modernization program was worked out between ourselves and the department of energy. frankly where we came out on that played a fairly significant role in the willingness to ratify the starred agreement. secretary panetta recently said i think it is tremendously short-sided if they produce funds that are essential for modern. we jeopardize the security of this country. i would oppose reductions with regard to the funding. with the treaties in place and it passed with the majority, i helped do that among others. the budget that came forth almost totally engaged the agreement regarding funding.

i know that you worked on that. a lot of trust up here nonstop. i'm wondering within the department, does that create integrity issues and how should those of us who relied on this letter from the president, how should we feel about this as it relates to other serious agreements that may occur between congress and the white house? >> first, thank you for your engagement. with me and the department. i highly value this committee and i know how difficult it is, but in effect the constant consultations are influential in determining our policy. with respect to nnsa modernization, the level of funding requested in the november 2010 for nuclear

modernization was unprecedented since the end of the cold war. we neglected our nuclear stockpile. we did not make the kinds of investments and as we have looked at what the sequence will be, the fy 2013 request for $11.5 billion will help achieve the objectives and the underlying agreement you referred to under start. it is an increase. it's an increase of 4.9% over the fy 2012 appropriations and developed as i understand it because it's not in my budget. it's in the department of energy's budget.

it was developed closely in concert with the experts about how much money can you spend in a year to get this under way and looking out year after year to actually deliver. if the single doesn't fund the budget as laid out in the report, the president will have to make a report to congress. >> if i could, i know we don't have time and i have tremendous respect for you, and this is not meant to be disrespectful. all that's history. the budget that was committed. the president did not ask for the very up ifs he committed to in the 1251 that was laid out. it was all part of this package that we worked so closely together on. it's a reneging of an agreement. i would ask the question if we are not going to modernize as was laid out, which we consider reducing and slowing the

commitment since we are not living up to the modernization component that was so talked about in such detail with such commitment. >> senator, i don't think respectfully i agree with the premises. there is a 4.9% increase in the budget request for fy 13. the $11.5 billion requested will go into the modernization agenda. as i understand it, it is what the experts will be doing the work at the labs and elsewhere believe can be effectively spent in a year. i'm going to take this question for the record and have the department of energy respond. i really want to say that given the budget the president and

administration is meeting the assurances that were given to you and others. it is cough in a time of restraint, but $11.5 billion will be followed by more which will be followed by more. if you gave them $100 billion, they couldn't do the work. i believe we are on the right track, but let me get the department of energy to respond. >> i'm glad i had the opportunity to raise the issue. we have tremendous respect for the way you dealt with this. the issue of iran and i know there is not much time left, but it's obviously front and center. i think most people in the country watching what's happening believe there is a good chance we can end up with a military engagement with iran in 12 months.

i would ask the question of you, what would you like to see congress do and not do as it relates to that particular issue. >> i think we are absolutely on the same page. the administration has been unequivocal about the policy for iran. with your good work and our efforts, we have passed the menendez kirk sanctions and implementing the sanctions. there has never been anything like them that the world has agreed upon. we are diligently reaching out around the world to get agreements from countries for whom it's quite difficult to comply with the sanctions. they are doing the best they can. we know what the stakes are here. we are in close consultation with israel and europe and our

friends in the gulf and elsewhere. we are focused on the toughest form of diplomacy and economic pressure to try to convince iran to change course and we have kept every option on the table. we are in agreement about the aspect of our policy and where we are total. the challenge is making sure we are constantly evaluating where iran is and what the reactions are. >> i appreciate you raising that issue also. i feel as if we are em partied aparty to that agreement and having worked that with you. i strongly feel that the secretary said the amount of money being spent is on track

within the constraints of the budget overall. that commitment remains to the extent and obviously needs to be made good on and we will work with you on that. senator menendez. >> madam secretary, thank you for your incredible service to our country. i remember when you were sitting here for your confirmation hearing and those of us had questions, you have dissipated the questions and have done an extraordinary job. i want to talk about iran. i hope you agree with me that our best peaceful diplomacy tool left to us to stop the march is the vigorous enforcement of the sanctions that we presently have, particularly the central bank of iran. is that the best tool? >> it is certainly probably the highest priority tool. we have others, but your

characterization is right. >> in that context respect to the implementation of the central bank sanctions that begin to take effect tomorrow with respect to non-petroleum transactions, i have concerns about the subjective criteria. that will be used to determine whether a country has achieved significant reductions and purchases of refined petroleum. i would have preferred we had some scale, but we heard arguments why having a subjective criteria may be better. i can presume that in the absence with the security waiver under the law, all countries would be required to make reductions in the purchases in each of the 180-day period?

