>> thank you, secretary clinton, it's great to have you here again. this is my last year in congress and i hear rumors that it may be your last year as secretary of state. i just want to take this opportunity to thank you for your tremendous service to our country in so many different ways. madam secretary, i want to raise the issue of our ally, portugal. i represent a number of portuguese american residents, and i share that heritage. and there are a number of issues with regard to the visas and consulates that i'm very concerned about. the consulate in punta del gada is rumored to be on the list for closure. it's one of the original consulates of our nation, and it's something that i would ask that you do everything in your power to preserve. certainly this is a budget discussion today, and so it's appropriate to discuss it in the budget. the second question that i would

have is that there are questions of visas that members of -- citizens of portugal would have to go to france in order to obtain a certain kinds of permit immigration visas or green cards to the united states. i understand the number may be only 150, but the relationship that we have with portugal is so important. when the gulf war first started, the original summit was on the azors and in the azors and portugal was the host country. there may not be a better friend to the united states anywhere in the world. and i'd just like to have you discuss that, if you can. and finally, i will share with you that i was somewhat dismayed a while back when the president indicated in the negotiating strategy of a reversion back to the 67 lines in israel as part of where he thought it might end up. and maybe you could clarify that

for me and for everyone, because that is something that i happen to have been in the country when these statements were made. and i'm not sure that the 67 lines are defensible or they're correct. there may be an adjust in lines, so i would like to hear the administration's position on that. >> first, with portugal, i share your view that portugal is a wonderful friend and a partner in many other areas, but the source of portuguese americans, culture, food, so much else. i will have to take those questions for the record, mr. congressman, because i want to look into the two areas that you raised, but i want to assure you that we highly value our relationship with portugal and will be very careful in making any decisions that would affect the free flow of people and trade. secondly, i think if you look at the president's speeches first

last may at the state department and secondly before apac, there is a very clear set of understandings that the president lays out, and there was no reference to going back to the exact borders. i mean, it would be based on negotiation between israel and the palestinians, and it is anticipated that there would be a certain set of decisions th a what has happened in the years since. but certainly from our perspective, looking at those speeches and looking at the reaction in israel, which was very positive, the both of them together, and we obviously are pursuing with israel and the palestinians an effort to get the negotiations restarted, because there is no shortcut. we support the two states' solution, we want to see it

negotiated by the parties themselves, and it turned out to be quite challenging to do that for a variety of reasons. but our position remains the same, that any final issue ultimately has to be decided by the parties. we and others can put forth suggestions, recommendations and ideas about what would work, but it's a negotiation. and the negotiation has to be resolved by the two parties most affected. >> i totally agree with you, madam secretary. thank you for your that reclarification and i appreciate it. i'd just like to make a notation on my original point about the azors. there is a base there that is of strategic importance to us. it's really more appropriate to bring up with the secretary of defense, but i'll share it since i have this opportunity today. our base interest data in the azors is critical and is being

the totality of things to pass is having a view opinion that sphere that we don't care any longer. and i raise the issues in combination because i think it will strain relations. >> thank you so much, mr. cardoza. mr. mccall, the subcommittee vice chair. >> we had a sit-down meeting with president zhadari, a very frank discussion. he looked at us in the eye and said that he had no knowledge that bin laden was in his country. and -- but we do know that it's probably likely that lower level officials knew of his presence in pakistan. then we had dr. fridi who helped us over there, and now he's in

prison for treason, as i pointed out earlier. they gave the chinese access to the helicopter that was left behind at the compound. and finally, the aconi network, and we talked about the aconi network. i asked for his support, as you have, asked for his support to go after the aconi network. and he says he goes after all terrorist organizations, not just the aconi. however, last year we had the chairman of the joint chiefs admiral mike mullen testified that with isi support, aconi operatives planned a truck bomb attack as well as an assault on our embassy. we have evidence they were behind a june 20 attack on a hotel in kabul, and other operations. in short he said the aconi network acts as an arm of pakistan's inter-insurgents

agency. i understand all the implications. zhadari referred to our relationship like a bad marriage but divorce is not an option. when it comes to the funding, we're looking at crafting legislation that would essentially require the state department to certify that they are not working with these networks, including aconi, and if that cannot be certified, the foreign aid will be cut off. i wanted to get your thoughts on that legislation. >> well, i think, congressman, what president zhadari told you on behalf of the civilian leadership of the government of pakistan is true. he has been a good partner in going after terrorism that threatens his country and afghanistan and our troops.

