mean by adverse effects. >> let me ask you this. the asset manager has been involved in the study to date? >> engaging in analysis to the extent to which they are potential threats to asset stability. the ofr has begun the process of talking with people in the asset management industry and will continue to do so. the council and the member agencies are welcoming any comments -- >> is there a formal process for conducting the due diligence for asset managers? >> any asset manager firm or any entity that wants to meet with the council, staff about the designation process is welcome to contact any agency and we will try to set up meetings for that firm. >> what i'm concerned with is

the fsoc evaluating asset manager. they are investing on behalf of clients. when a client changes an asset manager that doesn't mean the portfolio is immediately liquidated. i hope the fsoc is looking at that and there would be adverse effects. i would hope they certainly consider that. following up before we heard a little bit about the transparency. i have been hearing and correct me if i'm wrong. i have been hearing that it is not a transparent process. i'm hearing that the fsoc is almost working in a black box so to speak. i want to know -- let's take an example to make it easy. when a nonbank entity is put

into designated stage three it seems that there is no explanation why. can you elaborate on that? >> if any firm makes it to stage three that firm will be provided a notification that it is in stage three that begins the process of having discussion with the firm. the firm has the opportunity to provide comments, arguments and data to the fsoc and member agencies about why it should or should not be designated. >> so a company may have to disclose this information that they have been put in stage three but all they have is a notification with no explanation. can you see how that is untenable for these company snz. >> i think that that desire to create a stage three was put specifically at the request of companies in the comments that

we have received on the various stages of developing the rule where they wanted an advanced notice of whether or not they were up for consideration. the composition of what is in the notice is to be determined. the council can't before finishing the analysis provide a firm with all of the reasons it thinkathize firm may or may not be designated. that would prejudge the outcome. >> the cart before the horse seems to be the theme for the day. i yield back. >> i thank the chair and the gentleman on the panel. fed has proposed a rule to define financial activity through the definitions and purposes of dodd frank. it appears that a few additional lists of financial activities that are different from what dodd frank had intended and from those activities defined under the bank holding companies are

now included. in other words, dodd frank clearly says that the fed has the authority to define the criteria for falling into this category but it doesn't give the fed the option to redefine terms that are already set forth in dodd frank. so i guess my opening question is, why do you think the fed has this authority to go beyond what dodd frank is explicitly setting forth as far as defining of terms? >> i'm not aware of any ways that the proposed rule is going beyond or trying to redefine terms. i think that the proposed rule which has been reproposed is responding to comments we received in response to the first proposal that there were some suggested changes. we put out a second proposal. >> i know how this all came down with regard to dodd frank.

normally during a thoughtful and deliberative piece of legislation i think the fed would be responsive to what that legislation is. i'm not sure whether we are talking about the same thing. i know there was concern by the industry, various industries when there was talk about the fed being able to designate nonbank financial institutions. so there was specific amendment adopted into the law. what it said was engaged in financial activities as defined under existing law section 4 k of the bank holding act. now the fed has gone beyond that because here in dodd frank it describes predominantly engage in financial activities is described as section 102 a 6 to mean a company that derives 1 or 2% from activities financial in

nature. in section 102 b further provides that the board of governors shall establish by regulation if a company is predominantly engaged in those sections as described in action a-6. it seems as though it is laying out pretty clearly in the statute that financial activities are already defined as in a-6. so it makes sense that the list of activities for financial companies, bank holding companies would be to -- set a position that the fed is going beyond what is clearly set forth was part of the deliberation of congress in the amendment to try to make sure that it would be limitted to this area. >> so we have the reproposal out for comment.

the comment period ends on may 25th. part of the reproposal in april was a list of the activities that would be considered to be financial activities as of april because we were requested to be responsive of that to provide additional clarity on activities that are financial in nature for the purpose of determining whether a company is predominantly financial enough. we are trying to be responsive for the request for more clarity. we are open to comments we receive. >> is that list potentially or actually beyond what would be those lists of financial activities under the bank holding act as defined in the statute? >> i'm not aware that it is but i think the comments that come in will help us determine whether we got it right or not in the proposal. >> i'm watching my time here. so i think it was raised the

fact that once a financial institution becomes designated there may be certain benefits to the institution as far as lending and alike. so there is an anticompetitive nature with regard to bank financial institutions visa vee other nondesignated institutions. now you carry that one step further because if you designate nonbank firms such as insurance company that aspect of benefits for that designation would now go to their benefit. before you were trying to alleviate the anticompetitiveness for bank institutions now we are spreading it to nonbank institutions, as well. is that something that we really want to do? >> so the intent of what we are trying to do with enhanced prudential standards imposed on nonbank companies designated is

to propose higher enhanced capital requirements, not easier. and we meet with a lot of nonbank companies. they are more worried about being designated than desiring to be designated. >> i see my time is up. i yield back. recognize mr. duffy for five minutes. >> i want to thank the gentleman for their testimony. at this time this panel is dismissed. i want to recognize the second panel. bring up the second panel. we'll leave this hearing at this point. we are recording it and will make it available in the c-span video library. the federal communications commission goes this afternoon. commissioners will answer questions about fcc operations.

