i don't see it. i've been fighting the tsa on this since day one when i got into congress and i continue to beat the drum and educate people and highlight this. you've got to really love why is this just the tsa and airport uses these machines. there was such great technology and it works so well, why is it used everywhere else? because it doesn't work. yet somebody went in there and sold them. after critical of mr. sharecropper who after he left, one of the salesmen there is an ms. daschle who joined in and the bipartisan way and sold the american role a bunch of transport ..

and what else on a broader scale will your committee be doing in the next year? >> part of it, go ahead, sorry. >> real quick. i'm one of those contractors in software engineering you're talking about. i had the opportunity to attend the second congressional

hackathon. i asked this question of congressman mccarthy. i said when w we find issues abroad waste and abuse on our data servers, where do they go in congress to address those issues? he said take it to him directly. i followed up and is policy director is going to host a disclosure session for myself. i understand that that's the type of session that perhaps someone from your committee for office would like to attend. how exactly or who exactly is the person that i would reach out to our have the policy director from mccarthy reach out to come to attend a? >> thank you. thanks for doing that. gop oversight is the twitter handle. you can find this on a variety of different things. go find our website from there. once you get to please send us that information. it is involved in every department and agency. there's no one who doesn't have an it department. we did something as the

oversight committee because we are overreaching. we don't want to do with all these different silos. we created a subcommittee on it. congressman from texas is the one that spearheaded the. troy stock is the staff director for the. somehow we'll get that information detroit but we would love to have that information. as it relates to homeland security, some things need to be placed out. i have been encouraging out the appropriators to put more money into the secret service to do with friends old and mock white house and doing those types of things. but a lot of what needs to happen there, to have the authorization. congress last appropriated more money to the secret service and the president asked for but they have a huge hiring problems are i can't get into and solve that for them. they can't just solve it overnight. the problem is they are bleeding more people than they are able to hire up. then when we highlighted, mark meadows did a good job of finding out yet some people who

have not completed their security clearance process and they were put on the front line. you can't put a secret service agent or officer at work when they haven't completed their security clearance. that's what we've been doing. it's a constant battle with homeland security. money is not going to solve all of these issues. good management will, and write nothing homeland as much as anybody is suffering. >> please join me in thanking chairman chaffetz for being here today. [applause] >> i've got to bow out of your butt thank you, you've been very kind and i appreciate for hearing me out. i really do appreciate it. [inaudible conversations]

>> you can watch this program again on our website if you missed any of the. go to c-span.org. congressman chaffetz is on his way back to capitol hill where he is chairing a drink on executive branch oversight and information access. he will question homeland security justice and state securitsecurity justice and stae departments about their failure to produce documents requested by the committee. c-span3 will be covering about and you can watch that live at the top of the our 10 a.m. eastern again on c-span3. the house small business committee held a second day of hearings into mismanagement. had the agency will testify at 11 a.m. eastern time. the american petroleum institute president and ceo jack gerard now talks about those dates of

energy in america. he listed the top priorities of oil and natural gas industry beauties of the policy decisions we make today will determine our future in the world energy market. he spoke to the organization on tuesday. >> good afternoon all again. i hope everybody enjoyed your lunch. i begin welcome to the 2016 state of american energy presentation. as we all know energies fundamental to our society standard of living, to help the economy and it's a critical part of our national security. as this new year begins, including the presidential elections and campaign are in full swing, this year state of american energy report which is on the table in front of you at your seats focuses on the critical energy policy choices ahead. the presentation today will focus on the importance of getting it right when it comes to our energy future and the policies that will drive that. it's our hope that this

information of the presentation today will help drive a thoughtful discussion about policy both now and into the future for the campaign said. me remind you one last time, you all have questions cards, if you have questions related to jack's presentation. let me introduce jack gerard, apis president and ceo. [applause] >> good afternoon, ladies and gentlemen. happy new year to each of you. as you can tell my voice is a little scratch today's i hope we get through this well. many of you know-number of children, eight, two of those are 10 year old adopted twin to come home everyday from school and heaven knows what they brought home, but i haven't slept like to blame my 10 year old about what happened today for better or for worse. welcome and thank you for joining us this report 2016 state of american energy report. as was mentioned at the time of

year for us all to come together to talk about the role of energy and from our vantage point specifically oil and natural gas. with a roomful of vips like we have here today i do want to take time to introduce all of you, knowing that in washington everybody is a vip, but here i do have two tables of our partners that i would just like to make mention of before i start with my prepared remarks. i would ask you to stand very quickly and acknowledged the crowd. versus tom gibson, president and ceo of the american iron and steel institute. [applause] >> next to tom, hold your applause after we finish this table at a time. james baldwin, president of bricklayers and allied craftsmen. next to james is sean mccarthy, president of north america's building trade unions, afl-cio. next to sean is an important member alan armstrong, president and ceo of williams company. thank you for being here.

next to alan s. are good friend, don harris, director of office of economic impact and diversity department of energy. and then our good friend and admiral don lauren, or strategic advisor for veterans for energy. peter, the president ceo of the american road transportation association and is thrilled that he got a highway bill done, is that right, peter? next to peter s. our long-standing border apologizing, american association of energy. and our friend barry russell coeds the ita. let's give them a round of applause. [applause] our head table you've all met louis so let me go to florida. floyd is a president of the asian pacific american institute for congressional studies. randall, president of the national association ocean industries association.

