not trying to do it just ourselves but building across the federal government. >> good. questions from the audience. >> so one of our critical responsibilities is to make sure that our resources are

spent appropriately, there is no fraud, good controls in place. place. not to put you on the spot, but you should be look to in the government to do that for us? when you look at medicare, billions of dollars in fraud , beating themselves in the chest because they post this stuff publicly. were going after some of the most egregious fraud. why wasn't that cleaned up before? why did it need to be posted? half of all disability claims, government employees are overpaid. look at things like the irs courtesy hangups when there's half a million hours allocated for union lobbying activity. who represents us? he who is making sure that there is not fraud making sure there is good value has been negotiating with the people. i know it's a tough question, but. >> and i would say to some

extent everyone needs to be responsible for that and it is to be accountability for. we have a system of inspectors general and other agencies which try to create accountability around that. they're constantly auditing, going in the looking at where the problems are within government on agency specific basis and the cross. make sure findings of individual problems around us things are connected to a broader picture. is there is there a systematic or structural problem that we need to take on? and i do think part of the problem, to be frank, is that you're not going to hear stories about where we are making progress. we tend to have a culture in the media particularly that

focuses on where there are egregious problems. very rarely what you will see is, is this more than anecdotal? what is really happening? i those examples increasing decreasing? and i think one of the things that -- and as you said, i've been at omb about a year but we worked on it extensively. our improper payment rate has gone down substantially across the six years of this administration. we do measure, look of the at the programs that are most vulnerable, measure very consistently the improper payments for go out and what are the things that we are doing to try to stop that and have seen significant progress in many of those areas. one of the problems is -- and this is the frustration often of the way the budget process can work you mentioned the irs.

40% of. 40 percent of taxpayers are having their questions answered timely when they collect because budget of been cut so dramatically for in the irs. and the, you know, irs commissioner has been clear that he has been doing what he can to improve the service but there's only so much you can do without the resources. it's getting to the.where we had to cut back auditing dramatically. and we can show there are tens of billions of dollars that we are unable to collect. basically shooting herself in the foot. if we are if we are investing in the things that allow us to measure fraud, to go after folks that are cheating the system and ultimately if we don't have a tax system that we can rely on, that's that's a serious problem. one of the biggest things were concerned about is the resources that allow us to go after fraud.

>> other questions? >> i could ask a quick one. we have the brought up the debt ceiling that limit issue. it's not kind of pushed out into late november territory >> because the deficit has continued to come down. we now expected to go longer hard to predict exactly. >> we were headed at some. do you foresee that is being a real problem and impediment? did congress to approve of raising the debt ceiling. >> look, if there is a most basic task by congress as it is to protect the full faith and credit of the us government. i don't have to tell you and

so the president has been clear this is not something to be negotiated with, taken as a hostage. i think we have heard encouraging words from the leadership on both sides of the aisle, republican and democrat that we should not play politics with the debt limit. so all i would say is it would be deeply irresponsible for this to be the very 1st congress in our history to let us go over the cliff, to push us over that. we're certainly not going to be negotiating over the debt limit. this is something congress needs to do command they need to do it without conditions. >> well. >> thank you very much. >> coming up defense

secretary ashton carter and joint chiefs of staff chair gen. martin dempsey general martin dempsey testifying on us efforts to combat isis and us policy in the middle east. a hearing under the proposed epa for real standards and later house ways and means committee chair paul ryan discussing corporate tax reform.

>> sitting kind of front left of the chamber, if you will. when when brooks comes into the chamber he comes in the center doors sits down and is almost looking directly at. the problem is is not looking at him. his head is bowed. literally signing copies. he gets up walks down the center aisle with his cane approaches summer. totally oblivious to what happened. head down signing head down signing the copies of the speech. reaches them, •-ellipsis cane over his head and says mr. sumner, i read your speech over twice. it it is liable to my state and relatives. he looks up. brooks is blurred through his glasses because it's so close. he strikes in the top of the head with a cane. his head explodes in blood almost instantly.

