democracy, has create add presidential executive council commission to work in partnership with us, to attempt to defeat the organized penetration and seizure of the borders, airports and customs depots which rob afghans daily of millions and millions annually of resources, as well, the ministry of defense has recently underare taken and completed a transparency and accountability working group which is a complete survey of the ministry of defense led by minister wardack. all -- everything from patronage associated with recruiting and assignment to procurement of systems and weapons and pay facilities, it's a very comprehensive assessment which has been built into a work plan to begin to address those specific issues. the ministry of interior is undertaken very shortly a similar assessment which will

really lay bare the corruption issues in the two security ministries which are our principle partners both in terms of building a credible ansf and the shield for stability for the state. those are important outcomesenthe pro outcomesenthe. the proof in the pudding, having now designed effective work plans. now we've got to start checking off the items. that's really where we'll see how serious everyone is in their compliment to do this. >> on a related note before my time expires, i have observed the, some of the reports relating to human trafficking among contractors. there are about 70,000 out of country employees from the philippines, from other countries, employed by contractors and subcontractors

there. i'm going to be introducing a measure along with at least one other member of this committee to seek to prevent and remedy that problem, and it has been identified by the commission on contracting as a problem as well. i don't know whether you have any observations on that issue. >> you could make those brief, because we have two more senators and the vote has started. >> you can respond in writing as senator levin observed. >> thank you very much, senator blumenthal. thank you, senator graham. >> thank you, mr. chairman. gentlemen, we have a lot of ground to cover and a short time to get there. start with the big themes here. general allen is thas defining time in the war on afghanistan? >> i believe it is. >> would you awe glgree we have had it right since general mcchrystal have we had the right strategy and resource? >> really not ten year, just

will it right the last several years. do you agree with me, dr. miller and general allen, that afghanistan is a center of gravity for the moment in the war on terror? >> i believe it is, sir. >> senator, i do, and given our history there, it's also essential for our credibility in conducting operations elsewhere. >> here's a comment. no one can guarantee success in war or politics. you can do your best. i have great deal of confidence in your plan. i ask my colleagues to listen closely. you've asked good, hard questions, but i have come to conclude that you and your plan represent the last best chance for success in afghanistan. do you both agree with that? >> i concur with that, sir. >> senator graham, this is an essential moment in afghanistan. >> i got you. that's good. >> senator, i want to say that, there will be bumps on the road,

and you know that, sir. >> this is the last best chance, no guarantees? >> no guarantees. >> okay. >> here's my comment to my colleagues. i understand it is difficult back home, but i believe that this is our last best chance and the only way we will really fail at the end of the day is for our political system not to support the general at a time of his greatest need, and i know it's costly. i know it's gone on a long time but we've got to keep it in perspective. dr. miller, i urge the administration to stand by this plan to make sure he has the resources he needs and i will promise the president of the united states and members of this committee, i will do everything on the republican side to give you the support you need to execute this plan. now, in terms of the cost. would you agree with me, general allen, in the history of warfare, the attack on this country of 9/11 that cost

probably $1 million to plan and execute was the best return on investment in the history of warfare in terms of cost it inflicted upon the intended target? >> a great asymmetric. >> here's what you need to understand. it took $1 million to knock down the two towers and kill over 3,000 americans and the place that attack came from is afghanistan. so, please think about what it would be like for our future safety if the place we went to to secure we failed? i think we would be buying in terms of cost a lot more than the cost of staying and getting it right. now, as to the army. general, senator levin and i have the same absolute opinion on this. what's the difference in cost between 230,000 and 330,000 a year to maintain afghan soldiers? an army of 330 versus 230? $1 billion, $2 billion? $3 billion? do we know the difference? >> it's between it's 2ds and $3

billion, sir. >> i would suggest to this committee after all we've done, take a view those $2 billion ors 3ds billion for a period of time is the best investment we could of make to make sure we don't she to go out again. general allen is it your goal to leave afghanistan, withdraw with security and honor for the united states? >> of course it is, sir. >> now, do you agree with me the strategic partnership agreement, if entered into and executed properly is the turning point in the war? >> i believe it is, sir. >> do you agree with me that if we maintain the night raids as a military tactic, the enemy will suffer greatly? >> he will. >> do you agree with moo the thu will never allow that program terminated? you will always strive for afghan sovereignty in terms of its implementation? >> i will, yes, sir. >> to the detention agreement. will you please tell captain ne'er, the plan doing this along with his team, that he extendsed ad and took a way a year from