next is the president of black women's agenda. next is karen, president of the small business council. then we have rob underwood, president of petroleum marketers association and then tom and ceo of the american wind energy association. , as well as which talk about today and i said i was good to take on the wind energy association so he is listening very content as you can tell. next is dawn, president of the interstate natural gas association of america. then our good friend eric dean, international association of bridge structural ornamental and reinforcing iron workers. next is antiblack president of the association of oil pipelines. thank you paul. let's give them a round of applause. [applause] before i turned to my prepared remarks i would also like to acknowledge a couple dozen

veterans that we have in our room today. those that lead our efforts what we call that's for energy group and the like them all to stand up think they're all over in this area. could you please stand for us? would greatly appreciate -- [applause] >> all you have to do is read the newspaper headlines today and see what's going on around the world. it's a very soberin sobering tho go as we give thanks to these veterans and others what they've been doing is working hard on issues of national security associate with energy security. want to get a special shout out to you, and thank you for your service, and any other veterans who happened to be in the room with us today. as louis mentioned address each a copy of issues report which captures america's current energy reality and potential to the lens of seven u.s. regions, the east, southeast, gulf coast, pacific arctic, mountain west

and central. this year the report emphasizes the national scope of the oil and natural gas industry and identifies the common challenges which we face. and the important leadership role played by the states in the transition of our nation away from the decades of energy scarcity and uncertainty towards an era of energy abundance and security. the report is a snapshot of energy policy as it is today, and has it could and should be in the future. in broad terms the state of american energy is strong, even during this time of what we call we align it. the united states is more energy self sufficient and has transitioned from air of energy scarcity independence into a global energy leader. today the global energy world is

realigning with united states poised to remain a dominant global player, something that was unforeseen just a decade ago. the energy policy decisions we make today will determine whether this nation remains a positive stabilizing force in the world energy market, and whether consumers can continue to count on reliable, affordable and abundant domestically produced energy for years to come. domestically the 21st century energy american energy renaissance which has greater did an unprecedented surplus of energy has significantly lowered energy costs for american consumers and delivered a sizable list towards u.s. economy. for example, the energy information administration estimates that the american consumers have now saved on

average $700 in 2015 on transportation fuel costs alone. as a result of this abundant energy, and ihs no estimate of the average u.s. income was $1200 higher in 2012 given lower home energy costs are about the unconventional development. ihs estimated the figure could reach as much as $3500 a year per family by 2025. even during this period of the realignment, the oil and gas industry remains an important source of well-paying jobs for millions of americans. america's oil and natural gas industry supports approximately 1.2 trillion in u.s. gross domestic product. that's the equivalent of the size of the mexican economy, according to the world bank. fortunately, we know how to

bring about america's brighter energy future which means lower cost for american consumers, cleaner environment and american energy leadership. because that is today's reality here in the united states. we call it the u.s. model. simultaneously the united states is leading the world in energy production. we have one of the strongest western economies, and we are leading the world in reducing greenhouse gas emissions, i trifecta of success unmatched by any other nation in the world. our nation's success as a global energy production and carbon reduction later is rooted in the united states unique federal system which allows the states of an active and semiautonomous actor when it comes out its energy resources are developed. our system of government working

in combination with our long tradition of entrepreneurship and distinctive innovative spirit has led to world leading reductions in carbon emissions now at near 20 year lows. as the state of american energy report details, the states demonstrate time and again that the best way forward on energy policy is not through legislative mandate, overreaching regulatory oversight, or executive decree, but by using facts in what we call the u.s. model. including what's worked and what's best for our energy future. the economy, consumers and the environment as our guiding principles. that states demonstrate how bipartisan compromise, consensus building and collaboration with industry can lead to significant increases in energy production and environmental protection. nationally according to the latest epa data, in 2013

greenhouse gas emissions were 9% below 2005 levels, even as our population, energy use and gross domestic product have increased, proof that the u.s. model is the most effective way to better protect the environment while growing the economy and increasing our energy production. our nation's emissions are lower as result of greater use of clean, burning natural gas. and according to a study by the associates, the oil and natural gas industry itself reduced its own greenhouse gas emissions why the equivalent of 55.5 million metric tons of co2 in 2014, all while dramatically increasing our production right here at home. further and we ended have invested $90 billion in zero and

low carbon emitting technologies from 2000-2014, almost as much as the entire federal government's investment of $110 million. we also know what the difference between pro energy development and anti-energy development will mean to our nations economy, businesses, families, consumers and for our environment. last year a study by mckinsey found that with the right energy policies america's oil and natural gas industry can support as many as an additional 1 million american jobs in 2025, and as many as 2.3 million additional jobs by 2035. the study also looked at the real-world economic difference between pro-development energy policies and anti-develop an energy policy is espoused by some. specifically, over the next 20

years pro-development policies could queue at your local, state and federal government revenue by more than $1 trillion. 1 trillion, and boost household discretionary income by as much as $508 billion. further come average household energy income expenses galore by approximately $360 per year at the same time. conversely, national energy policies that discourage energy development and constrain u.s. refiners could lead to a cumulativcumulativ e decrease of 500 billion in government revenue from 2016-2035 and increased by 242, the cost of energy annually with the average household. because according to the eia, fossil fuels will account for

80% of u.s. energy consumption through 2040. and the agency estimates that even under the best case scenario or alternative fuel use, fossil fuels will still account for 78% of our energy needs. this is just another data point in support of the long-standing tenet of energy policy which is held by most economists, academics, and government analysts. fossil fuels will remain the foundation upon which our modern society rests for many decades to come. encouragingly, there is growing support within congress for the u.s. model as would like to call it, this style of energy policies. as many industrial are well aware, just last month as congress was finishing the people's business before recess, we witnessed a rare glimpse of

bipartisanship and forward-looking energy policy on the national level with the lifting of the 40 year ban on crude oil exports. lifting the ban is a win for american consumers and economy. according to recent study which found that lifting this band could save consumers as much as 5.8 billion per year on fuel costs. congress' action was a victory of long-term vision, and fact-based policymaking over political ideology and ideological dogma. still, and in spite of all these facts, and a wealth of other evidence to the contrary, the are an ardent you who continue to believe that keeping our nation's abundant energy resources in the ground is a credible and viable national energy strategy. there are some in government who

will advance their favorite forms of energy to the dubious and untested and, heedless of the potential harm that could cost to our economy or how much cost would impose on consumers, or how it could impede continued environmental improvement. for example, ignoring clear consumer preference and in spite of current record levels of production and refining, epa continues to push the renewable fuel standard. a relic of our nation's era of energy scarcity and uncertainty. a 2014 congressional budget office study projected that the rfs could raise the cost of fuel prices because quote given the design of the rfs, the cost of which encouraging additional sales of high ethanol fuel falls on producers and consumers of gasoline and diesel, end quote. what's more there is very little