>> retaining a massachusetts senator. i drove the country closer to civil war. >> last week president obama ordered the deployment of 450 additional troops to help train iraqi forces. wednesday defense secretary ashton carter and joint chiefs of staff chair general martin dempsey testifying about the us strategy for combating isis and us policy in the middle east. his his house armed services committee hearing is just under three hours. >> the committee will not

tolerate disturbances, including disturbances including verbal disruptions, photography standing all the signs. i want to thank our guests for your cooperation. your committee meets today we should acknowledge that the devil statesmen of many countries. there's also this is the way i do particularly perilous time in the us policy and strategy is inadequate. testified earlier this year that in the middle east multiple of peoples are unfolding simultaneously. struggle for power within states, contest between them, a contact and an assault on the international state system. he further argued especially in a time of global upheaval

the consequences of american disengagement is greater turmoil. it seems to me that that is what we are in fact witnessing. while president obama admitted recently that there is not a complete strategy others argue there may well be one of retrenchment and accommodation so that the us plays a lesser role in the middle east and elsewhere. us military personnel and most capable in the world, but i no of no one who thinks 450 more 450 more in iraq under current constraints will turn the tide against isis. very concerning to me recent press reports in the midst of negotiations to remove sanctions related to nuclear programs iran is continuing to pay and equip the taliban in afghanistan as part of its regional efforts to us so instability and argue assistance. when one factors in the chaos in yemen and syria by the uncertainty about the future direction of turkey the turkey the doubts about

as traditional allies such as egypt and the gulf nations as well as continuing threats to our ally israel the plain hard factions that the situation in the middle east has deteriorated substantially in the last six years. what's worse, there seems to be nothing coming from the white house to change the trajectory. we cannot expect our distinguished witnesses to answer for all the failures of the administration's approach to the middle east over the last six years. we can and should expect to hear the military component of a strategy to reverse this deteriorating trend and to protect american interests. my view is that there is no substitute for american leadership in the middle east or anywhere else that does not mean it is up to us to solve age-old disputes, but it does mean we cannot afford for our own sake to simply stand back. .. simply stand back. we must be strong, especially militarily. the yield to the ranking member.

adam smith: thank you, mr. chairman. i want to thank the secretary of defense. the joint chiefs for joining us today. and for the great work for our country. there are different battles going on. it is an overwhelming problem that is creating a huge humanitarian crisis, is that not just to the region, but to the globe. i disagree with the notion that a u.s. presence will stall the problem. i hope we would have learned that having a substantial u.s. presence in iraq and afghanistan, that -- showing up and saying we are here to solve your problems is not going to get it done. as far as the strategy is concerned, i think we have a strategy. i think what people are frustrated by if that that

strategy, the u.s. strategy, does not simply solve the problem. i have had a number of people complain to me about a lack of strategy. and i asked them, what should we do >>? i have not gotten an answer. so as we approach this, i hope that we are cautious. i think that would make it worse and i great cost to us. but we have to do is tactically use of the u.s. military to help the right people and move things in the right direction, not think that the more u.s. military we use, somehow the better the situation get. i think that would be very, very dangerous. as far as the broader strategy it is really simple on its face. we need to find cindy's who are willing -- sunnis who are

willing and able to fight isis. not just isis but if isis went away tomorrow, there would be another violent group, like there was al qaeda. it seems now isis has eclipsed al qaeda. it is not just a matter of defeating a group, it is an ideology. i want to hear from our two witnesses about our strategy, and getting those sunnis that would be willing to fight isis and present a more reasonable alternative in iraq and syria certainly but elsewhere, as well for the people over there we are still relying on the baghdad government. it is built our hope that there will be an iraqi government that is sufficiently inclusive so that the sunnis will be willing to fight for it. i just don't see that happening. starting with out my lackey -- a

l maliki, they set up a very sectarian separatist government that did everything to shove the sunnis into the arms of isis. i've heard he had a desire to change that. the problem is, the people below him do not have the desire to change that. he does not have the power to make them. the minister of interior, to change their minds. as we continue to try and do that, i fear that strategy won't work. now, i know why we do it because what's the alternative? how do we offer the sunnis a reasonable place to be if they don't have support from back that. but i think we need to start thinking about it. i think we need to put a lot of pressure on a golf allies like saudi arabia like you a you to