we'll have live coverage starting at 2:30 p.m. white house threatening to veto the violence against women act. the house begins debate on defense programs and policy next year. the house is live right now on c-span. the senate is considering five alternative budget resolutions for next year all offered by republicans. up to six hours on debate on budget today. you can see it all live on our companion network c-span 2. this afternoon booktv.org will be live with arthur brooks. you can hear what he has to say at 5:30 eastern online at booktv.org. what people are saying to

him don't take the vice presidency. right now you are a powerful majority leader. you won't have any power. johnson says power is where power goes meaning i can make power in any situation. his whole life i said nothing in his life previously makes that seem like he is boasting because that's exactly what he had done all his life. >> sunday night the conclusion of our conversation with robert caro on the passage of power volume four on the years of lyndon johnson sunday night on c-span's q and a. this is c-span 3 with politics and public affairs programming throughout there week and every weekend 48 hours with american history tv. get our schedules and see past

programs on our websites. the u.s. army's chief of staff told reporters today that sequestration would be disastererous for the army and discussed how the army is shifting resources and the army's decision to expand training. this is about a half an hour. >> sorry about that. well, i want to talk about three or four minutes and open it up to questions that you might have. i really want to start off by reminding everybody that today the united states army remains committed. we have 92,000 soldiers currently deployed in support of operations. 68,000 of those are in afghanistan. as you know the president and

the secretary of defense provided new strategic guidance to focus our efforts on the beginning of the year. the guidance was clear, very collaborative. more than ten years of fighting two large scale operations. the army clearly is moving inside a frame of transition over the next five, six, seven years. it's important to me that we continue to apply the lessens. we will be leaner and more agile army that is a versatile and ready component of the joint force. our charter will remain to be the best trained, to be decisive for a broad range of missions. in today's increasingly uncertain and complex strategic environment we must ensure that we sustain a diverse mix of capabilities, adapt processes to reflect broader range of

requirements. and through the changes ahead we will demonstrate unwaivering commitment. to guide us through this dynamic landscape the secretary of the army has our vision as the army's globely engaged and regionally responsive, as an indispensable partner in capabilities and multinational environment. as part of the joint force and as america's army that we offer we guarantee the agility, versatility and depth. acknowledging the changing geopolitical environment the strategic guidance articulates. the army has a vital role in the prioritiess and we are developing several initiatives.

i would like to share a few of those with you. first our army generation process has served us well in meeting our demands in iraq and afghanistan. with operations in iraq complete and on going transition in afghanistan we will have the opportunity to adapt this process to be more wide ranging especially as we rebalance towards the asia pacific region. we will implement a progressive readiness model for the active and reserve components. in support of the combat and commanders we will be implementing a concept beginning next year to better meet some theater requirements. the intent is to focus unit or headquators during training cycle or specific profiles and unique and environmental characteristics that make them

available. we'll conduct a pilot next year when a brigade combat team will be the first unit to execute this concept in coordination with u.s. africa command. the regional concept will be important in the asia pacific region as we move forward. home to seven of the ten armys and this will follow over the next several years. for enduring commitments in some of the theaters we plan to employ rotational units. europe comes to mind as we reduce two combat teams and leverage equipment, sets and exercises to allow us to promote regional security and enhance capacity and sustain our relationships with our nato and other allies in europe. finally as the army's strength reduces it is important to note that this leaner army will be

vastly more capable than our pre-9/11 army. besides ten years we continue to increase a special operations force capacity. we have significantly increased our ability to conduct surveillance and reconnaissance. we have increased our aviation assets to support world wide missions and responsiveness around the world. we continue to increase our cyber capability as we move forward and we continue to look at other capabilities in order to move forward. we are also reviewing and refining our organizational desi design. all in all i believe these are the right investments to posture the army to meet our strategy. in addition to these initiatives we will continue to reinforce standards and accountability. rightfully so the military is held to the highest standard.

trust and respect are paramount. i will never pass up an opportunity to talk to our soldiers and our leaders about the sacred trust and the commitment to moral and ethical behavior and values.

secretary mchue announced we will be standing up at joint base lewis-mcchord to focus on the transition -- training readiness and administration oversight that promotes standards, discipline and excellence. on another important note last week we concluded our annual sexual harassment and sexual assault. something that is absolutely intolerable and inconsistent with our army values. it is something that i have kmargeed commanders at all levels to stay focused on to take care of and protect each other. that's what we do and that's who we are and we cannot expect anything less. as many of you know earlier this week more than 200 women began reporting. selected to participate in the exception to the direct ground combat assignment rule. additionally this revision will result in the opening of six military occupational specialties in 80 units, more than 13,000 positions to women opening up new opportunities to our female soldiers which make up about 16% of our force.

as i have testified over the last several months it's important for the army to execute the fiscal year '13. it allows the army to meet contingency requirements, take care of soldiers and families and achieve balance between strength, readiness and modernization. our approach will remain strategy base and fiscally prudent. so thank you for allowing me to give this opening statement and i welcome your questions. >> one quick question. you mentioned the women who are starting with this nonpilot program. i understand there has been some initial discussion about rangers. can you talk a little bit about that?