consumer demand for these high ethanol fuels. according to the eia the annual amount of e-85 that was sold in 2014 is less than 1% of the annual gasoline demand. the reason is simple. ethanol as less energy dense than gasoline and as a result provides fewer miles per gallon. the laudable goals of the rfs less dependent on imported fuel, lower gasoline prices and reduced emissions have largely been achieved through industry innovation and market forces. it is well past time that weekend or significantly amended through renewable fuel standard it is a relic of our nation's era of energy dependence that poses a direct threat to our nations economy, risks reversal of important environmental improvements, as concluded by the national academy of sciences, and could raise energy

costs for american consumers. another example is the clean power plan which under the guise of environmental protection does, in fact, seek to pick winners and losers in the energy market, not based on market conditions, consumer preference, or economic reality. the reality is that the approach of the rule is to proposed regulation based solution for a problem that is already being successfully addressed in the marketplace. and the treatment of natural gas is a good example. the administration routinely acknowledges a greater use of natural gas and power generation has not only led to greater greenhouse gas emission reductions than any other nation, but that it has been a quote game changer, end quote come in reducing other air pollution. and the president rightly highlights that we have for more than 100 years worth of natural

gas abundance. yet, in releasing the clean power plan last summer, the white house talking points bragged, quote, the rush to natural gas is illuminated, end quote. presumably a means to spur more renewable energy. in 2015 for several months in which natural gas produced more electricity than any other fuel for the first time in u.s. history. by no coincidence that period also saw the lowest carbon emissions from the power sector. and far from reducing opportunity or wind and solar power, natural gas provides the reliable base load power necessary to integrate those intermittent sources. states and electric utilities are required to provide clean reliable and affordable energy. natural gas will continue to provide all three with or

without the clean power plan. more broadly, however, the clean power plan but for the drive up costs for consumers who live in regions of the country who pay more than they should for energy they need because of the growing strain on our energy infrastructure. the eia estimated that england residents paid up to 69% more for their electricity than the national average just last winter. and the industrial sector has paid up to 90% more for its electricity than the national average. in part because of infrastructure limitations. much of these limitations are the result of a dangerous combination of outdated policies and it only -- and anti-fossil fuels technology that discourages american companies from investing in pipelines, marine terminals and other

needed infrastructure. emboldened by their ability to stop the keystone xl pipeline, anti-fossil fuels advocates have set their sights on all energy infrastructure projects. their arguments against this energy infrastructure project are not based on economic merit or on true environmental impact. and the decision to reject the pipeline simply ignores the pipelines many benefits, including strengthening ties to one of our closest trading allies, canada. the creation of thousands of well-paying jobs, the generation of millions of local, state and federal tax revenue, and a reduction in greenhouse gas emissions in developing canadian oil sands and have been achieved to date. keystone is a good example how facts can be stubborn things that take little heed of political ideology or preconceived notions.

in this case the stated reason for denying the keystone xl pipeline was environmental protection. however, that was contradicted by the administrations own state department report which concluded that after seven long years and five comprehensive reports that the denial of this pipeline would actually increase carbon emissions by 42% due to an increase in truck, rail, and barge traffic via the transport oil sands the gulf coast oil refineries. the oil is on its way to the marketplace through alternative means, and as they concluded prior to that decision, it has increased carbon emissions 42% as a result of that unfortunate denial. the demonization of the keystone xl pipeline remains a powerful, cautionary tale of the dangers

of energy policy driven by ideology rather than economic reality. and has a chilling effect on expansion efforts for our nation's energy infrastructure. that's not just bad national energy policy. it is also bad news for our nation's economy. according to an ihs study, the amount of energy sector infrastructure needed through the middle of next decade could spur 1.15 trillion in private capital investment. 1.15 trillion in private capital investment. ihs also projects infrastructure investment to support more than 1.1 million american jobs nationally, and contribute 120 billion to u.s. gross domestic product, and increase revenues to government by more than 27 billion through 2025. and, finally, another example of

why policy matters when it comes to energy is the glaring difference between energy production on state-controlled and federally controlled lands. federal data showed crude oil production remains flat between 2009-2014 on federally controlled land on natural gas production declined 35%. by contrast, on private and state lands were development does not need permission from the federal government, production increased 88% for crude and 43% for natural gas. these dramatically different trentrendlines are a function of political ideology, not geology. all three examples underscore not only our energy policy affects energy production, but also how changes in energy production at the lives and livelihoods of us all.

and that highlights a simplified that is often lost in the energy policy debate, but energy from fossil fuels is in for decades to come will be fundamental to our society. and as a result of the policies we put in place in that area will have repercussions well beyond the well head, the pumping station or the refineries. they have real-world impacts on american families, on small businesses come on our environment and on our communities. as the president said last full year in office begins, we hope that he will take note of and help foster what we like to call the u.s. model. we hope that you will note that the already heavy regulatory burden, almost 100 pending regulations on oil and gas industry, and counting, upon the oil and gas industry can hinder rather than advance what the

jokes to be one of the administrations defining legacies, environmental improvement. and while the outcome of november's election is far from clear, it is certain that no matter who becomes the 45th president of the united states, he or she will take a nation that is first in oil and natural gas production, first in refining ever cleaner fuels, in first in reducing greenhouse gas emissions. they will also have a choice to continue the trend its path several of energy abundance, global leadership and domestic economic opportunity and environmental improvement or to dismantle the progress we have made by implementing policies born from ideology and onboard to science or to facts. and if the past is indeed prologue as the november elections approach, our nation's civil discourse on our most pressing national issues will

