let me introduce myself so that you'll know where i'm coming from. i was born in council bluffs iowa, back in 1939, and we moved across the river to omaha when i was 10. i married carolyn jane rush, of broken bone, nebraska, in 1961. we celebrated our 50th wedding anniversary last august. we have a daughter and son, and four granddaughters, three of whom are 17, which presents its own problems. i was an anti-trust lawyer for 40 years.

i'm the only republican ftc excisioner. i would describe myself as a fiscal conservative. this is not my first stint at the ftc. i served as director of the bureau of consumer protection from 1973 to '75. that said, i've been free to agree with my democratic colleagues. and i have disagreed with them, hopefully without being disagreeable on a number of matters. and the president's policy decisions, which are reflected in that budget. the areas of disagreement with

my colleagues have includeded generics, which i know that you have an abiding interest in as well. since you have legislation pending on the subject. financial services, enforcement needs and case election. particularly since we now share jurisdiction with a new cfpv, over my dead body, i might add. oil and gas prices. the staff's preliminary privacy report. i will answer your questions about my views on these or any other topics. but despite these areas of disagreement, collegiality means to me that i have never felt

bullied by the chairman. or my colleagues. to support or not support a position i disagreed with. i consider this to be the e p epitomy of the agency. >> thank you very much, mr. rosch. i appreciate your comments. in spite of what the national news media leads you to believe, the congress has much more than the public thinks. and we, i think, enjoy the disagreement, but we can be friends on the side. and i think respect one another. i'm pleased to hear that's the way it happens at the ftc as well. i'm going to ask my first question about the consumer financial protection bureau and the the memo of understanding that the ftc has with the cfp.

obviously mr. rosch, i know since it was over your dead body that the functions -- some of the functions of the ftc would be merged with the cpfb. i'm going to ask some process questions first. if you want we can get into the substantive discussion. but chairman lbewitz. i read the mou. but explain to us your interpretation of what part of ftc's jurisdiction is transferred to cfpb, how y'all are working together, and i also want to know that since because of that, the fact that you all are working together and some of your jurisdiction was transferred, then it seems to me that you wouldn't nid as many resources as you have requested. >> so that's a very fair question. and i think that's part of

commissioner rush's concern as well about the creation of the cfpb. we have a memorandum of understanding, as you mentioned. we the that because we don't -- we want to make sure that we're efficient. as we know from the complaints we get and from the cases we brought. it's a target rich environment. and so we, so from my perspective, as long as we're not double teaming companies and we're letting each other know which investigations we're doing. that's probably a good thing, a good thing for consumers. we've also set up six working groups with with the cfbc, and we meet with them fairly regularly to make sure that we're not tripping over each

other or stepping on each other's toes. >> how do you define fairly regularly? >> i would say we are talking to them at the staff level probably every week at least once. i talk to richard or e-mail him probably every couple of weeks. now, on the resource issue, i would say this, over time it might make sense to -- i don't want to say stop authority. we still have jurisdiction to go after pred tear financial behavior. but it might make sense to defer to the cfpb but it's a new agency. it has not brought a single case yet. we have jurisdiction over nonbank institutions. they have jurisdictions over that plus banks, and so i think they have their hands full. and as we know, there is a fair amount of uncertain over the agency itself.

and over the and while i think over time it may be redon't need the resources. we're preying on the most vulnerable consumers. first in addition to 38 retirements, which we had this last year, we lost no fewer than 21 ftes. to the cfpb. so there's supposed to be 59 fte vacancies at the commission.

second, however, each and every one of those vacancies left by the 59 ftes has either been filled or it will be filled under the commission's 2013 budget. third, those 59 slots will be augmented by another 10 ftes, under the budget request you are considering. so the result, assuming the 59 slots had remained unfilled, is an addition of 69 ftes. fourth, many of those ftes will be used to combat the so-called financial fraud cases despite the fact that we now share

jurisdiction with the new cfpb. fifth, in so far as the testimony suggests or indicates or implies. that will are other substantial savings that will be made. i would i would suggest to you most respectfully that this is penny wise and found foolish. and that's the statement that i'm going to make for the following reasons. # i think the big ticket items are threefold. the first is the 69 ftes. additional ftes. the second is the creation of a new miami office. that would stand in stark contrast to the anti-trust division's proposal to close a

number. i think it's four of its offices at the present time. beyond that, it would require taxpayer funds not only now, but in the future, indefinitely, because i can guarantee you based upon our experience from '73 to '75, that we will play havoc trying to close those offices down the line. or that office down the line. third is the unprecedented proposal to give away and the chairman has mentioned this, to give away our headquarters building. which is federal government property built exclusively for us to the largely privately endowed national gallery of art. that will cost the taxpayers from $80 million to $300 million

