broad terrain in a way that we would not be able to cover if we had to do it all on our own budget. >> now, one last quick question. the current statute of limits of the office for social directors makes them subject to senate confirmation. and right now you're taking advantage of all four slots. but unfortunately, without any senate confirmed directors. do you have any thoughts, either on the number of the directors, or the requirement for senate confirmation? >> well, i think four confirmed directors corresponded to the four divisions. i think it's the right number. we started out after some delays in confirmation, having three of the four senate confirmed. the fourth, the president's nominee for national security

and international affairs, was never confirmed, got an interim appointment, and subsequently that expired. and so he has left. but in the meantime, the senate confirmed associate director for technology, and chopra has left a few months ago. and environment and energy, sherri abbott left a little longer ago. and the senate confirmed associate director for science, dr. carl wyman, nobel laureate in physics, left a couple of weeks ago for personal reasons, health reasons really. and so we're currently in a position very late in the term when the prospects of getting additional nominees through the senate are rather poor. we have one nominee, the president's nominee for associate director for national security and international affairs, dr. pat falconi, has had her hearing. we hope she will be confirmed.

but the other divisions are currently under strong leadership. the leadership that i've delegated the responsibilities to on an interim basis, and i think it is, while we're working on the problem, finding people problem to find people who would be senate confirmed for chose slots, i'm not sure how many we would be able to get confirmed before the election. >> thank you have been much, my time has expired. >> the chair recognizes dr. harris, the gentleman from maryland. an open government, with that in mind, as the president's science

adviser, do you think it's a matter of principal that the government should make regulatory actions public? specifically if you have an issue with the epa and some of their regulatory actions. as a matter of principal, do you think we should expect that? >> yes. would you work with the committee to see that we get -- >> be appear to do that, if there's a problem with that, i would be happy to work with you, i think the principal is absolutely the data on which regulatory decision and other decisions are based, should be available to the committee and should be made public, unless there's a classification reason. unlikely in this case. >> let me ask you, when you talk about -- he actually included natural gas as clean energy. you left it out of your testimony, do you consider

natural gas a clean energy source in? >> yes. >> is there a reason you left it out of your testimony? >> natural gas is the cleanest of the fossil fuel resources. >> i don't any we need a large federal r & d program, although we do need to ensure that hydrofracturing can be done in a way that protecting drinking water and projects other environmental value. >> if you're a scientist, is there a documented case of drinking water from hydrofracturing? >> there is not. >> so 1.2 million -- despite 1.2 million applications, we should be expending money in the federal government for ten agencies to look for a reason to

regulate hydrofractures. >> 1.2 million applications, doctor, you admit no documented cases of drinking water contamination. to me it looks like a why would goose chase. >> i think it's very important that we develop hydrofracing to where the american people have confidence in it. >> i'm going to interrupt you for a just a few minutes. do you think it's -- fearmongering press relief from the data from pavilion study and has to go back and collect some more data. do you think that's good science? >> i don't want to defend a particular press release. >> you have to have kchs in a technique that's been used 1.2

million times with no document case of water. we're going to look at it, but it's a baseline, it looks pretty safe. it's exactly 180 degrees from what science and administration said. in my final minute, there's a conference going on in rejoe io janeiro next. they're concerned that our taxpayers are going to bear the tax and economic bushrdens that come from these. in 2007, at the climate change conference in bali. americans need to reduce their living standard and this is a quote, and i need to know whether it's accurate. there's going to have to be a redistribution about an accurate -- is what you said in 2007? >> i do not remember, sir, exactly what i said in 2007, but it sounds to me that i would have been talking about distribution between clean energy technologies and dirty

energy technologies and where we get our consumption, what the processes are more broadly by which we support our standard of living. let me note as well what the president has said and what i have said that we believe the country's natural gas resources can be developed safely. we have both been clear on that. the question that you're getting at is whether the government needs to pay any attention at all to the range of potential environmental impact. >> the specific question is whether you said there's going to have to be a redistribution of how much we consume e. and i'll pull the final quote as to whether we're talking about energy or whether we're talking about this perception that the government thinks that americans just consume too much and that maybe this is not fair somehow. i would suggest that if you think that what we ought to do is reduce our gdp, consume less and have a lower gdp, that's certainly consistent with the american policies. >> that's not what i think, and

it's not what the president thinks. >> when they continually -- folks in the administration have said we ought to redistribute our consumption and you have other administrative officials are saying it's nice if the price of natural gas were at energy levels some people were skeptical with that. that was just a rhetorical question. i thank the chairman. >> the chairman recognizes mr. lapinski for five minutes. >> thank you mr. chairman, and thank you dr. holder for all the work that you're doing. it's listen almost two hours now and a couple of questions that i have here. first is the america competes reauthorization act provision.

