tv Key Capitol Hill Hearings CSPAN September 25, 2014 7:00pm-9:01pm EDT
7:00 pm
i know that we have come a long way in our launch and as i said earlier, we have 7.3 million people paying premiums -- >> i didn't ask how many had signed up. this is about security and he had a concern in january about security and yet, you ignored his advice. why would that have been? >> because i had my own i.t. team who conveyed to me that they were confident in the project. >> i yield back. i'm out of time. >> the other witnesses want to comment on the answer to the gentleman's question about a year ago was the site ready and should it have launched, in retrospect? >> well, i would just say that at the time of his launch that cms did accept increased risk, that -- from a security perspective. >> not having reviewed the data that the cmsi.t. team had, i wouldn't feel comfortable commenting associated with that i think it's important to have eyes on the project and be part
7:01 pm
of the team to make those decision, it's very difficult as a third-party partner participant to make that kind of assessment without the actual knowledge and data. >> as a former businessman, i would say that a site that couldn't accommodate a few hundred people simultaneously signing on and people waiting for weeks or months, security wasn't the reason that that should not have launched, but i appreciate that you're here on security today. the gentlelady from new york, a place where i.t. comes first for many of her constituents is recognized for five minutes. >> that's true, true of the west coast, too. i just want to note that this is the committee's 29th hearing on the affordable care act and the sixth on the website. oh, come on, please. i want to focus on some very positive things. and that's the cost growth is slowing to historic lows and that was one of the huge challenges that we confronted k the whole time that i've been in congress, is the -- just the
7:02 pm
whopping cost in health care in our country.$çwp now, contrary to some of my colleagues' claims that the affordable care act is causing health care costs to skyrocket, there have been multiple reports recently that show that the growth of health care spending in the united states is slowing to historically low levels. and that is good news for everyone. earlier this year, the centers for medicare and medicaid services issued its national health expenditure report. are you familiar with that report? >> i am familiar with that report. >> well work the report found that national health spending grew by just 3.7% in 2012, a near record low and the fourth
7:03 pm
consecutive year of slow growth of health care costs. in your opinion, what factors are driving this historically zv low rate of growth and i'd like the others to chime in, too, if would you like to add to her response. >> i think that we all felt it was a combination of things. certainly, the recession early on, but as -- as time went by and we continued to see this historic low growth, i think some of the actions in the difference and it's an ongoing conversation i have with my actuary and i think he would agree if he were sitting with me, it was both, but the affordable care act made a difference. >> that was outside the scope of my review. >> that is something i have not been involved in as the director of u.s. cert. >> okay. fine. earlier this month, cms released its national health expenditure projections for 2013 through 2023. and according to these estimates, national health expenditures grew just 3.6% in s 2013.
7:04 pm
is that correct? >> i believe that is. >> this is the lowest rate of growth since the federal government began keeping such statistics, since 1960. i would call this a very positive development in public policy. would you agree? >> i would totally agree. >> what about the next ten years? we are always looking ahead. i know cms projects an uptick in health spending overall due to the large number of people who are newly insured through the affordable care act. but what about per enrollee health costs? >> so, going back to that report, i think the trend is expected to move back up, the number of individuals in medicare and, but i think that stresses the importance of our success in tying together delivery system reform, payment and quality and why that work is critical that we continue. >> well, why will they grow more slowly than before the affordable care act?