say, look at these are your people. the baghdad government has abandoned them. you don't want isis to be the alternative. what can you do to encourage the tribes in syria and in iraq to turn on isis? it's not easy. hope that we do not go deeper and deeper into that and making the problem worse, the bottom line is, for all of their fault and failings, the one dependable argument for groups like al qaeda and isis is to stand up and say we are defending the muslim world against western aggression. that is a message that has widespread support, far more support certainly van the violent psychopathic groups that espouse it. we cannot contribute to that. it we needed to build partnerships. it has to be locally driven, locally driven by sunnis in iraq and syria and elsewhere to eject

isis, to eject that ideology and build a better future. it is no easy task. i do look forward to testimony and questions and hopefully we can learn more about how to go about that solution. i yield back. >> without objection, your statements will be part of the record. your floor. secretary carter: all members of the committee, thank you for inviting me here. thank you also for keeping a wide perspective on the challenges and opportunities for america and its leadership around the world. just a couple of weeks ago i was in singapore, vietnam, and india and next week i will be in germany, estonia, and belgium for a nato meeting. i understand that your focus in this hearing is current development and the middle east. i will be happy to answer questions about anything else.

the middle east, it is going through a social and political turmoil with a number of crosscutting geopolitical developments. our strategy in the region is grounded in america's core national interests. that is the foundation. tailored to address specific circumstances in specific places. iraq, syria, iran, and so forth. it leverages american leadership with the efforts of a coalition of allies and partners. our core interests, for example, they drive our actions to prevent iran from acquiring nuclear weapons. similarly, they dictate that we not let up until we have destroyed isil and terrorists throughout the region that pose

a danger. [disruption] >> this meeting will be in order. sorry for the interruption please proceed. secretary carter: similarly, we should not let up until we destroy isil and terrorists throughout the region that pose danger to allies and friends. the past few weeks serve as a reminder of those terrorists, whether they are in libya, yemen , or syria, that we have "he to reach out and strike them. meanwhile, the security of israel will always be one of my top priorities. and the chairman just returned from israel this past weekend. we will continue to hone

important security relationships with our partners in the gulf bolster their security and ensure freedom of navigation. the pursuit of our nation's core interests in the region is a strategy based on tireless diplomacy, backed by formidable military power and dedicated capacity building to buttress and leverage the contributions of others and especially as noted those in the region themselves. that's why we have 35,000 forces plastered throughout the region, enabling us to strike terrorists and check iranian influence. that is why we ensure israel's continued edge and why we are working with golf partners to make them more capable of defending themselves against aggression. that isn't why we support saudi arabia and protecting their territory and people from attacks. and supporting international

efforts to prevent uranian shipments from reaching forces in yemen. that is why the united states is supporting efforts to pursue political sentiments throughout the region and to libya and syria. while i am prepared for questions related to the dod, i will like to focus on the immediate issue that i understand the committee is interested in, the u.s. led coalition's strategy to defeat isil. isil poses a threat to the u.s. and the middle east, also in europe and asia. this is because of its intentions to strike and attack this country. they must be and will be dealt a lasting defeat. the strategy to degrade and ultimately defeat i sold -- isil

draws upon the u.s. intelligence, law enforcement, diplomacy and others. the strategy and its associated military campaign also involves a global coalition, reflecting both the worldwide consensus on the need to counter this threat and practical requirement for others to do their part. the counter i sold strategy has nine so-called lines of effort reflecting the breath of this challenge and the tools needed to combat it. the first is the political one, led by the state department. in iraq, this involves voting more effective, inclusive, and multi-sectarian government. each of the other lines of effort requires success in this line, because it is the only way to create support among local forces and people.