his family anddoor great fruit to you and the afghan partners, congratulations on the agreement. >> thank you, sir. >> now do you agree we me if we are virginia follow-on force, a counterterrorism force strategically locatesed in afghanistan, air bases with american air power and special forces units, that's the end of the taliban's dreams of of taking over afghanistan? >> i do believe that, sir. >> and that is part of the strategic partnership agreement, correct? >> it hopefully will be. >> the insurance policy for this nation that never again will the afghanistan go into terrorist hands. you agree? >> i agree with that, sir. >> and pakistan needs to quit betting on the taliban because they are losers? >> it will stabilize afghanistan, which is good for pakistan. >> tell me how the people of afghanistan view the taliban as a whole? do they miss them? >> there is no love lost there, sir. >> they hate them. don't they? >> they considered that period what they called the darkness.

>> what is the feeling on the ground in afghanistan of the 85% of the people who want to live free of the taliban about what we play or may not do? how do they feel right now? >> i think they, they're deeply concerned that we may not conclude a strategic partnership agreement. >> i am telling everybody in this committee that if we get this right, not only will they feel better but i will feel better and we will win this thing. killing bin laden. congratulations to the administration and to our military. did the killing of bin laden affect the taliban much at all? >> i believe it affected al qaeda at a network. the taliban have not register registered -- there's no registry of this. >> to those who believe you can kill a few terrorists and we'll be safe and come home, do you agree with that general allen? is that the way to maintain perpetual security? >> no. the stability comes from a long-term presence. >> doesn't the stability come

helping the many, where they live, fight and defeat these bastards in their backyard so went don't have to send 100,000 troops? >> not just to fight but also give the population confidence that it's the right force for them too. >> senator graham, i hate to do this. >> i'm done. thank you. >> senator mccaskill a few minutes because the vote started. i appreciate it. i hate doing that. >> thank you, and thank you both. i think only our military could be accomplishing what we're accomplishing in the most difficult circumstances. and every day that passes i stand in awe of the leadership of our military and the sacrifices that you all make. i am going to, some of my colleagues have touched on some of this. so i won't feel the need to go into it, but as you know, i've spent a lot of time looking at contracting and i know those auditor, pesky, but you are aware, i know -- >> thank you for that. >> that we have $s 20 billion of

reconstruction money in iraq that can't be accounted for. can't find $20 billion that we spent on reconstruction. and we know and i can cite in this question a number of projects that we built in iraq that prisons that are sitting empty. health care facilities that water parks that stand crumbling. some of this w project. some was serp, and what i affectionately call ais, son of serp, a new thing we're doing that the military is engaging in major construction as opposed to what we've traditionally done in this country, and had all of that come under the ejis of the state department. this is new territory. now what i want to drill down on in the couple of minutes i have i am aware of the projects that we are funding with the aif money currently. i'm aware of the three power projects. aware of the two transportation projects. and i'm aware of the three water projects.

i know that the 12 money is going to complete these projects even though many of them will not be completed what worried me most is what is this new $400 million for? aif? in other words, if we are completing these projects now, what this envisions, we're starting brand new major infrastructure projects where regardless of what senator brown says, we all know some of the security we have to buy works its way into the hands of the bad guys. we know that they have no capability of sustaining many of these, because of their gdp. the afghanistan people and the government. they don't even have a national highway system with any kind of revenue that can even fix highways after we build them. so i am confused and as you know the studies that have been done, while i think serp, as i began on this committee way down on

that end, i had heart to hearts with general petraeus about fixing broken windows and storefronts. we have morphed far beyond fixing broken windows and forfronts. we are now doing major, major, multimillion dollar infrastructure projects and i just don't think we've seen the studies that show other than just intuitively knowing the country likes it, that we're putting a lot of money into their economic development, that it actually is helping with the counterinsurgency. so i need to know why are we just reflexively asking for the almost $1 billion in serp and aif for this next year, or is there specific plans? >> we will give you the specific plan for the aif. let me give that, take that for the record and we will give that to you to the level of detailed that you're satisfied, senator. when i took command, one of the most important admonitions i gave my commanders was fiscal responsibility.

