in effect to get a gallon of gas out to some of the forward operating bases. what do you envision, mr. secretary, in this budget as actually getting accomplished in terms of making us more energy-independent? >> i'm going to have general dempsey speak to the particulars of what you just pointed out. energy is, is a very important element in driving our national defense. but at the same time, we have made strong improvements in trying to develop energy efficiency. particularly in the navy, as well as in other elements. and here, the goal is to try to continue the investment in energy efficiency. because it does save money in the long run to be able to do that. we are serious about this, senator. for me, it's part efficiency and part effectiveness. the better we can do it,

becoming self sustaining at the point of need, the less we put soldiers and sailors, airmen marines on road work networks. there's a real operational requirement here. there's places in afghanistan where you can't get anything by way of resupply, except by air-dropping it. that kind of drives the cost of that commodity up. when that's the condition in which we place our armed forces. to the secretary's point. we're seized with it we've got commitment in the budget. we've got some plans, milestones and we're working towards them. >> senator, mr. chairman. >> senator grassley? >> senator wyden brought up the issue that i was going to start with on the air guard. so i don't expect you to say any more than what you said to him but i would like to make a comment about your answer. and that would be this, is that you probably correctly quoted the secretary of the air force, that it was, that the active duty had taken probably as much as he can. and so something had to come

from the guard. but we got the distinct impression with our meeting of the iowa delegation in regard to the des moines 132nd fighter wing being removed. that, that while the last time they went through cuts, the air force did it and now it was the guard's turn. as opposed to being what senator wyden, having data-driven. we asked for a lot of this data. but we're not getting anything. and we heard from the national guard burg, of which fighter wing to cut. after the decision had been made to take the cut out of the air national guard. so we're looking for the statistical basis, the data basis, whatever it is and we're having a hard time getting it. we'd like to have it. and not just chuck grassley, but the whole delegation. my second point would be to read a statement and not have you comment. because i gave awe letter that's going to have the basis of what

i want to talk about. but just so you know, that this isn't something that i give little concern to. for the last three years, we have in my office, we have read each year, 120 audits, done by the inspector general and you want to remember, we pay about $100 million a year in this area. so my letter is about just 16 of the 120 audits in the last year, we've uncovered egregious waste and misconduct at dod. these reports were issued by the office of inspector general last year. i discovered them during my ongoing process of oversight and review. if i had to use two words to characterize what i found in these 16 reports, these words would be scandalous and disgraceful this is some of the worst that i've ever seen. these 16 reports tell me two things -- first, all the waste and money needs to be recovered. and secondly, responsible

persons held accountable. you have said that you want to save $500 billion. well, the acting inspector general is serving up some savings on a silver platter, close to $1 billion worth. unfortunately, without high-level intervention, i fear all the good audit work and all potential savings will be go for naught. i fear the accountability and recover of wasted money, not likely to happen any time soon. all the information i see tells me the hard-hitting recommendations contained in these reports are being slowly and quietly ground down to nothing. by pentagon bureaucracy. so i respectfully ask that you take a moment, read the summaries of those 16 reports that i picked out of the 120, which you'll find in my letter and then tell me whether you're disturbed or angered by what you read. if you see what i see, then please initiate a top-level review of all allegations laid out in these reports, please urge those assigned that task to

search for a reasonable path forward on all the unresolved recommendations. for audits, recommendations are a point of the spear. they're the bottom line. and they're about to fall through the cracks. may i remind you that these audits cost as i said, $100 million. given the strength of the evidence that i presented, i believe it is incumbent upon all of us to act on the waste and i'll just use one example. and only one sentence from my letter. one of these reports calls for a review of the actions of officials responsible for approving pv projects that were not cost-effective. and take administrative action as as needed. this is what the navy's response was to it in an email of january 17th this year. it stated, quote, it is not necessary to take administrative