likely include energy. our vote for energy vote education campaign will keep the national energy discussion hopefully above the hyperpartisanship of a presidential election year. vote for energy focuses on what unites us as a nation and seeks to drive the national energy discussion that focused on facts that are smart, responsible, pro-energy policies and what they mean for american jobs come and stronger economy, a better environment, and continued global energy leadership. it will focus on the facts, will focus on the future, and empower voters with information they need to understand where those who seek to lead us stand on america's energy future. vote for energy after industry central message is straightforward. energy is fundamental to our

society, and thanks to american innovation and entrepreneurial spirit, the united states stands as the world's leader in energy production and environmental improvement, and will remain a global energy leader only if we get our nation's energy policy right today and tomorrow. there will be those whose rhetoric and contributions to the national energy policy conversation consists only of personal attacks, misinformation and political polemics as an attempt to reduce the discussion to a set of false choices. we will instead work toward improving realistic solutions as demonstrated by the facts of the u.s. model. in this new year let us all resolve to work together toward a shared vision of a world where everyone, without regard to zip code, state, nation, continent or hemisphere, access to

reliable, safe, and affordable energy. and it will keep the energy conversation focused on what's most important, energies role in increasing american prosperity, long-term job creation and economic opportunity coupled with environmental improvements and enhanced national security. our goal is to get the positive momentum of the last few years and in the politicalization of energy for patty partisan ends. we want to foster national energy policy discussion the remains above the partisan fray and immune from the misinformation campaign deployed by critics of fossil fuels. because the reality is that no single source of energy will alone solve our problems or is the source of all of our woes. will over no group holds all the answers other solutions to the challenges that we face. what history has taught us is that american, america,

prosperous most when we work together for the common good. i continue to believe and hope that all of us ultimately have the same goal, to leave our community, our nation and our world better than we found it for the next generation. they deserve nothing less than our collective best efforts to that end, into a counting on us to put into place realistic policies to enhance our nation's energy security and national security, while at the same time promoting job creation and responsible environmental stewardship, economic growth and status as a global energy leader. thank you very much for your attention and i'm happy to take a few questions. thank you very much. [applause] >> i think you held up pretty

well spent thanks, luis. >> you got a little stronger actually. reminder that anyone has a card so you have a question please give them to us. jacket, first question is, what is abi's top legislative priority now that the oil export ban has been lifted speak with the oil export ban was one of many priorities for us. let me suggest as i touched on today the renewable fuel standard is another current policy that needs to be significant ended and repealed or i expect as we work with our membership but that's another issue we will focus on. i can't over emphasize how important these infrastructure issues are. as a look at my partners with a great opportunity here to step beyond as i mentioned earlier the projected investment is $1.15 trillion. that's all private capital. i don't know of any other

project, with all due respect to peter and highway bill, that's a big number. you couple this investment with the highway bill and others and you can see a real job opportunity for the country, at the same time we're producing moving a lot of energy to have great benefit to consumers. we were talking earlier about some of the issues going up through new england. consumers if they are paying 69% higher than the national average. why? because we can't get the natural gas there. let's put people to work, build the pipeline, safe pipelines, we transport everything we've move 99.999% of it safely. we got a good record. we are committed to that. we can all do this together. >> jack, i have two questions that can tie into one another related to saudi arabia in the middle east and iran. what are your thoughts on what happens if the political leadership false in saudi arabia? and more over what happens to

reliability of energy supplies that impact on american consumers? >> it's a great question. all you have to do is take a look at what's been taking place the last few days. the one thing i would note that all the analysts are now talking about, look at what is happening to the price of crude oil. it's been moving slightly but there is not limited update. 10 years ago, and i believe the market show, it would've been significant movement in the price of oil with the unrest that is taking place today. why is that? because the united states has come in as a major player. things like the crude export ban being lifted put us in a position where the geopolitics and the energy production around the world will never be the same, unless we restrict ourselves. many believed that what you see is the epicenter of power for oil and gas production is now shifting to the united states. i don't have to go back through with all of you the history of

what's happened over the last 10, 20, 30 years. so i think we are all hopeful we can get as much stability as we get out of those oil-producing nations. i don't think any of us can predict what's going to happen what i will suggest as well as domestically when you to be focused at home. we need to look at lng exports as opportunities, not only for our own domestic production creating jobs, but think about what i can do a round the world if we took cleaner burning natural gas and started to displace wood and some of the developing world for those that are today without energy, we have 1.5 billion people in more who don't have energy. if we talk about income inequality, we talk about a moral imperative. i believe we should help people get educated. we should help people rise to standard of living where they can enter a reasonable quality of life. energy is key to all of that.

>> with a low prices of both natural gas and gasoline will be difficult to fire up the public about these energy issues? >> i don't think so because i think the public will be a what we may call for traditional oil and gas producing areas have started to get a good taste of what this means. what this 2-dollar-gallon gasoline means versus $4 a gallon gasoline includes what does a new jobs created in pennsylvania that pays over $90,000 a year mean to those who are out there producing natural gas? if you look up the job creation engine of the oil and gas industry, though we are going through difficult we align it even as we speak, longer-term prospects are very bright. we can build the infrastructure. we can make the united states truly the energy power of the world. and if we do that i believe the public will get interested. if you look at survey research today, three quarters of the american public says yes, we want those jobs. yes, we want to produce more oil

and natural gas right here at home. and then when they begin to understand what we like to call the u.s. model, that cleaner burning natural gas is made the united states the leader in carbon reductions in the world. we encourage the president to go to paris and talk about our proven case study right here at home. it would have a very different dynamic to a. we could start showing improvement in environmental protection at the same time we great these well-paying jobs. i believe more the american public understands, the more engaged will be, and i think energy will be a big issue in 2016. >> how to best support the communities that have suffered or the oil and gas industry downturn that have been negatively economically impacted? >> i think the first thing i did is we need to realize that all the market-driven dynamics that we are experiencing today, the

worst thing we can do is get a government entity in and try to manipulate. the best opportunities long range, long-term visionary policies like lifting the ban on crude oil exports, first think i think went out last week or earlier this week. those of the opportunities we need. we're not asking for government intervention. were asking for the opportunity to compete on a global scale. the initiative to lift the ban on exports from iran and allowed them access to the global marketplace. we finally allowed the u.s. producers to do the same thing. just let us compete what we can do at home is just like we demonstrate over the last five or six years what we have created hundreds of thousands of well-paying jobs, is let the market work and let's do what the signs and the data. the science today shows that the u.s. leads the world in carbon emission reductions. why? because we producing vast

volumes of cleaner burning natural gas which has now become economic and consumers are benefiting to the tune of $1200 a family per year. that's what we need for society. as an opportunity to compete and to provide those jobs in the energy that's new to do with that, louis, thank you very much. thanks for the easy question. they are always appreciated. thank you for being here today. we greatly appreciate it. thank you. [applause] [inaudible conversations] [inaudible conversations]