i'm particularly interested in talking about induce mngtd -- s is -- i have continued to promote the use of innovation prizes. so if you can update us on what the prizes authority has done in 2012. and what been done to reduce the prizes at the national science foundation? >> thank you for that

question--making clear that they had the authority to use prize competitions to achieve the goals of the departments in agencies where they made sense. officially to generate innovation because you end up only paying for success, you describe a goal but don't prescribe the ways to get there. and you draw on the creativity of a very wide community to find the innovations, we now have prize competitions. transportation and many others, and the ones that have already come to completion have shown some quite remarkable results. i mean one that i'm sure you know about is the auto motive x

prize which was corporate money, doe or kes strags of the prize competition, there was $10 million in prizes for folks who could demonstrate a vehicle that gets more than 100-mile-per-hour fuel economy. and three vehicles succeeded and split the prize money. but the interesting thing is, kmt for federal government

spending programs across all departments and agencies that do these things and we're already benefiting from some of the insights in that inventory in finding ways to expends programs that are more cost effective and trim some of those that are less cost effective but i would not expect the informal programs to go away. >> i know how important that was for me personally and for a lot of others and i look forward to seeing the federal education strategic plan later this year, anything more specific about when this may come out or anything else you could tell us about that plan very briefly? >> i believe the same education strategic plan will be out by fall. >> thank you, yield back.

>> i thank you dr. holdren for your testimony, i may have some other questions i have submitted in writing and get them to you within a couple of weeks, we can leave the record open for that and it's my understanding that they have an agreement on the content of her request and without objection her request is granted. and with that, doctor, you're excused. this hearing is adjourned. we are adjourned. >> in a few moments, jp morgan ceo jamie dimon testifies before the house services committee. john hickinglooper will talk on

the hydraulic fracing. >> this weekend on american history tv, harvard professor john stopper tond the war and the end of slavery. >> when lincoln gives us an eye roll, the self-described and legses are a tiny minority and they're still despised. what transforms abbond legsist o' -- >> also this weekend, more from our series on key political figures who ran for president and lost, but changed political history. the contenders and a look at eugene debs five-time socialist candidate for president. that's this weekend on cspan 3.

jp morgan's ceo jamie dimon apologized to congress again this week for the country's trading loss of more than $2 billion. he also said that no taxpayer money was lost and that his company remains fiscally sound. >> thank you. the chair wishes to remind our guests that the manifestation of approval or disapproval including the use of signs and placards is a violation which governs this committee and

maintain order and decorum. our second panel is made up of one business of the ceo of j.p. morgan chase, mr. dimon. mr. dimon, you are recognized for five minutes and maybe if the cameras would take a picture and then exit. mr. dimon, you are recognized for five minutes. and we welcome you to the committee. >> thank you, mr. chairman. chairman baucus, ranking member frank and members of the committee. i'm preparing to discuss recent losses in a portfolio held by j.p. morgan chase -- mr. chairman, can we get him to pull the mike closer. >> chief investment losses. these losses have generated curveball attention. and while reviewing the facts i will do everything i can to the extent possible. j.p. morgan chase's six lines of business and provide a financial array of small and large businesses, governments and not for profits. >> these include deposit accounts and loans, credit

cards, and mortgages and capital market's advice and mutual funds and other investments. let me start by explaining what the chief investment office does. like many banks, we have more deposits than loans. at quarter end, we held approximately $1.1 trillion in deposits and 700 billion in loans. cio along with the treasury unit invests excess cash that includes treasurys, agencies and mortgage-backed securities and corporate debt and other domestic and overseas assets. it also serves as an important vehicle for managing assets and liabilities of the consolidated company. in short, the bulk of c.o.'s responsibilities is to manage approximately $350 to our portfolio in a conservative manner. while their primary purpose is to invest excess liabilities and manage long-term interest rate and currency exposure, it also

maintains a smaller, synthetic credit portfolio whose original intent was to have a systemic event like the financial crisis or the current eurozone. so what happened? in december, 2011 as part of an effort and in anticipation of new capital requirement, we reduced the risk assets and to disassociate risk. to achieve this in the synthetic credit portfolio, they could the krooirks -- cio could have reduced the existing positions, instead starting in mid january, it embarked on a complex strategy that -- larger and result matly resulted in even more complex and hard to manage risks.

this tragedy ended up creating a portfolio that was larger and resulted in even more complex and hard-to manage risk. this portfolio morphed into something that rather than protect the firm created new and larger risk. as a result, we let a lot of people down and we are sorry for it. let me turn to what went wrong. we believe the series of events led to the difficulties in the synthetic credit portfolio. these are detailed in my written testimony, but highlight the following. cio strategy for reducing the synthetic credit portfolio is poorly conceived and poorly vetted. in hindsight they did not have the complete understanding of the risk they took. the risk limits for the synthetic credit portfolio should have been specific to the portfolio and much more gran knew lar and lower limits on each of the specific risks being taken. the cio with the synthetic credit portfolio and the firm wide risk control function. in response, we've taken a number of important actions to regard against an occurrence. we've appointed an entirely new leadership for cio. our team has made real progress in analyzing, managing and significantly reducing the risk going forward. while this does not reduce the