7:05 pm
>> some of the measures you the in place with the afghanistan, -- the affordable care act, tying payment to outcome, transforming delivery system, which is a work in progress. >> now, the kaiser family foundation recently released an annual employee health benefit survey and this report indicates that the slowdown in health spending also extends to employer-sponsored insurance. more good news. according to kaiser, premiums in employer-sponsored health plans grew only 3% in 2012. so, i would like to ask you, that's tied for the lowest rate of growth since kaiser started measuring the growth of employer health care plans. do you agree with that? >> i reviewed the kaiser report, employer insurance tends to see what we are following in
7:06 pm
medicare and medicare. yes.j >> this seems to be very good news for the american consumers and our overall delivery of health care service, so i'm very pleased with these reports. they say numbers don't lie and numbers are showing an i want to congratulate you and your colleagues for your work to help bring this to the american people. thank you. >> thank you. the gentlelady from california, ms. speer. >> mr. chairman, thank you. i thank you to our witnesses. i want to congratulate you, you have lived through the real life "survivor" show and succeeded. i find the fact that we have engaged in the most thoreau, repetitive implement of the aca as an incredible waste of your time. a lot of good news, as my colleague from new york has underscored and really quite
7:07 pm
interesting to me, for the longest time, there were all those who were panning the affordable care act, we will never get the numbers and you were mentioning it earlier, ms. tavenner, 7.3 million r4d subscribers, correct? then the hue and cry was we won't pay for it, pay for one month and won't pay any longer and it will fall on its face. that hasn't been the case either, has it? >> no, ma'am. >> the chairman of the committee and a number of republicans just sent you a letter and i want to read it out loud, one segment of it. "in order to enroll beneficiaries in the exchange, healthcare.gov collects, obtains and retains massive amounts of
7:08 pm
personally identifiable information about millions of americans. this information includes social security numbers, personal addresses, income and employment records and tax return records. it is extremely important that cms and the other federal agencies involved in the exchanges properly protect and maintain this sensitive information." now, i actually agree with that statement and i presume you agree with that statement? >> yes, i do. >> and having agreed with that statement, have you, to date, had any signer attacks that resulted in personally identifiable information being stolen? >> we have not had any malicious attacks on the site that have resulted in personal identification being stolen. as the chairman rightfully brought up earlier, we did have some technical issue on front end that we had that were our
7:09 pm
>> that's right. but we're in the present day and let's look to where we are and where we're going. okay. now, meanwhile, target security breach included 110 million americans. potentially affected. you're wear of that? >> i am. >> my staff checked the census website and said the total population of the united states is 319 million. so, more than a third of americans potentially had their personally identifiable information breached, stolen, as a result of that target data breach. there wasn't an interest by this committee to have a hearing on that potentially affecting a third of the american people. see, 110 million people
7:10 pm
affected, no hearing. zero people affected, and we've had dozens of hearings. it seems like our priorities are not quite on what the american people would be interested in. now, we do know as a result of target that the hacking came from outside this country, it appears it came from russia or from some region near there. and rather than trying to find out where these hackers are coming from and how we can forestall them, we are going to waste more of your time asking you a number of questions about issues that haven't even impacted. now, some would say, well, accept that's private business. well, how about u.s. is? they have a contract with the federal government. it does security checks and 27,000 people have had their personal information steam
7:11 pm
stolen from usis, a federal contractor and have we had a hearing on that? nope. appears that's not important either. so, i want to just commend you all for recognizing that you have to do this no matter what, come to these committee hearings, you do it with great respect and we appreciate that. i hope we can send you back to do the work that the american people would like you to do and i yield back. >> i'll take my time now. >> we now recognize the gentleman from maryland for five minutes. >> i want to thank all of you for being here today as we come to the end of this hearing. i just -- you may, ms. tavenner and others, you may never hear the full thank yous of people
7:12 pm
who are going to stay alive because of what you and your colleagues have done. and i really mean that there are people -- there's a mother who's now going to be alive, may have been suffering from cancer, breast cancer, like the lady inp my district, couldn't get treatment. but she's alive, she got treatment. i have a sister that does a lot with breast cancer and they were waiting -- they had women who had been tested and they were waiting for the affordable care act to pass and come into effect so they could get treatment. i have come to you today and to your colleagues to thank you. i tell the story that went
7:13 pm
affordable care act came up, i had one prayer, i came to the floor early, i came early and sat on the front row and i had one prayer, i said, god do not let me die before i vote for it. the reason why i have said that is i have seen so many people who were sick and could not get well. you know, johns hopkins is smack tab in middle of my district, great hospital, one of the greatest in the world. people fly from all over the world to come to johns hopkins. and there are people standing on the outside, could not get in, but the treatment was in there. and so, you know, i know your colleagues are looking had on and i just don't -- i know they have been through a lot.
