internet. >> all right. thank you. commissioner wright, the u.s. supreme court's recent decision in american express versus italian colors upheld the right of companies to force arbitration of antitrust terms through adhesive clauses and hidden in contracts in companies' terms of service on-line. are you familiar with that decision? >> i'm vaguely familiar with that decision. >> well, in her descent, justice kagan clarified the issue. she said as a result of that decision, amex's contract will succeed in depriving italian colors of any effective opportunity to challenge monopolistic conduct allegedly in violation of the sherman act.

it so requires. don't be fooled, she said. only the supreme court so required. the federal arbitration act was never meant to produce this outcome. in the hands of today's majority, arbitration threatens to become more nearly the opposite, a mechanism easily made to block the vindication of meritorious federal claims and insulate wrongdoers from liability. the court thus undermines the federal arbitration act no less than it does the sherman act and other federal statutes providing rights of action. so, commissioner wright, in your written testimony you argue that the courts should set the rules of the road for internet openness through antitrust law. but how could a complaint of anti-competitive behavior even reach the courts if it's lawful

to force every consumer, small business and employee to arbitrate their claims in a foreign venue that is secret, that's for profit. you're familiar with the arbitration process? no jury trial, no right to appe appeal. how does your opinion about how the internet should be regulated fare in comparison to, or in light of that supreme court ruling? >> i appreciate the question. i'm going to give you two quick answers. one is there is nothing in that decision that would preclude the ftc or the doj from bringing in a case. we are not in arbitration agreements with any of the companies at issue. we bring investigation into areas where there are information clauses all the time. >> the public, though, would be banned, essentially, from a jury trial. >> the second reason, that

speaks for the public agencies, so with like the ftc or the doj. >> we would leave the public subject to the government going to court? >> the second part of the answer is that with respect to private rights of action, i can tell you, perhaps not on an industry-by-industry basis, but private rights of action before and after the supreme court's decision in italian colors are alive and well. over the last 30 years, private rights of action are at an all-time high. >> they're going to be at an all-time low as we proceed forward under this u.s. supreme court ruling, which actually snuffs out the constitutional right, 7th amendment right, to a jury trial where the case in controversy exceeds $20 or more. so i will at this time yield

back the balance of my time. >> thank you very much. the gentleman from southern california has indicated that he is under a time constraint, and out of the good sense of yielding to my full committee chair on the oversight and government reform committee, i'll now recognize mr. isif. >> thank you, mr. chairman, and as a result i will go to a different subcommittee on the other side of this wall in just a few minutes, and i thank you. professor wu, i really appreciate you being here. i think you've given us the appropriate characterization for the true reason of net neutrality. you said it was social media policy, speech policy, political policy. you used words including control. all of that you did voluntarily here, right? so what you're saying, in effect, is that if the fcc gets ahold of this, we can go back to the "leave it to beaver" times, times in which two married adults had to be in twin beds in order to get past the social

norms of the day. times in which even today bill maher, who i often disagree with, can't be on broadcast because the fcc won't let him on because he uses the f-bomb too often. times in which complaints are being considered today and in the last year against "two and a half men" because they're too sexually explicit. this is the fcc's role. they're a regulatory policy entity that actually does limit free speech, carefully question moral norms and the like. do you have any way to tell me that that's not true after your opening statement? >> what i'm trying to suggest -- >> please answer the question, then you can pivot to your suggestion. >> i am suggesting that if the antitrust agencies overtake -- >> no, no, you were telling me the good reasons for the fcc to have this kind of control. and i have countered with you're absolutely right.

everything you said about social policy, speech, political, these are things the fcc has controlled over the airwaves for my entire life. commissioner mcdowell, you probably have the best perspective because you're a former commissioner, and i'm nothing like somebody who has been on both sides of it. do you have any question but that, in fact, that's still today a part of how the fcc views its mandate when it takes complaints on whether "two and a half men" is crossing the line in broadcast? >> absolutely. the fcc has control over speech, overbroad cast licensees, under a doctrine called spectrum scarcity. it does have control over speech, and to build on professor wu's comments, and a lot of other net neutrality proponents, this is about bringing such controls to the internet as well. it's social policy, speech policy, political regulation policy. and i think that actually does summarize it quite well, just as he said. >> i've been in washington for

nearly 14 years -- >> if i can answer the question -- >> you answered it wonderfully in how you phrased it, but -- >> i want to -- >> professor, professor. i will ask the chair to remind you, this is my time. i got an answer to your question. i will come back to you in a moment. >> all right. >> in my 14 years, the one thing i've noticed is that we like to ha harmonize things. so commissioner wright and commissioner mcdowell, do you have any question that there would be if the fcc takes full net neutrality authority, if you will, that the fcc by definition will tend to want to harmonize other spectrum such as broadcast and its limited cable role with the internet? in other words, the rules of the road for broadcasts that have given us not having things on broadcast inevitably would be applied, at least in some parts of the internet, maybe similarly to how we regulate cable can only go so far. and i'm just going to give you a

simple question. you can't put what some people consider pornography on broadcast television, can you? >> no. >> and it's extremely limited as to what can be on cable. it cannot be a free-for-all. it can't be obscene. but on the internet today it is limited only to criminal acts. is that correct? you can put anything on the internet no matter how much somebody doesn't like it as long as it's not a crime; is that correct? >> correct. >> and do you see any consistency with exactly that, because you're talking in your statements about speech policy, social policy, control. isn't that part of the concern the american people should have, that much of what they see on the internet could be regulated out of existence? >> no, i disagree. net neutrality prevents the exact opposite. net neutrality protects the --

>> net neutrality doesn't exist. net neutrality is a concept, isn't it? >> it's a platform for diversity of speech. we've had net neutrality defacto in the past 20 years. i'm suggesting that if we maintain defacto. >> professor, your own words indict you. one last quick question. it's an antitrust question. isn't our real ability to ensure competition in our control if we, as a congress and this committee, define the relevant market so that, in fact, it is intended -- it can promote competitiveness by defining the relevant market to a low enough level to always ensure free flow of competition? >> mr. chairman, i would ask for regular order if we're not going to allow professor wu to answer the question. >> it is mr. issa's time. i indulged you kwwith a couple

>> anyone can answer the question. and i think i got the answers from professor wu -- >> your time is expired. >> when a gentleman goes off the actual question, it is not his time. chairman conyers is over there, and he knows well, i ask a question, i asked professor wu to answer the question and be succinct. the fact is the pertinent question right now -- and i don't care how much time the chairman gives professor wu to go on disagreeing with us, but it's a relevant market question. i would appreciate all four witnesses answering. >> we'll give him a short time to answer, and as your time is up, we will allow each wnitnessa couple seconds to go in, and then we'll recognize the gentleman from michigan. >> i hate to do it at this point, but can you repeat the question? >> no. >> it's short. the relevant market, in other words, how we define competition, is competition entire state or is competition what's available to you in your

home, those kind of relevant markets we can set which, of course, would make antitrust harder and harder to circumvent which would push for more antitrust control over entities that have 60, 70 or 100% market share in your particular rural home? >> that is -- yes, that is correct. there is a standard mode of market definition analysis. antitrust has very sound, economic principles that i think would serve just fine here. >> the definition of markets is very key with what the fcc does in defining the public interest standard. and when it comes to broadband, there is coaxial cable, fiber, copper, dsl. there is also the wireless broadband, the fastest growing segment of the broadband market and there's unlicensed wireless broadband, which i've been a big proponent of all the time.

what's fascinating is how these companies are converging. as everything migrates to protocol, there is intelligence in networks. if you're a content delivery network, you've got networks, and if you're a traditional telco network, you've got intelligence and content embedded in those, and from an engineering perspective, they're starting to look a lot alike. so the danger with the government trying to parse this and with a scalpel somehow outguess the marketplace, that's the big danger that will undermine investment. >> if you could be quick, we're way over on time here. if you want to take a stab at it. you're welcome to pass. >> i've been invited to pass. i pass. >> i'll answer the question. market definition is central to the antitrust policy and it would affect everything we do in this area, and it's one of the problems in this area because the fcc is equipped to deal with things like regionalism, like localism, like diversity which

aren't captured by analysis which only focuses on market definition. >> thank you very much, professor wu, and we'll now recognize the ranking member of the full committee, the gentleman from michigan, mr. conyers. >> thank you, subcommittee, acting chairman. >> he looks good in that chair, though. >> i'm impressed with the fact that we have three very distinguished witnesses taking one position, and professor wu, i'd just like to go through a few things in the minutes that i have. would the fcc be regulating content as was suggested by our full committee chairman goodlap? and isn't antitrust regulation weak and slow and can't operate

in a preventive way? >> the answer to the question is the fcc would not be regulating content, net neutrality is not a call for content regulation, it is a call for nondiscrimination norms on the internet. which everyone on this panel seems to agree with in one form or another. and my suggestion is that by having a neutral platform, it has served as an incredible platform for free and diverse speech, and that threats of that have intimately -- threats to the neutrality network ultimately threatens speech environment and the political process of the united states. how many political outsiders have come from nowhere from an internet campaign? i would suggest, with respect to the chairman of the full question seems to have left, but he has things precisely wrong, 180 degrees wrong, and doesn't seem to understand the internet very well. because under net neutrality, over the last 20 years, we have

