as we build support for the agreement we will also be encouraging the administration to work with congress to address the legitimate concerns expressed by industries and legislators about some aspects of the deal. and we will continue to push for another potentially historic agreement, the transatlantic trade and investment partnership with the eu. both sides recently agreed to speed up the negotiations. we're also working on trade in services agreement and pursuing bilateral investment treaties with china and india come and we are urging the senate to pass a custom three authorization bill and get it to the president's desk in a hurry. given the weakness in global demand, we must do everything possible to remove trade

barriers. to form new commercial partnerships, and to aggressively market america's goods and services in traditional, and yes, nontraditional markets. the chamber is uniquely qualified to help american companies expand their markets and fill up their audio books. we run 12 bilateral business councils, making a network of 170 american chambers of commerce abroad, and we are establishing new offices overseas in places like turkey and israel. we're developing new bilateral councils with countries like cuba, we are leaving high level commercial dialogues with china, mexico, and now saudi arabia. and we just launched a new african business center. we can never ever forget that 95% of the world's customers,

the ones we want to sell something to, live outside the united states, in nearly 40 million american jobs depend on trade. we could create millions and millions more if we advance our pro-growth and pro-trade measures. now expanding america's energy supply as another one of these few but they're important priorities where progress can and must be made. we can and should be developing all kinds of energy, and discriminating against non. we have untold amounts of american oil and gas come and unleashing the power of our own energy will put our economy on a much stronger footing. as i mentioned, congress took a major step forward by lifting the ban on exporting u.s. oil. while prices will inevitably go up and down, we can count on the

world's long-term need for energy to dramatically increase. you know, america is now in the position of supplying countries with the energy they need instead of importing it from nations that use energy as leverage. by responsibly expanding production on federal lands, we can assure that we have the energy we need to meet the needs of a growing economy, and put folks back to work. now, we want also to expand emissions resources like nuclear and renewable company press for greater gains in energy efficiency. but we must into the regulatory assault on coal come which will be an integral part of america's energy for a long time to come. it's hard to have a discussion about energy these days without mentioning climate change your

the chamber supports a reasonable action to deal with this and all environmental challenges, but the focus ought to be on what has been proven to work. remember, the united states was the only country to meet the targets laid out years ago in the kyoto accords, even though we were one of the only countries that didn't sign the agreement. how? we did it our way. we did it through technology, through efficiency, with alternatives, and a cleaner use of traditional resources. let's build on what works. let's reject unproven schemes that would put the government in charge of our daily energy uses, our choices, and our lives. now, let me dare to go where

most politicians fear to tread. the chamber is going to bang the drum loudly throughout 2016 and beyond on the urgent need for entitlement reform. americans should think very hard about this question. who are the real champions in and other programs? like social security, medicare, medicaid. those arguing for absolutely no change, except increased benefits, or those who support constructive reforms in order to protect and sustain those benefits. if we do nothing, social security and medicare will become insolvent, and sooner than you think. neither of them will be able to pay full benefits within 20 years.

why? because 10,000 baby boomers retire every day. think about that. and will do so for years to come. by 2025, these programs, along with the interest on the debt, will gobble up about 77% of all federal spending. without reform of there will be next to nothing left for other important national priorities, like education and national defense. but if we make commonsense changes soon, we can ensure that the nation's social safety net remains intact for future generations. pundits and the political class are quick to dismiss all of this. dismissed the idea that anything

possible can be done in entitlement. however, we are somewhat encouraged by the doc fix agreement we reached last year, the first significant entitlement reform in two decades as well. is this simple? there can be no -- it is simple that there can be no solution to the nation's long-term fiscal imbalances, and our exploding national debt that does not involve reforming social security, medicare, and for the state budgets, medicaid. this is perhaps the most predictable crisis that our nation faces. there are lots of others, but we know what this one is and when it will show up. shape on our government, and shame on all of us if we don't make it an absolute priority for

reform n both parties. -- shame on our government. now, ladies and gentlemen, the fundamental question facing us today comes down to this. how do we accelerate our growth and strengthen our economy so that it creates more jobs, rising incomes, and more opportunity for every american? that's why we are supporting these policies and these ideas. not just to help business, but to help our country. during his more than 100 your history, the chamber in the business community it represents have stepped up to help the nation in times of great need. we did it by marshaling vast resources of the private sector to help win two world wars and the cold war. we did it by advancing pro-growth policies that created the strongest economy the world has ever known. we did it by supporting a strong

national defense, and principled american leadership around the world. we did it through technology and the innovation that came with it, and strong protection of intellectual property rights come and set the pace for the rest of the world. we continue to do these things today by helping our government fight cyberattacks and terrorism by supporting our armed forces on active duty after veterans and their spouses. and by projecting american ideas like free enterprise and the rule of law around the globe. we want america to be as good as we know it can be your we want all americans to have a genuine chance to thrive and succeed. we want policymakers and citizens alike to understand that they growing economy represents true compassion.

how else could we ever hope to pay for a strong social safety net for the poor, the sick and elderly? in fact it is the private sector that pays most of the bills in our society for the schools, a clean environment, and a strong national defense. we are having more than just an election in 2016. we are having a big debate over our nation's economic future. and the chamber will be the middle of it. we're going to respond to the growing attacks on our free enterprise system and america's businesses by folks on the left, and the right as well. left tells us that our economy is hopelessly rigged, and that's the only reason some americans are doing well is because they

have managed to rip off of americans. the solution is to put politicians, they say come in charge of our economy. how has that worked out? where ever and whenever it's been tried. from the right, we hear a phony capitalism, the notion that government spends all day every day figuring out how to help big business. really? that's not the washington i know, and i've been around here for a long time. we are even seeing a dangerous effort to silence the voice of business, to demonize, and even criminalize different viewpoints, and to actually rewrite the first amendment of the constitution. i don't use of this phrase very often, but that's just plain un-american. if we succumb to the demands of political correctness, rewriting

of history, airbrushing the past, or censoring views that make us uncomfortable, then how can we learn from our mistakes and build on our successes? winston churchill who seem to understand americans better than many of our own citizens once said that some regard private enterprise as if it were a predatory tiger to be shot. others look upon it as a cow that can be milked. only a handful see it for what it really is, a strong course that pulls the whole cart. ladies and gentlemen, private enterprise has been shot at enough at it has been milked unmercifully. it's time to recognize that business can be the sturdy horse

pulling the whole cart forward. just give us a chance to show the american people what we can do. today, americans are hungry for leadership. across all institutions, and all sectors of our society. leadership that understands that a vibrant private sector working in a free enterprise system built the greatest economy ever known on earth. leadership that knows we are the envy of the world because we reward innovation and individual initiatives. leadership that celebrates success and does not attack it. it embraces the principle of personal responsibility. limited government and the right to take a rational risk, to fail, to succeed, to prosper. leadership that believes that business is not the problem, but

a big part of the solution. this is a challenging and uncertain time for america. we must reject the notion that government has all the answers, or that we can isolate ourselves from people, trade ideas, capital and responsibilities across the globe. estate of the american economy may be risky, -- the state of the american economy may be risky and uncertain, what our future is not. it's a bright, if we pursue the right priorities and the right policies. in the coming year and beyond. we are going to do everything we possibly can to win on these policies that will create jobs, that will force the growth, and expand opportunity for every community and every american. most important of all we want