7:14 pm
and i remember when they -- we had the website problem and many were saying, oh, we can never get through this, so, you know, just so horrible and everybody was warning that everything would collapse. but you know what i said? this is a can-do nation. this is a can-do nation. and we need to definitely do when it comes to the health of every single american. and i listened to what you said a moment ago about how, day after day, you worry about making sure that people's information is protected. we could not pay you enough or pay your colleagues enough to go through what they have been through and to worry as you have worried and to do everything in your power to be protective of the american people. and yeah, you're gonna be criticized. yeah, folks are gonna try to do
7:15 pm
and say all kinds of things about you. but i have come here at this moment to simply say thank you. thank you for my constituents. thank you for constituents -- our constituents all over this country. and you know, sometimes i think about illness and a lot of people -- i wonder if people have not been ill themselves when they see other people in the position of getting sick or sicker and dying. i wonder whether or not they have ever been ill and that (sqáhsqbecause i think that president obama said it best, and i wish i had coined this phrase myself. he says, sometimes we have an empathy deficit. an empathy deficit. so, i take this moment to thank
7:16 pm
you and just have just a few questions. i'd like to ask you about the attack by the by the hackers last summer against healthcare.gov. it was my understanding that this was not limited to het healthcare.gov alone, but included a broader universe of targets. is that right? >> so based upon the analysis that our team did, it was a typical kind of malware that's dropped for denial of service >h attacks. so, basically, they are trying to create a node and a botnet to use for denial service attacks, so, yes, they look at resource servers like this to use them for those types of attacks. >> and the hackers were able to place malware on a server, but it was a test server that did not have any personal information, is that correct? >> based upon the analysis that our team did, it was a test server that was deployed with
7:17 pm
its out-of-the-box configuration, meaning the default password hadn't been updated. >> just have two more questions. as i understand it the type of malware at issue is called denial of service. >> mm-hmm. >> malware, which is designed to slow down or even shut down the system but not extract information, is that right? >> correct. the malware is to use the resource of the server as part of this botnet so it wasn't targeting the server, it was using the resource of the server for the botnet for another victim. >> how common are the [ inaudible ] -- >> sorry? >> how common are they? >> they happen every day across the globe on -- [ inaudible ]. >> so the bottom line is that at least as of now, no personal information was transsubmitted outside the agency is that right? >> correct. the breach was discovered by cms, it was alerted to us. we looked at the images that were provided. there was no ex-filtration of
7:18 pm
data, there was no loss of pii. due to the segmentation of the network. this was a test network separate from the production network, so there was no lateral movement into the production network associated with this activity. >> thank you. >> thank you. >> i guess, still got more questions but let me make some statement and then i will ask a couple more questions. you know, ms. spiers left and jm that is unfortunate, this being said when are we going to hold all kinds of hearings, they forgot to mention there is a committee mr. lynch belongs to, the financial services committee and held hearing hads because they oversee the financial community, meaning home depot, target, these other companies that they are referring to, those fall under that committee's primary oversight bas these were financial transaction related.
7:19 pm
my staff also mentions that the federal trade commission, the department of justice, the cfpb and the fdic also are looking into each and every one of those. so, with tens of millions of dollars, countless agencies and individuals looking at each of these, the question is, ms. of aener, who's been looking at you mr. will shoeson, in a nutshell, one of the things that you said at the beginning was they didn't have strong passwords, so, somebody could put in a short password and not change it. is that correct? >> that's correct. we identified several technical security control weaknesses with healthcare.gov and its supporting systems. >> so, somebody who didn't change the password created a huge vulnerability, particularly if they had a high level of access, is that right? >> if they used a weak password that could be easily guessed, that would be an increased risk. >> so, marilyn, her birthday, if used, would have been easy to
7:20 pm
7:21 pm
>> those things should be done. yes. >> and you know what's amazing, target and home depot had those kinds of protections, but there was a malicious attack from a foreign nation with advanced tools, some of those tools being exactly the tools that our cia, nsa use to go after the worst of the worst. and we succeed all the time. so, what i'm finding here today is that everyone wants to talk about organizations that employed, in many cases, best practices, that did their best and then were targeted by very advanced networks, criminal networks, networks that may even have had the kgb's successor helping them hack. and they want to talk about those rather than a lack of common sense, simple practices that -- to secure a website, isn't that true? >> i would say that probably the majority of federal incidents that occur within the federal government could be resolved,
7:22 pm
perhaps prevented, if agencies were practiced strong signer security. there's always going to be a risk that you come across an agent or an entity, a foreign intelligence service that has very sophisticated techniques that may be difficult to protect against, at least to prevent. but by and large, many security incidents could be corrected and prevented if the agencies practiced strong security control. >> now, even without seeing the 13 compromises that occurred, you were able to make and cms accepted a lot of suggestions that are improving the site here today? >> we looked at the security controls over those devices that we've looked at and identified vulnerabilities that could be corrected and cms concurred with each of the 22 technical recommendations that we are making. >> so, all of the talk about this robust team, all of those experts brought in from silicon valley, special people that worked on the president's re-election, all those people had missed those 22 points? >> that i can't answer in terms
7:23 pm
of -- >> but when you suggested these, did they say, oh, we are already doing them, we just forgot or saying we weren't doing them and now we will? >> i would just say that we identified them during the course of our review and they have accepted our findings and indicated that they will implement. >> you are very kind. >> would the gentleman yield for just one quick point? >> i was one of those who shopped at target and i have a new credit card today. there are two distinct differences. one is i'm not compelled by law to shop at target. i am compelled by law to sign up for obamacare. there's a huge difference. mr. chairman, what happens is those are voluntary transactions, which i don't have to give my social security to them, i give them a credit card and i do a transaction. it's very different for healthcare.gov. >> that's very true r i thank the gentleman. we now go to the gentle lady from new mexico who has arrived for a round of questioning.