we have no evidence of any high-level official knowing about bin laden, but like you, i have to assume that lower-level people, you know, had to have known something. but we haven't proven that. it could be asserted, but not yet proven. so this is -- you know, this is a complicated, difficult relationship. and what we are doing now is making it very clear what our expectations have to be going forward, and there is no doubt in my mind that certain elements of the pakistani government are more ambivalent about cracking down on terrorism than other elements. you know, when i sit across from the foreign minister or talk to the ambassador or talk to the prime minister and others, i think they are very sincere. you know, they know the fear of

terrorism is killing pakistanis. zhadari know that pakistanis killed his wife. yet there have been relationships between terrorist groups and the military and the intelligence services for many decades. and what's unique now is that this democratically eleced long than any other democratically elected government. for the first time in the parliament, you have questions being asked of the military and the isi, you have the supreme court asking questions about actions of the military and the isi, so you see the strains and stresses of trying to have a civilian government in a democracy assert control over all elements of the government. and we want to continue to support the democratic trend inside pakistan. so, you know, walking this line, trying to make sure what levers

we can pull are, where we can really put pressure is basically how i spend a lot of my time. and i take seriously the underlying thrust of your question, and i will carefully evaluate all factors when it comes time to make a decision. >> let me just say i thank you for -- you've been very strong about the aconi network. i think zhadari is sincere in his efforts, but i don't think he has much control over the isi, and i think that's part of the problem. i would urge you to continue your efforts to get them to fight with us against these terrorists rather than be come police it wi -- complicit with them. >> thank you. >> madam chairman, it's wonderful to have you back in front of the committee and thank you for your thoughtfulness on the budget proposal both in its fiscal responsibility and its diplomatic priorities. i thank you for that and acknowledge all the men and women who serve under your

leadership at the state department. you have helped, really, to restore america's position in the world arksz our ranking member said, as a partner for peace and democracy and we are all grateful and thank you for your service. and we've had a lot of discussions today about various parts of the world that are of great concern and particularly unsettled, areas of great violence, and i'd like to focus mine on two areas closer to home. the first is, and i'll just articulate the questions and give you the balance of my time. the first is about events in the middle east in general. in syria, in iran and that region of the world and its impact on our gas prices here in the united states. i know that in my home state, we've seen a tremendous increase in gas prices, almost 40 cents from a year ago today, and i'm wondering if you can speak to your perspective on how a variety of international events that you're closely monitoring

might have an impact on fuel prices in the near term and also what we're doing both diplomatically in terms of development efforts in the long term to ensure that gas prices are stabilized or that at least in the long term they're mitigated. because i think we hear a lot about how this unrest is contributing to rising gas prices, and some of us also know that a big part of it is speculation and gouging and we're going to take up some legislation hopefully to address that. but i think events around the world are certainly impacted and i'd love to hear your thoughts on that. and the other thing is something i hear a lot back at home. you know rhode island is a huge manufacturing state and we're really on this agenda to rebuild and incur lots of manufacturing, and i hear about the chinese and their behavior as trading partners and their manipulation of currency and their refusal to protect intellectual property

and the challenges of their policies of indigenous innovation and technology transfers. so i'd like to hear you speak to some of the state department's efforts diplomatically to really help even the playing field so that we can really rebuild manufacturing in our country. again, thank you, and i will finally associate myself with congressman cardoza's amounts on the azors and the importance of both of those issues, skpand i' submit for a written question relating to the turkish -- our submission that turks respect the religious speakers in that country. thank you, madam secretary. >> thank you, congressman. with respect to gas prices, i think there is room for considering ways to rein in speculation and gouging. are there events that happen in

the world raising questions? yes. but to the extent it justifies or can explain the increase in the gas prices, i don't believe so. so, therefore, i have long thought that there has to be some market mechanism that can be explored to try to break speculation that is unrelated. now, if the iranians closed the strait of hormuth, we would have to deal with it, and we've said we would deal with it, but that would obviously cause the market to react. right now there is talk in the air of all kinds of things, but there is no event, so i do think it's worth exploring the legislation that you reference. with respect to manufacturing, this administration has brought more trade action against china, against unfair trade practices, against the theft of intellectual property, against the use of indigenous innovation, and we will continue to do so because we don't fear a