all of our children and our grandchildren to know that we have not forsaken them. we are determined that they will know in america that is stronger, more prosperous, more confident, and more helpful and hopeful than ever before. i've thought about this deeply for a long time. i am convinced it can be done. we will need all of your help, and i thank you very much. [applause] >> we are going to come back to the chamber of commerce in a couple of moments. , donohue is holding a news conference with the business

groups top lobbyist. that is scheduled to start in about five minutes and when does we will be like you on c-span2. while we wait for that a discussion from this morning's "washington journal" on the nuclear agreement with iran. house of representatives matthew lee with "the associated press" diplomatic writer back at our table this morning to talk about the situation in iran and the nuclear deal that was struck that i want to begin with the sailors that were captured and released and this they do that has come out showing the sailors on their knees, hands behind her head. something shows him apologizing for drifting into iranian waters. what do we know and why does this matter. >> guest: it matters because if they were mistreated in some way, if they were triggered in violation of international conventions, then it is incumbent upon the u.s., the administration to make some kind of complaint to the iranians are take it to an appropriate

authority. this is being hailed by the administration, and what led up to the, conversations can multiple conversations between secretary kerry and the iranian foreign minister on tuesday. administrate is hailing this as a benefit from the negotiations that led to the nuclear deal last summer. and while it is not arguable. you can't argue that it is the case, the sector case, the sectors case, the sector to take case, the sectors they can pick case, the sectors they can pick up a call the iranian foreign minister now and probably was in a position to do that for years ago. there are still very troubling issues with iran and its behavior, and that may not include the treatment of these sailors. >> host: if they had invaded or caught in inadvertently iranian waters, wouldn't that be normal procedure for the iranian

military to approach transferred it very well may be but it's more of the issue as understand it, it's more of a vision of the taking of the figure, the filming and the broadcasting company taking of photographs of the broadcasting the video in which one sailor seems to apologize, does apologize, whether that's under duress or not we don't know. that's the issue. >> host: so that violate geneva convention which says you cannot use this for propaganda or insult. >> guest: exactly. you can't parade your prisoners, detainees, however you want to describe them come around and publicized that. that's against, thou violate the conventions and it's also isn't this the kind of behavior that you expect from a country that allegedly wants to rejoin the group of nations, the world community than one secretary of

state john kerry just a thank the iranians for the quick cooperation he said for releasing the sailors. some -- john kirtley the spokesperson tweets this, absolutely zero truth to rumors that john kerry apologize to iran over sailors. nothing to apologize for. >> guest: right. we have to take them at the word they didn't apologize for that i think, it's a bit of a slippery slope to believe absolutely everything that the iranians say. iranian's i guess we released them after the apologize, but that apology they are talking about may very well be the one that has been aired in the video of a sailor saying we made a mistake and we are sorry for that mistake. so it's very possible to arrange for referring to the. whether that sailor who made

those comments that everyone, many people have seen, was speaking under duress or was forced into saying it somehow, we don't know. but at this point i don't have any reason to doubt that the spokesman, john kirby, who is a retired admiral, and he became so, that he was not telling the truth and that john kerry in fact apologize. i don't know anything to suggest that john kerry did. >> host: we have been showing the video. this is a video on reuters website by the way. for those who want to go and watch it and listen to it themselves. what does all of this mean for the nuclear deal transferring well, -- >> guest: a speedy resolution of the situation i think is, helps the deal. if these sailors were still in

captivity say today or tomorrow or the we can do whatever and had not been resolved, that i think it would've been ripped issues with getting cute with at least the u.s. signing off on implementation. they are not directly related but there's a lot of reason to believe that there is some indirect relationship. imitation pay for this deal, that day that the u.n. atomic watchdog confirms the iran has done what is supposed to do under the deal, and then the sanctions relief, billions of dollars for sexually is supposed to happen, it looks like it's imminent, maybe not this week but early next week. i think if the sailors situation had not been resolved quickly, it would've been extremely problematic for the administration to go ahead and sign off on that.

now that said, let's remember that there are still for american civilians who are languishing in iranian jails or and while the administration says, and made the point yesterday over and over again to say that look, this -- this is the imitation is a direct result of the nuclear deal and this channel of communication is great and you shouldn't undersell this as a side benefit of the nuclear do. you have to members is lot of troubling things about iranian behavior that this new channel of communication has not resolved, including the four american civilians in jail in iran the u.s. wants out. and missing american who u.s. believes the iranians know something about. so those issues are very troubling issues, still unresolved and have not been addressed to u.s. satisfaction i

this channel of communication. >> host: i imagine you and other reporters will get asking those types of questions of the state department. >> guest: yes. asked yesterday very pointedly so. when the state department spokesman gets up and says you can't undersell this, a direct result of this resolution of us in this case, a direct result of the committee kitchen, then you can't overselling either because it's certain not the panacea that will resolve the host but let's get to calls. james come independent review on the air. >> caller: yes, good morning. yes, sir. you sort of like it on the head the way you are talking out my thing is, those people would have just took them and held them and not release them, and

then put up what went on when, guantánamo bay, when they had those pictures of those soldiers being mistreated and they didn't, they didn't want those pictures to get out about how to act upon each other and that dogs attacking them. they could've used that incident right there to do the same thing. so i don't see no problem with them doing what they did, and the soldiers that they put their hands behind their heads and did that. i mean, that's the smartest thing to me you can do. and america should not be, they should not be feeling bad because they did that. because like i said, if you look at the way those people were held in guantánamo bay, some of

the secret things they did to them, compared to that, that's a blessing. >> host: got your point. >> guest: i think he is referring to abu ghraib in iraq, not guantánamo. but that said, yes, the prisoners at abu ghraib were mistreated, it was bad and it was prisoners at abu ghraib were mistreated, it was bad and it was punished, the behavior of these soldiers. i don't think anyone is trying to excuse the mistreatment of prisoners of their or anywhere else. but that's a separate issue speed we will leave this discussion here and go back to the chamber of commerce for president tom donohue. he's only a news conference on the safety -- the state of the economy. >> the only major ground rule is please identify yourself and your organization when you're asking your question, and please wait for the microphone that the staff of retaking around each of you. >> thank you very much. good morning, everybody.