that support being necessary to make progress against extremism. next to lines of effort are interconnected, to deny them safe haven and -- in iraq and syria. this alongside partners, it is the bombing campaign from the air, assisting forces on the ground, and training and equipping trusted local forces. i will address our militaries current execution of these two lines in a moment. i want to underscore a crucial point about our campaign in iraq and syria. it requires capable, motivated, legitimate local ground forces to hold to rain -- terrain, that is the only way to make a truly lasting defeat of this movement. the fourth line of effort is

enhancing the collection on michael of intelligence. -- of isil. this is code led i -- code led -- co-led by the state and counterterrorism center. this is to disrupt the flow of foreign fighters to and from isil, both which are critical in this networked world. and the eighth line of effort, is the humanitarian support. the department of homeland security and fbi are working together to support and protect the homeland. the ninth line of effort disrupting terrorist threats here. the effective execution of all nine of the lines of effort by the united states and the

coalition partners is plainly necessary to ensure overall success. let me turn to the execution of dod, beginning with the u.s. led campaign of airstrikes against isil. this effort has produced clear results. it has limited isil's freedom of movement and impeded it control. it has enabled key achievements for forces including the recent success of anti-isil forces that took the town -- took a local town. they are also buying time and space to carry out the second line of effort and enforcing a ground campaign. it is a work in progress. the iraqi security forces were severely degraded after an attack last june.

the combination of this unity deserters, and ghost soldiers, who are paid on the books but do not show up, have greatly diminished their capacity. however, understanding challenges does not change reality. isil's lasting defeat requires local forces prevail on the ground. we can and will continue to develop and enable local forces, because we know from experience that putting u.s. troops on the ground as a substitute for local forces will not produce enduring results. that is why dod 62 bolster forces to be capable of winning back and holding the isil controlled portions of the iraqi state. what we saw in ramadi last month was disappointing.

it illustrated the importance of capable and motivated ground forces. in the days that followed, all of us on the national security team, took a another hard look at the campaign crossed all nine line of effort. at dod, i convened my team before, during, and after my trip to the asia region. -- to prepare options are the president for enhancements to identify. in our meetings at the white house and undergone we determined that while we have the right framework, execution of the campaign should be strengthened, especially on the ground. we determined that our training efforts could be enhanced and thus are focusing on increasing participation of our training

efforts, working with the iraqi government and stressing the focus on drawing in sunni forces , which are underrepresented today. we also determined that are equally being of the security forces had proceeded to slowly. this process was an earlier, sometimes delayed by bureaucracy in baghdad and also in washington. that is why we are now expediting delivery of essential equipment and material, like anti-take -- and i think capabilities -- including travel forces. we also determined that we can enable the security divorces -- security forces with critical outreach to sunni committees -- sunni communities. my recommendation, last week the

president sent 450 personnel to establish an additional site where we can advise and assist iraqi forces. situated between ramadi and another city, this is a key location for engaging sunni tribes. sunni leaders have committed to using terra-cotta -- takata to bring in forces. we are also encouraging planning support with an operations center. we expect this move will open a new dimension in the efforts to recruit sunnis into the fight and helped the iraqis coordinate and plan a critical effort to roll back isil. secretary kerry and i have agreed to begin a process to

continually look at the campaign, starting with improving coronation across our expect the lines of effort. execution however is a two-way street and our training efforts in iraq have been slowed by a lack of trainees. we have not received enough recruits. of the 24,000 iraqi security forces that we envisioned training by this fall, we have only received enough recruits to train about 7000. that is in addition to 2000 service personnel. as i told iraqi leaders we must see a greater commitment from all parts of the iraqi government. there are positive sides. i met with the prime minister and just last week i spoke with

a member of the parliament, and they all fully under and the need to empower localized iraqi security forces and address organization and leadership failures. because of sovereign multi-sectarian iraq, it is more likely to ensure a lasting defeat of isil. the u.s. must continue to work with and through the iraqi government and all our actions. including our support of tribal forces. we need to reinforce multi-sectarianism not fuel a reversal that would make a lasting defeat of isil harder. the situation in syria is more complex, because of the lack of a legitimate government partner and competing forces there. regardless, we will continue to strike isil in syria.