>> yes. our expectation and direction we are giving is that we do expect to see significant reductions. i am pleased to report we have been reaching out to and working with countries to assist them in being able to make significant reductions. for some countries it's harder than others. we have come in with a lot of suggestions to help them be able to do what we are asking them to do. >> i appreciate saying we expect them to make the reductions and each of those periods, it sends a clear message to allies abroad joining with the europeans that are pursuing an oil embargo about the seriousness of this nature.

what progress can you tell us with reference to the countries like china, india and turkey? >> with respect to china and turkey and india, we had very intense and very blunt conversations with each of those countries. i think that there a number of steps that we are pointing out to them that we believe they can and should make. i also can tell you that in a number of cases, both on their government side and on their business side, they are taking actions that go further and deeper than perhaps their public statements might lead you to believe. we are going to continue to keep

an absolute foot on the pedal in terms of accelerated aggressive outreach to them. they are looking for ways to make up the lost revenues. the lost crude oil. that's a difficulty for not just the ones you mentioned. we had to put together a team to think through ways of doing that. >> i appreciate that. the stronger and more uniform the message is, the less challenges we have in having countries to try to join us in common cause towards something in their mutual national interest and not just about the united states and not just about israel and not even about the european union, but all that was region and certainly beyond. one final question in this regard, i know that several of us wrote a letter to the president about the five plus

one talks and where that would head. some of us are concerned that iranians are simply entering into a negotiation thinking that either the sanctions would cease or the enrichment facilities and centrifuges are part of the discussion on the table. can you give me a sense of the conditions that we are going to be looking at as it relates to any such talks. >> as we have done since 2009, we pursued this track policy. we have had a policy of pressure and a policy of engagement and used them as a way to engage with us. two things we have been clear about. first as outlined in kathy

ashton's letter to iran, any conversation anywhere with iran has to begin with a disposition of their nuclear program. that is the number one issue. iran's response to her letter appears to acknowledge and accept that. second, we have been working with our colleagues and the p 5 plus 1 to set forth the actions we expect them to take that would have to be verifiable and sustainable. there has to be some guarantee to the international community that assuming they were willing to come into the compliance that they would do so in a way that was not reversible and not immediately reversible. we are a long way from having any assurance as to what iran would or would not do in the p 5 plus 1.

i can assure you that there is not going to be any front loading of concessions on our part. this is going to be a very hard nosed negotiation. we are joined by the p 5 plus 1 in that kind of approach. >> everything cannot be a priority in the world although i'm sure everything is important. i want to call your attention to what's happening here in our own hemisphere and appreciate your travel to the hemisphere has been important to us when we see the erosion of democracy. and erosion of free press and the influences that iran and china are seeking in our own

front yard. i hope we will continue to work with you on that and i will have a question for the record on that i am concerned about that transition. i look forward to your response there. >> thank you, mr. chairman. secretary clinton, i'm not going to dwell on this, but i didn't vote for the treaty. but the administration almost took me with the promises that it made. there has been a lot of discussion as to whether the promises are being kept or not. i don't think it comes as a surprise that the promises are not being kept. the good chairman and make commitments and the period made

commitments in writing. when you are taking questions for the d.o.e., i don't think you focus on what can be done as to whether or not the commitments are being kept. that's my two cents worth. over to iran, as you try to work through this rooub rubik's cube and try to get things ratcheted down, it's best to start with what's the other side thinking? you read this stuff and you -- it's hard to comprehend why you push the youthful and why they continue to pursue something that everyone in the world doesn't want them to do is it homegrown politics or what is motivating them to continue to do this? >> senator, briefly on the question about nuclear monitorization, i will certainly

provide you with information that i hope makes it as clear as possible that we took our obligation seriously and there may be debate about how fast we are going and where we are doing it. that i don't have any expertise on it. i acted in good faith. >> i believe you did, but the comfort level needs to be raised. >> i will do what i can. i will have the answers delivered with macaroni and cheese and other comfort food that helps make that case. >> that will get you everywhere. >> thank you. senator. >> i know last week the former general clapper and the collector of the cia and general petreus and the chairman of the joint chiefs all testified in front of other committees in the senate.

it is the conclusion that they have not yet made the decision to produce a nuclear weapon. the explanation that came from those credible sources, patriots all, is that there is a continuing debate going on and it's complicated for anybody on the outside and some people on the inside to understand. there is a lot of power struggle going on. there are personality clashes. the supreme leader who is the head of the clerical presence institutionally within iran, the revolutionary guard and the quds force, the parliament, and the

president. we just get a lot of static in intelligence reporting and analysis from not just our own sources, but international sources. to pursue peaceful, ci nuclear power. and there's no doubt that a lot of what has been discovered by the eia points in the direction of a nuclear weapons program and there is no doubt that they raise all kinds of suspicions by putting a lot of their work in their nuclear program in accessible places and recently denying them the right to investigate. so i think it's understandable, senator, why you and why