as tom indicated, we are looking forward to taking your questions. as you know a few minutes ago i delivered the annual state of american business deal but if you heard it that's great. and if you didn't or you want to get some specifics, there's a copy on your plate. i said in a speech at the chamber believes the state of american business in 2016 is filled with uncertainty, risk and challenges. we all know that. our businesses and jobs, creators are facing extraordinary political and geopolitical uncertainty. they have to deal with economic weakness at home, and especially abroad. it's a real problem. and massive new regulatory burdens that are pouring out of washington, and we are being told even yesterday by the chief of staff who did the "christian science monitor" deal, bruce,

said that they're going to be really aggressive on what they're doing on the regulatory side. we can't eliminate all the uncertainty, but with a recovery that is probably the worst since the great depression, we've got to go to work and do everything we can. and my own view is we can get it done. there's a lot the chamber can do. i was very encouraged, as i said in the speech, by what got done at the end of 2015 in a bipartisan way on issues that we have been told every day by people on the hill, by people in the press, by political operatives that it wouldn't get done. and we are going to take their aggressive approach going forward and hope to do much of the same thing. i'm skipping all of this because i would rather get you what you want to ask me. you know, we made the point of

fundamental issues we're going to be working on, the elections right now and going forward, there's regulatory stuff, trade. we are optimistic people. we have a great country. we have, you know, great resources to advance our views, and we look forward to taking your questions. and whomever, i think we got to light up, and after that it's all, i'll grant them. thanks, that's much better. we can remember without a. who's up? >> just from "the wall street journal." during the remarks when you're talking about candidates who want to wall off america, the dangers signaling out specific groups is morally wrong and politically stupid is that a reference to any, to trump in particular, any particular candidate? >> actually it represents anyone

who in the process of the debates and remember we start out with what, 17 groups, who chose to go in that direction. it's not solely one candidate, if you go back a look at what they had to say about immigration, about cuba, about issues of trade. i think, i think they stepped over the boundary and i lost track of who we are and what we stand for, and how we fix this economy. and i hope, i hope we will straighten out that as we go further into the elections. all right, so then we would do that last went over there and then i'm going to picking. is that they are? go ahead. >> doug palmer with political. you said that the chamber plans a vigorous push for approval of a trans-pacific partnership this

year but then mentioned the initiation needs to work to build support. do you think the administration has got the message and is willing to do what's needed in areas like biologic, investor-state dispute settlement's, financial services and data restrictions, data flows? ..

second of course is to figure out when would you vote this? in an election year, and with a very, very tight votes in the senate and so on, you have heard the majority leader say not until after the election. but third and very, very important and the president and his hip have been very supportive of this agreement to go and get your votes. you've got to get democratic votes, so picking when is the right time to vote and i think those issues are what is standing between nasa and getting it done and i believe getting it done is absolutely fundamental to making a move forward that we need on the economy and i will go right

here. >> reporter a financial advisor magazine spoke about the fiduciary role in also litigation. is the chamber planning to file suit against the role once it's finalized? >> somebody asked me that the other day. they didn't say when it is finalized if they just said are you going to see that? i said i haven't even read it. we have had very strong conversations with the people in the white house and others about what has to happen to that rule for it to be acceptable and not destructive to the retirement system to companies and individuals. we hope they have hurt us. they say they have heard us. if it looks appropriate, then we

won't have to sue. if it is not appropriate, it is not just doing. we now how in the senate and in the house much, much better systems to use the appropriation and other parts of the committee process to get in there and work on this deal and we will. [inaudible] >> i don't know. i haven't read it. the idea is frightening. but they are working on it and i'm giving them the time to work on it. this building mehsud is always a possibility. i'll come back. >> given congress is tepid support so far for tpp, how they risk in the chamber be,

especially given the key republicans such as senator hatch. what exactly are you planning on doing to lay the groundwork over the course of the years. >> it is important to recognize senator hatch was a vigorous supporter of trade promotion authority and he didn't do that because he was a straight agreement. he just wants to make sure they get done right. bruce has a whole slew of people that work on this on a regular basis and we are going to be working on all three parts of the deal. that is how we get the problems fixed. how do we find the votes and how do we work with the leadership for the most vicious time and we will get everybody we can in chambers and associations all around the country and the

bigness business community to get off their scene and get this done. >> the concern of the majority leader in the finance chairman have expressed certain provisions in a trade agreement. that has nothing to do with the otherwise well grounded in exceptionally strong support for trade. this is not unusual. we have gone through this nafta. we went through this with chorus. if you think that, there are always little challenges here and there that need to be addressed and work in agreement and are dealt with separately. that is what everyone is saying. we also are in the same boat with tm because we want to get this deal done and enacted as a whole. >> i will go back there. go ahead. i will do the one in the middle. i will do you in a minute. >> you talked a bit about the regulatory reform bills that the

chamber supports pgc process for passing on the 2016 or is it more building support program in mass administration has has been given the threats. >> you know, people told us last year we wouldn't get the permitting teamwork. of course it ended up in a broader bill. every intention of moving figures down the process. because so back to truman or something. we haven't changed the process of regulation. make it very clear that you have to look at what it costs a new artifact. we are not only going to do that in trying to change the process, but then we want to use the committees of the congress to make our case on all of this. yes, we think we can get more of it done this year. >> i would also point out it has taken a while of educating and

getting members to understand tom's point. the administrative procedure act which guides the process hasn't been touched in the mid-40s. there is now broad-based and bipartisan support to modernize it and start to address how the agency for regulating. that is why the streamlining proposal became law. that is why the regulatory accountability act has drawn bipartisan support. i think the answer is yes, we intend to push. we intend to pass it. whether the president signs it is an open question. most members of congress understand and appreciate the reality. >> i'm going over there then i'm coming back across here. >> thank you. cq rollcall. have you identified primary for the republican or democratic side house and senate races you are involved in and have you

established a budget for what you miss the nonpolitical work for this election cycle? >> the first answer is yes. the second answer is we have a system that is based on spending money where it expands spending money we have. and so, we don't sort of go with the baseman although we have a little down there. we go out and raise it and i think we will have a vigorous system. it is going to be complicated because it is a presidential year. but we are going to pursue exactly what we said. we are interested in following up in making sure we protect the advances we've made in the last election and we are very, very interested in supporting people who want to go win and mprove the economy, put people back to work and we'll have more to say

about that in the near future. thank you for asking a question. we'll go there. >> 10 starts from "politico." you mention in your speech that businesses are still vulnerable to cyberattacks. what would you like to see that in washington to address that russian marat >> first of all, we know a lot about this for the simple reason we have been added for 11 years. we have on our advisory, one of our major advisory group people that ran all of these functions of government for a long time but part-time advisors. we work with large companies in many ways on this issue. here is something we've learned. this is an over moving, ever changing problem. you know at one point i guess six months ago the government or

maybe more than that, they were beginning to say to companies, banks, retailers, if you get cracked into, we will penalize you for that. they had in mind that they would run the same kind of lawsuits as if the class-action guy. they thought suing companies for those problems. and then along comes the reality that the federal government in the united states looks like a piece of swiss cheese. everyone was running holes in and out of our system everywhere. we haven't heard any more of that now because folks understand this is an ever challenging, doubling down kind of problem in many of the problems are not only technological but they are people. by the way, they are not people of ill intent that they leave the machine. we have to change all of our

thinking and how we go about this with all the benefits we have gotten from this unbelievable technology. one man or one than with the right technology on their wrist or in their purse and walk around this round and have everything -- every cell phone in this room with out of her saying so are doing so. we are in a new life and we are working on it. we are very vigorous on it. we are expanding our own skills, our support working with members and do this well. >> one of the issues is definitional. there's a big difference between somebody stealing your personal information, hacking into a corporation to do corporate espionage are attacking critical

infrastructure. for example, somebody dropped a bomb, if you will, on a structure considered an act of war. what is it considered when somebody attacks a critical infrastructure? none of these things have yet been defined in the way the government is comfortable with the way the private sector is comfortable. we have a huge task force of close to 200 companies to tom's point that we've been working with for more than a decade. we will be intimately involved with the government from the fbi to dhs cyber command trying to answer those kinds of questions because that day lead to what are you going to do about that in terms of detection, prevention and risk him. >> go right here. >> you are in next he said. >> i would like to ask you about western hemisphere. how optimistic or pessimistic

are you being able to avoid that, what would that mean? how do you assess the progress so far? i am not >> in cuba is a process we have to say is very significant in during more than 50 years we didn't do anything. we are very supportive of the rational kinds of things being done on both sides with absolute understanding there is still significant neck dignities that must be dealt with. but it appears everybody is going to keep talking and i believe that will go right through an e-mail -- and a new presidential administration. on the hemisphere, obviously,

you know, when you look at brazil and argentina who are struggling, brazil particularly, when you look in venezuela and the changes they are we'll see how they play out. it is going on right now. i believe it is an area and i could go on a name other places, an area that is quiet and is very important in the united states. this is an extraordinarily trading relationship. it's a very important geopolitical relationship and the chamber is putting extraordinary resources and time into it. we think it is very important. >> katy o'donnell, "politico."