>> cq roll call is reporting senator richard shelby who chairs and a profusion subcommittee has asked attorney general loretta lynch to appear before his panel on january 282 after questions about president obama's executive action on guns. let me be clear from he said, i will not sit idly by and allow the department to the unlawful unconstitutional actions the road wednesday in a letter to lynchburg you can read more by going to cq roll call's -- cq roll call.com. the house small business committee held executive hearings into ms. nash at the small business administration. the head of the agency will testify, live coverage at 11 eastern on c-span2. yesterday the committee held its first hearing into sba mismanagement and her friend inspector general of the general accountability office. here is that house small business committee hearing.

i think they are still coming in. good morning. i call the committee hearing appropriately titled attention needed: mismanagement at the sba to order. i also want to welcome back a frequent witness before the committee, bill shear of the gao. since 1946, federal agencies have been required to operate using rational decisionmaking procedures. that's the expectation of taxpayers, whether it's the law or not. congress made that sensible idea and expectation of taxpayers the law when it enacted the government performance and review act back in 1993. to operate in the manner demanded by statute, agencies must make extensive efforts that strategic planning and actually take that planning out.

today, the committee will hear an assessment from gao on the sba's efforts to deliver effective assistance to entrepreneurs in an efficient manner. with a $100 billion loan portfolio, the taxpayer has too much invested in the agency to allow mismanagement to continue. barriers to effective and efficient operation of the sba include the failure to address longstanding management challenges, failure to develop human capital plan, filter institute sound acquisition methods, failure to revise outdated policy directives, and failure to assess the structure of the agency, among other things. the gao's conclusions are clear, the sba needs a complete overhaul of its operations. finding a resolution to these problems will not be easy. gao has taken the first step, identifying the problems at the sba.

the next steps are significantly harder, meaningful solutions usually are. problems that have existed for decades will not be resolved overnight. it will take the dedicated effort of agency officials, and the watchful eye of those on this committee, to right these wrongs. this committee's efforts will not end with the review of this report. we will convene multiple hearings over the next few months to examine sba programs and their implementation by various branches of the agency. the hearings may reveal other barriers to efficient and effective operation of the sba that will require further examination by this committee and gao. if the report examined today, subsequent hearings, investigations by the committee, and additional reports by gao continue to reveal problems that the administration will not fix, the committee will not hesitate to take legislative action. the sba plays a significant role

in providing assistance to america's entrepreneurs. the problems that have festered far too long must end so that small businesses and taxpayers can rely on an effective and efficient sba. the taxpayers of this country deserve no less. i would now like to yield to the ranking member for her opening statement. >> thank you, mr. chairman. of the many responsibilities this committee has, one of our most important is overseeing and examining the small business administration. it is absolutely critical that we conduct this oversight. doing so ensures that tax dollars are spent efficiently and appropriately. gao has been held long-term partner of this committee is oversight work, and has helped us identify and solve a wide range of issues affecting the

agency's programs. today's hearing, however, does not focus on a particular program or initiative at the sba. rather, it focuses on the overall management and strategic vision of the agency. i along with prior chairman gray requested this broad view of the sba. g8 global reported several key findings, many of which site issues already raised by the sba's own inspector general over the last decade. at the top of the list are organizational matters which are critical today due to the ability to serve small businesses. gao found the agency structure to be overly complex and workforce planning was not up to date. such redundancies and deficiencies can ultimately to poor service to entrepreneurs.

in addition, gao found that risk management and i.t. security are being improperly administered. such core activities and internal controls are central to the functioning of esea, and without adherence to furthering accept the standards agency is subjecting itself to unnecessary risk. perhaps the most troubling issues raised by the gao come in two areas, procedural guidance and program evaluation. with regard to procedural guidance, gao reported that as of march 2015 sba had determined that 74 of its 165 standards operating procedures revised, needed to be revised comment 31 need to be counseled. an additional nine needed to be issued. without guidance it is impossible for program or dispense or even the sba to know

how a program should operate. this mix it difficult for small firms to work with the agency, given that these sops are not issued pursuant to common will making, frustrate those that want greater transparency in how government works. the report shows that sba has some work to do in improving its overall management of the agency. with that said i was glad to see sba has agreed with nearly all of the gao's recommendations and has begun to take action to address these matters. today i'm looking forward to hearing from gao about whether or not they believe sba is following through on this committee. this committee stands ready to examine the sba and its program so that small businesses and taxpayers benefit more broadly. it is a vital role and one i want to ask all committee members to take part in.

i look forward to hearing the gao's testimony and i think mr. bill scheer and his team for the continued work on our behalf. without, mr. chairman, i yield back. >> thank you very much. we would ask committee members made opening statements prepared if they would send them for the record. and just to explain very briefly our roles here at a time limit which mr. shear is very similar with i'm sure. operate under the five minute rule where the witnesses get five is to testify. industries will give you a little bit longer than that if you need it. since there's only one witness we cannot have four. that doesn't mean we want you to take 20 minutes but if you need more time that's okay and we will ourselves to five minutes at least in the first round and then determine we think it's -- the red light will come on and we'll let you go although that further than that as i indicated. and out a brief introduction.