millions of people who are concerned and worried about this are trying to decertain what they want and what they are trying to achieve. and that's one of the reasons i support our dual track of intense pressure and of being willing tone gauge because i want to gather as much information not only about actions, but about intentions. and very deep ongoing consultations with israel and the gulf arabs and europeans and others. there isn't anybody of any stature in the world in any government that really is not concerned about what the iranians are doing. and it is a source of constant discussion. so what we are intending to do is to ratchet up these sanctions as hard and fast as we can,

follow what's going on inside iran, which seems to be a lot of economic pressures that we think do have an impact on decision making, continuing to be vigilant, responding quickly to threats like the threats about the strait of hormuz leaving no question in the iranian mind as to what we would do if they should take any fool-hearty action, having crafts going in and out of the gulf, consulting and planning with a lot of our partners. so, you know, that's the state of play right now. but the question you asked is a question that's asked every day in the intelligence community and in foreign affairs agencies around the world. >> thank you very much. i appreciate that. i would think that someone in their decision-making authority in iran would look back at recent history in iraq and look

what saddam hussein did. what a reckless thing to do to take the world and make them believe something that isn't necessarily true. thank you for your analysis. >> thank you. senator casey? >> secretary clinton, great to be with you again. thank you for appearing before us. i have two questions. one on first on pakistan and then on iran. with regard to pakistan, this august senator winehouse and michael bennett and i traveled to both afghanistan and pakistan with really one focus of our trip. and that was this question of ieds and the material components of. the four of us sent you a letter just recently that you may have just got an number of days ago. i want to ask you about that topic. but i guess wanted to focus your

attention on what the pakistanens have done or not done. i would argue that despite the assurances they gave us on our trip, and i mean assurances at the highest level of their government that they would take this matter more seriously and they would implement the strategic plan they had in writing that they presented to us. it's my judgment, to say they are very slow in implementing that, to focus on the networks that are moving these component parts that become the foundation of these road side bombs, ieds, whatever we refer to them as, either killing our troops on a regular basis in afghanistan or grievously wounding them. as a predicate to that as well, i want to thank you for your determined leadership on this. you have been focused. you have been vigilant.

and you have been persistent in pushing the pakistan leadership to help us on this. from your observation of their actions or inaction on this, do you think there are any measurable steps that they have taken to specifically go after the networks? because i think that's what a lot of us are waiting to see, whether or not what their professed plan is becomes a plan of action in specific steps. can you tell us how you see it? >> senator, i appreciate your leadership on this issue. and as i reported to you some months ago, i raised it at the vfr highest levels of the pakistan government. i discussed it last thursday with the foreign minister. it's very clear they need to do more and they need to do more

for themselves. our concern is very much rooted in the terrible attacks that take place in afghanistan against our soldiers, against other targets there, but, you know, in 2011 there were 1,966 terrorist attacks in pakistan, which resulted in 2,391 deaths. so our point to pakistan has been, you know, this is not about the u.s., nato, afghanistan alone, this is also about you. now what they have done is they have introduced legislation in their national assembly. i've been told they expect to pass it shortly. it is focused on the transport of calcium ammoniumitra. they have an implementation plan in the works. we have had several expert meetings with them on their

national counter-ied strategy. they are working with their afgh afghan counterparts to restrict fertilizer imports. we have had several productive meetings between the government of pakistan, the government of afghanistan, and isef over the past year. so we're making progress. i just have to say, senator, that when i raised it directly with the very highest levels of the military and civilian governance in pakistan, there was a lot of confusion. they did not understand how fertilizer that many of them told me they use on their own farms was such a problem. so i explained to them. after the oklahoma city bombing, we had to reach the same conclusion. and we had to go after the use

of fertilizer. so they are like 10 to 15 years behind us in terms of thinking through what this means and how to do it. so they are making progress, but they are not moving fast enough. >> and i know that when you were sitting with their leadership back in may, i remember seeing the the video from memorial day weekend. then when you came back you called me about it. but i hope we can continue to be as persistent as you have been and others have been to make this point. as you said, it'sal protecting their own people as much as it is the urgency it is about protecting our own troops. it's remarkable the lengths to which our armed forces and our military intelligence have gone to protect soldiers to prevent and to deal with the aftermath of the horror of those explosio explosions. you know pennsylvania well. we have a lot of folks who

served in both iraq and afghanistan. at last count, we're at 79 killed in action, 573 wounded. it's a major issue for our families. and the remaining time i have left, let me go to another aspect of the iranian question. there's a report that was recently released. the institute for science and international security released a report about efforts to prevent iran to gaining access to materials. here's what the report said in part. "there remains significant steps the weak implementation by china. china remains vulnerable to iran smuggling vital goods for their nuclear program. they use front companies to buy from chinese suppliers located within its