we will continue to work with their neighbors to impede the flow of foreign fighters into and out of syria. the mission in syria has been challenging, but the requirement for a capable and motivated counter i sold -- counter-isil force and there isn't necessary. in conclusion, this can and must be assured. it will require assistance on everyone's part, the entire u.s. government, the entire national coalition, and most importantly the iraqi and. peoples. with your support, including your support for american troops and their families, for which i and they are ever grateful, we will achieve isil's lasting defeat. >> general dempsey, you have had

a number of interactions with this committee in the first six months of this year. that is the reason, i will not say goodbye to you, even though the date of your retirement approaches. so thank you for being here. floo y >> >> thank you chairman, it is good to be back to talk about the subject of importance and the ranking member smith is good to see you. other members i do appreciate the opportunity to be cared to discuss a increasing disorder and that military strategy it is unpredictable and increasingly complex but our goals are straightforward. we seek a of a region that is an hospitable to our enemies the pros and projects our core national interest.

i characterize the current to environment in terms of three converging sets of complexities. first, several governments are struggling for political legitimacy because they are not sufficiently pluralistic or accountable to their citizens of iraq for example, is still working to the national unity government. second the centuries-old rivalry has come to the floor weak states are less able to assert independence and a third pc rising competition between moderate elements and radical elements into that space isil and others to make for the environment that test the resolve of the security force and during stability cannot be imposed from the outside and. it must be cultivated from the inside out.

and owned by a stakeholders. and with them of partners it represents a my judgment of that average secretary carter also emphasize the military is one component of a broader strategy i don't think anyone would disagree with that. of our to lives of effort that combination of air strikes to enable the iraqi security forces than the train and equip mission. it should be considered in the aggregate the campaign

focuses on partners who were taking responsibility. this is the iraq first strategy but not the aircraft only and certainly not military. we continue to pressure syria and isil with our partners in the region. at the beginning of a nonlinear campaign to require an extended period of time to promote durable regional stability over the long term. to make sure we resources appropriately so let me think this committee will you do every day to support men and women in uniform better serving around the world. thank you very much.

>> let me follow-up and those that are security but at least 450 folks will tip the balance to make that mission successful. >> the numbers are not as significant as the location is in the heart of city territory -- sunni territory with regards to recruiting sunni fighters we have seen that in the days since we established a presence. also the anbar operations center located as another

function of those people being there to be with the anbar operation center with the iraqi forces to help them with the command and control planning and discipline. it is necessary but not sufficient to do gets in l.a. so they are motivated. >> what is the reasonable time period to check back? >> i think it is reasonable to ask midweeks because we already get the flow of the sunni fighters to go to the program we have the capacity to do that. we have unused capacity in

parts of iraq because the iraqi government has furnished us with paid recruits. now with us to turnaround. >> members have questions about isis talk about the strategy to do with the raid and influence i mentioned in my opening statement the press reports about the iranians equipping to pave the taliban who are fighting us and our allies rigo they're providing support with the civil war or whenever they call it niemen they are the primary force propping up aside in syria they have a presence in lebanon, of what is the

administration's strategy to deal with the iranian influence other they and the nuclear talks? >> thank you. iranian influence in the region is the other major challenge to our strategy in the middle east besides isil. they stand above the others. i would go back to the foundation which is checking that influence to defend our ally israel to keep our security commitments to both partners you were here in town a few weeks ago is the reason there are 35,000 u.s. forces based in the middle east to provide the foundation of security for our friends and allies in to check the iranian influence

which as you have indicated indicated, it is not just iraq is also around the region. it is another significant challenge for us and is the reason we are postured the way we are in the middle east. the chairman just got back from israel working with our partners on exactly those types of checks. >> i appreciate the fact we have polls over there but i still have not heard an approach because it seems their influence is expanding and i am not sure we're dealing with it. i yield back. >> mr. chairman the chairman and i met last week with us a the sunni leader of the iraqi parliament and what he said that surprised me as we talk about the difficulty to

get broader support from the baghdad government to shift the focus with the path up into syria where. . . is most dominant. he expressed disappointment frankly the other gulf states like saudi arabia, uae or even in turkey up north did not seem to be willing to provide much support. recorded as well, for the sunni in that area. number one, do you agree with that assessment? i intend to take him at his word. number two, white? it would seem that defeating isil is very important to saudi arabia. why aren't they doing more to help those groups that want to resist isis in that

