have actually addressed some of them to some extent. one problem is getting the excess supply of housing off the market, so to speak. and one way to do that is the convert reo housing into rental housing. gses have a pilot program to do that, and we've discussed some of the issues related to that in our white paper. there's also, for also to get rid of dilapidated or uninhabitable housing, land banks and similar institutions are a useful tool, potentially. we also consider -- we have not taken a position, and there certainly is no official position on principal reduction, but we have looked at various alternatives to foreclosure, including, for example, deed in lieu or short sales, which allow people to get out of the house, you know, and to, and for the bank to avoid the foreclosure process. i guess a final area where we have a bit of a discussion is about availability or excess to mortgage credit, which is now very, very tight.

and one of our recommendations was that the gses look at their policies regarding representations is warranties to provide greater assurance to originators that their loans would not be returned to them. gses are looking at that. that's a positive development. another way to improve originations is to reduce uncertainty about servicing obligations and between the various agreements that have occurred recently and the fed's cease and desist orders, current discussions about national servicing standards and the like, i think some of that uncertainty is being removed. there's a whole variety of things that can be done. none of them as a silver bullet, but many of them can be helpful. >> thank you, mr. chairman. >> time of the gentleman has been yielded back. chairman bernanke, we thank you for your testimony today. the chair notes that some members may have additional questions for chairman bernanke, which they may wish to submit in

writing. without objection, the hearing record will remain open for 30 days for members to submit written questions to the witness and to place responses in the record. this hearing is adjourned. >> thank you.

>> as the fed chair leaves, he'll be on capitol hill again tomorrow, testifying before a senate committee. and we'll have coverage of that. we will be back here on capitol hill in just under half an hour with secretary of state clinton testifying before the house foreign relations committee on her department's budget request for 2013. the president is requesting $51.6 billion, and that is a

1.6% increase over 2012. secretary clinton was on the hill yesterday, testifying before the senate foreign relations committee, where she was asked by committee chair, john kerry, about increasing demands on the state department. >> i'd like to ask you, i'm confident colleagues are going to ask you specific budget questions with respect to specific countries. what i would like to do is sort of ask you, perhaps, to be a little bit more broadly reflective and expand on the comments that you did just make. since this is now your fourth budget and, by your own decision, the final budget that you will put before us, and having now been in there for more than three years, i wonder if you could put a little meat on the bones, perhaps even more, of the importance of this budget number that we deal with here.

egypt, for instance, is teetering on potential economic collapse, unless the right decisions are made. and that would have profound implications on every other interest we have in the region. there are many parts of the world where we're simply not adequately staffed to be able to protect our economic interests. to promote american business opportunities, and so forth. and it seems the to me that beggaring the foreign affairs budget, which as you said is about 1% of the entire budget of the united states, which has so much -- which touches on trillions of dollars of engagement, one way or the other, and profit and so forth, so could you -- there must be some measure of frustration, in some degree. this budget is 8.5% lower than the president's request.

and the president's request clearly is reflective of his sense of those priorities and your sense of them. so would you share with the committee what you think we get for this. and you've particularly put this fund in there for the north africa piece. and i think that's part of this discussion. but what are we missing? and what are we losing for not being willing to be a little more critical about $100 billion a year in military expenditure in afghanistan and these small amounts that get parceled out in these longer term investment opportunities elsewhere? >> well, that's a question, mr. chairman, that, you know, i obviously spent a lot of time worrying about, because as we try to respond to the urgent demands that are made because of changes in the world, we often find ourselves having to reprogram, shift resources, come up with what with we can so that america is present, america's a

player, america is in there, trying to influence the outcomes of events. and this past year has been unprecedented in the demands that we have faced. at the same time, wile we're dealing with the urgent, even the emergency humanitarian and political strategic demands, we also try to look over the horizon, which is one of the reasons why the so-called pivot to asia is so important. we need to be, you know, very clearly present in asia. so it's -- it shouldn't be an either/or, you know? and there are many other examples of that, that i could give you. we need to be very clear-eyed about how we interact in this fast-moving environment in which we find ourselves. and i also firmly believe, as i alluded to in my opening marks, were it not for the work that

foreign civil officers and civil servants and locally employed staff do every day, american businesses would not be as profitable and expanding and creating jobs in this recovery as they are. i mean, we have these thousand economic officers, we have many other people who are there, constantly trying to support american business. i just held and hosted a big conference at the state department where we called in american chambers from across the world so that we could be asking them, what are we doing right? what can we do better? we are in an economic competition that has profound consequences, but it is primarily the work of diplomacy. as our businesses are trying to open doors, they come to our embassies. they come to the state department. they say, what do i need to know about this country? what can you do to help me to get to the right person so my bid can be fairly considered? we are also seeing an increase in travel to the united states.