7:24 pm
>> mr. chairman, thank you very much for recognizing me and i want to thank the panel here today. and i share many of my colleagues' concerns that we should be doing the very best to protect information and certainly, we've led in the private sector world with hippa and related requirements, security protections and working diligently and tirelessly to make sure that patient protection, patient privacy and now financial information must be protected. and i think the point is important that every person must sign up and be insured through the affordable care act. and i want to read this i think it bears energy the context of this hearing, bears repeating. in gao, in the march 2013 )))))x ñ
7:25 pm
report, found that the federal p government continues to face 6 g including designing and implementing risk-based signer be?ñrity programs at federal " agencies, steak and identifying÷ infrastructures, and detecting b and responding to and mitigating signer incidents. and since that report, we've got 28 gao additional recommendations and i know that we've been talking about today in this hearing. in fact, gao has designated
7:26 pm
technical recommendations. 19 of those have been resolved, fully mitigated or will be further reviewed prior to open enrollment. so, those will be handled. of the six other recommendations, we are in the process of either completing -- have completed those or will complete those prior to open enrollment. >> and based on the 19 that you've identified, ms. tavenner, and the remaining measures to implement, you are confident that not only are they implemented but they are tested and will have, to the greatest degrees, i might disagree with some of my colleagues that we
7:27 pm
can do everything in our power and those hostile, those negative, those who intend us harm and intend to access that information for their own gain will find ways to do that. i want to make sure that we are doing everything that we know that mitigates and prevents and gives us the opportunity to also detect when there's been a problem. you're confident that these will be tested and in place by the open enrollment period? >> i'm confident but we will never quit continuing to try to improve the process. our work with the department of homeland security, our work with gao, oig, will always be looking for improvements. >> i appreciate that. and given that we know we're working on another issue in my state, i appreciate your attention to that and your coming, mr. chairman, we are working on a behavioral health ñ
7:28 pm
issue. for me, it all ties to making sure that consumers have confidence, that they are protected in a way that cms is responsible to protect those citizens, that they are clear that your responsibility and oversight is paramount to the work that you do and that the access to health care is only as good as making sure that the information and the protections that are required by law are, in fact, in place and they can go to cms when there is a problem and have that resolved, objectively and appropriately. i really appreciate your attention to all those matters. >> thank you. >> i yield. >> ms. tavenner, i just want to make sure that i understood what you just said. that -- and i agree with every word that my colleague just said. but you're saying then there's six recommendations left, is that right? >> sorry, sir there were six
7:29 pm
major and please correct me, greg, if i get any of these wrong, there were six major recommendation and we are in the process of completing those and some of them are done and the answer to those is all of them will be done prior to open enrollment. >> and open enrollment starts when? >> november 15th. >> so, we can -- would you let us know officially when they are done? >> yes, sir. i think -- >> to the chairman and myself. really appreciate that. >> if the gentlelady further yield, the earlier report we had is you didn't agree to all six, but you agreed to three out of the six, you now will agree and complete all six? >> so i think in some of them, we partially concurred but we are getting the work done. whether we totally agreed or not, i think there were some things, fringes, there was a different description of how we did security testing versus what gao wanted. that wasn't an action we would change, but we understand where
7:30 pm
they are coming from, we just have a different way of getting the security testing done. the rest of these things, such as the privacy impact statement, we will have that done, that was a documents issue. the computer matching agreements with peace corps and opm, we will agree to that get that in place prior to open enrollment, security agreement governoring the facts. the 22 technical recommendations, 19, we have already done the others, we are reviewing and i will be happy to do something in writing back to the chairman and to the ranking -- >> i think we both would appreciate it. >> all right. >> gentleman from north carolina? >> i wanted to follow up on one thing, ms. tavenner and it really, as we start to focus on some of these other issues, it takes our eyes off of the core issue and this's what the ranking member was talking about, which is providing health care really to the american public. and that's your primary responsibility. i can tell that you take that seriously. it is a distraction to say the least, when we have a billion
7:31 pm
dollar spin on a website that doesn't work, security issues that are there. along that same time, there was a rule that came out with regards to medicare part d in january that -- a rule that really would limit some of the options of our seniors, a rule that you came, much to your credit, and said we're not going to do. and i want to say thank you for doing that on behalf of millions of senior citizens who would have seen choices limited. do i have your assurances here today that we are not going to put forth a rule that is similar in nature to that rule that was brought back? i very rarely have an opportunity to have you in a public forum under oath, and so on behalf of millions of americans, do i have your assurances that we're not going to do it? i think you made a good decision.