an incredible flourishing of speech, including his speech, which would probably not have been heard in an earlier era. and he owes -- and all speakers owe the internet an incredible debt of gratitude for getting their voices out there, all the speakers in our society. what i'm suggesting is net neutrality has supported and upheld this network as a platform for speech and a platform for innovation and a platform for non-economic values. no one of this is well captured by antitrust scrutiny. the fcc has taken -- it hasn't always been pretty, but over the last 20 years, it has taken a light-handed approach that has had incredible benefits for the entire society, and i agree with your suggestion that the antitrust laws, had they been in place over the last 20 years, probably would not have been adequate to oversee and create the kind of incredible speech and innovation environment we

have seen over the last 20 years. and so i thoroughly agree with your suggestion, and i think that the fcc, despite its imperfections, remains the right agency to oversee this network. >> i'd like now to turn to our other three witnesses and ask if there was anything objectionable that was just uttered by professor wu. yes, former commissioner. >> it's great to see you again, congressman, by the way. i'm not going to see an objection, but i think there is a fine point of distinction, especially for the house committee, which has jurisdiction over the first amendment. which is, when we're talking about speech, what i think the professor is offering is speech balancing. in the broadcast context historical to the fcc we call that the fairness doctrine which would probably be ruled unconstitutional by the supreme court today. when you have private parties speaking on private platforms,

the constitutional precedent says the government can't balance the speech, so that is actually censorship. when private parties shot down one another, that is not censorship. censorship is intertwined with power and state involvement. we want the internet to be open and free in a great platform. that's going to come with abundance and that is what innovation subverts. >> could i ask professor wu my last question? >> sure. >> what is the -- i mean, why can't most people see what i think i've heard. why is antitrust, which is slower and weaker and can't get in front of a problem, why would it be advocated over the fcc?

is there something i don't understand going on underneath this discussion? >> i certainly don't advocate it. antitrust is slower. sometimes weaker, not always weaker. the at&t breakup was pretty strong. but i think what it does is it would turn -- as opposed to being a public debate over the open internet, it would turn to an economist debate where you have one set of economists with one set of data -- and as i've suggested, many of the important values, which i think are values in our communications networks, values of the media would be neglected. >> but there's more than that. >> yeah, there's important values of localism, regionalism all of which are lost when we turn to a purely economic analysis which only considers

purely economical factions of the internet. >> thank you very much. >> i'm going to recognize myself for five minutes of questions. i was going to start with professor wu. you've engaged me and brought me in. what's broken now? give me some examples where you've seen internet service providers regulating political speech or shutting down potential speakers? i don't see a big public outcry that this is happening. >> i would point to the countries outside the united states where they don't have net neutrality to suggest where you see the problem. now, in the united states -- >> but it's the countries themselves that are doing that through their internet policy and not so much private sector isps, isn't it? >> it's often a mixture of the two. whether it's the private isp or the government involved. and i also don't think the government should censor the internet, either. let me say the reason we haven't had a problem over the last 20 years is because we've had

defacto net neutrality policy in place. >> again, i have limited time, so i want to get to some of the other people. this sounds like if it ain't broke, don't fix it kind of argument. i've been on the internet for a very long time. you know, back when i was in college in the '80s, i was accessing usenet and things like that. whenever there was some sort of content regulation or something that wasn't deemed fair, there was a huge outcry, and i don't think there is a more vocal advocacy group out there than internet users. we need to look no further than when we were looking at sop aa d pipa to see how adequate internet users are. we're seeing -- outside of rural areas, you typically will have two or three providers. you'll have a cable provider, a

wire line provider and a wireless provider of broadband. so commissioner wright, commissioner mcdowell, do you see it broken, and do you see a problem here? >> i don't, and the ftc has studies in this regard, but i want to focus on one part of your question, which is the values -- we've heard a lot about the values of internet users in a variety of ways reflecting on the debate. i think that's important to note, that what consumers value in their activities on the internet is, in fact, what lies at the center of antitrust analysis. i've heard now something that needs correction with respect to how cramped a view of antitrust sort of is out there. ain antitrust is a consumer based welfare system. that means that what economists do are not merely focused on the things we can count but also on what consumers value. and to the extent an antitrust analysis that things like the amount of content, the quality of content, innovation, things

other than price and quantity, these are captured within an antitrust analysis. >> commissioner mcdowell, do you have anything you want to add? >> i'd like to say the federal trade commission can act at the same speed as the federal trade commission or lack thereof. so the idea that antitrust laws are slower moving just is not the case. i also think it's important to point out that those countries where the internet is regulated more, there is less freedom overall, but especially less freedom of speech. there is a direct correlation between more regulation, more state involvement with the net and less freedom. because these countries are balancing. it's really censorship. >> so potentially could some of these net neutrality regulations get in the way of innovative offerings? i pay close to $100 a month for my internet access. i like it fast. i've got four people in my house who typically are all streaming at the same time. but my mother, before she passed away, was e-mail and facebook. would net neutrality of making the streaming services equally

available as opposed to somebody who just wants to use internet and e-mail, doesn't it force internet service prices higher and take away my options to buy a limited account? >> the case for antitrust regulation sis as simple as thi. the view across many industries helps consumers. what the antitrust post approach allows you to do is have benefits of contracts and reserve enforcement for those instances where we can find, and we do, abuses of market power. it allows consumers to have both. >> all right. and professor wu and some net neutrality advocates have suggested that antitrust law is ill-equipped to deal with this. while i disagree, are there any tweaks that we should be looking at in antitrust law that would perhaps address these problems and be there should the problem arise? >> antitrust over the last 50

years has evolved significantly in a fine-tuned approach based on modern economics that focuses on consumer welfare. that approach is one that incorporates things like non-price dimensions, quality and innovation, exactly the things we would want an antitrust policy to do. in my view, they have served antitrust very well. in my view it doesn't need any tweaking. it does what it does well. what it does well is broader than some of what we've heard, and i don't think it should do more than what it already does well. >> thank you. i see my time has expired. we now recognize the gentlelady from washington, ms. dubonai. >> thank you, mr. chairman, and thank you all for being here. i appreciate it. it's clear we have a free and open internet and we all appreciate how essential it is to innovation and economic growth. and i appreciate that there are very different views on how we

get here. i believe that it's critical for the fcc to implement strong, enforcible rules that will protect consumers and make sure there are clear protection against blocking and discriminating on content. commissioner wright, your testimony suggests that you believe the fears of internet discrimination could lead to less power. i'm not sure i agree with that, but can you talk about the potential benefits or efficiencies these types of contracts will create for consumers and how consumers are going to actually see that? >> sure. the idea of discriminatory, what we call vertical contracts, for example, between broadband providers and contract providers, these types of contracts have been the focus of antitrust inquiries in the economic search for a century. sometimes what they do when we have close relationships with folks in the supply chain is

align their needs closer by combining not by merger but by contract. >> specifically, a consumer today, what do you think they're going to see today in terms of benefits? when i hear from consumers, i hear concerns about net neutrality and kind of violating the principles of net neutrality. i hear concerns about pricing. when you say there are benefits -- >> for example, business models that charge -- the heart of discrimination, business models that charge different prices to consumers can allow lower prices to disadvantaged consumer groups for different types of services that might be charged for higher prices. that discrimination gives some people cause for concern, and i understand that concern. but it also provides -- and i don't think there is any debate in the economic literature about this -- that it provides real benefits to consumers by facilitating the growth and entry of new products, new business models, sometimes

differentially priced or differentially designed, but those provide real benefits. >> i guess i have a question for professor wu, then. did the regulation of the internet today prevent venture capitalists or others from investing in start-ups like google and yahoo? have we seen a lack of innovation? >> no. we've had a net neutrality policy for the last 20 years, maybe 30, depending on how you count. and we have had, during this period, the most astonishing period of economic growth and development centered on the internet that we've ever seen in telecommunications. and it has been a tide that has risen all boats, the telecommunication sector itself, television and cable itself have been very profitable. under net neutrality we have approached what economists aspire to, which is a market

with very few barriers to entry. >> and we are defacto today, have kind of a net neutrality policy that's been in place that folks have been operating in. maybe not formally. in some ways formally but also informally. >> i'm going to agree with the sentiment if it's not broke, don't fix it. the fcc turned antitrust instead, which is unproven, would likely lead to disappointing results compared with the successful policy we've had the last 20 years. >> so doing that would be a change? >> the fcc oversight has been terrific both in terms of economic development and innovation. >> i also want to say that may be why we have a letter from over 100 internet companies, from large company start-up services who wrote a letter to the fcc last month arguing that the commission's rules should protect users and internet

companies on both fixed and mobile platforms against blocking, discrimination and paid prioritization. and mr. chair, i ask for unanimous consent to submit this letter for the record. >> without objection, so ordered. >> that's an example of folks feeling like we have a competitive environment today where they've been able to thrive and innovate and want to make sure we continue to maintain that. with that, mr. chair, i yield back. >> thank you very much. we'll now recognize ms. smith. >> thank you for holding this hearing. i think it's important that we examine the importance of the antitrust laws. they can play in the discussion of the internet and particularly net neutrality debate. my first question is for mr. mcdowell. how would this impact small internet providers?