action against officials responsible for selecting the projects and considers the recommendations closed. i'll close with this. that i want to compliment on another issue, i want to compliment the defense department for reopening the project flicker, project flicker was supposed to examine allegations that government employees, including dod personnel had pursued child pornography or government computers, some of those involved were reported to have sensitive security clearances. after learning that the defense criminal investigation service had arbitrarily shut down this investigation, i wrote your predecessor, secretary gates on november 5th, 2010, i wanted to raise questions about why flicker investigation was allowed to go dead. i have recently learned that after review, cases are now being flowing from dcis to the courts for prosecution, that's very good news and i hope dod employees purchasing child

pornography while on the job are held accountable, thank you. >> senator grassley. >> you can respond if you want to, but you don't have to. >> i understand. i'd like to. >> first of all, i want to thank you for your leadership on these issues. you and i have known each other for a long time going back to your agriculture committee. i've always respected your work going after waste in the federal government. i want you to know a couple of things. number one on those i.g. reports-day not take those lightly. i think they're seriously done. my direction is we will implement the recommendations contained in those reports. i get a report on that and i'm happy to share that with you as to what progress we're making on implementing those recommendations. i require, when an i.g. makes those kind of recommendations, we don't just put it in a drawer. we've got to implement those recommendations, that's something i believe in.

secondly, our ability to develop our own audit capability, i hope will give us the ability to get ahead of this game, rather than behind it. where we are now. >> well i thank you very much and i appreciate your following through. >> thank you, senator. let me put this chart up. you know, secretary panetta, you gave a serious charge to this committee in your earlier testimony. saying that we've got to be the conscience of the congress. in these committees and the house and the senate. you certainly were that when you were chairman. i've tried, i must say i don't think i've had much success in convincing my colleagues to be part of this matter. i think we made serious responsible suggestions to do

things on a, in a balanced way. yes, discretionary spending has to be addressed. yes, we have to reform the entitlements, yes, we've got to address revenue as well. but as i've listened here this morning. i hope conclusion is not that there's no additional savings that can be derived from defense. not other nickel. because i don't believe it. we've spent a great deal of time looking at things we could save responsibly. and i don't think at the end of the day we're going to have an alternative here. if we don't find a way to come together around a comprehensive band, to have additional savings. what's ultimately going to happen here. it's going to be forced on us. and it will be forced on us at

the worst possible time when we're in crisis. i can't think of a worse outcome for this country. and problem is. none of these things are very popular with the american people. reforming entitlements? people say no, don't touch them. revenue, about 65% say no, don't do that. >> further savings on program after program that have already had significant savings looking ahead over the next ten years? people say no, don't do anything there. the only thing they support on the spending side is cutting foreign aid. well mr. chairman, mr. secretary, you no he that's not going to do it. that's less than 1% of the budget. and about the only thing they support on the revenue side is taxing those who have inoms over $1 million.

and there's no question in my mind, we're going to have to ask some of them to do more. but when i look at, here it is. here is the spending in dollar terms. under the president's budget, there's a little dip, but then it goes up over the remainder of the budget period. so when people say it's being cut to the bone -- really? it's being cut to the bone? there's more spending every year beyond this next year, than we've had. every year, more spending, i compare it to the sequester, that is harsh. i don't think this is a wise course. certainly not. i absolutely agree with you that this trajectory and sequester, too sharp a cut and the means of

doing it, across-the-board cuts, we share your view, that would have to be done. that really doesn't make sense, simpson-bowles, the only place we've had a bipartisan agreement around here more savings initially and more savings over time than the president's budget. but not the kind of abrupt cut that we see in the sequester. so i just say this to you. i hope that we don't conclude or it's not your testimony here today, that there's not another dime of savings to be derived in defense. i was just had an analyst briefing that was talking about the way we manage our our navy. and that we keep crews tied to ships. and that means when a ship is

deployed, and it comes, or the crew comes back, the ship comes back. there's been analysis done that if we kept the ship deployed and shared crews, that we could derive significant savings. i don't know if that level of detail is something, mr. secretary, you've looked at, but i'd be very interested, do you believe or have you looked at the notion of having crews share ships, so that we wouldn't have to, when a crew returns, return the ship. >> mr. chairman, i'm not sure that is the case any more. because i think there was -- there was a concern about just what you've pointed out. and let me get back to you to make sure that, that that is the