7:32 pm
my mom, who's a senior citizen, thinks that you made a good decision. so, do i have your assurances that we will not see a similar rule? >> i'm not interested in bringing back the pieces that we've pulled. >> okay. that's good almost answer. so, do i have your assurances, yes or no -- >> you have my assurances that i won't bring back the things i just pulled. how about that? >> or something similar? >> or something similar. >> let me tell you the reason why and it gets back to cbo indicates that much of the reason it is working so well is the competitive nature we have. we are going to limit options for our seniors, some cancer, some anti-epileptic, these are serious things, so you and i can banter back and forth, but really what i need is on behalf of the american people, your assurances here today that that's not going to happen? >> now you are bringing specific, i'm not interested in bringing back the drug categories, if that he is the question. i'm not interested in bringing that back. i am interested in promoting
7:33 pm
competition, promoting private market and i think we have tried to do that with the marketplace rules as well. so, we would continue to work -- >> not going to limit competition and we are not gonna narrow what people can get? >> that's -- would be my preference, yes, sir. >> that he is a your assurance? >> that's my assurance. >> all right. thank you. i yield back. >> could you yield to me? >> sure. be glad. >> briefly, item four from the gao says perform a comprehensive security assessment of the ffm, including the infrastructure platform and deployed software elements. now, initially, that was one that you said no to. are you saying you will perform that full system-wide test and have it done by november 15th, 'cause that's sort of the -- that's sort of the one that gao couldn't -- we can't know what
7:34 pm
we don't know until you do that, is that right? the mic, please. >> we get into a discussion of style here. it is our intention, and we will complete a full end-to-end assessment, security assessment prior to open enrollment, yes, sir. that's scheduled for later this month or october. i think where we got into a different kind of structure had to do with infrastructure and platform and our definitions, but i think our intentions are the same. >> why don't we let, greg, if would you give us the rest. >> as long as the tests that they perform includes how the applications interface with the operating platforms and the infrastructure to look at it in totality is going to be critical, because certain vol you are in ranbilities on
7:35 pm
certain levels, layers of the security, could affect the security of the other components of it, 'cause there are a number of components involved with this website, supporting systems, and a number of different entities involved with their operation. >> so, for the layperson out there, would it be fair to say that, for example, when software opens a portal on a particular piece of equipment, that that can create a vulnerability in one type of hardware that it wouldn't in another, that that's the kind of thing that they have to look at the actual hardware they are using, what it interfaces with and so on, is that right? >> and to include looking at the firewalls and the routers and switches that support it as well as the operating systems and how they are being configured. yes, sir. >> and i presume any remote access to devices, vpns or any of that would be part of it all it takes, if i understand right, is one pc that has a vpn connection that isn't in the software but once you put it in, it can create a separate vulnerability, right? and that's what you're looking for? so if i saw the heads nod, and i like that, the two of you are --
7:36 pm
one of you's going to come back to the ranking member and myself if this agreement that you're gonna do that by november 15th doesn't happen. is that right? maybe both of you? >> i would be following work with your staff to do some follow-up. >> i think that's all that mr. cummings and i would like to know, since you're shaking your heads and smiling now, if that stops between now and november 15th, one of you will tell us? >> yes, sir. >> mr. cummings? >> i mean, i'm going to encourage you to do that. just do it. please. >> we will do that. >> and i'm not trying to be smart. i mean, ms. tavenner, i know that -- and all of you, i know you're trying to do what's in the best interest of the american people. i understand that. but it seems as if what we want
7:37 pm
is the highest level of best practice, am i right, mr. chairman? >> absolutely. >> the highest level. and i can't help but when i was thanking you on behalf of my constituents, i could see a tear come up in your eye and you know, so often, i think federal employees, a lot of people don't realize that a lot of our employees, most of them are not in government for the money. they are in it and i have people coming trying to work for our committee all the time who are willing to take reduction of salaries from the private sector because it's something about this that feeds their souls, something about lifting up the public and making their lives better. and so, to all of you and to all of the federal employees who may be listening out, the ones behind you, ms. tavenner and all the ones that maybe in the