>> this is a progressive way forward. we are opening up the occupational specialties that currently women serve in down to infantry and armor battalions. we will run this for several months. my guess is based on my experience in iraq and afghanistan we will move forward with a more permanent solution inside the army probably sometime this fall. the next step is we have to continue to look at do we open up infantry and armor mlss to females. what we have done is we are really now collecting information and we're setting a course forward on how we might take a look at this. that's what i have asked the training commander and major general bob brown to start taking a look at this and provide us recommendations how we might move forward.

there has been no decisions made. we want to bring information up to the secretary and decide the way forward on how we want to progress and potentially open it up to these positions. >> does that depend on how you see things go over the next several months with what is happening now? >> it's not going to wait -- start looking at it now. and then we will chart a course of action as a way forward. and i suspect something like that will probably come out sometime this summer. >> does this include a plan to send women through the marine equivalent of their infantry officer school? >> we have our own schools. we'll take a look at it. that's what the recommendation will come forward. are we going to do something like that senate that is part of what the recommendations are. we'll make some announcement on that later as we had a chance to

look at it. >> the house opposition that has the floor today i wonder if you can comment on a couple of items. there is language that limits the pay and down sizing the force. can you give reaction to how you handle that? >> i submitted the budget for the pace that i thought was the most appropriate pace for us to down size. i have two concerns. one is the language the last time i saw it caps us at 552,000 through '13. that will hinder us because we were planning on being at about 543,000 by the end of '13. what does that mean? that means we will not be able to use attrition. this might cause us to force more people out of the army than we want instead of using natural attrition that we identified.

so i have talked with the house. i told them that i don't agree with those amendments. i would like to see them adjusted. we'll continue to work with them as we move forward. i think we'll be able to come to an agreement. i think what we submitted ozthe right pace. it enables me to take care of soldiers and families and continue to meet our commitments in afghanistan and continues if necessary gives us enough leeway if something occurs we could reverse it if necessary. i think all of those factors could be met. >> secretary pi netta said that the way that they put some money back into some items will take away from military personnel.

>> i would say for us in the budget the real issue is the in strength number. if we have to keep a higher in strength number we start to lose our balance. and if those start getting out of balance we have to be careful. we don't want a hollow force. i want the best trained, best equipped and ready army. >> can i just follow up? i'm unclear on your answer on the ranger question. you are looking at this but what is the chance of being able to take -- >> i think we are taking a look at it. i don't want to get ahead of myself. so let me give you some statistics. so as we look at our senior infantry officers, about 90% of our senior infantry officers are ranger qualified. so if we determine that we are going to allow women to go in the infantry and be successful

they will probably have to go through ranger school. we have not made that decision yet. it is a factor i have asked them to look at. we have to look at the all encompassing problem that we have in terms of if we decide to do this we want the women to be succe successful. how do we make them most successful. >> i think they are beginning to be able to go into infantry battalion. it is signal, general, mi, medical. mors. those are the ones. >> could you tell us beyond the

current budget if sequestration follows through what kind of cuts do you anticipate to modernization? >> two points of sequestration. one is my estimates are it would cause us to cut another 80 to 100,000. it would be a combination. but what even makes sequestration worse is we have no say in where the cuts go. it is directed across every element of our budget. it is a certain percentage. what we really have in place because we not meet the current requirements that we have on our

development al contracts. i think all the joint chiefs come to the conclusions that we have to relook our whole strategy if it occurs. those are the concerns that we have. >> quick clarification. of the regionally aligned brigades are those those specialized units? >> no. what we have done in the past we go through a generation process where we put brigades and aviation and engineer forces. we prepare them to go to afghanistan or iraq. what we are changing is they will be in a line. as they go through a training process they become available for a period of time and they will be aligned based on their requirements. and then they can use those

forces to meet whatever requirements. it might be rotational forces or building partner capacity. it allows them to become more understanding of the tasks that they will have to work. what we are doing is we are meeting combat and command requirements by aligning army forces so they can use them in the future and plan on them which helps them to shape the environment that they are operating in. that's the thought process. we are using the forces that we'll have and they will adapt and adjust in order to meet whatever requirements that that combat and commander will have. >> full spectrum? >> that's not what i said. what i said was we will have units that will train to certain levels. and then as they get requirements they will train and be capable of