>> there is a record on the fcc in '08, and i think 2010 and now under the current proceeding, wireless internet service providers, witsps we call them, they are very concerned. they've been questioned by their banks as to what their future would look like, whether or not they could get loans from banks and build out and continue to improve their networks and serve their customers. >> would these companies be similarly impacted by the application of the antitrust law? >> no, i don't think so. they wouldn't. one of the questions here is creating a new body of law. i would object that there is a net neutrality policy in the private sector to maximize pree d -- freedom so that you're actually creating abundance and competition, but not by the government. in any case, no is the answer to that question. >> okay.

well, in your view, do you believe the fcc is properly equipped to handle the enforcement of improper conduct over the internet? >> what do you mean by improper conduct? >> just -- i mean -- >> anti-competitive conduct? >> yes. >> the courts have cabined in the fcc's authority here, because congress did not contemplate this. i disagree with the d.c. circuit in the verizon case that it gives fcc authority to add more regulation. it's about reducing more regulations to stimulate broadband infrastructure deployment. the fcc has very limited authority here, and i think we'll fail again in court if it goes outside the bounds of what george tatle was drawing. which, again, i disagree with, but he's talking about commercially reasonable agreements. and that's something in the data roaming context which has worked

so far. in any case, to answer your question more succinctly, i think the fcc has almost no authority in this space. >> thank you. professor wu, outside the free speech concerns in your outline, do you believe the fcc would be pro competitive behavior over the internet? >> i think the fcc would do some things very well. as i said, i admire the ftc. i think they're a good agency and i think they're well equipped to deal with violations of the sherman act or of -- and other unfair methods of competition. but i don't think they have adequate scope to deal with the full scope of harms, including non-economic harms, that we might see that arise from discriminatory practice by internet service providers. you know, i've given the example of political bias, of regional bias, of localism concerns,

diversity concerns, and so i think they would do a good job with a certain form of harm, but i don't think their review encompasses all the harms that we care about in the internet space. >> commissioner wright, would you want to answer that same question? >> the supreme court has described the antitrust laws in the united states as the magna carta of free enterprise. the idea behind the antitrust laws is that competition is what drives not just a lower price for a gallon of milk or increased output, but increased quality, proliferation of content, variety and a number of things that have been described in this context as non-economic values. the fundamental idea -- and i disagree that they're non-economic values, but the fundamental idea of the antitrust laws is that a belief that competition drives these things is the basis for having a strong antitrust enforcement. in my view, the evolution of the

antitrust laws attached and tethered to sound economics have given antitrust enforcement at the ftc and other agencies a real strong, intellectual, analytical basis for analyzing precisely this type of conduct, allowing the conduct that benefits consumers over which there is basically no real debate, and preventing competitive harms. >> thank you, mr. chairman, i yield back. >> thank you very much. we'll now recognize the gentleman from rhode island. >> thank you, and thank you to all witnesses. i think we're all interested in preserving the internet as an open platform for innovation and free expression and a tool for economic growth. i do think it's very clear that the internet plays a very special role in a free and open society, as professor wu says. and so the notion that the federal trade commission that has real expertise in ensuring

competition in the sale of commodities and trade of sort of widgits, goods and services, but may not be the best agency when we're talking about a very different entity, which is the internet, which is a vehicle and platform for a whole series of other important democratic values. the first question i have is to you, commissioner wright, to follow up on congresswoman deibene's point, which i don't think you answered, you said competition between content providers and communication providers contain certain efficiencies. tell my constituents what benefits you believe would arise from those contractual arrangements. >> so to give an example, a broadband provider and a content provider can have an arrangement where they are going to jointly,

through their contract, offer a service to some group of consumers. for example, we can have the sale -- excuse me -- a service -- metro pcs had this a couple years ago where they were going to offer a service at a reduced price, but because of concerns about congestion on the network, take off the use of video downloads. i think they had youtube off of it. but they were going to offer it at a lower price. there was significant demand for that product. it was at a lower price to a consumer group that maybe couldn't buy services that would have the sort of full scale and be at a higher price. we have that sort of relationship. >> but again, that all relates to an economic benefit. i guess this is where i would like, professor wu, for you to talk more about it. it seems to me that analysis is helpful as it relates to a strictly economic analysis. what's the danger of approaching the internet with that sort of narrow view, and what are the

values that are at stake here if we don't preserve vigorously an open, accessible internet? what are the implications here and around the world? >> the implications are serious. i think the united states would no longer be the leader of internet openness which is, in fact, part of our foreign policy. the state department has spent an enormous amount of time saying to authoritarian regimes, you need to be like us, you need to be in internet country. if we abandon our rules for the open internet and say, we've decided it's an economic issue, i think that sends a bad message. i also want to say that most of the most valuable uses of the internet actually are not commercial uses. for example, probably one of the most valuable uses of the internet is when extended family share pictures. parents send a picture of their grandchildren to the grandparents. that doesn't show up in an

economic analysis and a commercial analysis. it's very hard to measure these kind of values. and i'm concerned that things like families, things like just friends, totally non-commercial interactions will be the kinds of things that won't get properly factored into an analysis that is focused on trade, either the federal trade commission or the antitrust laws, which are focused on things you can measure that have a clear commercial value. >> and professor wu, should we draw any inference that the letter that went to 100 technology companies that are calling on the fcc that protect net neutrality as compared to the smaller group in the business of selling the products on the internet, should we draw any inference from the different positions of those two? we hear about how it's going to

impede innovation and impede investment from entrepreneurs. it seems as though there's been a very loud signal from the innovators and entrepreneurs that, in fact, it is critical to them and the growth of this sector. >> i'm going to agree with you. i'm returning to the saying if it's not broke, don't fix it. what is becoming clear is moving away from that policy and towards a tested antitrust method, and we've seen very clearly that the incredibly vibrant economy, which has grown up on the internet and has been enormously beneficial to cable and telephone companies, they want that neutrality protected using the fcc. so why would we mess with that by experimenting with antitrust enforcement, which is untested and will have results we can't predict, and as you earlier indicated does not protect some of the most important non-commercial values at stake? >> thank you very much. i yield back, mr. chairman. >> thank you very much. i think since we've been through

the complete round of questionings, we'll ask the witnesses if anybody else has any additional questions. if within the next five days we submit them, would you be willing to reply to those in writing? without objection, all members will have five legislative days to submit additional written questions for the witnesses or add additional material for the records. that concludes today's hearing. thank you all very much. it was an informative and fun hearing.

maryland governor martin o'malley is the key note speaker at the iowa state democratic convention in des moines saturday. iowa traditionally holds the first presidential caucus. we'll bring governor o'malley's comments on saturday on c-span. part of the over the road white house coverage. next the latest on the situation in iraq, including some of the options that the u.s. is currently considering in response to the increasing violence there. from washington journal, this is 30 minutes. >> well, we're pleased to have representative walter jones, republican of north carolina, join us here on the washington journal for the first time.

congressman jones, you serve on the armed services committee, the military authorization debate is going on right now in the house. do we spend enough, too much or the right amount on our military today? >> well, the issue is that we continue to spend so much money by sending our men and women around the world to take care of the world. i am a person who believes sincerely we need to rebuild the military. but when you look at the fact that we continue -- you know, there is a great quote and i'd like to use it very quickly. is it not senility to bar frorr from the world to defend the world? we're an indebted nation. we've had to raise the debt ceiling. under george bush we raised the debt ceiling seven out of the eight years that he was

president of the united states. under president obama we raised the debt ceiling seven times in five years. that allows our nation, which is in debt, to borrow more and more money to spend. and there is no cap to it. and this is why we continue to -- afghanistan, we ought to stop spending money in afghanistan. we ought to spend it here in america on our roads, on our schools. and it just goes on and on. so for me personally, i am a person that believes sincerely that we need to start rebuilding america and not the world. >> what would happen if the u.s. wasn't in afghanistan, or didn't go to iraq and try to help the middle east out? do we just let it happen? >> i look at the other countries that have just as much at stake as we do. we are the voice of the collapse

in iraq right now. they're not going to send military in there. president obama says we're going to send in 3,000. that sounds like the echoes of vietnam again. we in this country need to understand that we need to have a strong military which is based on the requirements of the constitution. and we used to have a better foreign policy and not a foreign policy that seems to be wherever there is a problem, we need to be there to fix the problem. we cannot do it. as colin powell said, we never should have gone into iraq. and colin powell said, if you break it, you own it. look at where we are today. we need to re-evaluate our foreign policy, in my opinion. and there are people in both parties. i think donna edwards feels that way. she's a democrat, i'm a republican. we just need to come back to what is in the best interests of america. and yes, i would say with terrorism, with the threat to our country, let's continue to rebuild america and have a strong military.