so we have dramatically had to up our budget and our presence in countries like brazil and china, because business travelers, tourists, they want to come here. we want them to come. that's good for our economy. it holds forth the possibility of greater benefits. we have to continue to counter violent extremism. i mean, we've done, i think a good job in going after, you know, the top leadership of al qaeda, including bin laden, but we can't rest. i mean, al qaeda's now made a coalition with al shabab. and i just came back from north africa and everywhere i went, from tunisia to algeria to morocco, we talked a lot about security because of al qaeda. we have to be constantly not only responding with our intelligence community and military means, if necessary, but we have to be on the ground, picking up the information that can then be shared with our intelligence and military

professionals, and we also put together for the first time this past year a global counterterrorism forum, where we have the major players from around the world. i hosted the first meeting with turkey in september. we're setting up a center in the uae to counter violent extremism. so these are all parts of the multitu multitude role that the experts perform every single day. and obviously, we think it's important work. because we do it, you know, with great pride. >> well, i thank you for that. i know they do it with great pride and to great effect. i think one of the things i was struck by, this is not under the 150 account, it's under the commerce account, which i also serve on. but when i was in hong kong, i remember, there were about three foreign commercial service folks who were complaining bitterly that they didn't have either the

place, which other countries had, to convene meetings in, or the staff capacity, and that we were literally missing, they said, quote, billions of dollars of business, because we weren't as aggressive as other people in seeking it. so i think this connection is something that we really need to try to underscore to people. >> well, i appreciate your mentioning the commerce department, because they've been our partners over the past many decades. their budget has been severely affected with the result that they are removing commercial officers. you know, here we help to liberate libya from gadhafi, and, you know, the commercial officer that could be there to help guide american investments, whether it be in hydrocarbons or agriculture or you name it is not going to be renewed. and throughout the world, and you know, i've had many

conversations with major american operations, but also with small and medium-sized businesses in our country. we are trying to double exports in, you know, five years. we're close to meeting that goal. we have to keep upping the number so that we are always on our toes. that's where a lot of the new jobs are going to come from. as senator lugar pointed out, we still have a lot of people hurting in our country, and although thing we're making progress, we want to accelerate that progress and we have to get into those markets overseas and it's difficult for many american companies to navigate through that without expert help. >> that clip from yesterday's foreign relations hearing. we will have senator clinton the's testimony before the house committee coming up at 1:15 eastern, about 15 minutes from now on c-span3. we'll show you a portion of hearing from earlier today on

cruise line safety, in the wake of recent accidents and incidents with large cruise ships. this testimony includclip shows testimony from two survivors of the recent "costa concordia" accident. >> thank you, mr. chairman. thank you for giving us the opportunity to come in here and present what we have to say. i would start off saying that this was our fifth year anniversary trip, first trip to europe. we were very excited, and as miss brown had said earlier, it's a very affordable way to travel. we had cruised before, so that kind of helped us to make up our mind to take another cruise. we boarded the "costa concordia" on friday, january the 13th, 2012, from tlaitaly, between 5: p.m. and 6:00 p.m. the first impression was the ship was huge and very beautiful. the boarding process was fairly

easy. since we had one non-european passport, we had to surrender our passport to the crew members. after that, we went to our room that was on the ninth deck. at this point, we had no instructions regarding the emergency instruction drill. we were in the full spirit of our vacation and were very happy to be on board. soon after getting situated, we started to unpack our luggage and started to get ready for our dinner reservation at 9:00 p.m. on the third deck. at about 9:15, we were at our dinner table on deck three and were in the process of ordering our food and we had just ordered our appetizers. at that moment, there was a violent shaking of the ship, followed by loud crash noises as the plates and glasses broke due to the listing of the ship to the starboard side. lights went out immediately, but there was no announcement of what happened. it was pitch dark with no