i told them that we have got to ensure that every dollar we spend in afghanistan is a dollar that ultimately contributes to afghanistan's security, not robs it of economic security over the long-term. that is why we are moving first of all if you look at our obligation rate, for serp it isn't that high this year, because we're going for the right kinds of projects. the vast majority of the projects of $50,000 and below and are community projects. they're projects which ultimately the community had a say in that will help the community. we're going to continue to folk kniss that regard so when we spend money it doesn't create additional detendency, doesn't ultimately create a form of economic disadvantage. we seek to have that money really do what the commanders need serp to do, which is provide on the ground immediate assistance that can be of an urgent nature ultimately to accomplish the mission . >> i know the okay obligated

money. look at the unobligated serp money, it's significant. >> yes, ma'am. >> appropriate yated over $3 billion and have a billion and a half that hasn't been obligatesed and maybe it would be time to say we could do without that $800 million for the next fiscal year, and -- >> we won't spend a dollar we don't need to spend, ma'am. that's my obligation to you. the american people. >> well, i think it might be something that would help reassure the american people that, you know if we've got unobligated money already appropriate operated, not asking for more would be a show of good faith to the american people we're not building things in afghanistan we really need to be building here that might not be sustained in light of the challenges that afghanistan faces. >> very fair comment, senator, and i have identified money that i will not spend. i've done scrubs of milcon. we recognize we're not going to obligate all of serp, and we're going to make sure that we return that money if we don't need t. that sounds good.

i'm sorry. i can't -- i think we've got to go vote. we are? oh, okay. go ahead. >> senator, i just wanted to add my compliment to bring to you our plan for fy 13 and to agree we need to make the case on an item-by-item basis for the iaf, for those, for how they're going to fit and be sustainable and to say that, i said on the afghan resources oversight council for the development. i spent time on this. i agree we need to do better working on it and appreciate your support and appreciate for the department and in the field we've got to do better on auditing, better on contracting. we will continue to work hard on it. >> i worry that if we go down the path of new major reconstruction projects, that as we draw down, a consideration that you will have is not just the transition as it relates to the safety and security of our troops, but what will we have to leave on the ground for the contractors? bu i think we're going to end up

way situation like we did in iraq. that we found ourselves pulling and all of a sudden looked and we still had tensof contractors. and i just want to make sure that those two pieces are not going down the pathand we with blinders on, aif, more reconstruction, not realizing we could be in 2018 still building a dam with minimal troops on the ground in terms of any kind of security protection. >> thank you. >> thank you both very much. >> thank you. >> the good news is thate ck in for his questions. the better news is we're going to take a five-minute break before his questions. we thank you both much. your testimony has been very, very strong, very clear, very powerful, and very moe five-minute break and that will leave senator lieberman enough time to get his questions in and enough time for you to have a few moments. thanks. thanks to your family.

both the house and senate are in session today. the house working on a beal repealing part of the health care law while the senate hopes to finish a bill making it easier for small businesses to access capital. watch the house live on c-span, the senate on c-span2. while this hearing is in a break, we're also covering federal reserve chairman ben bernankes teaching a series of classes. we'll have coverage of today's class coming up. next a look at what he had to

say earlier this week. >> -- the value of the currency is fixed in terms of gold. so, for example, by law, in the early 20th century, the price of gold was set as 20t $20.67. a fixed amount between the dollar and a certain amount of gold bp that in turn helped set the money supply and the price level in the economy. there were central banks that help manage the gold standard, but to a significant extent a true gold standard creates an automatic monetary system. basically, money is tied to gold. now, unfortunately, gold standards are far from perfect monetary systems. one small problem, which is not on the slides, but i'll just

mention is that there's an awful big waste of resources. i mean, what you have to do to have a gold standard is you hav to south africa or some place and dig up tons of gold and move it to new york and put nit the basement of the federal reserve bank of new york. it's milton friedman used to emphasize that was a serious cost of gold standard all this gold was being dug up and then put back into another hole. there are more concerns that showed practical experience were part of a gold standard. one of them was the affect of the gold standard on the money supply. since the gold standard determines the money supply, there's not much scope for the central bank to use monetary

policy to stabilize the economy. there was no flexibility for the central bank to lower interest rates in recession or raise interest rates in inflation. some people view that as a benefit of the gold standard. taking away the discretion from central banks and there's an argument for that. it did have theism occasion that there was more volatility year to year in the economy under a gold standard than there has been in modern times.