7:38 pm
audience and up here, i just want to thank you very much. thank you. >> thank you. and i understand the gentlelady from new mexico, did you have any follow-up questions, ms. grisham? >> mr. chairman, i don't, i was thanking you and i appreciate both the leadership of the chairman and the ranking member to assure that we get feedback and they represented very effectively all of my concerns and points so, thank you very much for your leadership. >> thank you. i've got a couple very quick wrap-ups that came out of these and big smile, because we are nearing the end. there was a question about more people being insured. and i just have to ask, is medicaid insurance? >> in my opinion, medicaid is insurance, for sure. but that is not -- >> but the actual level of insurance under medicaid that was talked about, it's medicaid insurance, that's what's lowering the number of uninsured is medicaid? >> plus the marketplace. both. both are lowering that number.
7:39 pm
>> which is then subsidies, primarily? the actual number of people who are receiving unsubsidized health care has gone down, is that right? >> you know, i -- and i don't have all the reports in front of me, but actually, the number of people insured off the exchange without subsidy is also rising. i don't have the latest private insurance, private insurance had a negative trend that had been going on for the last ten years that seems to have kind of stabilized out, if you add medicaid and you add the marketplace exchange, with or without subsidy, i think that's what you're seeing this. >> the reason is that those questions led to this sort of feeling that you know, everything was better, but isn't it true that the medicare trustee, charles blauhas, he projected by 2021, the impact of the affordable care act will be a 346-527 billion increase in the deficit, essentially because the government's going to pay that 190% for medicaid, the
7:40 pm
government's going to provide those subsidies and the government is, in fact, the taxpayer, so the deficit will rise based on the money that buys that insurancesome that true? >> i'm not familiar with that report. >> okay. but the government is general tax revenues are, in fact, paying for these subsidies and for medicaid, doesn't come out of a trust fund. medicaid is ordinary income tax? is that correct? >> i'm sure that you know that, mr. chairman. i don't. >> well, for the record, medicaid is paid out of income tax. and much of medicare is paid out of income tax. the trust fund, when we talk about it, pays only a small part of what our seniors reflect. now, i have really the final question and it's one that deeply concerns me and it wasn't the main topic today, but it's right in your lane. on may 15, you projected 8 million as an enrollment number. august, it's now 7.3. what happened to that 700 to 800,000 people? why was there such a precipitous
7:41 pm
drop? >> so the 8 million individuals, and i think that number was after the end of open enrollment, had signed up. and i think during the course of the next several months, individuals may have either gotten employer-sponsored insurance, they may have found other eligible for medicaid instead of the marketplace, and some individuals may have decided no to go forward and pay. i think there was always -- >> that's great question and it's -- the reason i ask that question is, you know, people were asserting that signing up meant nothing and paying meant everything. how much of that 700,000-plus drop were people who did not pay or do you know? >> i don't know that information. >> wouldn't it be all of those
7:42 pm
people did not pay? >> i don't think we will know that until the end of the year and then we will probably -- >> let me ask the question a different way, because, you know, i'm an an old businessman. people signed up. they were there for insurers, is that correct? they enrolled, they were insured? >> these were people who signed up for a plan, but in order to get insured, you had to make a payment, right? >> well, no, they were insured right away and then if they didn't make the payment, they -- >> 90 days. right. >> so, they basically got a free
7:43 pm
ride, 700,000 people got a free ride. they had coverage and if something catastrophic happened, they could make a payment and if something catastrophic didn't happen, they could just let it drop. >> sorry. i don't think we know that information. >> well, no, this is a structural question that i know you must know or the technical people behind you must know. if 8 million people sign up, let's just say 8 million people sign up and not the 700,000 who dropped, but let's just say 50 people out of 8 million had a health event and they weren't gonna pay, they just signed up on a lark because it's a free ride to sign up, but then they had a health event, did they get to go to the doctor during that 90 days because they had signed up and hadn't yet paid? >> yes. >> so, the system as it is today is an incredibly easily gamed system, if i understand correctly? 316 million americans could all sign up and get 90 days worth of free insurance and if nothing happens, there's no downside, they are just letting it lapse by not making a payment, is that right? you don't dunn them, don't go after them, don't follow-up, don't sue them for the coverage they had but never paid for, did you? >> which i think is why it's important to know as of august,