depending on where we move, and whether it's a new building hike the sec's. you know, madame, chairman. at least for a fiscal conservative like myself, i think that this congress or a large majority of the house at least was enacted on the promise of frugality. and to my way of thinking, it's time to walk the walk as well as talk the talk. i say that most respectfully. >> thank you, very much, mr. rosch. and i don't disagree with you. let me just say briefly, and then i'm going to leave it. with regard to the headquarters building. that's a discussion with the authorizers. we don't have the able to make those decisions in an appropriations sub committee. i would like, and i'll bring this up in another round of questions.

i want to pursue with you the filling, both of you, the filling of the 59 and adding 10, particularly having sent the 21 over to cfbp. i also want to discuss with you so many satellite offices. it's not just y'all. it's the security and exchange commission. i believe we can be much more efficient with our funds as opposed to having bodies be placed in other places with some exception. so i do appreciate -- i do appreciate that. both of your comments, very, very much. i am curious, though, particularly with you, mr. rosch. do you think, knowing that you aren't crazy about the notion of the cfpb, but do you believe that your jurisdiction should have been transferred over to

the cfpb? >> good lord no. >> i absolutely agree with commissioner rosch. we can come back to this in the next round. if we're not transferring jurisdiction, we ought to stay active in the field until they have proven they can do the job. i think it can over time. >> lupty kags of efforts a waste of taxpayer dollars. let me passing on my questioning. >> thank you, madame chair. first of all, i would like to congratulations you and your staff on putting forth a bujd request $12 million less than for 2012. and that's probably the last time anyone will hear me congratulate somebody on a cut. we all have to do more with less. can you describe the steps eftd is taking to increase efficiency

and streamline your operations? >> well, we all understand we're living in aner ra of os terty. for example, one thing we're trying to do is use computers to do the document reviews that are sometimes done and still have been done up until recent years in part by manual labor. another is human capital. commissioner rosch mentioned the buyouts that we have done for retirement eligible employees. one way in which you save money, and it's sometimes painful because we have wonderful people who are institutional memories is to offer buyouts and then to bring in younger attorneys who are at a lower sort of pay level. and then, i think probably, as much as almost anything else, because again, we're a lawyer driven agency, probably 65% of our budget is staff salaries.

it's sort of creating a culture of savings. so they asked for ways in which they could save money. we had 150 responses. and some of them we institutionalize. we send fewer people to meetings as we should. and we got rid of our sedan that we had in the agency. we both came over in minivans. so we're working on this, and it's important. >> the only thing i would say is i'm a reform senator in this regard as well. i have supported an increase in the budget for the ftc as well as the ftes. but i would suggest now is not

the time to do some of these things. for three reasons. first, we are now in the midst of an austere time. the fed says we're going to be until at least 2014. so prosperity is not around the corner. secondly, we need every last dime that we can get ahold of in order to get us out of the building at 601 new jersey. when the lease runs out, which it's going to do at the end of the year. no matter what. that's a fact of the matter. no additional spending by this agency is justified in these hard times and under these hard

si circumstances. in my judgment. >> if i could just respond. you know, in our -- as you pointed our, our budget is actually a request less for this year than for 2013 and in fy 2012. but we have a slight increase in the budgeting office. the rest of it is for technology upgrades, which will really very much needed. and again, you determine our pro appropriation. we all understand that. we're a pretty good agency in terms of taxpayers getting bang for their buck. but i do think that if we end up particularly under sequestration or with a reduction, we're just not going to be able to do the things you want us to do. that means bringing up cases or

reviewing of documents and businesses. you know, we're doing a merger review. it's the businesses who can put us on the clock and we have to review, you know, tremendous numbers of documents in the second request. which are the second request is where we're closely scrutinizing a deal that most mergers don't go to second request. but when we are, we have to look at on average 1.5 million documents. when i first came in 2005, the average was 200,000. we will work with the budget this sub committee gives us. but we're a pretty productive agency. and so we're just -- and so i understand commissioner rosch. i have the greatest respect for him. he makes a much better agency. he's a brilliant lit gator. but if you want us to be as effective as we've been, and there's bipartisan consensus that we've been effective, it

would be tough to do with a smaller budget. >> and i think it's clear on both sides of the aisle that while there are cuts in place and there's a desire to continue to cut, we do want you to be effective. and we want you to take on new areas. and with that in mind, the last question i had added, it's not the binder. even though it has holes in it. there's one this companies knows i care a lot about. i'll tell you what it is. it's the equal treatment or lack thereof by a lot of folks who sell their goods into territories. the commission for consumer affairs just fined amazon because they won't ship or give the special shipping rates to the territories. in this case puerto rico and the virgin islands than they do to the 50 states.