do what's right for our agencies who are trying to protect us from terrorism. but when you start sending our troops around the world putting them in these foreign countries, and especially the middle east, then i think you're setting yourself up for trouble. >> congressman jones, is it fair to say that you're kind of a n contrarian within the house of republicans? >> i've been called many things and i guess that's a proper term. i'm a very strong man of faith. i do what i think is right for people of the third district which i have the privilege to serve. and many times i guess i'm a contrarian because my value system is based on my faith. >> and the third district includes the outer banks? it's the coastal area of north carolina? >> and camp lejeune marine base. >> and your father was a democratic congressman prior to

you? >> yes. 26 years. >> in the same district, basically? >> more or less, yes. >> and he was on the democratic side. who did you vote for in the house republican leadership races yesterday? >> yesterday, raul labrador. >> who was oet poethe opponent n mccarthy. >> and steven l erksleeks. >> why did you not vote for kevin mccarthy? >> because we need to change things. i believe they sent a message that the leadership -- i go back very quickly to the debt ceiling issue. you know, we continue to raise the debt ceiling. the last time, peter, i voted for a debt ceiling increase was in 1997. the debt of our nation was $5.7 trillion. today it is over $17 trillion. that is, again, why i am a person that believes we cannot continue to fix the problems in

afghanistan when we cannot fix the roads in eastern north carolina. >> walter jones is our guest. after the president's announcement yesterday, you sent this letter to the president. i'll just read a portion of it to get you to expand on it. the 2002 authorization of the use of military force against iraq authorized the use of military force specifically to defend the national security of the u.s. against the continuing threat posed by iraq and enforce all relevant u.n. security council resolutions regarding iraq. the current situation in iraq clearly does not meet these criteria as it is obvious from a full reading of the legislation that weapons of mass destruction were the continuing threat being referenced. >> peter, i have said many times that the worst decision that i have made since i became a congressman was to give

president bush the authority to bypass congress to send troops into iraq. i say that because i voted for the amuf at the time that this happened, the authorization of military force, amuf. since that time, that gave the president and continues to give the president in this time -- obviously, president obama -- the authority to make certain military decisions and can bypass congress. i look at just real quickly the fact that we bombed libya. yes, the president said, well, i contacted the leadership of the house and the senate. you know, the constitution says congress shall declare war. and we have advocated our responsibility based on the constitution, and that's why i join adam shiff, democrat, and about 30 other republicans did a couple weeks ago to sunset the authorization that was given to

president bush in 2003 that is now being used by president obama. that's the purpose of the letter. >> how did you vote on barbara lee's amendment last night? >> i voted for every one of them. >> were you the only republican to vote for ms. lee's amendment? >> no, it was interesting last night. i have not been able to check the scorecard, if i can say it that way, today, but i think we begin to see more and more republicans that are voting like i'm trying to say that we cannot continue to police the world. we have got to come back to fixing the problems of america. and when you are an indebted nation, like i said just a moment ago, you have no business borrowing more money to spend in afghanistan. we have had in a bipartisan way morning before he creakfasts wi general of reconstruction.

what he tells the public and what he tells us in congress is that the abuse in afghanistan is worse today than it's ever been. we build their roads, we build their in america. >> finally, congressman jones, before we go to calls, who would you like to see as president of the united states? i like rand paul. i like ted cruz and i'm sure there are others that would offer themselves. i want a person that will understand that we have to have a strong military. that we need not have a foreign policy where we decide that we need to police every country in the world. >> sometimes we hear maybe the simplified argument internationalist versus isolationist. is that fair? >> well, again, you know, definitions apply in some situations and some definitions

don't in other situations. the issue is every great nation -- i'm not a great historian, but i did study history in college. and every great nation that has from the spanish to the french to the romans, any great nation that started to go around and start to take other territory around the world eventually failed. and i think we in america in the 11th hour of a 12-hour clock, i really do. you look at our monetary problems. you look at the problems here in america. but yet, we continue to want to say that we can bring, you know, sanity to the chaos in iraq. i don't think we can. let's go the diplomatic route. let's get other nations to join in this. let's get other nations to take the lead. we are always taking the lead. but yet, we're always having a debate every 12 months to raise the debt ceiling so we can borrow more money to spend. and it's also that money that we're borrowing to spend goes overseas. >> walter jones is our guest.

robert in laurel, maryland, you're the first caller, independent line. robert, go ahead. >> caller: good morning. >> good morning. >> caller: i've done a lot of research on the afghanistan situation. to add to your point about the chaos, the money -- "the washington post" and "the new york times" have reported that our contractors from the united states have to bribe taliban. so we're bribing the taliban to let us build roads or schools or hospitals, and then they go in and destroy them. it's a lose/lose situation. same thing with iraq. it looks like the media and politicians are aiming at going back into iraq. it's a big mistake. >> robert, your point and your understanding is so

correct. that is what -- i mean, john sopco, he has been on shows. i think he's been on c-span. he has articulated your concern and your point. this is what does not make sense. i have camp lejeune down in the district. i talk to the marines. i don't have that kind of background. but i talk to the marines. i went over to walter reed three weeks ago. i went over there to see two marines. horn at walter reed in bethesda. it turned out we were in the rehabilitation area where they teach them how to walk without legs and things they can do when they've lost body parts. and i saw three army fellows from ft. bragg, which is not in my district, robert, but i saw three. they had lost one leg each. then the first marine i saw from camp lejeune, and his father there from louisiana, had lost two legs and an arm. and he's on kind of a bed in the rehabilitation area sitting up. i look in the eyes of the

father, and what i see in the eyes of the father, hurt, sadness, pain, and worry. here's the father of a 23-year-old son that's lost both legs and an arm. i don't know why he had to go there. i don't know what we think we're going to change. the taliban, most of them, are pashtuns. this is their country. they live in a different century. we cannot bring them to our century. they don't want to be us. they've got their own religion. and another point about my visit, a young marine had lost both legs, had stepped on a 40-pound ied in february of this year. february of 2014. he was talking about his little baby, who's 8 months old, talking about his wife. they were not there, but he was talking about them. you know, you wonder what we're doing to our military. let's reinforce our military. let's do what's necessary to have a strong military. let's be prepared to go out to

those who hate us. but let's not try to police the world and change these cultures in the middle east. we'll never change them. history has proven that. >> would you be okay as a member of the u.s. congress if iraq split into three countries? kurd, sunni, shia? >> i truthfully came out against the the iraq war in 2005. it was an unnecessary war to begin with, and i made a bad mistake which i've already explained in voting for the resolution. absolutely, i think joe biden was -- vice president biden was a united states senator. he was a strong advocate of dividing the country into sunnis, shias and kurds. i think that's what's going to happen. i don't think anyone knows what tomorrow's going to bring in iraq. that's for sure. but i think that is a possibility. >> john tweets into you, congressman, i am your constituent, and i admire your

character, but you're way too moderate for me. chris is calling in from newport richie, florida, on our republican line. hi, chris. >> caller: yes. good morning, gentlemen. good morning, congressman jones. >> good morning. >> caller: long admired you, first of all. i need to clarify. i'm a huge ron paul supporter. >> i am too. >> caller: yeah, i know that. and of course i'm going to support rand paul as our republican nominee in 2016 for the office of the president of the united states. i wanted to point out something that -- a comment i'm troubled by. then i'll go into the gist of why i was calling. i don't think ted cruz is eligible to be the candidate for the presidency because he is a canadian. both of his parents are canadian. i don't believe, even though he just relinquished his canadian citizenship, i don't believe that qualifies him for being a candidate. okay.

that out of the way, i wanted to talk about kevin mccarthy. i'm pleased to hear that you were backing mr. labrador. i think he's probably -- would have been our best guy to put in there. i don't know a whole lot about him, but what i do know i like. because i think he's in defense of our liberty. i'm sorry kevin mccarthy made it. because he's not much better than eric cantor. and then i wanted to go into just real quickly. >> you know what, chris? got to make it quick now. >> caller: okay. i want you to talk a little bit about your work with the other guy on the other side of the fence about promoting some information on saudi connections to 9/11. thank you. >> all right. you got ron paul, ted cruz, kevin mccarthy, and saudi connections to 9/11. >> okay. chris, first of all, my comment was a response to peter about

whom maybe would be your choices to be the president. i could admirable balkman, there are other people i could add. i was just responding to peter's question about whom i would like to see run for the presidency on the republican side. the second, pete, i'm sorry. >> ted cruz being canadian. i don't know if you want to address that or not. >> well, that will take care of itself as we move forward, truthfully. >> kevin mccarthy. what's your relationship? >> my belief is that we need to change the face of the house leadership. i believe sincerely, including the speaker of the house, i think we need a new look. we need a new direction, and i think, quite frankly -- i mean, i was one of the 12 that voted for -- i voted for david walker to be speaker of the house. and so my belief has nothing to do with personalities or my feelings. i respect both of them. but i think their direction for our nation, for our party is