case. but no, i, i agree that that's an area that we need to review. >> all right. contracting. last year the department's testimony was we do have a contracting issue. we do have to better manage our contracting. we do have to derive savings there. is that still the view of the department, that we have legitimate savings that could be derived? >> yes. >> from better managing of contracting? >> yes. >> senator graham has returned. senator graham, has been trying to get his questions in. he's had another hearing going on, that's why he's had to shuttle back and forth. i'll going to stop right now to give him a chance so that he has his opportunity. >> thank you very much. this is not a budget question, but does relate to us going on to afghanistan. there are 3,044 prisoners under

american control and under the law of armed conflict. general dempsey, secretary panetta. i'm going to ask you to provide detailed analysis, what they're being held for. how many of them ied makers, how many of them engaged in attacks against american troops and do you believe that the afghan legal system has the capacity to administer justice in these cases by march 7th? >> no, sir, i do not believe they do. as you know, general allen has a plan to build their capacity over time. >> do you agree with me that if we release the prisoners to the afghan legal system as it is today, a lot of them would go back on to the streets and kill americans? >> that's trouble. >> do you agree with me that of all the military strategies we've employed in afghanistan, a night raids have produce a lot of results? >> that's correct. >> but from a military point of view, they need to continue? >> correct. >> okay, do you support a strategy partnership agreement

with the afghanistan government? >> i do. >> they need to step it up if they want one, do you agree with that? >> that's true. >> when it comes to the budget, you were asked about tri-care premiums, general dempsey, when you retire, would you be willing to pay more in premiums? >> yes, i've made that clear in testimony. >> i've asked you that. the reason i ask you that, we haven't had a premium adjustment since 1995. if a means test is to be applied, second panetta, the entitlement part of the entire dod budget health care cost is competing with the guns and weapons system. correct? >> correct. >> if we don't like the way we've adjusted premium. i would ask the congress, because we haven't done anything with social security we should, i'm for means testing, i would support working until you're 70, but giving you plenty of notice. i'm willing to do the hard things, but when it comes to the department of defense bumt, because we haven't done these other things.

there's no reason to put dod in such a bind. it's absolutely essential you get control of your health care costs, is that correct, secretary panetta? >> that's correct. >> if you've got a better way of adjusting premiums, it has to know. >> i'm open. >> this is a better deal you'll ever get in the private sector, it should be a good deal. but it's an unsustainable deal. now when it comes to bracc, i'm in the camp if we're looking at trying to save $80 billion that we should put everything on the table and do you, do you believe it would be prudent to take another look at our bases? >> you're in the right camp. >> i just think we can't say not in my back yard. when it comes to sequestration. saw it's the dumbest idea you've heard lately, right? >> that's right. >> you're competing against a lot of dumb ideas. that's really a big prize. so -- would you, would you be willing to consider resigning if you were ordered to implement sequestration? in protest? >> well i'm not going to go there because i -- >> i wouldn't want you to i

wouldn't want you to because i think you've been one heck of a secretary of defense. but the way you communicate, general dempsey, much to your credit. you're telling us without any nuance will destroy the military. and i'm telling you we won't let the military be destroyed. when it comes to budget threats, budgets and threats, do you believe the iranians are trying to develop a nuclear weapon? secretary panetta? >> i think they're developing a nuclear capability. our intelligence makes clear they haven't made the decision to develop a nuclear weapon itself. >> do you feel confident we have the ability of necessarily militarily to deal with the threat that iran faces? >> yes. >> okay. and if we implemented sequestration, that ability would be greatly reduced? >> that would hurst us. >> now at the end of the day, general dempsey, you're being tasked to take $450 billion out

of the military budget. we're being pushed to do that. but $600 billion on top of that, that would be a no go for you? >> we'd have to redo our strategy and we wouldn't be a global power. >> when it comes to afghanistan, secretary panetta and general dempsey, is it worth it? what is winning? what's the benefits of winning? what's the cost of losing? could you describe as briefly as possible? >> the reason we are there, senator, is because our mission is to dismantle, destroy and defeat al qaeda and their terrorist allies. and that means that our ultimate goal here has to be in afghanistan that can control and secure itself and make sure that it can never again become a safe haven where terrorists can plan attacks. >> do you think that's possible? >> i do. >> that would be winning? >> that's correct. >> what's the cost of losing?