mr. shear who is our witness, director of unnatural markets and committed investment team at the government accountability office, most of us refer to as the gao around you. and we look forward to your testimony and you are recognized for five minutes, or as i say, a little bit longer. >> thank you. i'll keep it under five minutes. chairman chabot, ranking member velazquez, and members of the committee, i am pleased to be here this morning to discuss our management review of the small business administration. my testimony is based on our september 2015 report and related updates on the status of recommendations. rather than focusing on individual sba programs, we conducted a comprehensive assessment of sba structure, processes and systems, including its efforts to address its management challenges. in september we reported as

being at not resolve many of its long-standing management challenges due to a lack of sustained priority attention over time. many of the management challenges that we and the sba office of inspector general had identified over the years remained, including some related to programs implementation and oversight, contracting, human capital, and it. sba has generally agreed with prior gao recommendations that were designed to address these issues. as we stated in our report the agency had made limited progress in addressing most of these recommendations, but had recently begun to take some steps to address them. for example, as of july 2015, sba have implemented 46 recommendations from a 2010 gao report on its 8(a) business development program. in our report we made a new recommendations designed to

improve sba's program evaluations, strategic and workforce planning, training, organizational structure, and enterprise risk management, procedural guidance and oversight of it investments. sba generally agreed with these recommendations. we also maintain that the 69th recommendation we made in prior work has merit and should be fully implemented. as of december 2015, sba have implemented seven of the 69 recommendations from prior reports that were identified in our september report. for example, with respect to disaster assistance, sba revised its planning documents to adjust staffing and resources available for future disasters by considering the potential effect of early application submissions, as we had recommended. in addition, sba officials told us about actions the agency had

initiated in response to the eight new gao recommendations. for example, the sba officials told us that the agency had established an economic impact evaluation working group which according to the sba officials was developing evaluation plans to suffer program offices. chairman chabot and ranking member velazquez, this concludes my prepared statement. i would be happy to answer any questions. >> thank you very much and you definitely kept it under five minutes. i when i recognize myself to begin the question. mr. shear, in the last year we've seen the federal government heart in a whole series -- hacked into ulcers of bridges. opium had millions of records to pixels is pretty numbers, addresses, health records, financial and biometric data were all taken. we've seen the irs hit, the state department, even the white

house. in your view of the sba, the small business administration, you have listed a whole range of deficiencies, areas where the sba has fallen short, just not cutting it. and the one that worries me the most is in the area of i.t. security. first of all, the information that they keep on individuals and on small businesses can be pretty sensitive information, is that right? information you may not want a rival business or your neighbors or the chinese government to have access to. would you agree with that and would you like to comment? >> chairman chabot, you raised a very good point. here, one of the things i just want to say procedurally, that when you take such an extensive operational view of an agency like this, we certainly partners with sba's office of inspector general and we greatly

appreciate the interactions we had, and you see in our report that we refer to the ig's work quite liberally, and some of the issues raised. the issue of i.t. security is one where we relied on and we reported on the ig's findings. so basically, there are issues identified by the ig that require attention. it's a very serious issue, and it's one of the issues -- >> if i can. despite the logical concern that individual or small businesses who deal with the sba may have, the sba has failed to implement more than 30 of the office of inspector general's recommendations related to i.t.

security, is that correct? >> that's what we report based on what was available in september. we note that information technology security has been identified for well over a decade as a long-standing management challenge, and its most recent report that came out recently, there was not a report of an upper but it certainly is one of the long-standing management challenges so i can attest to talk about the number is at this time. ..

now the principal purpose of even having an sba is to assist small businesses and it's our responsibility as the committee of oversight to make sure that the sba is living up to their responsibilities to small businesses. so if you would like to comment on that fact that they lacked the long-term attention to this issue that it deserved. >> there is one agency -- [inaudible] you know, previously that the challenges that it had around

and it's very disturbing to last that these challenges still remain and it goes down to the very basic function. with all the program audits we have done at sba, the one we've been suggested to the committee of undertaking such a review is that we saw simply recurring things happen over and over again when you look across the agency that affect all of the operations and we think there's some work to be done here. and we look for commitment to deal with other issues, many of which are the issues we pay very close attention to. >> i've got more questions. in order to impose the same type minutes am everybody else full text there they now yield to the ranking member, ms. velazquez.

thank you, mr. chairman. in the report, gao found that the sba still has not implemented de facto program reform, which this committee authored when i was chair in 2008. what are the major reasons why sba has not that bush a program? >> when we have done repeated work, you know, and appeared before the committee, there seem to be some movement after the establishment of a plan within sba, there appeared up until early 2010 some collaboration going on between the office of preparedness, the office of disaster assistance in the opposite assets to try to stand up a pilot program in the first

step to try to move into these areas to better serve the result. i used the expression the ball was dropped by sba. it's collaboration when we did our work on mandate, the collaboration just seemed to fall apart and we haven't seen any evidence that there is really a collaborative effort, which i think is what is necessary here for sba to try to develop these three programs. >> to what degree do you think the reasons may be symptomatic of some of the more general operational challenges you found in the review. >> i think it is a great question because one of our concerns and sometimes we as a simple word like silo effect. sba has the complex organizational structure and

reported relationships, working relationships and different parties that are involved here. the idea that the disaster assistance involves a number of parties and it just seems what i will call a silo effect, the inability to work across the organization is relevant to the work we did on enterprise risk management. the value to identify the agency and working on the risk across the tea, it doesn't seem like the collaboration in there. i have to be critical about our first interview dealing with the three -- there was a conference call after sandy occurred and they couldn't be named. it was in a documented interview, but the three

founders didn't like it. that was the case i had to direct to sba the people that had been involved earlier that were part of the collaborative effort to try to stand up and that never came to the table. it seemed like if there was something that was developed or working on a development by previous people in those positions that that had also kind of fallen off the table. >> since the tri-state area was affected by sandy, hurricane sandy, would you tell us based on what you have seen that if there is another large-scale disaster such as hurricane sandy that the administration, sba will be prepared to tackle the