going -- is not what we need at this particular time. the 28 pages that chris made reference to, the 9/11 commission classified 28 pages that they said needed to stay classified. members of congress can read those pages with authorization from the intelligence committee in the house. i've been given permission to read. steve lynch, who's a democrat from massachusetts, and i, along with thomas massey, have put in a resolution calling on the president to release the 28 pages. the 28 pages have nothing to do with security, nothing. it has more to do with relationships. that's about all i can say. but the families of the 9/11 have been calling for this. senator bob graham has been way up front on this calling for these 28 pages to be declassified. and he was on the 9/11

commission. to me, there is no freedom if the american people don't know the truth about one of the worst days in the history of our country. >> jerry, henderson, north carolina, democrat. is henderson in your district, sir? >> no, sir. >> okay. jerry, please go -- >> but i know where it is. >> caller: thank you for taking my call. i have a question for the congressman and a follow-up. congressman, do you think it would have been right to keep american soldiers giving up their lives and limbs to fight in that country without being immunized from prosecution by the iraqi government? >> okay. what's your follow-up, sir? >> caller: my follow-up is that all these republicans, mccain and graham and everybody, talking about barack blew it. he didn't get the status of forces agreement. the reason he didn't get the

agreement, because the iranians and maliki wanted to keep the soldiers there without being immunized. and that's why the talks broke down, sir. >> jerry, i don't know in detail what your point -- excuse me, what you were saying. i'll just accept it, though. i will accept it. but you're right. the iranians and maliki did not want our military there. so therefore, i don't think the president had any other option but to do what -- it's their country. whether we like it or not, it's their country. if the leader of their country says, we do not want the american troops here, then we have to follow the wishes of the leader of that country at that time. >> roger green tweets into you is, mr. jones, how do you view tea partiers? just americans taking back their country or right-wing radicals?

>> citizens who believe in the constitution who want to take back america. i am not a tea party type person, but i am a conservative. and i lean toward being a libertarian. i can honestly say that anyone that believes that we should live by our constitution and, as a man of faith, the bible, i believe we'll have a better america if we can come back to those two documents. >> you had a tough primary a month ago. >> sure did. we had the outside groups. peter, i have said that the two worst decisions by the united states supreme court since i have been in congress, roe versus wade. i'm a pro-life member of the house and citizens united. citizens united, i think, has created this situation where those who have -- i'm not opposed to people who have money.

but i will tell you that quite truthfully, the influence of money is growing and growing and growing. and when you have outside groups to come to my district -- which they have a right to do -- and spend about $1.4 million, that's a lot of money in eastern north carolina. especially to buy tv. just one ad after another ad. distortion, lies, and misrepresentations. and we had $123,000 to defend us, ten to one, and i thank god first and the people second that trust me to do what i think is right. we won the primary. we do have opposition in the november election. i will be working hard to win that. >> have you ever thought about stepping away from congress or not running for re-election? >> i am 71 years of age. god has given me an unbelievable

amount of energy and fight. and i believe that either the people first or god first will say that you've lost that fight. i have the fight, and i'm fighting all the time up here for something good, i hope, most of the time. >> where do you think, if your father were alive today and it were in congress, would he be a republican? would he still be a democrat? >> you know, it's hard to say. he knew before he died that i was thinking about changing my party affiliation. we had a conversation, and i think that he understood my frustration. he agreed with some of the frustration. i'll tell you the truth. i said recently that with this world we live in of fundraising, fundraising, fundraising, i'm not sure he would even run today. but, no, he was a conservative democrat.

of course, when he became chairman of committee, which happens to both parties, by the way, he became less conservative. those things happen when you become a chairman. you can't always stand for your principles. that's why i like being an independent-thinking person who believes certain value systems, and i try to stand by my principles and take the hits that come with it. congressman jones, who are some of your friends in congress, your best friends? >> you know, it goes from paul brounton steve stockman to thomas massey to jimmy duncan, justin i mosh, i'm in the liberty caucus which is the head of caucuses, justin immosh. and there are other people in the democratic party i have relationships with. so to me, i just don't think we can fix the problems of this country if we don't figure out where we can come together. we can't always agree philosophically. that's just not going to happen,

but there are some issues that we can come together on. and i think we need to. it's -- of the 20 years i've been here, this has been one of the most difficult times not for me personally but for our nation. >> pat, dallas, independent line. please go ahead with your question or comment for watter jones. >> good morning, mr. jones. >> good morning, pat. >> you said something about diplomacy. but i'm really, really confused. the republican party speaking from both ends. mccain always talk about, oh, obama is too slow. he's not -- you're talking about diplomacy. president obama tried to use diplomacy in libya, and the french were leaning to war. not supposed to be behind? america should lead the war

instead of the french? now, he said diplomacy, he's too slow to react. he's too slow to react to the situation in iraq. and yet, you're thinking is what he's thinking that we shouldn't have our military going back into iraq. the war was wrong from the day one. >> i agree. >> i was against it. you know, so what do you think about this republican talking from both ends. >> we, pat, i can't speak for any senator or even any house member. i can only speak for myself. and again, as i said to the call before you called, pat, that i think that too many times that the politics of washington is, you know, guns first, diplomacy second. and i would like to very quickly, peter, if i might just read for pat, i want you, pat, to listen. after ronald reagan died, ronald reagan was the president when we

had 241 marines killed at the barracks in beirut. and there was a book written an american life, the autobiography and it was about ronald reagan. i'll read this very quickly. in the weeks immediately after the bombing, i believe the last thing that we should do was turn tail and leave. yet, the irrationality of middle eastern politics forced us to rethink our policy there. if there would have been some rethinking of policy before our men die, we would be a lot better off if that policy had changed toward more of a neutral position and neutrality, those 241 marines would be alive today. i truthfully believe sincerely that we ought to go through the diplomatic channels and have the discussions with foreign leaders and see if we can't come to some type of compromise wherever the problem might be. >> carl is calling in from new burn, north carolina, republican

line. carl, go ahead. >> thank you for taking my call and good morning, congressman jones. >> carl, good morning. >> number one, i'm very pleased that you prevailed in the primary and will work very hard for your election in the fall. >> thank you, carl. thank you. >> i thank you for being a contrarian. i think we need more independent thinkers in washington. have you proven for years to be that. but i've got a question. i'm real puzzled by actions yesterday. the president announced that he was going to send 300 military advisors to iraq, but he also said that heal not take sides that we are not partial to one side or the other. do you know whether that means that 150 are going to help the shia and 150 help the sunni? question. >> car, i think you've got a great point. i mean, that is what is so confusing. so confusing about the iraqi situation. and much of the middle east. you know, malaki is a shiite. the iranians are shiites.

they support the shiites. saudi arabians support the sunnis. and that's why i think, again, that we don't need to send the advisors there. we don't need to bomb the area. and i believe sincerely it's time to let some other country take the lead and figure out this chaotic complex situation known as iraq. your point's well made. thank you. >> walter jones is often on the floor of the house making speeches during the five-minute or one-minute speech time or in special orders after the house is out. mccore in amarillo, texas, please go ahead just a minute or two left. >> good morning representative wauters. >> good morning, mccoy, thank you. >> representative waters, i'm excited that you mention about that. we want america to be a great

nation. we're always looking to live under the dream of the united states. and i'm a soldier. i served the nation as a u.s. army. republicans went way down on obama's administration, and we think that as a united states protect our troops in iraq and -- america did nothing about that. they didn't accept our democracy. and but why do we waste time to take our troops to iraq to loose limbs? we lose more than $80,000 million in order to use in the united states. >> mccoy, thank you, sir. >> i agree with you totally. iraq was a mistake.

we never should have gone in there. it was based on manipulated intelligence, and i regret the fact that i sent young men and women to die in iraq in 2003. i have signed over 11,000 letters to families and extended families since that time because of my pain of not voting my conscience. i did ot not believe that the intelligence that i heard in classified settings. i should have never voted to give president bush the authority to go into iraq. and do i regret it and i agree with the points you made. >> lauren, this is a tweet that came in for donna edwards. i want to ask you the same question. lauren tweets in, what do you think of the president not defending our southern border? >> i think we have to defend our southern border. i think this situation with the children is a contrived effort by some south of the border to create problems in america to force america to do certain things that we should not be

forced to do. and i am for securing the borders. and i am for the governors of the states that are severely impacted to have the right to do whatever they need to do to protect their borders. >> another tweet for you. and this is a little out in left field. so you know, don't feel obliged to answer it. but pair pa pet tick an pos tate asks, out of curiosity, what do you think of john c. calhoun and this person goes on to say i bet he idlizes. i don't know if you've thought about that. >> i haven't thought much about john c. calhoun. i studied it a thousand years ago about him. but no comment on that one. >> right, i understand. and finally, jan says i'm not understanding. stay out of iraq but bid the military up? what for? >> you build the military to have a strong military so that in case we need that military, we're ready to use the military. what we have failed to do since