are you anticipating any action at all this year, maybe enough conversion and also what are your biggest turns about country reporting? >> bruce and i are going to do this together. on the tax deal, there could be issues because of inversion and other things that would come to the floor. that generally and i have to tell her members is, we are committed. we are committed to a broad based tax reform that stimulates economies and gives the risk takers a fair shake in the tax side. i think it would be fair to say that we don't think until 2017 we are going to get there. even then it is tough because the people that used to do this and know all about it aren't around anymore.

on the second question, i think you ought to make a couple comments on the tax and then take the rest. the mac a couple things. there's about 36 tax extenders that we are not extended or just extended through this year. there has been a commitment for brady and pelosi both within agreement to take a look at those and try and figure out how they are going to do with them this year at some point. so there is going to be another tax extender package of sometime this year. that is for sure. chairman brady of the house, ways and means committee has made it clear he does want to proceed on the international side as i am sure you know. he views that is a bit of a steppingstone to way he discusses it to get to broader comprehensive tax reform. so far, everything at the treasury department is done to tackle the versions and do nothing but make it more

complicated and more expensive but they are not going to stop them. the reality is the have to do fundamental tax reform. we have fallen behind talking about calling behind for a guess now going on close to two decades the rest of the world has been in really tax-cut competition. oecd countries have lowered their rates dramatically. japan is now adopted territorial brave. we don't have a territory -- we are the outlay with the high rate train to compete in the global economy that disadvantage u.s. companies makes a takeover target. i think we are going to see some movement here. ryan the speaker wants to minimally put his weight as speaker behind this with brady. whether or not that is a template for tax reform as opposed to an actual vote i can't say. i think there's a lot of that committee here or activity in

this case we obviously will engage completely from start to finish. >> okay. right there. >> thank you. and libya wheeler with the hill. the white house released audacious executive actions in 2016. can you tell us what you think those remaining executive actions will be about? what is to come for the administration's >> i know. but i thought it was really interesting. if you think about it, that was the message. it didn't come from some second-level staffer in the white house. it came from the chief is not. he was sending a message. e-mail, and executive orders are very tough to deal with. i believe presidents ought to

have executive power, but there are instances at times when it is abused and basically to get around the congress, not to deal with the merchant is or particularly sensitive issues that everybody sort of agrees on. you can't miss them that we will be very involved with every tool we have. now we support some executive orders. i believe the executive order that came out of the white house when we came up with an important cybersecurity bill, which we were helpful with was a great example of that sort of a process. we will have to see what comes forward in mr. mc dennis idea of

things we can even imagine. >> i would add based upon what we know in the pipeline and fiduciary role, watch the department of labor and epa. >> one of the real faces if i were running a small or large come to me, what i am worried about more than anything else is the department of labor pools on the employment in the pay and benefits and regulations of people and how they work. i will go read there. >> andra drescher national journal. i would like to follow up with elections. given the number of republicans for reelection this year in the senate died, d.c. the chamber playing a role in races like indiana and florida and primaries?

>> we will play a role in a very aggressive way. we believe that there is a value to the business community by holding the senate. we believe failure to hold the senate, no matter who is elected, democrat or republican puts us at risk and what kind of the supreme court we might end up with if there are changes in the quarter. so we will be working the senate and a very thoughtful way similarity are. we've heard he spent a good deal of money this year early on in the senate races than you could expect to see very aggressive in the senate. by the way, we will also be in the house. when you're in presidential territory, you have to pay a lot more attention to the house.

>> we are watching them carefully. we are doing our best not to answer your question. you can probably figure that out. >> come back over here in a minute. >> rachel karas from that policy. you have mentioned tools challenge in regulation. what does that mean in terms of changes to your approach with working with cms on aca regulation and which of those regulations do you think he will make the most headway on this year? >> without close to 100 comments and web server there once a week to negotiate outcomes. we've had some recent success with cms backing off of the regulations. this is another example when you have these huge, humongous legislation, they are going to demand changes going lowered.

this one is demanding changes. even the admin is ration is driving a lot of changes that have taken place in terms of obama cares what's going on in the marketplace. there's a lot of title and description of the marketplace, some announced that about that as you all well know, worried about the risk pools, worried about the makeup of who is signing up and appear not to be signing up with any rapidity as had been hoped. they are kind of concerned about 2017. a lot of them want to see what happens. i think this is another area that we are going to be doing health care legislation every year i think forever. >> escaped you before. go ahead. >> hayek, inside epa climate.

you mentioned during your speech earlier that the chamber would be in favor of reasonable action to address climate change. i know the chamber has done prior and analysis showing that there is a lot of work to do to meet climate goals despite what the obama administration might've said. could you define more precisely what reasonable actions might be and what do you see for any agreement this year i'm not? >> well, look. there is no question about the realities of climate change. we are able to track for about 2 billion years. what really comes down her three set of issues. one of the questions the issues that the business community or the country are causing any additional change in climate,

what are the other countries around the world doing in the issues they are is can we have an incremental effect -- beneficial effect. and finally, what are the proposals going to do to the united states economy and jobs in the well-being of our country? i think when i mention we did the kyoto accord, so that was great and most people didn't know that for a long time. but how did we do that? we did it with technology, efficiency. we did it with collective action. we are willing to do all those things again. we just don't want to take steps that will penalize the united

states in a fundamentally different way than what is gone on around the world and we don't want to destroy industries that will put a lot of people out of work when there are ways that you can to keep them functioning. the next deal i will go there. >> good morning. i'm ryan rainey for morning consult. he was talking about you would like to see changes, fixes two.free. in the coming months, what are some of the priority specifically that you see as low-hanging fruit i guess that congress would act on. secondly on the tpp, there is a nice discussion about the timing. do you think there is any chance of a vote happening before the election in either chamber of congress or at best buy when you

talk about timing are you only talking about it assuming the vote will take a month after the election? >> he will answer about why think about your first question. >> looked around the president has here now has an event and the agreement. wait for the international trade commission in economic report with the entire agreement for 14 countries. that means to me it may be pretty tight, questioned to see that voted on in that timeframe up to june. i say that because of the announcement that the senate leader has made about regular order doing appropriation bills because in that type timeframe. i think that is a bit of a push to see that happen in that time frame. do i think it's possible to see about?