visibility. people nearby started to scream and a few minutes into the ordeal, the emergency lights came on and we saw that the ship is now listing on the portside. this is when the first announcement came on, telling us it was nothing but an electrical failure and that everything is under control. crew members urged the passengers to remain calm and seated. the staff started to bring out people's food as if nothing bad had happened. while the ship is still tilted, we saw a few crew members in our dining room break down crying and extremely panicked. when we glanced outside, we saw around five to seven crew members wearing life jackets, but still the announcements continued telling us to remain calm and seated and the electrical issue is being worked on and everything is under control. around 10:00 p.m., around 30 minutes into the situation, we are still in our dining room when my husband decided, it is time for us to go and at least get our life jackets from the room, because at this point we have no idea if we don't have to go back to our room, where else

can we get our life jackets from? >> we had no knowledge from where we can get the life jackets easier i had spotted the life jackets in the closet of the room, since i was unpacking and putting our luggage away. as we went out of the dining room, we were highly unbalanced due to the tilt and there was water and wine and broken glass on the dining room floor. it was extremely hard for us to walk and maintain our balance. once outside, we were immediately unable to locate the stairs, as we had taken the elevators to get on deck three. there were dim emergency lights indicating the stairs, and we climbed six familiars to our room on deck nine to get to our room without light. somehow we did manage to get to our rooms, holding the guardrails, very much exhausted and panicked. as we were getting to our room, there were constant announcements of the same message. "ladies and gentlemen, everything is under control at this point and it seems to be a generator failure. please stay calm and wait for

further instructions and be cooperative." what caught our attention was that all of the announcements were made on behalf of the captain and never once did we hear the captain speak. however, there was a sense of panic in the announcer's voice that kept making the announcement. finally, we did manage to get our door unlocked using our card key after several failed attempts. the room had no light and it was extremely dark. i stumbled upon a few things that had fallen on the floor. at that time, my husband decided to stay in the middle of the door to keep it open and pushing the furniture back to make some room to get our life jackets. the ship felt a little more tilted and the room's furniture had shifted significantly. i knew where the life jackets were, because i had just unpacked the luggage to arrange in the lostclosets. once we got the life jackets, we immediately got out of the room and spotted our state room attendant nearby. i, at that moment asked the room attendant, where we supposed to go? and she replied in a very irritated tone saying, madame,

at this point, there's no emergency. you do not need to go anywhere. please stay here and wait for further instructions and for the emergency alarm to sound, which we had no idea how it would sound like. as she started walking away, and we ask her again, in an emergency, where are we supposed to meet? she replied at that point, the the muster stations are on deck four. at this point, we were still unaware what was the root cause of this ordeal. there were no emergency alarms going off and the same announcement kept on repeating, telling the passengers to remain calm and the electrical issue was under control. while we are going to the deck four, we saw the crew members amongst us running around, panicked, frustrated, and clueless. no one seemed to have any clear idea as to why they had -- what they had to do in this situation or where they were supposed to send us. people seemed to direct themselves on to deck four and stood near any available lifeboat. as we were making our way to the deck four, where the muster stations were, we located and

saw a lot of people just sitting outside of their rooms, waiting. people were also sitting on the stairs closer to deck four, but we went ahead and stood closer to a lifeboat. at this point, there were three or four crew members per lifeboat and they were trying to keep the crowd away from the boats. still, there's no communication from their side as to when they would allow us to get on the lifeboat or what we are supposed to do. the time by now is around 10:30 p.m., and one of the crew members came and practically gave us the same instructions this time, urging all of us to go back to our rooms and wait for further instructions, and everything is under control. a few people did what was being asked for, but we decided to stand near the exit door near the lifeboat. by now it was really difficult to stand straight, as the ship was listing towards the port violently. at this point, we decided amongst ourselves and located a rock where we could swim to in case they kept us waiting for any longer to get into the lifeboats. we tried asking a couple of crew members to tell us what had

happened and they simply shrugged their shoulders and went on. the lifeboat crew was equally clueless and kept waiting for further instructions from the captain that never came. people started to panic and getting frustrated as the ship is tilting more by the minute. we were getting frustrated, aggravated, and the crowd was pushing and shoving against each other. still no sign of any emergency alarms or any evacuation instructions from the captain. finally the lifeboat crew let us on as they saw the crowd getting enraged and out of control. there was no order of boarding the the lifeboats and everyone was shoving, pushing, and kicking to get on to the lifeboat. at this point i would like to close it and pass the mic off to my husband, mr. chairman. >> so once on the lifeboat, people stand, stood, whatever they could do.