the last 15 years is to have a strong foreign policy that would make sure that we went the diplomatic route before we had to use the military. >> walter -- i'm sorry. >> excuse me. i just wanted to say i think we have to have a strong military to be ready to use the military, but have a foreign policy that makes sense. >> representative watter jones, republican of north carolina, please come back to the "washington journal." >> thank you, peter. >> on the next "washington journal," faith and freedom coalition founder ralph reed discusses the road to majority conference under way in washington, d.c. and looks ahead to the midterm elections. then ben wikler from moveon.org talks about a web petition warning the president against military action in iraq. and washington post white house correspondent juliet i'll bren discusses the decision this week to expand a protected marine area in the pacific to nearly ten times its current size and as always we'll take your calls and you can join the

conversation at facebook and twitter. "washington journal," live at 7:00 a.m. eastern on c-span. this weekend, "american history tv" is live from the gettysburg college civil war institute. saturday morning starting at 8:45 eastern, you'll hear historian peter carmichael on robert e. lee followed by arizona state university professor broorks simpson on grant and later historian megan kate nelson on the burning of chambersburg this weekend on "american history tv" on c-span3. next, defense secretary chuck hagel and joint chiefs can of staff chair general martin dempsey at a senate appropriations hearing on the defense department's 2015 budget. some of the topics addressed as the this two-hour hearing include the current situation in iraq and afghanistan, military readiness and the potential effects of additional budget

cuts in the future. >> good morning. the subcommittee meets this morning to receive testimony on the physical year 2015 budget request for the department of defense. pleased to welcome the leadership of the department, secretary hagel, general dempsey. to represent their views on both the strategic and budgetary challenges facing our armed forces. mr. hale, thank you for your expertise, as well, your continuing contributions make a big difference.

let me congratulate the department on the capture of ahmed abu khattala, a key figure in the december 2012 attack on the facilities in benghazi, an attack which cost us four american lives. i want to commend the professionalism of our men and women in uniform who worked lookside law enforcement and intelligence counterparts to ensure that this man will be brought to justice. we're also following several other recent events which have underscored the many challenges to american security and interest around the world. the shocking events in iraq this past week demonstrate the threats posed by continuing chaos in syria which has given rice to dangerous new extremist groups. deterioration of security in yemen shows that established terrorist organizations such as al qaeda in the arabian peninsula remain a serious threat. the aggressive moves by russia and ukraine recall the importance of u.s. security commitments to our allies,

partners and friends. and finally, the drawdown of u.s. forces in afghanistan raises serious questions about our future posture and commitments to that country. secretary hagel, general dempsey, i hope you can address these situations in your remarks. along with the security threats, the department has longer term challenge when it comes to the budget. i've said many times sequestration was a threat that was never supposed to happen. but it did. the shrinking budgets have meant that many important programs such as large head quarter staffs, generous contractor support contracts, and generous travel pols have been changed. and cut back. but it's not clear the department is making all of the tough choices required in this budget environment. the fiscal year 2015 defense budget plan includes $115 billion in spending between 2016 and 2019 above the bca caps. meaning that more tough choices are ahead if we do not eliminate

sequestration next year. the department also proposed $26 billion in an additional programs that could not fit within its budget constraints but they reviewed as high priorities for readiness modernization and key needs and the service chiefs proposed an additional $36 billion in programs also viewed as high priorities. lastly, it's been 3 1/2 months since the 2015 budget was submitted and congress has yet to see the overseas is contingency operations budget request. i'm the first to say we need to do something about sequestration, provide a responsible budget plan that balances investments and national defense, education, health care innovation and other national priorities. but i'm concerned that the department of defense cannot continue to count on tens of billions of extra dollars arriving each year outside of the budget process and i'd like to know how the department intends to further tighten its budget process in light of the continuing unknowns about

sequestration. despite these challenges we can still forward to make critical investments in the defense budget with available resources. many defense leaders have embraced competition to get more bang from the taxpayer buck and there's more that can be done to accelerate competition. investments in science and technology rlg critical, not only to national defense but to innovation across america. dod investments and gps satellites, internet, medical research have touched the lives of every american whether or not they've ever worn a uniform. work going on today at darpa, the army research laboratory, the air force research lab and the office of naval research could improve our national security, revolutionize medicine, technology and business for years to come. even in these tough budget times, we have to work to afford investments in medical research for break through technologies and to increase investments in key areas. i look forward to working with you, sect hagel to make that

happen. chairwoman mccull can i ski is not here. ranking member shelby is on the floor and so at this point, i'm going to proceed to our witnesses and ask secretary haggle if he would like to open up and make a comment. your written statement will be made an official part of the record. >> mr. chairman, thank you, good morning, members of the committee. good morning. and thank you for the opportunity to talk about our fy 2015 budget and as you have noted the other issues that are before us today in the world and in this country, we are prepared to respond to questions regarding those specific issues. i also, on behalf of the defense department, want to thank this subcommittee in particular for your continued support of our troops and what is required to keep our troops modern, ready, capable.

and that is much the focus of this budget and much of what we'll be talking about this morning. and why we presented the budget we have and why we need the budget that we'll present. mr. chairman, i particularly appreciate being here, as always, when i'm with the chairman of the joint chiefs. general dempsey. this country is very fortunate to the have the general dempsey's leadership as well as all the chiefs that not only represent our services so well but are very effective in their leadership and very wise in their advice they give to the president. and give to me. i also want to note that bob hail, as you have recognized already, our comptroller dod, almost the last five years, this i believe will be his last budget hearing. and i know he's greatly

distressed by that but he's a great admirer of the congress and never gets enough time with all of you. i want to particularly acknowledge bob hail because he has really been particularly important to dod and there country over the last year or two years when we have had government shutdowns, abrupt steep cuts, sequestration which you mentioned. he has been the architect and the chief operating officer to guide us through that. so bob, we will miss you, your leadership and what you've contributed but you deserve to escape and you all know very well his successor, mike mccord, who served many years as a senior staff member on the armed services committee. this body confirmed him recently and we appreciate that. so he will replace bob.

mr. chairman, you have noted and i just recognized that recent crises in iraq ukraine, remind us all how quickly things can change in the world. and not for the better. and they underscore why we must assure the readiness and an jit and capability of our military. that's what we will address today. my lengthier submitted statement, mr. chairman, describes our budget in detail. and the rationale behind the decisions that we have come forward with presented in our budget. you mentioned our overseas contigency budget oco for fy 2015. it is being finalized now. i know it's late. there are some reasons for that are. this oco presentation will reflect the president's decision on a couple of new initiatives that he has announced that he's

taken. and certainly the continuation of our enduring presence in afghanistan as well. the president, as you know, recently announced a $5 billion counter-terrorism partnership fund which would be funded through oco. and a $1 billion european reassurance initiative, also funded out of oco. i strongly support both of these for the reasons that we will define more clearly this morning. their budget reflects i believe the threats, the uncertainties and the opportunities facing our country today, but also probably as important in the future. everyone on this committee knows that decisions made today have immense impact on what kind of a military we're going to have down the road. you mentioned science and technology. that is one of the foundational dynamics of keeping our

technological edge our capability our modernization ahead of what's out there. it also, mr. chairman, reflects the tough fiscal realities facing us here today and you mentioned one of course, sequestration. the tremendous uncertainty that dod has had to deal with the last 12 months but really the last 24 months do we have a budget, we don't have a budget, what kind of a budget, that kind of uncertainty when you're trying to put together and operate in the interests of our national security and enterprise this big has been difficult. but because of the kind of leadership and people like bob hale and marty dempsey, we've been able to do it. last year dodd's budget was cut 37 billion. it was cut $37 billion because of desequestration. i might remind this committee as you all know, that's in addition to the $487 billion ten-year

reduction under the budget control act of 2011 that d.o.d. was already implementing. december's bipartisan budget act gave dod some temporary relief from sequestration for fiscal years '14 and '15 but it still imposes more than $75 billion in cuts over fiscal year this year and physician ca year 2015. and mr. chairman, unless congress changes the law, as you all know, before fy 2016, sequestration will be back as the law. and that will take another $50 billion from our budget each year through fy 20-21. damage thing the milt military's readiness, undercutting our defense strategy and our capabilities. >> the president's five year plan provides a realistic alternative to sequestration projecting as you know the $115 billion more than current law allows from 2016 to 2019.

this is the minimal amount of additional spending that our military and our civilian leadership believe is needed to successfully execute the defense strategy. since my submit the statement explains in detail our budget requests and the rationale behind those key decisions is i want to focus on two critical areas. first, our decision to reduce the size of the military's force structure and retire older platforms in order to invest in training and modernization. under the strict budget limits being ip poetsed on dod, we can't keep our current force structure adequately ready and modernized. readiness is our main concern. i know it's a concern of this committee. readiness is our main concern as it must be for anyone who cares about our national security and the men and women who defend it. we cannot place our men and women in situations if they are not ready. it would be a failure, the worst failure leadership could make.

so we made a strategic decision to reduce the size of our force to ensure our troops are trained, ready, capable. these decisions were based on strategic priorities and detailed analysis and agreed to by all the service chiefs. after 13 years of long large stability operations, we must shift our focus on to future requirements shaped by enduring and emerging threats. much like we're seeing today. we must be able to defeat terrorist threats and cyberattacks. and deter adversaries with increasingly modern weapons and technological capabilities. that's why we protected funding for cyberand special operations. for the active duty earp, we proposed drawing down by 13% over the next five years to about 440 to 450 soldiers. which we believe is adequate for future demand. chief of staff the of the army, general odierno believes is adequate for future demand.