part of iraq and syria? >> it is a critical question going back to your opening statement of other sunii end for says up against isil he also said the same thing last week when i met with him and i dq is speaking on behalf of a number of sunni political forces in western iraq who would bite to see more support than recognize that americans and westerners can meet and unable but if they have too high of a profile that is a problem. is there for this all the more reason to get more sunni involved in the fight. but the heads of state were

here in washington when we went to camp david three weeks ago and i would say this was one of the major themes of our conversations the other is checking the iranian influence which they're also concerned about they're concern about isil is genuine but their actions could be greatly strengthened that is what we talked about. >> i got all that. but why? what is your opinion working with these people why isn't it happening? >> they simply lack the capacity so we talked about building special operations forces but we look for ground forces better capable

better skills with counterterrorism and counter insurgency and so forth. >> that is the key question. sorry to interrupt. but that is where we have to go where we have this fight in the senate and the house whether or not to directly arm the kurds to skip the baghdad give permanent give it to those iran actually fighting and in some cases cases, fighting successfully. shouldn't we be shifting our focus to that to say to baghdad time is up? you have your relationship with iran, the shia militia there isn't much we can do about that you continually pushed the sunni now we have to shift our resources you mentioned 24,000. at what point do we shift

that strategy? believe me i a understand the implications, the concern is about the fracturing of iraq but as i have said before that cal has left the barn it is fractured and to make a powerful argument that it is no more. so when do we shift that strategy to build that capability of the other partners who will fight? >> sectarianism is the principal factor that progress to where iraq is and isil prime minister maliki is the sectarian manner of governance. now the prime minister that i met and the chairman may have met also, one that is

genuinely committed to behavior in a decentralized multi sectarian single state. he is dedicated to that. but it is what we are waiting to use the in the meantime we are harming the kurds and the sunni and coordination with the iraqi government that does not delay as it was a few months ago, the assistance but we still do it through the government of iraq because we still try to support the prime minister to maintain a decentralized but single unitary iraqi state. >> just one quick saying on iraq. if we just had these extremist sunii groups to fight that would be enough to challenge if you throw it

in the iranian influence and how it stirs up the region it creates a higher level problem. i want to make that observation as awful as iran is, number one it is it necessarily helping them to fight multiple wars outside of their own borders to fight in syria or iraq or yemen that could be trading. - - trading and the difference between them and isil is isil wakes up every morning nations to kill as many americans as possible. so it is a very difficult balance to make to defeat isil should be at the top of the list of concerns are as

bad as iran is to figure out to stop that i am all for it but we need to have ever number one focus not just isil but there are broader ideology that motivates people to attack as. the aside government is weakening. where do we assess the chances that assad cannot replace his troops he is losing now? is it possible because of how bad things are going? then what? >> to observations on that. first of all, we would like to see age transition where assad would disappear from the scene. his regime as another source

of fuel for extremism is eliminated, it is possible because his forces are weakened and they have taken great losses and the forces and the reserves are depleted. they are increasingly isolated in the damascus area of northwestern syria. the last thing i would say it is the best way for the syrian people to go is for him to remove himself from the scene as difficult as that would be come a new government of syria based a

moderate opposition that we have tried to build to help them strengthen themselves to retake the syrian territory. that would be a desirable path if he was removed from the scene or removed himself >> eight heroes. >> that was the purpose of my trip to the region to discuss with partners a scenario in which the regime would collapse or assad would depart. generally it is the consensus that in the near term it is more likely the regime would go over to the defensive and when its protection of the minority groups that are not governed did raise that are not

positive for the region in the near term so we're working with our partners. >> mr. "forbes". >> the country owes you a great deal of gratitude to my with just a thank you for all you have done for us and also thank you for being here today per car talking about policy and strategy in the middle east. one thing i find disconcerting is when we find individuals who call to your job in the past as secretary of defense that indicate rightly or wrongly the president's heart may not be in our military operations. is disconcerting when the president suggests we may have no winning strategy in the middle east. it is also disconcerting as a committee we are not always in the policy and strategy business but in the capability business and looking at the gaps we know