sure. is it possible it might do? sure. the bigger issue is everybody needs to remember in tpa we had to eat in. we need to build support for this agreement and part of building support for this agreement as event ustr rep has acknowledged those back to addressing the issues outstanding on biologics and isd as, et cetera. in the financial services with data service. according have to be addressed. until they are, it is hard for anybody to calibrate and there had the confidence of putting something like that on the floor. the one thing you don't want to do is put something like that on the floor and fail. >> to give you a quick deal on the dodd-frank, the big save with the regulations, they haven't even been dealt with hanging over the head of the

business community. we've got to get on that. we need to go back and look at what i call layering on. when you look at the reserves to hold by two or three u.s. actions on what is going on, we need not take a deep drive and look at what we have done to the banks that have the capacity to support our economy and we will be working on not. now i will go right there. >> back to the affordable care act, what would you like to see done this year? what are you working on apart from making the tax more permanent. >> is a piece of what we work on because we had a short-term fix to the bear. that is another area that is as

community can organize labor, particularly the cadillac tax joins us in working on. so look, we are not trying to destroy this law. members have invested hugely at this point after five, six years. we're trying to make this work. the insurance industry, hospital is trying to make it work. pretty much everybody is trying to make it work. i can't tell you what exactly it is because there is huge aspects and elements of this thing that needs to be addressed on an ongoing basis. how many of them we are going to seem that this year, i have no idea sitting here today with you. the reality is this thing needs to be fixed in a host of different areas. there have been targeted,

highlighted and reported on. it is fair to say we will be involved in every aspect of the period >> the only comment i want to make about that, all of the institution affected by these laws are not standing still whether it's the medical profession, whether it the hospitals, whether it to technology people, pharmaceutical and all the new drugs, these things are a moving constant moving changing system and we are dealing with all of these questions of the affordable care act not again, you know, a standstill system, but something moving. the sooner you get it, you will find in a system of this size, in an industry of this size continual motion. >> one of the easy ones would be

trying to address the amendment on health savings accounts. the small business days and the ability for them to purchase is still a major can turn for them. so there's a lot of issues here and they are not going to go away anytime soon. >> let's go back in the middle. >> chris namath, artist media. prices are causing a lot of pain in the oil industry. is there anything the obama administration could do that could soften the blow or is this something that has to work at healthsouth? >> one thing we never want to do is get into trying to regulate oil prices for two or three reasons including it would never work the phenomenal, global system. i think some of what is going on

in the paris talks and some of the attack which you know are absolutely unacceptable on individual companies who maybe don agree or have spoken about some pain that is not found in you agreed to see the attorney general of new york were to see others come out and behave that way is very frightening. none of that helps in any way a vigorous balance price of energy. but let me say, you can't run the economies of the world without energy and everybody likes to have it downwards workable, but if it goes down so far, nobody is going to take it

out of the ground. we have a problem and simply to say we are at two art years than it is very essential to our future and this is going to be a very interesting year. >> that's a good question, but almost impossible to answer. who would've predicted a year ago the price of a barrel of oil today. if i remember this week, one of morgan's m&a, citibank said it could go to $20 a barrel. they say it's going to go up about 60 before the end of the year. i am not so sure we have a clue on what that is. getting out of the industry's way would be one thing the government not to be mindful of. this is one of the most technologically innovative industries in the world. tracking is clearly change the game globally not just here because you can pretty much now find oil and natural gas pretty much everywhere.

we ought to celebrate the fact we have these resources. we have to celebrate the fact this industry is one of the most innovative technologically in the world and it's already made a dramatic difference for you and every other american. >> well, i'm going to take two more and anybody can come up and talk to bruce. you've been working on this. go ahead. >> i want to ask you about the crony capitalism. do you think the strong vote in favor of reauthorizing export import shows that is not a potent of an argument inside the republican party for d's don't fear that site could end up winning today in the gop. >> i think what basically happened on the bank, first of all it was a great day for the far right to get on top of because they really didn't have any expenses. it was just supposed to make them look very efficient and not sort of thing.

nobody had out about this very much. when everybody began to think what really did this mean? this meant that the united states did not have a government associated export financing operation, the 30 major countries in the world would not buy capital goods from our country. now you can imagine how many very important come to me is we are looking at and you haven't heard in the time of the chairman of ge spoke at the economic club, he was prepared to knows the company not from connecticut to boston. but from connecticut to canada. we always had the votes. you just have to figure out a way.

these are decent debates. there'll be other arguments in the same venue. the bottom line is we are trying to get hired to get people no matter what their philosophy is to understand they are failures. if we don't put people to work, if we don't drive growth in this economy, if we don't recognize business is the one way we can get a lot of this done and if you are screwing that up, you will deserve what you get. >> as you know, crony capitalism is a key catchphrase around for 20 years. i don't see us expunging that rhetoric from the political debate anytime soon. but we will continue to fight the battle is necessary because defining that it's a little bit like defining beauty in my opinion. expect members of congress.

if you don't like it, change it because you demanded that he is the one they are current date using. >> how many of you know what the accounting methodology is? something they saw on their talking sheets. i'll take the last one, go there and anyone who wants to come up with talk to you. >> i have a question about the sanctions in iran. their expect it to be lifted soon. if it happens, what kind of actions do you expect to see among u.s. companies and if any, do you have any specific industries which are interested in the country? >> well, of course we all know that european companies have i will say under the law and outside the law has been engaged in iran for a long time.

they think american companies will be very careful in the early going. it is not only very, very competitive, but it is going to be difficult here in difficult their and i think there are two sets of sanctions. you know one has to do with nothing with the deal and we will have to see how that goes. and i am not sure and i don't know that bruce is ready to go there either. we certainly believe what is going on all through the mideast is a very troubling time and we hope whatever comes out of iran is hopeful, not difficult particularly when the racers is go back. they don't use an unsupported terrorism. thank you, everybody. anyone who wants to come up or slow tell them what he thinks.

[inaudible] [inaudible conversations] >> are you expecting the white house -- [inaudible] [inaudible conversations] it is kind of like fiduciary

role questions. we obviously are concerned. we are obviously actively going to review it to sit down with legal people and see if there has to be a legitimate opportunity to make challenge. [inaudible] -- that they are willing to respond to your demands. >> they been making pretty encouraging comments particularly this week. i think everybody wants to get this done. everyone has to figure out how we will get it done. this administration is outside of the agreement before they would send it to congress. they would have similar efforts on other agreements, so this is not new.

[inaudible] >> can you talk about the permit reform to the end of the year? >> right now for a major facility, whether it rode for a new energy infrastructure through corporate headquarters has been about 12 years. why does private capital when you hear about these public partnerships, why has very little taken place in america? the reason is you have to add in to that how much you are going to have to llocate in terms of the legal costs and the legal challenges. think of the 12 years with more than a dozen lawsuits. if you talk to the people with money that want to invest in infrastructure, why would i put anything here? i can go anywhere else in the world, any other industrialized economy and i can get a permit in 12 to 18 months and we can

start construction and i don't have to deal with the legal challenges. getting the permit streamlining bill done this as opponents proponents, everybody must be heard. you got it cut the pie and make a decision. it's going to make a huge difference. >> does that include in your concern about it -- are you concerned enough about its take on some of the congressmen and the incumbents who taught crony capitalism question >> for the reasons i said. it is like defining duty with the incumbents again import export and primary challenges. if you support -- >> i'm talking about the u.s. xm chamber of commerce. we covered 300 issues.