within one minute, the boat was full with all the people. and now the lifeboat was overcrowded and while the crew members were trying to disengage the boat from the ship, it wouldn't happen. and at this point, the crew members are asking people to get off the lifeboat, because it is overcrowded. however, we didn't see anybody who was going to, at this point, go to another lifeboat and risk the ones finally when they got on to the lifeboat. once we are in there, in the lifeboat, that was the most scary part of all the tragedy for us. when the lifeboat was still stuck followed by the banging noise of the hammers or hammer-like equipment they were trying to use to break off the ropes, and once the ropes broke off, a ripping noise came, like

something had ripped from the boat and now we landed right into the water from the fourth floor. we thought that now that we are on to the water at this point, we'll be able to at least get out, if we have to, because now we can see a rock nearby. once we were with on the water, it wasn't immediate the boat started to move, because of the overweight of the boat, we started seeing the blue smoke coming out of the boat, and it was not moving at all. it was making almost like a circle as there was a current nearby that was caused by the ship, the boat is not moving at all. and now we are seeing a tall, gigantic building of this ship leaning on top of our boat.

at this point, i asked my wife, who does not know how to swim, i said, we have a life jacket, i'm going to try to take this tarp off and we are going to jump now, because we are about ten minutes into the boat that has not moved an inch and ship is moving on top of us every single second. so from this point, as i am trying to lift the tarp in order to jump out of the lifeboat, i am unable to do that, as instruction by the crew member was to keep the tarp on while we were on the water. and a lot of people were working against and with me to pick up the tarp. but i was unable to do. and soon after, inch by inch, the boat started to move and finally, we were able to get away from the cruise ship. and that's when we spotted

nearby, there was a lighthouse, and we were able to get out. and one of the things i noticed while we were on the boat, the coast guard from italy were also nearby and that's what was giving us assurance in case we had to jump out and stay on to that rock nearby, somebody would come and get us. so we do thank the coast guard were there, which we now learn that it was by the people, a passenger who had called the coast guard, and not any member from the crew who had gone to the police or to the coast guard for help. once on the shore, chaos and confusion continued. it was not end. and how we were keep, while we were on the ground, we were thinking that we were being assured by the crew member all

the time, how an electrical issue can cause this ship to sink. while on the ship, there was not one instance where crew member or anybody had mentioned that there was anything wrong, other than the electrical issue. so we felt very betrayed, very much lied to at that point, which we had -- i and my wife, who were celebrating our fifth year wedding anniversary, trusted these people with our lives, and they took that for granted and were not honest with us at any given point. thank you. >> well, that's a pretty compelling account of your experience. i had a number of questions, but your thoroughness of your statement, you've covered the questions that i had.

mr. larson? >> thank you for your statement and testimony and sorry about your experience. i'm -- having nothing to do with it, i'm embarrassed by what happened. it's shocking, what happened. were you at any time informed by anyone that the vessel had struck a rock? and was severely damaged, at any time? >> no. never. never. actually, the first time that we got to know that a rock had struck was when we were in the u.s. embassy, the next day. that's when we saw the picture of the ship, completely submerged in water, with the rock sticking out. >> a full 24 hours later, about? at any time were you given any concise guidance about how to evacuate the ship? at any time? >> no. there was no time at all, as

long as we were on the ship, or on to the lifeboat, that -- what to do, whatever -- it was always -- the crucial time that they had on hatheir hand, not o person from the crew or anybody had mentioned what had happened and what to do in an emergency. >> not even at embarkation, not even when things were calm and you're about to sit down to dinner or even before then? >> no. >> no, nothing, at all. >> you noted in your testimony that you spotted life jackets. you leave me with the impression that you weren't actually told where the life jackets were, but you happened to see them in your closet. >> no. it was only because i was hanging one of his suits, and that was the only closet that didn't have any shelves. it was easy for me to hang in, and that's when i ended up spotting the life jackets. they didn't tell us where they were, but that's when i opened the closet and saw the orange jackets there. >> and i had no idea where the

life jackets were. only she knew where the life jackets were. >> on the upside, the italian coast guard, sounds like from your perspective, a good response from the italian coast guard? once they knew about it? >> yes. >> yeah? yeah. well, again, i'm glad you're here to give us the firsthand experience. i'm sorry for your experience. >> thank you. >> but thank you very much for coming. thank you, mr. chairman. >> thank you. mr. junta? >> thank you very much, mr. chairman. and thank you for being here to account to what occurred and again, i'm sorry that both of you had to go through this as well as every member on that ship. a couple of quick questions that i have. was this your first cruise ship