level playing field. i have great confidence in the workers and businesses of rhode island to be competitive with anybody. but if a big thumb is on the scale, whether it's currency manipulation or indigenous innovation or the unfortunate theft of intellectual property, that makes competition one-sided. and so this administration has taken a very aggressive approach on the defensive side. on the offensive side, i just posted a big conference at the state department where we had all the american chambers from around the world come in to talk about how we could do a better job helping american businesses, how we could really knock down those barriers, cut through that red tape, and so we want to be deeply involved with our 1,000 economic officers around the world in helping to open markets and create jobs here at home. we consider that part of what we

call economic state craft. and i am very committed to it. >> thank you so much. judge poe is recognized. >> thank you, madam speaker. i have some questions regarding beef trade with taiwan, u.s. rice given a fair shot in iraq and also pakistan. i ask to submit those for the record. >> no objection. >> thank you for being here. i know you have to leave. i want to talk about something that we have always talked about when we discuss me. and it's the folks that live in camp ashraugh. they are being moved, some are being moved to camp liberty. camp liberty now is a situation where there's not enough water. the sewage is a tremendous problem. there is no electricity. the people there are not allowed to see their family members.

they're not allowed to see lawyers. some have compared camp liberty to a prison. rudy giuliani said it's not a prison, it's a concentration camp. so people are not being moved from camp ashcroft to camp liberty. and of course, the goal, my goal just like it is, i hope, yours to get those people out of iraq and get them somewhere in the world where they can be safe and they can be free and they can reunite with their families. we have two situations going on. we have the designation of fdo is still an issue. it's been going on a long time. i have worked with your department trying to find out on a consistent basis, is there any evidence, is there more evidence why they should stay on the fdo. evidence one way or another, i just want to know what it is. i've been to every briefing in the homeland security, and your

office has sponsored regarding the designation and why they're on it. i'm not convinced they ought to stay on it. and we continue to weigh, and now so much so that i think yesterday a lawsuit was filed again to get the state department to pick a horse and ride it, as i like to say. and meanwhile, during this time, there have been two situations in camp ashrof where people have died. others have been wounded, regardless of whose fault, that has occurred. so there is no more people moving to camp liberty because of the conditions in camp liberty, and to my knowledge as of today, no one has left camp liberty to go somewhere else in the world. and so as sincere as i can possibly be, i'd like to know from you a couple things. first, is the united states

prepared to take any people from camp liberty? does the fdo designation that they still have affect that in any way? and i'd like to preface that question with one other situation. the last time i was in iraq, i met with malachi. we asked him if we could go visit the folks in camp ashrof and see for ourselves what it was like. and he said absolutely not. but the one thing he told all of us, the reason they are in camp asheraugh is because your country designates them as an fdo organization and we treat them like a foreign terrorist organization. so he dumped it back on our designation as the reason he was treating them the way he was treating them. he apparently got so irritated with us for even asking the question, we learned when we left his office that we had been evicted from the country, he asked us to leave.

of course, we did what we needed to do, but it's a serious matter. earlier you mentioned that the fto fto designation is tied to camp asheroth and a para military group. can you tell us where we are if we are going to see resolution in getting the designation and removing the issues so these people can leave the area which everybody wants to do? >> congress member, i appreciate your deep concern. i share it because we are trying to work to resolve a complex situation and avoid bloodshed and violence and have the people from camp asheroth and move to the camp herea and have them processed as soon as the united

nations processes them. i prefer have them processed at asheroth. that turned out to be impractical for a lot of reasons. the move now should open up an accelerated process for the interviews to be held and decisions made. you know, we're working around the clock. we're seeing improvements in the infrastructure. we have to close camp asheroth to move this process forward. it will be a key factor in any decision regarding the foreign terrorist organization status. >> thank you so much. mr. connelly, i will ask your forgiveness. according to the procedures we setforth, you have been a good soldier. mr. murphy played it well. he came here and he is next on the queue to ask the question.