we will have a gap where we will have certain regions of the world that will not have the carrier presents. we also know it in 2007 in the navy could beat 90 percent of the of requirements the shiralee meeting 44 percent rehab testimony from the air force that they currently have the oldest and smallest airforce in the history of the air force and less than 50 percent of combat squadrons are fully combat capable. this committee on a bipartisan basis has worked hard to close the gaps to reach some of the numbers that you need. we've voted out a bill this committee voted six / two we have to pass a defense appropriations bill. but with all likelihood a

looks like a conference report will come out before the president in september. you probably know we have 12 appropriations bills the first before the president will be the defense bill and the president will have 11 days to sign it. your kind you have the last time you were here to suggest a recommendation to the president about vetoing bills. and how they actually have a real bill to look at and analyzed to build the cap can you tell us whether or not you would recommend if the president would veto that bill on a bipartisan basis out of the house? >> they do congressmen and. i will second what you said about the chairman. he has been my battle buddy a number of years through

various jobs and i am very much going to miss him. he has been terrific for your absolutely right about resources. we cannot continue to be the world's finest fighting force if we don't get a budget picture or horizon in front of us. i changed my view from the last time i saw you. i fervently hope in this is not something i am skilled in and i will not be part of the deliberations but i fervently hope that everybody can come together. >> and don't want to cut you off but here is my porridge we don't always get to pick the bills. but i am saying if the bill comes this essentially the same that passed the house would recommend to the

president he signed the bill? >> he has already said he will veto the bill. >> i masking for your recommendation for you would recommend he veto the bill? >> we would recommend that? let me ask you had you done an analysis of the risk that would put to national defense the result is you get a least $25 billion. >> with those risks during one year at this time with budgeting. >> i know you are asking but that herky-jerky approach to the budget is manager really harmful. >> mr. secretary of $25 million short if that bill fails be was still take that risk? and that would put us at a place where we would be below the minimum edge of what we need for national security. and i will just and by

saying that i think it is unimaginable we would send 450 troops into harm's way and still look their families in the eye to tell them we would veto a bill to give them the resources they need. i yield back. >> i would just like to reiterate i have not changed my view redoubled five-year defense budget we have a strategy that is a long-term strategy we have the very people that the congressman referred to who has careers there want to know their future and the business of the budget one year at a time, i am not blaming anybody a i realize it is collective that the country needs to rise up to get it together it is very damaging to move the institution i am responsible for. also i travel around the world and this looks

terrible. it gives the appearance we are diminishing ourselves because we cannot come to gather with the budget year in and year out. so i continue to hope and believe we can come together behind the aggrieved budget with the multi-year horizon to allow us to plan and execute programs to recruit and retain people in a way that i think we need to do. >> i don't disagree with anything you just said when we vote is yes or no and that is the point. yes or no. that is what is concerning to me. >> thank you mr. chairman for being here and general dempsey eye gravy appreciate your service in but you have contributed. obviously there is

controversy about your response by appreciate the of fact it is direct and we have to work harder on it. thank you very much. i want to first ask about your first critical eye of the firth you say is political but my concern is with limited security that we have i am not sure the state department, even if they have the resources if they're really able to do their job? i would like you to respond to that and how we communicate and if we do that effectively. the third thing briefly, the issue about resources you

mentioned we need to expedite delivery of equipment and river not doing a good job with that. why did that take so long? there are issues around baghdad even our own policies were returning from that so it doesn't happen in the future? >> on the political front which means trying to use support the prime minister and the government of iraq to govern in a way to collect and support the kurds from the shiites and unaffiliated or directly supported by iran, to create those security forces that

can defeat isil to turn iraq into a place where people can live in a decent way coming is the essentials basket every need to live that which is why secretary carrier is back in town and we are reading specifically to make sure those lines of effort are synchronized messaging. i just make one note about messaging an area that we are unnecessarily humbling ourselves. we had a web site with centcom that describe the facts of the campaign and what was going to and for the audience in the region so they could learn and tell the truth but we were denied the authority to operate that and told that was not

appropriate for the department of defense to be doing i have that authority. >> tonight from? >> by congress. with respect with the situation there is plenty of responsibility to pass around i would not put all on iraqis tore us or congress or the pentagon but you pass the money during 2015 the appropriations bill in december the money came out in january then there was it your bill the requirement will be spent 25%. we met that requirement.