and if you live under the american flag, you should be treated equally. and what can you do? what can happen now that everybody seems to be aware that this is happening more and more. i'll give you an example. there was a journalist in puerto rico interviewing the commissioner, the secretary, and found out that she had a problem with the car. and she needed a part. the suggestion to the person on the phone was do you have a relative we can ship it to, and then that relative ships it to you well, that's not an answer for people who are american citizens who live under the american flag. whenever i ask the commission on the committee, i look at congressman womack. i know that he had a long military career. and when it comes to veterans, we treat everybody equally. and when they go back home, they

don't get the same services or the same treatment because they live in a territory and not in a state. so what is under your jurisdiction ha you could do about these kinds of problems? >> well, we'll take a look hat this issue. i know a little bit about it. but we can go after companies that engage in unfair deceptive practices or unfair methods of competition. >> but it might not be deceptive. maybe not hawaii and alaska and not puerto rico. >> right. >> so it's not deceptive and whether there's an increased cost to them.

we have brought anti-trust cases and done anti-trust investigations in puerto rico. and i believe we've had some health care matters where there were sort of entrenched companies with very high market shares trying to prevent competitors from coming into the marketplace. i'll get back to you on both of those. thanks. >> thank you, mr. alexander? for those of you who didn't come in. i said we would take people in the order, usually of seniority, but in this case, if that doesn't apply, it's first come, first serve, okay.

you felt like you continued to hit above your wasist in your dealings. but it's hitting below the waist of the other guys that hurt. and they're the ones that we have to stand up for. there's a bunch in the community about the seniors for the effect of the merger for two of the nation's largest pvms. as a member representing a very rural district, i share the concerns.

the question is we're hearing some reports that. we're hearing that they will recommend in the forthcoming privacy report could effectively starve our nation's economy on the information that it needs. it appears the proposal would have an enormous impact on the economy. have you done any sort of economic analysis before making such a dramatic recommendation? >> well, let me take the second question first. >> which is, we haven't finished up our final privacy report. and so i done want to comment on what we're going to do.

in other words, more privacy by design, more choice for consumers very few read them online. it's certainly not about regulation. we see ourselves as an enforcement agency in the privacy area. i know you all have concerns about privacy issues. it's more about the enforcement cases. we have more than 30 cases. a couple of cases involving social networks over the last year. so i hear your concerns there. but we're not going to, and i don't want to say exactly what we're going to do but we're not a regulatory agency in that sense. on esi metco, i can't say more than we're looking at this, we're asking questions, we're collecting information, and we are very aware of the sort of rural independent pharmacists,

my mother-in-law was a pharmacist. i have met with a number of groups on both sides of the issue. >> i can't say anything more than to reiterate or more that my grandfather was a farmer. >> on the privacy issue, do you have evidence to show or to dmn strait that the public is being harmed now if we don't do anything. certainly in the cases we brought. even if it's very hard to quantify. when you talk about other cases involving facebook or google where they will boil down and

protect people's information and keep it private. it's hard to quantity fi. but there are real harms. as i view our policy work. it's about best practices. and a lot of companies wants to be engaged in best practices. we work with the stake holders. so, for example, one company that participated in all of our workshops was wal-mart. because they believe it's really important to have good privacy practices. it ensures more trust in the interne internet. >> i'm comforted to hear the chairman say that. perhaps that does away with my concern about the staff's privacy report that was issued back in december of 2010.

because as i read the report, and again it was a draft at that point, but it appeared the emphasis was on unfairness. we reiterated in 1982. as opposed to the deception prong. we were going to vigorously protect consumers under the deception prong. that's what i think we ought to do. and beyond that, we have championed, as i read the report, i thought the staff championed a do not track recommendation. and i thought we were in no position to advise anybody, let alone the congress of all people about do not track. after all the solutions that

were there for both the -- the browser solutions and the self regulatory solutions, we're not ready for prime time in my judgment. and for that reason, i disagreed with the privacy report as it was written at that time. >> so if i could just take 30 seconds. so i am actually supportive of the notion of do not track. if a consumer wants to opt out of tracking. he or she ought to be able to do that. when i first started. she used to say your computer is your property. people shouldn't put thing bs in it without