we have this political process for challengers and incumbents. if they were cumulative voting with us, you get indoors. [inaudible] >> 70% or more and you get to it. >> i love these questions all the time but this single issue. who would you ever deal with politically? [inaudible] in the coming months. >> what is the progress on the customs bill that if there was a lot -- [inaudible] the private letters we notified

then, making sure we don't have any errors. at the end of the year it is going to be a couple months. >> the customs bill, what is the update on that? there is a hold on that. >> the customs bill became the dumping ground so the first deal is to try and get out of the customs bill. all of that stuff had nothing to do with the customs dl and trade enforcement. so that has been going on. then congress wanted to add the internet tax freedom act, which has been around since 1992 and basically unanimously authorized perpetually by congress. they wanted to make it permanent, so now the per minute internet tax freedom act. senator durbin complicated it because he wanted to at the marketplace fairness act, which

is an amendment to a larger bill on senator reid's majority leader never can get it in the house of representatives and never even moved to the judiciary committee. the barrier right now, the challenge right now with the component wanted to add another thing. got the reauthorization pretty easy for everybody to vote yes. no one. no one will say we will tax everybody's access to the internet. that is for sure. but the marketplace fairness deal needs to be socialized, needs to be dealt with the regular order in the house. that right now is the bit holder. >> you mentioned tax extenders that kind of fell by priority. >> this is the one raised apparently geothermal and the whole list.

when i mention what i said, that is what i was specifically talking about. weber's publication -- i don't remember who, both he and she were quoted as saying they've agreed to tackle that and the extenders that marked out with. she says she has a commitment from him to do that. >> to have any particular concerns about the domestic given recent fluctuation. >> this has been a concern for years. we were not growing at the potential we believe we should be and could otherwise be. i think it was pretty clear. tom tried to make the point that one of the reasons we are growing up that slow-motion recovery based at the policy is put in place. his remarks try to suggest the difference. so we are concerned.

>> we mentioned a letter to address the issues. what are the other options they can take? >> they are not going to reopen it. on the implementation side, they have always done that bar deals and letters and other agreements and that is the only way we are going to fix these issues. >> on the tax credit issue, how does you question the ironclad commitment or is there wiggle room there? >> seriously. >> you must have a sense -- >> i just read it. >> given your commitment, how close are you working with republicans on the replacement effort? do you think they can come up with a viable plan about what elected in it? >> five years. i think this is a very challenging deal because i think

there are elements of the obama plan that are impossible to get rid of. one is a preexisting condition. i don't think we'll ever see people going back on that. the kit deal under the parents policy is probably another one. that is probably not going to go away anytime soon. so there are some aspects of this name that are going to stay. the gold suburb on has become a real challenge for people because you are seeing insurers could call it a period you are seeing numbers forced to raise to do the walls that are making it. remember the president saying the payment would be $2500 less. that never quite happened. the code that slowed has slowed before obamacare. go back and trace it and come forward. this is going to be a huge

challenge. this is a personal issue. this is a very expensive issue, the most expensive than government is doing. this is going to overtake and it's very expensive to continue to provide this as you know even though we have the benefit in terms of the tax deduction. republicans have found themselves a plan. >> do you think they will have the election? >> i don't know if they will pull the election and vote on something but they have no choice. you can't campaign as they have on repeal and replace and not come up. >> how big of a priority is getting done it passage in the short term of the customs bill, and is that a priority of the chamber right now? >> to trade enforcement act as a customs reauthorization.

>> is that your main priority for what you would like to see done? >> is one of the main priorities would like to see. probably one of the more ripe ones to get done. >> any more specific expending energy supply priority that was discussed earlier and opportunities you see -- >> congressional republicans holding a legislative retreat in baltimore this week. we have covered here in alabama, but it's really the elementary schools that are set to.

the african-american kids are getting poor education, portable building. it's just not anything stop you. >> first, we put together these kid houses and the big thing booker t. washington never did was say no, just like we do in tuskegee i want the community to build it. so first these wer built and that's amazing. from that, it morphed into 5000 schools all over the south including maryland.

>> the national flood insurance program matures within 5 million homes, mostly in texas and florida. the program is $23 billion in debt. financial service subcommittee on housing insurance yesterday held a hearing on nongovernment alternatives to the program. this is just over two hours. [inaudible conversations] >> to make it to her washington traffic here has joined us. it's called the committee to order. without objection the chairs objection the chair is authorized to declare recess of the community in a time and how to create a more robust and private flood insurance marketplace. before you begin to dance like to thank you begin today at deutsche bank witnesses were appearing today. i look forward to your testimony and i now recognize myself or two and a half minutes to give an opening statement. flooding is devastated large areas of my home state of

missouri as well as neighboring illinois, tragic late causing millions of dollars of damage. in the past several months we've seen similar situations without airline is to southern california. unfortunately, these are not isolated incidents. the most prevalent disaster in the united states. communities in missouri and across the nation put their lives back together, it is fitting the subcommittee and the construct of the national flood insurance program. yesterday the subcommittee held a hearing to discuss the flood insurance in america. last week i convened a roundtable discussion on flood mapping, what has become evident is a total reliance on insurance coverage is inadequate. numbers agree across party lines to policyholders, communities and taxpayers deserve better. one of the first answer is affirmed as to allow policyholders to have market-based policies. h.r. 2901, flood insurance market modernization act of 2015

introduced by the gentleman from florida, mr. ross and mr. murphy would allow the greater the matures and private market participation does so under the provision that the state insurance commissioners on the foundation regulatory system in an overall bipartisan fashion to protect. by removing around what qualifies but insurance property owners will be assured of greater options and flexibility in their choice of policies with private competition to the publicly admitted to will also promote competition in markets which have previously been underserved. i would like all americans who have suffered from flood damage to create a program for flood insurance that is stable, accessible and cost-effective. before i yield, i ask unanimous consent to insert into the record h.r. 2901 from pci, aia, cia the common national

association for professional insurance agents, financial service roundtables, smarter safer coalition and the association of realtors, nba, aba in the multifamily housing council. as you can see, there's wide support across the spectrum. this alternative to our present system. the chair recognizes the ranking member of the subcommittee, the gentleman from missouri, mr. cleaver for five minutes. thank you, mr. chairman. but me again as yesterday the very step you take towards dealing with the issue of insurance before it becomes caught up in a critical year where we are not going to have a lot of days. i think it is appropriate for us to continue as the authority

begun hearing issues that relate to the flood insurance. and we discussed yesterday rather broadly the nfip program and highlighted areas where there is room for improvement and discussing ways in which nfip could be reauthorized. today there is a second hearing on flood insurance and they will be discussing the role of private insurance in the flood insurance market which is a significant issue in a significant concern and we dealt with it yesterday. i think the key to the whole issue is whether or not the private sector is interested in and will become intimately involved in the program, which we've attempted over the years the program created and made 68 to provide consumers to get

coverage from the very limited private mark it. nfip is developing flood maps and promoting mitigation activities. one of the things that i think we all have come to see the flooding can occur anywhere. i grew up in the flat part of texas, the dallas area until you get to politburo canyon amaryllis just flat. last summer and this flat land, there is all kinds of flooding and we do know that it can and does occur everywhere and can have a devastating impact on our communities. one of the things we have also learned is when these major events occur like katrina, it pretty much decimated any

private participation in the government has had to do a lot of backstopping both for sandy and featuring a period as we begin to discuss reauthorization program, i think we've got to make sure products remain affordable and available. conversation must also focus on the importance of the teen accuracy in our mapping, which is a really big issue in the rural part of the fifth district which i represent in missouri ms not being and risk technologies developed since the creation of the nfip, the appetite for private insurers to reenter the flood market has grown. i look forward to hearing from our witnesses today see a race in which the private role in flood insurance could roll. >> i yield back the balance of my time.