army national guard and reserve units will remain and have to remain a vibrant part of our national defense. we would propose drawing the reserves in the national guard down by 5%. we will continue investing in high tend ground capabilities to keep our soldiers the most advanced, ready and capable in the world. the navy will have 11 carrier strike groups under the president's budget plan keeping our carrier force at the level approved by congress. we protected investments in submarines, a float staging basis, guided missile destroyers and other lethal survivable platforms ensuring our technological edge and enabling our naval forces to operate effectively regardless of other nations' capabilities. but we had to make some realist take tradeoffs to help keep ship inventory ready and modern, it reduce the budget levels the navy will set aside 11 cruisers

for modernization and retrofitting and return them to service with greater capability and longer life spans. it will also support a strong industrial base, itself a national strategic asset. the marine corps also continue its planned draw down to 1 2,000 and will devote about 900 more marines to increased embassy security. the air force also continue investing in advanced capabilities that are most relevant to maintaining our aerial dominance in confronting new threats, including the f-35 joint strike fighter, the new long range bomber and the 45 refueling tanker. but we chose to replace the 50-year-old u-2 with the unmanned global hawk. and phase out the 40-year-old a-10, which lacks the multimission capabilities of more advanced survivable aircraft. let me dress compensation reform as the second issue. taking care of our people as

everyone on this committee knows means providing them with fair compensation. as well as the training and tools they need to succeed in battle and return home safely. to meet those obligations under constrained budgets we need modest reforms and structural adjustments. we need these to slow the growth in pay and certain inkind benefits. let me clarify what these adjustments are and are not. first, we'll keep recommending pay increases. but the rate of growth of those increases would be slowed. second, off basing housing, off base housing subsidies. they will continue. today's 100% benefit would be gradually reduced. but only to 95%. phasing in over several years. and i would remind us that in the 1990s, the housing allowance was about 80%. third, we're not closing commissaries. we recommended gratitudulely

phasing out some subsidies but only for domestic commissaries in large metropolitan areas. we'll continue fully subsidizing all some carries overseas and in remote locations. fourth we recommend simplifying and modernizing our three tricare systems by merging them into one system. phasing in modest increases in copays and deduct ducketts for family members to encourage the most affordable means of care. active duty personnel's health care will remain free. we will not compromise on access and quality of health care. under our plan 100% of the savings from compensation reform will go toward enduring that our troops have the training and tools they need to accomplish their missions. readiness. if congress blocks these changes without adjusting current budget caps or if sequestration remains the law, it will jeopardize readiness and capability of our

armed forces. and shortchange america's ability to effectively and decisively respond when global events depend it. my submitted statement, mr. chairman, details how sequestration would compromise our national security. mr. chairman, the president's budget supports our defense strategy. it inddwents this country and ks all of our commitments to our people. the chairman, the chiefs and i strongly support it. i look forward to your questions. >> thanks, mr. secretary. general dempsey. >> thank you, chairman durbin. members of the committee, he appreciate the opportunity to come before you today and speak about our defense budget for 2015. i want to add my appreciation to undersecretary hale for his many years of service to the department. and to the nation. let me begin by commenting on iraq. the men and women who served in iraq did exactly what we asked them to do. al qaeda inspired extremists

raising flags over iraq's embattled cities trigs are in me the minds of any veteran who served there which is bitter disappointment that the iraq's leaders failed to unite for the good of their people. i share alarm about the future of iraq and we are developing a full rake of options to help stabilize the region. let me also speak to afghanistan. our men and women remain fully engaged on the mission at hand. they continue to build the institution of the afghan national security forces who secured the recent elections that will allow the first democratic transition of power in afghanistan's history. the decision on troop numbers beyond 2014 positions us to support afghanistan's transition. it aligns military objectives with resources and allows us and our allies to plan for 2015 and 2016 while continuing to focus on the important work at hand this year. three months ago, i met with my nato counterparts in brussells. the threat of further russian

coercion to the east in a growing arc of instability to nato's southern flank weigh heavily on our allies and last week, the joint chiefs and i met with the united kingdom's combined chiefs in london for the first such meeting in london since 1948. we agree that now is not the time for business as usual. we can't think too narrowly about future security challenges nor can we be too certain that we'll get it right. each of my international engagements reaffirmed that u.s. military primacy is still regarded as the world's best hope for stability and prosperity but there's a real sense our primacy may be at risk in part because of the choices being made in this city on the defense budget. as i said last year, we need time, certainty and flexibility to balance the institution and to be allow us to meet the nation's needs for the future. without these things, our commitments to our allies and partners to the defense industrial base and to the men and women who be in uniform and

their families will be placed in jeopardy. it will undercut the reassurances that i just spent a good deal of my time deliver diagnose around the world. at the same time, this congress has depended correctly that we it be more strategic, efficient, and innovative in the way we do business. this budget in real terms does all of these things. it's a pragmatic way forward that balances as best as it can be balanced our national security and our fiscal responsibilities. yet, our efforts to reshape and reform the military continue to be rejected. we have infrastructure that we don't need and with your support, we ought to be able to divest. we have legacy weapon systems that we can't afford to sustain and with your support, we ought to be able to retire. we have personnel costs that have grown at a disproportionate rate and we ought to be able to make modest an july the justments that will make the all volunteer force more affordable and sustainable over time. failing to act on these issues

is a choice it sef, one that will force us into an unbalanced level of cuts to our readiness and modernization. when major portions of the budget are rendered untouchable, readiness pays the bill. this ultimately makes our force less effective than this nation needs it to be. if sequestration level cuts return in 2016, the options that we will be able to provide the nation shrink and the risks will become in my judgment unmanageable. this is a reckless and unnecessary path. i know these issues weigh heavily on the minds of our men and women in uniform and their families. i hear about it constantly. i know they weigh heavily on you. mr. chairman, members of this committee, thank you for your support. and i stand ready to answer your questions. >> thank you, general dempsey. it is difficult here to separate out the lines of questioning. there is clearly an important line of questioning related to the budget and an important line of questioning related to

today's threats. they do merge at some point. and so we have to pick and choose. but let me start with iraq. secretary hagel, 13 years ago, when we were both serving in the united states senate, we faced a historic vote on whether the united states would go to war in iraq. it was a long and involved and bitter debate. and the senate finally decided to give authority to president bush to go forward. with that invasion of iraq. and here we stand today, 13 years later. having lost 4,484 brave americans in iraq, tens of thousands returning with the scars of war, applying for disabilities with our va at a record level, pushing that agency to the brink in terms of providing those services, having spent several rillon dollars added to our deficit, in a situation where we invested billions of dollars so that the

iraqis would be able to defend themselves. i will concede ood political ineptitude when it came to the leadership of iraq. some of the decisions made by mr. malaki were disastrous and divided his country instead of unifying it and building it for the future. but now we find ourselves in a curious position. one of the four hard targets of the united states is iran. which has been a source of great concern for the united states and the threat to stability in the middle east and the world. and now we find conjecture and speculation that we need to work with iran to stabilize iraq. can you tell me first, how did we find ourselves in this position? is this the right course to follow? what have we learned about the situation in iraq that we can apply to afghanistan in terms of their ability to defend themselves once we're gone? >> well, mr. chairman, i wish i

was wise enough to sort all of that out for you and give you a clear concise answer. but let me respond this way. first on the comparison with afghanistan. it is my judgment that the two bear very little comparison for many reasons. first, afghanistan is not iraq internally, historically, ethnically, religiously. second, there's strong support in afghanistan today for america's continued as well as our nato isap partners presence there which both presidential candidates have said they would sign a bilateral security agreement. election just took place a few days ago. they'll certify that election here in a couple weeks. so that aside, i think there are many, many differences between iraq and afghanistan. but back to your more fundamental question. let's take one piece, iran.

let's not forget that when we went in the united states into afghanistan, in late 2001, actually, early on, we had worked with the iranians on that western border of afghanistan. so there's some history here of sharing common interests. we have significant differences, obviously. that's what vienna is about, what's going on there now as well as other interests, iran is a state sponsor of terrorism. all the other issues. but when it comes to the common interests are of a nation whether it's the united states or any nation, that's what forges some kind of reality to what we're dealing with. certainly iraq is a good example. all the neighbors in iraq are being, will be affected by

what's going on there. these are regional issues. syria is a regional issue. isil and the other terrorist groups, those affiliated with al qaeda, all are a threat to all nations, all governments, certainly including us. so i don't think these issues come neatly wrapped in geopolitical graduate school papers. they are complicated. they are intertwined with history. with tribal differences, religious differences, ethnic differences. in iraq, i think the opportunities that we presented after a rather significant and committed number of years there, what president bush signed with then prime minister maliki in 2008, a strategic framework agreement which laid out when

america's troops would be out of iraq, this was signed in december of 2008, we presented the iraqis with tremendous opportunities to govern themselves, defend themselves. we've continued to support iraq. we've accelerated our fmf program with iraq. but we can't dictate outcomes. it's up to the iraqi people. so i know that's kind much a wave top answer. but it's all those complications fit together and we are faced with reality of dealing with the reality we've got on the ground right now, threatening our interests. all the nations of this area, gcc nations are threatened and certainly iran is threatened. >> general dempsey, i don't know that there's any end to the ambition of vladimir putin. i do believe that there is one trip wire. he has shown that he's willing to invade the republic of

georgia and to take over territory which i have seen. the barbed wire that separates what was once part of the republic of georgia now being crowed by russian troops. he has shown that he's willing to invade with people wearing i wouldn't kaw them uniforms but parkas with no insignia on them, invade crimea, ukraine. it seems to me the only trip wire to stop this man's naked many ambition to restore the russian empire is nato. and the obvious question for us in the west if and when the day comes, when putin decides to test us lug are we ready in are nato allies ready to stand together to stop any aggression that he should exhibit toward members of our alliance? >>. >> well, chairman, the briefly, what the tactic that russia is using is one i would describe as approximate coercion, subversion and misinformation.