challenges that we saw during hurricane sandy? >> i don't take sba has a plan. especially to create three private loan programs it was the rationale to those programs. much of it, i'll, certainly in the gulf coast with katrina and based on our work and the work on the ground but can issuance in the tri-state area with sandy, there would certainly appear to be demand things for a bridge loan type of program and things like that. i don't think sba has really put itself in a position to serve those needs. >> have you conduct did any other management review with any other federal agencies? >> as an agency, we did a lot of

broad management reviews and basically the 1980s company's mayonnaise and this one type or without sba was and say because of the recurring problems that would require one. we currently have an ongoing general management review of hud. we have done other things there when they call a management reviews including one that we did a number of years ago at sba. >> the general it is time is expired. mr. luetkemeyer is recognized for five minutes. thank you, mr. chairman. this is quite damning them quite concerning from the standpoint that it looks like we have an agent he that is mismanaged from top to bottom. you know, i represent the district in missouri that gotten hardest hit in our state these past two weeks. when i look at the office of disaster assessment and then

because i couldn't really figure out what to do, they created this office of disaster planning and not because they can't court made those two is anybody else, they will create an office of disaster interagency affairs. this is an example of government run amok good one agency can't do the job and note that a third agency. am i misreading what is going on here? does the agency cause it to create more agencies continue to be an apt? >> you raise a very good point and basically what we look for generally is the way sba operates, including assessing the meeting the mission that you just need more thorough plans on how to do this than just creating additional entities isn't necessarily the way to do

that. you really need to develop a plan strategically about how to deliver this. >> well, through your discussion, your report, you talk about gao or different challenges and after 10 years, only seven are still at instead. some of them as the chairman alluded to, one is extremely important, which is the security, added the default. proper payment or this is a pretty basic function of the agency i would assume. do you know off the top of your head with the raiders? the pastor ray for the home portfolio? >> know, if you want to make a question for the record. >> i'm curious if you know off the top of your head without going up or down.

indication of a management problem when we have that as well as economic times. also you talk about develop strategic plans as if the plan done, no one is able to review it. my reading that right within your report? they develop strategic plans but get there is no follow-up as to seen if the plan is followed or an evaluation of its effect to miss, whether it was accurate. >> the deficiency we identified consistent with other work we have done on individual programs -- the lack of a valuation of the programs or effectiveness there can simply put the chairman brought up, the lack of a valuation than the valuations without being incorporated and it's hard to have an effective, strategic

plan if you don't have a concept of how well the programs are working. >> coming from the private sector, you need to know where you are headed and review it on a regular basis so you know what you did right, what you did wrong and how you can improve. there's no follow-up action. it's an exercise in futility. also, you talk about standard operating procedures here in rules and regulations seem to be either ignored or they create them and go off on their own tangent. there's no coordination. can you elaborate on that? >> and of itself standard operating procedures are so out of date and are not kept up to date. they are replied not -- relied upon to heavily because there's a lack of specificity to begin with. but if you put the different pieces together from what we've done, you have staff that are in

the district offices that referred to the boots on the ground say you have staff in district offices that i've been well-trained to really conduct their function. when you have that, when you don't have clear guide -- guidance for how the regulations are supposed to be carried out. and then you do things that are makeshift sop current product says, you are going to have what we are there, a lot of them can distance an incomplete oversight of its program. >> i appreciate that. you know, it would seem to me if we have this kind of to me reckless regard for the reports them out, reckless guard for recommendations come in there needs to be some action taken by us, mr. chairman against this

agency starting with freezing of the funds in future rules and regulations and recipes. you can't do the job they don't need any further. i want to work with you on something along those lines and i yield back. >> generally from california, ms. chu get her to committee. you are recognized five minutes. thank you, mr. chairman. mr. chair, it is there some general agreement between sba and gao on recommendations she al me to address important problems at the agency is facing. it is a concern of the 69 recommendations that only seven have been met. it is also clear sp has taken tips to address some of the issues at hand. in preparing this report, did you find disagreement between sba and gao on what should be considered completed or fully implemented by the agency?

>> over the past year, since last april or may there has been a lot more focus and looking under open recommendations, which is a long list. we reported to this committee before sba's record over the years of addressing the recommendations was not very good. the comptroller general in november sent a letter to the administrator and other heads of agencies and in this case sba's implementation rate is the way we calculate around 58% and most of the government is around 80%. this has been a concern of ours. we have seen him attention and movement on this. there has been a push from

senior management since last summer and we've had multiple meetings that sba proving the senior leadership, so it is a positive sign. the idea was this actually represent an improvement as ecma statement that seven were implemented since the issuance of the report is a positive change from what has occurred before and there were a few that were implemented very roughly last summer, for example. i made reference in my statement to some recommendations we made in the report on the program in 2010. so there is more attention to this. there sometimes when we get information on sba and say here it is. we think we have implemented the recommendations that requires a lot of follow-up in certain times where we just don't agree. there's certain times we explain

in excruciating detail why we don't agree that a recommendation is implemented. sometimes it is the back-and-forth. i'll give an example on the one dealing with the early application. that is one where it requires some back-and-forth, and the james revere and his team works very well with us. they say okay, what do we have to do to convince you we are addressing a recommendation? we went through the different pieces of what we needed to understand. a very collaborative process between us and sba. there is more attention to make it now. the agency is still very challenged in terms of addressing these recommendations. >> there were seven recommendations that went to fall completion. can you tell me why you believe sba chose to prioritize these

and what was it that made these recommendations rise to the forefront? >> i think that there was one of the things that the chief of staff that there was enough of this looking up the program. the associated minute is relatively new to the position certainly reached out to with the idea that she was take his recommendations seriously and wanted to better understand what those recommendations were. they were somewhat dated, but they are still very relevant. they just extend the context of the recommendations from what they were and it have to do with how the program is operated, we were writing the reports. so there was some back-and-forth we stayed at that just prior to issuance of the report for the recommendations from the 2010