losses incurred it does reduce the probability and magnitude of future losses. we're conducting an extensive review of this incident which the board of directors has independently overseen. when we make mistakes, we take them seriously and often we're our own toughest critic. in the normal course of business we apply the lessons learned so we know we won't make mistakes and we do believe this will be an isolated event. we will not make light of these losses and they should be put into perspective. we will lose some of the money and for that we feel terrible and no client, customer or taxpayer money was affected by the incident. our balance sheet remains intact. as of quarter's end we held $190 billion in equity and over $1 billion in loan loss reserves and far in excess of regulatory

capital standards. as of march 31st or basel 1 the ratio was 10.4% and the estimated tier 1 common ratio was 8.2%, both among the highest in the banking sector. we expect both these numbers to be higher by the end of the year. all of our lines of business remain profitable and continue to serve consumers and businesses. and we expect the quarter to be solidly profitable. in short, the diversified business model did what they were supposed to do, cushion us against unexpected loss in one area of our business. while this incident is embarrassing and should not and will not detract our employees from the main mission to serve clients and consumers and companies around the globe. during 2011 j.p. morgan raised capital of $1.8 million for consumer and commercial clients up 18% from the prior year. we provided 17 billion of credit to u.s. small businesses up 52%

over the prior year and over the past three years in the face of significant economic headwinds we made the decision not to retrench and step up when we were the only bank willing to commit to lend billions to the states of california, new jersey and illinois. all of these activities come with risk and just to remain focused and serving our clients we remain focused particularly given today's considerable global, economic and financial volatility. last in the face of the recent losses we've come together as a firm, acknowledge our mistakes and committed ourselves to fixing them and we will emerge from this moment, stronger, smarter and better company. i would also like to speak directly to a moment to our 260,000 employee, many whom are watching this hearing today. i want all of you to know how proud i am of j.p. morgan chase, the company and how proud i am for what you do for our clients and communities around the world. thank you. i welcome any questions you may

have. >> thank you, mr. dimon. the first panel unanimously said that j.p. morgan had sufficient capital and there were no liquidity problems and that the clients' money was certainly not at risk. >> mr. chairman, a point of order. we'll ask the witness to take an oath and testify under oath or has that process been waived here. we've never done that and in my mind i see no reason to do what we have not done in several years. >> i object to that, sir, thank you. >> i see no reason to place this witness under. this is not a criminal proceeding or even a civil proceeding and he's voluntarily come before us.

at this time mr. manzullo for five minutes. >> i thank you, mr. chairman, for calling this hearing. mr. dimon, on the third to the last paragraph of your written testimony, you've written, all of these activities come with a risk and just as we have remained focused in serving our client, we have also remained focus on managing the risk of our business, particularly given today's global, economic and financial volatility. i just returned from a conference in copenhagen with members of the e.u. parliament discussing the tremendous crisis going on with the eurozone countries. the imf has estimated that the average debt of the 17 euro zone

countries is about 80% of gdp, but in the united states, the debt of this country which includes state, local and federal is 107% of gdp. and my question to you is what do you think will be the story of the health and the financial industry, the trading losses at jpm or the euro zone? >> i'm sorry i take up so many people's time on this loss because it is rather not significant in the global scheme of things and things that you will have to worry about as legislators and we need to worry about europe. europe is a significant event, and i'm far more worried about europe than i am about this trading position, and i hope the legislators over there can overcome their complications and

keep the eurozone alive. >> do you -- can you give us a reading, in your opinion as to the impact, for example, on the u.s. economy should the greeks decide to get out of the eurozone and go back to the drama or should the entire eurozone itself collapse? unfortunately as a bank we from have to prepare for all eventuality so we're not guessing what might happen and we might have communities and say whatever happens, we can survive and thrive going forward. greece defaulting a loan is not the issue with greece leaving the euro. and the fallout effect of that might be a bank run in italy and spain. we say as they're trying to keep fire walls in place to keep that from happening. if i had to guess at the outcome, i think that might work. i think it's important to do that and hold back a crisis and

then they have to go about having a fiscal treaty among the 17 nations of the euro. those short-term solutions may stop a crisis, but they have to fix the underlying problems. italy has an economy that's two and a half times of ireland, portugal and greece combined. the banks don't have a liquidity problem. they have a big problem with debt and could you address the impact of debt on nations as it relates to the ability of -- as it relates to liquidity and more importantly the overall economy. the banking, italy is a very wealthy nation and they had the wherewithal to meet their debt and they have a crisis of confidence which is damaging it. the banks own a lot of the sovereign debt and they don't function well if the sovereign system is not functioning.

you need to fix both to make the whole financial system strong there. >> the reason i ask that is, as you know, the eu is our largest trading partner and your bank is obviously involved in international finance and it's always important for members to be able to glean from people who are on the inside. can you give -- i'm not looking for a forecast, but how do you see the eurozone issue as being resolved? in europe, what we see is the politicians have the will. they want to fix it and they talk about no plan b. there's only one plan which is to keep the euro alive. i think the way is very hard because you have 17 nations and 17 parliaments. what our economists think and a lot of smart people listen to that there will be a fire wall it