>> back in the chair recognizes the gentleman from florida, mr. russert should have transferred opening statement. thank you, mr. chairman. thank you for the important issue to which i'm dedicated. that is providing american homeowners more affordable consumer options in the marketplace. would also like to thank our distinguished guests for testimony sudan representative patrick for joining me today in the modernization act we will be discussing this morning. sister in house financial service committee urge colleagues to record me to address shortcomings of the current government flood insurance model known as the national flood insurance program. yesterday we held our first in a series of hearings to examine the problems with the federal program. ..

>> flood insurance market act. this bipartisan legislation will remove the unnecessarily regulatory barriers that are hendering options. i am proud kevin mccarthy has offered support of this legislation. i urge my colleagues on both sides of the aisle to support this bipartisan that the encourage a more affordable private option for homeowners. >> we want to begin our testimony and welcome the panelist. starting with theresa miller. steve bradshaw, vise president

of the mortgage corporation. brad kelly, executive director of the national association of surplus offices. and bernie birnbaum, center for economic justice. each is recognized for five minutes and without objection the rest of your statement will we entered into the record. green means go, yellow means a last minute to wrap up and red means i am the one with the last word so hopefully you stop. i would like to recognize the gentlemen from pennsylvania. >> it is my privilege to welcome pennsylvania insurance commissioner to the committee today. ms. miller oversees the fifth

largest market in the country and 15th in the world in terms of premium volume. commissioner miller brings years of experience to her appointment and our subcommittee today having served in oregon's insurance division and the private sector. she is speaking to us not just as pennsylvania's commissioner but an active naic member. she provides advice and recommendations on issues auto insurance affordable. given pennsylvania history of flooding and the ongoing concern about flood insurance policies on citizens i expect ms. miller to provide what will be impactful and good information. >> thank you. ms. miller, you are recognized for five minutes. >> good morning. thank you chairman and ranking

member and congressman for you have kind introduction. i appreciate the opportunity to provide state regulators' views surrounding the development of a private flood insurance market. it will help promote consumer choice and spur competition and provide homeowners necessary coverage often at greatly reduced cost. in pennsylvania we are finding in many cases private carriers are willing to offer compareable covera -- com parable coverage at a lower cost. in one instance, it would have been a $7500 premium but private coverage was found for a little over $1400. another example is a quoit of $6,000 but a private quote for $900. private flood is being developed and offered by the surplus lines

insurers. they insure unique or otherwise difficult risks that the market is initially unsure about insuring. we have significant authorities to insure these communities are well-protected. these authorities include capital, surplus, and eligibility requirements as well as the ability to hold the insurer and broker responsible for any misconduct. as the private flood insurance market grows and more companies offer coverage, our regulation will continue to evolve to meet the size and the breadth of the market as well as the needs of the consumers. more can be done to facilitate the development of this market. the waters act objective was to create opportunities in the

private market. unfortunately, the definition of and the regulatory environment surrounding private flood insurance is at odds with this objective making it more difficult for regulators to protect consumers and insure availability. the flood insurance market parody addresses these concerns. we find it troubling the bigger waters empowered federal banking and housing regulators to apply their own requirements related to the financial solvency or claims paying ability of private insurance companies from when they will accept private flood insurance. banking or housing regulators don't have the experience to regulate the insurance markets and they have regulatory objects that are different than ours and

don't foster a competitive environment. they are ill suited to regulate insurance and it is inappropriate for their judgment to be subjected on those charged under the law for insurance products. hr 2901 includes important language clarifying state insurance regulators have the same authority to regulate private flood as they have to regulate other insurance products in other markets. the vague definition of flood insurance, insurers need flexibility to taylor products to meet consumer's needs. it doesn't allow for innovation but focused on making it sure policies don't deviate from

criteria despite the fact private insurance companies can offer greater limits at a lower price. state insurance laws should govern over the transaction and this law will insure regulators have the flexibility to improve private flood coverage that is responsive to the needs of their states while complying with the state's regulatory requirements. this will remove the confusing language to help prompt more insurers to enter the market if willing. we support the efforts to develop the private market to help consumers with additional access to private flood insurance and coverage at a more affordable price. we appreciate congressman ross'

help and murphy's help. thank you. >> mr. bradshaw, you are recognized for five minutes. >> good morning, chairman, and ranking member and members of the community. i am testifying on belandfall of the mortgage bankers association. i am currently vice president of the organization and our head quarters are in new orleans. the company was founded in 1925 and serves 28,000 loans throughout the southeast. this past august marked the tenth anniversary of one of the most significant flood events in the united states history. hurricane katrina. approximately 3500 of our customers sustained significant flood damage to their homes. on a more personal note, nearly

two 3rds of our staff lost their homes. as a result of the hurricane and two other significant storms in the fall of 2005 more than one million housing units were damaged across five states. there is no doubt the national flood insurance program was a key component to the gulf coast recovery just as it has been for other communities across the country that sustained major flooding. there is no doubt the program needs to be reformed. it is 23 billion in debt and not sustainable. the federal government cannot and should not bear the full burden of post disaster recovery. passing bigget waters it was evident that private insurance must be developed. expanding flood insurance markets will make it easier for the homeowners to obtain that

and lower cost and increase the number of at-risk properties that are insured. in other words, we are expanding the pool. for example, many homes destroyed in katrina were not located in a special hazard area and homes outside of that area are not required to have flood insurance. as a result, mortgage companies like us were responsible for the houses when they were wiped out. we can serve to shift some of the burden, not all of the burden, of post disaster recovery away from the government and to the consumer. in light of this, we support hr-2901 the flood market parody and modernization act. the bill has two improvements. it clarifies what is a policy

and provides a clear definition of private flood insurance making it easier for lenders to accept private policy to satisfy the mand tory purchase requirement. second, it addresses lenders' concerns regarding continuous coverage requirements. in the current law, it is unclear if someone previously covered but moves to private sector policy can return at the previous rate. we are pleased this eliminated the disincentive for consumers to chose a private policy doing so by clarifying private flood insurance satisfies the continuous coverage requirement. in summary, we support hr-2901 as a way to encourage the growth of private flood insurance market. the increased market will expand

options for borrowers, lower cost for consumers and reduce the cost of flood losses over time. we are grateful for the leadership shown by dennis ross and patrick murphy on this legislation and urge the subcommittee to approve it. thank you for the opportunity to testify again. i look forward to any questions you may have. >> thank you, mr. bradshaw. mr. kelly, you are recognized for five minutes. >> good morning, chairman leutkemeyer, and the ranking member and subcommittee. i am based out of kansas city, missouri and thank you for inviting me to testify. this is a 40.2 billion market and we underwrite a high amount of that.