report were implemented. i think there was a focus on the senior management at sba and also likewise the associated administrator herself of the program. if there is disagreement and how do you move forward if there is disagreement between sba and gao? >> a lot of times there's agreement. if they do it for us. sometimes the focus becomes very much when he documented they should conduct you to change. for example, there were many times when we stated district office staff needed better guidance for how to carry out their responsibility and it would provide date where training is training the kurds we would just say okay, so tell

us what the training entails. we have to see some substance as to what is happening there. it tends to be a back-and-forth process and sometimes and a lot of us having a focus on these issues -- to see a situation here with many of these issues have now gotten a focus. >> the gentlelady's comments have expired. the chair would just note if you have a teenager and told him to clean up the room they have 69 things around the room and they cleaned up seven of them, that might be in a positive direction. i don't think most parents would be satisfied with that and i certainly wouldn't be inclined to give them an increase in their allowance. the gentleman from mississippi, mr. kelley is recognized for

five minutes. thank you, mr. chairman. thank you, mr. shear for being here. it is my understanding during any interviews with employees that they require the general counsel the president during this period in your experience had that been the same routine with other organizations or other agencies when these experiences -- when these investigations are dead? >> no. the idea of having district council president when we are interviewing nonmanagement district employees, it is an experience we haven't had with other agencies. >> is a former prosecutor, generally when people loitered up so to speak, when they didn't have any reason, when it was a routine talking to there is generally something behind not. -- that it is so important when you have an sop and the experience we have sop for a

brief book than we do. if you don't understand and use that, it is really not an sop because that's an per standard operating procedure. if you don't know and understand and use that come it is just a bunch of guidelines you weren't using. in your experience in the sop at the sba has a bunch of guidelines that the use and understanding continued to a date or sop? >> you've asked a few questions is how they are in the process of a dating and bring in up to what their current practices are in creating the guidance at the district office staff is the idea that is reported for us as far as procedural guidance. this is one of the major deficiencies, one of the major new deficiencies that we identified in this report.

the sop is, the issue of how specific they are. for example, no matter how good it is, because they are pretty general, the idea that when we had district staff thinking i was made a business opportunity specialist and i was handing the sop is my training, i might be reported and it will evidence of one or two people. in another south it is sufficient to somebody to carry out the job duties. >> now i want to talk about something else really important to the military side which i don't be in the sba but that is risk management and to understand risk, obviously you have to understand risk first of all. it is my understanding they don't have any strategic plan. they don't have a risk management program which is ample to determine what the racecar. do you know of any way were capable of understanding risk

and second of all if they do understand it, are they capable of addressing the risk they have asked areas? >> it is a great question. as far as strategic planning, we did find a positive strategic planning is, the part we really see is the role of a valuation in the strategic plan. with respect to enterprise risk management, it is almost identifying the pieces in what was going to enterprise risk management, but it requires a very crosscutting approach across the agent be that created a board to say that at the same principle should be addressing these issues. but it was first unofficially at risk officer at the time the general counsel in 2009 and here we are years later and you just don't have the element of a

robust enterprise management system to really identify the risks not only from a financials and point, but the risk having to do with carrying out the agency's mission. for all, disasters and other pieces of the agent he. sometimes you can like it enterprise risk management and they even before it was invented, was in basic common sense business practices that really -- that you could find similar types of language in terms of the enterprise risk management that is becoming coming in becoming coming to know, looked upon more by the office of management and budget. it is not a very premature stage. >> just a final comment. i find it very funny that for the personal risk they made sure they had council president, but

they don't pay that kind of attention to the organizational risk and risk management plan. i yield back, mr. chairman. thank you, mr. chairman. the gentlelady from new york, ms. meng is recognized for five minutes. thank you, mr. chairman. i wanted -- the gao identifies several long-standing changes at the agency. of course does that he delineated, which are the most important when it comes to service delivery and more tangible and immediate resource is for small businesses? >> it is a long-standing bid is challenge. i would really focus on human capital, the need to really assess skills gaps to identify training that might be necessary

all these different pieces fit together in this sense of there certainly issues that are associated with us as a contracting programs that require participation across the agent be in various parts of the agency. so they all kind of fit together in a certain way. but if i had to identify one that really and now, it would either human capital challenges if i was someone ending challenge. another one that is come up here, whether you call it wants the ending or not, they need to be able to document decisions and to evaluate how well your programs are working and to document those decisions. these are some of the things that really end up raised on our work. >> the report notes that the sba has made a mexican process when

it comes to the loan guarantee process. do you believe the sba in addressing human capital has helped it began to turn the corner and some of those concerns? >> the concerns with one guarantee -- >> development and implementing a program for the month centers to verify and document compliance with the loan process. >> i don't know whether i can link it to human capital are not. among the work that we cite from the general that have been certain actions to address long-standing challenges. i don't know whether it can be linked to any particular type of training or not. i just don't have an answer for the question. >> thank you you i yield back. they met generally deals that did the gentleman from california, mr. cavallo --

curbelo. >> thank you for recognizing my unfortunate injury over the holiday. i will reserve all of my comments on hoverboards. thank you so much for coming in today. there are a lot of specific questions that have been asked and i think they are all very important. i want to ask you more broadly, is this just a cultural issue that is going to have to be addressed beyond the specific fixes that you may recommend? is there just a cultural, structural issue here that we should really focus on? i don't think congress is particularly well-equipped to get into the details of how an organization is operating, but we can certainly lay out a vision and that they suggest a

structure. i am wondering if you could give us some guidance in that regard. >> you ask a great question. i'm going to stand back or what i will call the detailed auditing hearing of how pieces fit together in some of them fit in with enterprises and some of the other matters we have talked about. i used the word earlier and it has been used over the years with sba has been silent in the idea that you can have certain reporting relationships, working relationships are different and part of that is you don't have the collaboration that would occur across the agency went to try to do enterprise risk management or just manage roughly how you put together an operation that has this many pieces to it, that has to be a way of having that collaboration