there were other concerns also with the gold standard, now one of the things that a gold standard does is it creates a system of fixed exchange rates between the currencies of countries that are on the gold standard. so for example, in 1900, the value of $1 was about $20 per ounce of gold. at the same time the british set their gold standard as saying roughly, roughly four pounds, four british pounds for ounce of gold. >> we'll take you back now to the senate armed services committee as general allen resumes his testimony. this is live coverage of c-span 3. >> militarily this is a situation that we've invested a lot of life and treasure into over a period of time and it is

winnable. if we continue on a course. the reaction you've drawn i think is a tribute to the -- both to the strength of your testimony and what you referred to in very moving terms which is the strength of troops there. you mentioned the counterproductive role by pakistan and iran noting that the taliban operates i quote with impunity in pakistan. and that quote iran continues to support the insurgentsy and fan the flames of violence. let me ask you about pakistan first. in about the significance to the fight in afghanistan of the continued sanctuaries or save

havens for our enemies that exist in pakistan and bottom line can we -- can we win this fight if those sanctuaries continue to be protected in pakistan. >> senator, i think we can. i believe it's going to require some pretty hard decisions with the afghans eventually with respect to how they'll dispose their forces on the ground. the east clearly, the eastern corridor from the northeast ward towards up route seven to kabul that whole area and the security zone around kabul is under threat from the taliban operating out of the safe havens in pakistan. but i believe that with continued operations in the east and ultimately disposing enough

of the afghan forces in the east we can build a sufficient defense in depth ultimately to be able to protect both the population in the east, but kabul as well. but it's going to require probably more afghan forces than we had anticipated. i'm not talking about the larger number of the army. i'm talking about more of the standing force than we would have anticipated to be disposed and deployed in the east in order to defend kabul over times. but it remains a threat. >> it remains a threat so. the continued existence of these safe havens were our enemy forces in pakistan obviously makes the fight that we have to fight more difficult. >> it does, sir. >> can you conceive of anyway we can convince the pakistanis to take more aggressive action to close down the safe havens or give us the opportunity to do so with them? >> i actually think there's significant opportunity, frankly. >> good. >> to work with pakistan in this

effort. it is often overlooked the amount of military activity the pakistanis are ked indicating to fighting not the same necessarily insurgents that we are, but insurgents nonetheless in pakistan. they suffered over 3,000 dead in the last two years. some tens of thousands of wounded amongst the civilian population in their own military. they have a heck of a a fight going on in the tribal areas as well. there has been occasion -- there have been occasions in the past where the general where the pakistani military in cooperation with our forces across the border have conducted coverage tart operations that have been valuable to both countries. indeed we seek many the after math of the 26 november cross border tragedy, we seek the opportunity to have those conversations again. i think there is real common ground where we can conduct complimentary operations

ultimately to the benefit of both countries, afghanistan and pakistan and to accomplish our mission. it will be my intent ultimately as come isaf in meetings i hope to have in the future to seek opportunity for us to partner together across the border. not just for border coordination, that's a military necessity, but to seek opportunity where his military and the forces of afghanistan and isaf can partner to start to get at and squeeze some of these organizations. >> i wanted to say, i wish you well in the meetings. the movement there will be important. i know and i presume you do that the agreement on a strategic partnership with afghanistan may be an encouragement to pakistan to help us close down those

sanctuaries. dr. miller? >> senator lieberman i wanted to in fact say something along the lines of what you joust noted. that is that while as general allen said we've seen pakistan taking on significant fight within their own borders we've asked them to do more and will continue to do so. we see hedging behavior in the region. and we see it because some people have at this point are not 100% sure of the u.s. and coalition commitment to support afghanistan beyond 2014. the strategic partnership, the enduring commitment that president obama has talked about and the plans including at the chicago nato summit are going to be important markers in let me just say the support of the -- of this committee and congress is an important indicator as well it will help send the

message both through the american people but internationally that the united states is not going to make the same mistake that we made in 1989. >> thank you. i couldn't agree more. how about a quick word about iran. you say they continue to support the insurgency and fan the flames of violence. >> we've watched very closely the support that it has provided to the insurgence. it is low level at this particular moment. we would gauge their presence and commitment to supporting the insurgency by the appearance and battle space by certain signature weapons. the iranian manufactured 122 millimetre rocket or the manufactured efps. we're not seeing those now. we are seeing some support to the taliban. we are seeing some not just