>> cost of losing is that the taliban without question would regain control question would regain control and terroristal eyes would again, come together. and their sole goal is to attack this country. >> i thank the senator -- i thank the witnesses. i especially thank, we are a little beyond time, and i'm sorry for that, this is an important hearing for this committee. we are delighted, mr. secretary, that you are here in person. general dempsey, thank you very much for your testimony and service. thank you secretary hale for yours as well -- >> mr. chairman, may i thank the witnesses also for your testimony and for your service to your country, we know that larger cuts already, are working

diligently to achieve those in the most effective way that other departments have been asked to a chief. many have been asked to achieve not any cut s zero, that is important it is. with regard to the chart that you were showing, that is dollars not adjusted for inflation, if we continued -- you would not see a growth, i think the relative growth pattern that you showed in that chart is probably accurate. youed a justed it for inflation and energy costs go up, material costs go up. somewhat over the years so i think the sequester represents a greater threat than we would like to admit, and the way to fix it is not to give up the

reduction reductions but to look at the other aspects of the government, as senator gram mentioned. we need to make sure that our men and women in uniform know we believe this them and we are not breaking faith with them. that can be done and i think we share that view. >> i think we share that view. that is a very good summary statement for what we have to try to achieve here. one thing that has to go out from this hearing, a clear message, on both sides we do not believe the sequester ought to go forward. it is terrible policy. certainly for the national defense of our country. so let's not have that be the result. at the same time, we understand we have to deal with this deficit and debt threat too. as difficult as it is. and senator graham, thank you

for your question, right on point. we will stand in adjournment. and with affirm, a, firm

confidence, that will raise the hopes of mankind, when in that day, no one rattles a saber and no one drags a chain. [ applause ] >> as candidates campaign for president this year, we look back at 14 men who ran for thes of and lost. go to our web side, cspan.org/contenders, to see the contenders that had a last be impact. >> it's important to restore a clear understanding of the tierney of man over man, it's our cause to not continue to avoid hard decisions -- >> c-span/the contenders. >> even a person who is a senator, even a person now who

is a president of the united states, faces a situation when they talk with face. they face some who are racially prejudice. they face a much larger of the american populace wants to deny the reality of race, even know. >> harvard law professor marshal, on race, politics and the obama administration, he is the author of three books and will take your calls and tweetds for three hours. live on "in-depth." >> we are live this morning on capitol hill. ben bernanke will deliver the policy report before the house financial services committee.

sensoor -- senator baccus is th head of the committee. we were joined by congressman maloney, she previewed this morning's highwmorn morni morning's hearing. >> back at our desk here on "the washington journal." ben bernanke is coming to testify this morning, one issue that is likely to come up is why the federal reserve weighed into putting out a white paper that was not requested. the blue print is lost in the din of poll titipolitics.

i was taken aback when just recently as you know the fed issued an unsolicited white paper that if you did not support you mirrored the position of the administration, that the appropriate role of the federal reserve, are you concerned about it playing politics? >> i believe the federal reserve would say what every economist in the country is saying, every economist is saying that housing is a huge part of our economy and if we do not address it, it will continue to be a huge drag on our economy. mccain's he economiy -- mccain' economist testified that the housing industry and housing in general was a full 25% of our economy. so we need to address this large segment of properties that are

underwater, that are foreclosed on, that people cannot meet their mortgages, and the fed basically said do something about this. which is what everyone is saying and the president has come out with a proposal to help home owners refinance write down principal, many banks are helping to work with the backlog, if there's a foreclosufoclosure -- a foreclosure, how you move it out so that it's not a drag on the economy. when the fed says it, everyone listens. and we need to listen, we need to act on it and we are acting on it. >> remarks from representative ca caroline maloney. ben bernanke will deliver the

policy report. fiscal policy will be questioned, the status of the economy and the debt crisis in europe.