so i doubt that they'll actually be a full-blown invasion but we've got be alert to the other tools that he may use to actually undermine stability and notably in the baltics and in some of our oo eastern european allies. array your forces on a border and threaten the use of force. subversion as you've noted by the introduction of surrogates an and prox is and misinformation to get ethnic populations stirred up. i think russia lit a fire in ukraine that has somewhat burned out of their control and i think ukraine is in for a very difficult path as a result. our nato allies are awakening to the fact that for 20 years, they've taken european security for granted and can no longer do so. >> are they ready? are we ready? >> you know, the questions about readiness would probably be best answered in a classified setting. but we're not as ready as we need to be. >> senator leahy?

>> thank you. and secretary hagel and general dempsey, i want to thank you for taking the time to be here, especially with all that's going on in the world. i join with the others. comrepts to secretary hale. he's been a tremendous help to this committee and to all of us here in the senate in both parties. we i also wanted to applaud our people at the justice department, the fbi, department of defense, secretary hagel, you, attorney general holder, director kommy for the capture of ahmed abu khattala. i'm also wearing my hat as chairman of the senate judiciary committee. i'm glad you're bringing him back here to be tried in our courts. we americans show we're not afraid and we don't have to send these people off to guantanamo.

we can try them in our courts. i remember my family just spent ten months at guantanamo working with the military. i look at a place like that where we're spending millions of dollars a year to lock people up. we could put them in maximum security here in the u.s. and get convictions. and i'm glad that we can show the rest of the world we're not afraid just as we weren't when the oklahoma city bomber a great terrorist attacked. we used our courts. we'll use our courts and i have great confidence in them. and i also i look at the things that we have -- i was glad to see you reference general dempsey, the -- our guard a reserves as did secretary hagel. senator graham and i used a bill

to establish a bill. we have 46 colleagues that cosponsored including senators dush bin and cochran, the language incorporating the house approved authorization and the version reported by the senate armed services committee and i hope that that becomes law you will work very closely to make sure that it's followed. we will follow the law, senator. >> yeah, i know. it would have been news if you had said otherwise. general dempsey, you observed last year that with sexual harassment, assault in the military, everyone had taken their eye off the ball. we pass aid major reforms but the department has also instituted even more of their own. have they been effective? where are we today on this? >> our eyes are on the ball and the initiatives that we've taken

are beginning to positively affect the negative trend lines that i reported to you last year. we've got work to do. both at our own initiative and initiatives that the secretary that the secretary of defense has directed us to undertake. i think i would simply say to you that we're optimistic that we have to turn this around forget optimism. it can erode the trust that our military has been. we will turn it around and we've got our eye on the ball. >> in telling old war stories, i remember our difficult as a prosecutor, how difficult it could be in prosecuting depending on the agencies involved, in that case civilian law enforcement agencies who were willing to actually look at these issues. as you know from your own law experience in the military,

there's a wide variance among military commanders of how they look at had. i would surge yurge you to keepg for some consistency throughout the military just as in our military academies, this is something if we're going to encourage the best people to come in the military, we better show there's a zero tolerance area. >> if i could react, senator, i assure you that it is a zero tolerance area. also we've got a level of consistency now that if you're not aware of it we should maka wear. we've raised the level to where a decision could be made to investigate or not to investigate. we've got nine different ways that a man or woman can report incidents. we have a level of consistency

that i think would satisfy your concerns. >> thank you very much. we've had these media accounts, of course, as you know, i will direct this to both you and secretary hagel. with years of training provided by u.s. forces in iraq. we saw so many of the iraqi military just throw down their arms when the militants advanced on them. i'm not trying to compare apples to oranges but do we face a similar situation in afghanistan? >> are you asking me senator. >> i ask you and secretary hagel. >> two division and part of two. one national police organization did in fact throw down their

arms and in some cases collude with and in some cases simply desert in northern iraq. if they that and you can look back at some of our intelligence reports. they did that because they had simply lost face that the central government in iraq was dealing with the entire population in a fair, equitable way that provided hope for all of them. you ask if that could happen in afghanistan. the newly eleked government will have a lot more to say about that than anyone here. although, i will tell you that of the two candidates, it is our assessment that there's a likelihood that they will be -- try to form and maintain a unit government for afghanistan. i can't convince either myself or you that the risk is zero that that couldn't happen in afghanistan. >> secretary hagel. >> senator, i would agree with

the chairman and his analysis. i would go back to party the answer i gave to chairman durbin when he asked his question about iraq and afghanistan. there's no guarantee which we know there's no guarantee in life. it is up to the people of afghanistan to make these decisions, their military and their new leadership that will be coming in as a result of their new government. we have helped them build as well as 49 of our isaf nato partners, very significant military institutions, training responsible with the announcement of the president's plan where we will be there another two years as we phase our transition, our roles. i think that's significant. i think the progress made in

afghanistan has been very significant, different dynamics, different ethnic religious dynamics. it doesn't mean that they don't have differences in that country. that country has a very tortured history as we all know. i think we just stay steady and we keep doing what we're doing. i think the prospects of that turning out where they, in fact, can defend themselves. they can govern themselves. they can bring about an element of representative government and freedom of rights for their people. that's as good as it can get. beyond that. we can't dictate anymore. we can only go is far in helping any country. >> thank you mr. chairman. i will submit for the record a question on the convention of counsel relations. we are trying to get that through.

i think i know the department of defense's position. i will submit that for the record. i'd like a response than owe. >> thank you senator. senator coats. >> thank you mr. chairman. based on secretary hagel and general dempsey. based on my previous service in the senate and some service now, i'm fully aware that the pentagon on a contingency on the shelf for just about every possible scenario everything from a nuclear war and an invasion from canada and everything in between. my question is given what we've seen here happen in iraq, maybe we didn't anticipate how stunningly quick a territory could be yielded and major cities could be taken over without resistance. nevertheless after we failed to negotiate a status of forces agreement with iraq, there had

to be some anticipation that some of this territory would be up for grabs and scenarios where a lack of confidence in the leadership or capability of the iraqi military on its own would lead to something like this. was there a plan on the shelf, if so what is it? if there wasn't, why isn't it. general dempsey, i think i wrote down the quote. you said we are in the process of developing options. that is different than having options thought through and strat edgized. >> sure senator. let me assure you we do not have a plan on the shelf for the invasion of canada. i want to make sure our canadian alleys who are watching -- to your point about what options do we have, we generally for nations where we're not in an

active conflict. we certainly describe our options in terms of what resources we can put around the situation and then develop options, pleresent them to our elected leaders for decision. right now we have a great deal of isr assets committed to iraq. we have a great many maritime assets and aviation assets committed to iraq. we've placed a new contingency mostly for force protection of the u.s. embassy and for forces in and around baghdad. with that said, we have prepared options. we've been discussing them within the agency. the president of the united states will meet today with members of congress in a classified session. i certainly don't intend to foreshadow his conversation. i'd be happy to provide a classified briefing on that.

>> isn't a little bit late. the weapons have been ceased. the banks have been robbed. oil may or may not be in extrems a great source of monetary resources. >> isn't it too late to talking to members of the congress and say let's look at the options. >> senator, it's only late if you suggest that we could have stopped it in some way. i think it's worth remembering that the real threat in iraq that is common is this organization called isil which is as you know started off as al qaeda and iraq. went to syria and is now back in iraq. this all started and stops with iraq. there is very little that could have been done to overcome the degree to which the government of iraq had failed its people. that's what has caused this problem. >> senator, may i just add to

that. >> sure. >> one piece of your question, i think, was about surprise that we did not anticipate this to your point about planning. some of you, senator gram, senator blunt, members of the -- senator reed -- of the armed services committee may recall, the director of our defense intelligence agency general flynce testified before the armed service committee in february. in that testimony, he said that it is likely that specifical, isil may well take territory in iraq or attempt to take territory in iraq. that doesn't negate why weren't you prepared? why didn't you know about it? the other part of it is and i think it goes back to what general dempsey was talking about, i think we were surprised