our market exist to provide insurance coverage for nonstandard and complex risks and risks for what the market is not willing to underwrite. the freedom is what allows this to work. this principle is partial to the effective operation. considering the impact of losses causing certain countries of the business to withdraw. market responses to cat events is measured by the rate surplus premiums shifted up or down in relation to property premiums. you see these events followed by spikes in surplus lines

premiums. spikes that exceed the growth of the overall market. and the reverse is true in the years following where the market is lower as the standard market adjust. without this safety net, consumers can be left without coverage. the same same applies to the surplus lines. this is not new. why might that be? property exposures may exceed the $250,000 on private property. home owners may want replacement coverage rather than cash value, they may want to secure additional structures, additional living expenses, basement exposure, or business

interruption. these examples, coupled with communities or zones that are not eligible for the coverage, mean consumer alternatives are absolutely essential. our written testimony includes some facts about the flood insurance market and you will see they represent a small amount of the overall market but without it consumers who need it have no alternative. our market is allowed to provide private flood insurance but the 2012 law created uncertainty for lenders and consumers. lenders are unsure about accepting the policies in light of the laws requirements and it authorized federal banking and housing regulators to provide their own requirements on private insurance companies. no regulations have been developed and it is prolonging this uncertainty. uncertainty is the problem. but hr-2901 is the fix insuring our market's continued roll in

solving complex flood risks that exceed or are different from options available. it maintains the authorities of commissioners in regulating private flood insurance because of their experience, strong track record and success we support that. we have also provided written testimony describing how the states regulate the surplus market. i think commissioner miller did a thorough job describing that. let me reiterate the importance of the state over the insurance company and the broker in a surplus line transaction. as a result, there is a solvency record that is clear for our market and that is included in the testimony. hr-29 will solve the problems and concerns shared by the banking industries by preserving

our communicator ability to offer options to consumers and without with consumer who need it have no alternative. there is a desire to expend and improve this going forward and i think the witnesses over the last few days agree with this. we believe this bill is a positive step because it enables the private market to develop, and the naip to focus on repeated losses. we appreciate congressman roth and murphy for introducing to bill. we look forward to working with you. >> thank you, mr. kelly. mr. birnbaum, you are recognized for five minutes. >> thank you, chairman leutkemeyer and ranking member and members of the community. the availability and affordable of flood insurance is important for a resilient and sustainable

future. i worked on these issues for 20 years as a insurance regulator and economist. it is asked whether the nip is an effective model for the protection of residential and commercial owners for flooding and the answer is no. the primary problem of the nfip is the goals that congress passed the programs with and the constraints congress has placed on the program. the starting place for congress and the federal government should be a laser like focus that these programs provide protection against flood. this is the clear goal any proposal of the nfip can have. the reason resillancy and sustainable must be the goal is there is no insurance mechanisms, public, private, or combination that will finance

increase and frequent flooding. federal expenditures today replace disaster expenditures tomorrow. there is a great pressure on the private market to provide flood insurance but hr-2901 is not the approach to accomplish this or make the nfip more sound or resilient. the best approach for congress to achieve these goals is require that flood be covered in standard, residential and business policies. get the nfip out of the business of being a flood company by requiring that insurance by private insures covers the

flood. two, transition the nfip from a directtroid -- direct provider to a high risk program. address federal and state and local assistance outside of the insurance policy. with a focus on assistance for loss mitigation as the tool to create more affordable premiums. and reauthorize the enounfip. with response to current crisis contributing to bigger problems down the road.

federal agencies are slow with rules regarding private insurance and the opportunity to pick off nfip policies that are mispriced due to rating practices. hr-2901 will not address the long-term problems of nfip and promote market participation in the sale of flood insurance and creates bigger problems in the future. hr-2901 will include surplus lines for residential properties and eliminate federal oversight. removing the authority of federal agencies to implement requirements, and removing the authority of government sponsored enterprises to establish the claims paying for insurers. surplus lines can be set aside admitted insures in the following way. admitted insurances are licensed

to sell certain insurance and they are subject to the policy, forms and rates and subject to the state's consumer protect laws regarding unfair trade practices and competition and participate in the state guarantee fund. in contrast, surplus lines are not licensed by state insurance departments. rather the state department regulates surplus line agents who are authorized to place coverage on a list of acceptable insurers. surplus policy rates are not subject to oversight and they don't participate in state guarantee funds. i understand the theory behind the program is admitted insurance can't write private flood but they could be if concern requirements were relaxed. the story continues to one surplus insures are offering private flood admitted insures will be more comfortable.

i see no evidence to show admitted carriers will do as suggested. i have seen personal business mitigate to surplus lines when permitted to do so to take advantage of fewer consumer protection requirements. the result of these changes will be for surplus lines and cherry pick nfip policies that are overpriced. while the subplus lines insures take the profitable, low risk policies and the nfip will become even more in danger. it will create problems for nfip -- >> can you wrap it up? >> since the states don't regulate policy reform they contain exclusions a regulator would never improve.

flood insurance markets are not competitive so unleashing unregulated insurers is a disaster. >> thank you. i will start with myself for five minutes. ms. miller, you made a comment with regard to the gse's being able to regulate insurance versus the private market which needs to be overseen. can you explain? >> banking and housing regulators have regulatory objectives that are different than insurance consumer protection and promoting

competitive insurance markets. they are ill-suited to regulate insurance. it is really inappropriate for them to be given the authority to substitute their judgment for those of us who are charged under the law with regulating insurance. state regulators have 140 years of regulatoring and supervising the business and balancing coverage with solvency. to put it bluntly, banking and banking regulators don't have a m mandate of consumer protection and state regulators do. that is our charge. >> what you are saying is the gse is taking your authority to oversee and qualify the different policies of the private sector. is that what you are saying? >> that is correct. >> okay. thank you. mr. bradshaw, you talked a

little bit with regard to some of the folks who were not covered by flood insurance, especially in katrina, and you sort of alluded to the fact because there is concern of the floods affecting people beyond the flood plane. would you consider or are you alluding to there fact you would like to see everybody required to have this? or the lenders have more leeway in requiring people have flood insurance? or did i misunderstand what you just said?

standard >> standard mortgage is very interested in that. during katrina, there were a number of people that were flooded. due to the nature of the insurance, if someone floods, if they are not into flood zone, so there is no flood insurance, and if they then abandon their home then under the fha program it is up to standard mortgage to repair the home in order to file the claim against fha. so that puts us in the business of insuring fha. we believe with a new type of program that could be developed by private insurers that other people may be interested in a keen insurance even when outside

of the zone. >> thank you. mr. birnbaum, i made a statement about surplus lines don't belong to the guarantee association of states. did i understand that correctly? did you make that statement? okay. that is a very key point from the standpoint i think surplus lines are where you look to to be able to provide flood insurance. is that the case, mr. kelly? >> it is the case. surplus lines insurers are not backed by guarantee funds but there is good reason for that. if you look at the type of coverages written in the surplus lines market, there are often times not coverages that would fall under the general limits of the guarantee funds that exist for the standard market. you have also got the report that shows an incredible solvency record for the surplus market.

11 years of no financial impairments compared to 2007 in the same period -- 207 in the same time period. we tend to believe that coverage is typically inadequate for the size of policies covered by carriers. we believe they don't incentivize and guarantee funds add an unnecessary burden on the consumer given the stellar financial strength of the industry. >> thank you. my time has expired. recognize the ranking member mr. cleaver from missouri for five minutes. >> thank you, mr. chairman. yesterday, i asked your witnesses if any of them believed that we needed to