but it was limiting for was building training sites what we did do in the meantime is reached into the other pots that we have. retried to fill the gap in the gap is closed now but it wasn't all on the iraqi side although there were an impediment the government did not want us to do that but we are back on our feet now. i will not excuse what we should have. >> on the resources that the state department will have and the back of security and want to be sure we get a full answer on that. >> i can provide that. >> we would be very

interested to tell you who denied dissent, that ability to put out the facts and what basis? we have worked for some years to update some of those outdated restrictions on these sorts of issues and we are very interested to fix this problem if it is part of their problem with this branch of government. ask your lawyer. it is very important. >> thank you gentlemen for being here today. i was looking at the separation sheet for the hearing and it says this is a reference'' the policy strategy of the middle east and i think we concluded we don't have a strategy a the commander-in-chief said we didn't so i am a little bit mystified what we're doing here since don't have a strategy i've looked at the

situation in iraq i was justin baghdad a couple months ago to talk to our troops, about 3,000 and they are frustrated because they don't understand what the strategy is. now we will send for her june 50 more -- more that they don't understand? looking at the chairman we have been there over and over again to watch the situation changed and at one point we thought we we're doing well but then we saw isis, across the border this city would start to fall and baghdad was threatened. my question is, where our

real in iraq today? are we winning? losing? stalemate? what is it today? general? >> i never volunteer. i have been in the army a longtime udall volunteers. >> we volunteer that all the time. >> we do the logistics'. [laughter] >> where are we? >> what is going on? >> and let's talk about the personal pronoun we've. if you ask is united states winning that is the wrong question. >> that is what i am asking we have soldiers and a commitment ari we the united states the free world

western allies winning or losing? >> united states military campaign is supportive of coalition of the iraqi government we are on task to deliver what we have committed witches' security forces including a the sunni tribes to deliver those capabilities to confront isil inside they're sovereign territory. this is a far different approach than if we would decide it is our responsibility to defeat isil inside of iraq but the enduring victory over isil can only be accomplished by those nations and stakeholders of the region that has more to gain or lose and we do. >> so. [laughter] that would not be of stalemates or a quagmire?

>> this is what it means you've heard stamina crystal when he was on active duty about confronting al qaeda as a network to defeat that we have to be a network plan he built the exclusive network and data so we're trying to do with iraq i use a really bad example but most of you probably know on the surface it looks as if fully pads are free floating but they are tied to a network of vegetation we try to build a network that would disabled those regional stakeholders' because that is the only way it can be resolved. >> rabil except that answer but it underscores were restarted you articulated a piece that is sort of a

strategy with the network but i think we need to clearly articulate a strategy where we would do in cooperation with or in alliance with friends and allies. the arab states are increasingly engaged they fly strikes but we hear reports they are without success. we have some work to do and we should start with that strategy. i yield back. >> thank you for your testimony and for your service. is specially with you, obviously a with your experience will take with you when that time comes. for what you have accomplished and for your service.

mr. secretary can you convince me and the american people that our strategy in iraq right now trying to hold that country together is right with the iraqi people with the soldiers said they hope to train that day to mention the sectarian of retrying to do artificially hold to gather to go into a situation with

the artificial effort to to be better effort that had a more realistic for what local people what to defeat isil beyond that the president's decision but how do we move this to a strategy with the ranking member and they are disappointed. . . actions disconnected from a larger strategic effort.

gen. dempsey: thank you congressman. some of your comments echo the questions mr. kline was putting. we very much appreciate it when you visit our people. it is important they have an explanation of what our strategy is. that the oversight committee have an explanation of what strategy is. with respect to iraq, the critical ingredient is strengthening local forces. we believe that is possible. it will take some time. the american role in that to train, equip enable, and assist those forces once they are built. that is the american role in a coalition.