it's the last question. you want to share it? quick one and then mr. connelly. >> thank you very much. i will be brief to aow connelly to jump in before you leave. you have been generous with your time. i am one of a large number of folks here who are skeptical about our current timetable for withdrawal from afghanistan. i'm frankly surprised we have not talked more about afghanistan here today. part of that skepticism is spenng diplomatic and financial cooperation on getting to a place where they can succeed on their own. so i had a couple of questions related to that economic and diplomatic cooperation. i'll ask one of them. it is on the economic side. you know, there are various numbers that come out suggesting

that 80 to 90 and as high as 97% of the afghan economy is dependent on international aid. i would love to get an update from you as to how you see the timetable playing outs we withdl our military contingent that we leave behind a stable economy there and perhaps suggestions that you have for the united states congress as to things we can do here to make sure that we leave behind a stable economy. i would like to see us pull out as quickly as possible on the military side. i recognize that we have to make sure we don't leave an economy that collapses upon our withdrawal. i think that is something we have not talked enough about as a congress and i would love your thoughts on that. >> there, mr. murphy. mr. connelly, if you could ask the question. >> okay. welcome, madam secretary. let me join my colleagues.

i have great admiration of our service to the country. i have known a lot of secretaries of state over the last 30 years. i wonder if could comment on our diplomatic efforts to sort of try to change minds in russia and china with respect to the syrian situation. it gets worse by the day. they have provided a shield of protection that has, at this point, proved not only counter productive, but lethal. i welcome how we are engaging diplomatically and how we are turning that around. thank you. >> thank you,re member murphy, very specific ideas and plans about what we could do to assist afghanistan being more integrated into the developing economic assets.

i would like to take it for the record to give you a broader set of responses because we see this as you just said, as a critical part to really support the transition of r troops out in the end of 2014. they do go hand-in-hand, which is one of the reasons for the transition period for military withdrawal was established. we will follow-up withcongressme doing everything we can think of to influence th chinese, particularly the russians. they are the ones with the very deep, longstanding relationship with the assad family and syria. they continue to sell arms to the syrian regime. we know that if we can persuade them to work with us at least on the humanitarian issue, they will have access to assad that

hardly anybody else does. hardly anybody in the west. it is a very troubling and frustrating situation because the russians continue to say they are all for humanitarian aid, but they don't produce any plan that assad will sign off on and perhaps after their upcoming election, they will be able to focus on the serious humanitarian situation that is causing so much loss of life and suffering inside syria. but we are not waiting. we are trying to work out other ways of getting humanitarian assistance into syria and also support efforts on the borders because people are fleeing. they are coming out of lebanon and jordan and iraq and especially in turkey. we will be there to try to help the people who are coming out as well. this is a terrible crisis that

demands the entire world's attention and i hope that russia will come and work with us to try to resolve it. >> thank you so much. madam secretary, if i could yield one win to mr. johnson. >> thank you so much. it's a real quick question. thank you for being here today. with its growing economy and vast foreign reserves, it would seem that beijing has more than enough money to deal with many of the issues that u.s. foreign aid supports. borrowing money from the chinese government to spend back in china on health programs there, there seems a particularly bad use of u.s. government funds, especially as americans struggle to cover rising health care costs. why are we proposing $2 million in support of health care programs in china when the chinese hold an estimated $1.2

trillion of u.s. debt? >> congressman, the remaining aid that we are asking for goes to what we consider to be trans national issues in which we have a stake. united states aid and leadership that finally helped china respond to their own hiv/aids crisis, which does have a positive affect on the epidemic far beyond their borders. when we look at communicable diseases and good governance groups. there are a lot of brave lawyers in cities in china that are standing up against cohersive practices. i will give you a breakdown. i share your general point that we are certainly not looking to

support the development of china's economy. they are doing that well enough on their own. there are certain key values that we still believe we can further within an aid relationship with china. >> thank you, madam secretary. thank you so mr. wilson. you are on my dance card. you will come up first next time. before we adjourn, since you have announced publicly that you do not intend to serve beyond the end of this term, this is your final appearance to testify on the budget before our committee. i would like to thank you again so deeply for making yourself available to answer your questions today and during the past three years. i hope that we have the opportunity to host you again for other testimony prior to the conclusion of your exemplary service. the meeting is adjourned.