7:44 pm
7.3 million were still making their payments and were still continuing the insurance. >> 7.3 million people may have made small payments because they were highly subsidized or larger payments because they weren't. are you prepared to release those figures any time soon so we understand the 7.3 million, how many of them, if any, it will be some, were completely unsubside diocesed, how many were partially subsidized, how many were substantially subsidized? >> we will have that information and as soon as we have it, we will release it, but yes, we will be able to -- >> estimate when? >> i don't have an estimate but i'm happy to get that for you. >> okay. being an old businessman, i must admit that giving people 90 days free and no retrospective look to find out whether -- whether,
7:45 pm
in act if a, they were maybe dually insuring, just signing up for a lark, to me means that your initial figures are of no value and people should be sinnic and say we don't know how many people have signed up, but next year, starting november 15th, i'm presuming that if gao is going to estimate the signups, they are going to be able to only use that if you get 8 million again, they can assume that 7.3 is the net number, right? >> i think 7.3 is a really strong number and i would remind you that those individuals who sign up and get tax credits still have a reconciliation process next april, right? >> yeah, we're looking forward to that part to see if there's a clawback. my parting question, this committee held a hearing and on the issue of over $15 billion owed to the american people by the state of new york for excess payments in violation of the law, in violation of cms maximums, that falls under your watch. have you done anything to reclaim that $15 billion? >> yes, sir, we have.
7:46 pm
>> and have you gotten any of it back? >> we recently initiated that. i don't think we have gotten any of it back yet, but we sent the -- basically the request for recovery r >> you have made a -- you've made a requesfor recovery? >> we follow our normal process. >> do you have the authority to simply withhold, the way you would to a private entity? you know, if i'm a doctor and i overbill $15 billion or maybe some minor amount less than that, if i'm less hard working, the first thing you would do is cut off payments for services, right? you simply wouldn't send them a penny. you are sending millions or billions of dollars to new york every month, aren't you? >> so, i can brief you or your team on this in some detail. initially, what we would do, whether it's a doctor, an entity or whatever, we ask them how they would like to repay us and we -- >> i wish that were true. >> i think that's --
7:47 pm
>> i've had too many health care entities who make it very clear, your people come in you make a determination, the moment you make a determination, they basically have to quit their practices and go into an appeal process and in the meantime, they are not receiving a penny. and you clawback. so, you want to state that in a way that the pry sat sector people call me up and say how do you let her say that you give people lots of time and ask them how they would lake to repay it? >> i think you know i was on a private sector side for quite a period of time and so if there is a question of overpayment, yes, cms will make you aware of an overpayment situation. >> and then clawback real fast? >> unless you want to pay them up front, in which case -- >> if you're able to write a $15 billion check, they won't deduct from the revenue is new york prepared to give you a $15 billion check? >> i can't speak for new york. >> but right now, new york and perhaps others owe the american people money from excess payments and they are not being treated the way private sector is being treated. they are being treated a little bit with kid gloves. 15 billion's a lot of money.
7:48 pm
>> actually, we went through the first year and we made a request or demand for the money. so, and i'm happy to brief your staff on that. >> would the gentleman yield? >> of course. >> you have hit on an area that we have had a number of hearings already with regards to rack audits. and i'm -- i would implore you to treat new york the same way you're treating the constituents in my home state of north carolina. because very quickly, what you do is you put private companies out of business, because you deny the claim and you say, you either pay up or you go home. and if you're not gonna treat new york the same way you treat north carolina, i've got a real issue with it, ms. tavenner. >> so, we would treat north carolina the same way we would treat every other state. >> well, no, i'm talking about government versus private. i'm talking about private companies. >> i'm sorry, we would treat new york the same way we would treat
7:49 pm
anyone who owes us. new york, i just got this information from my staff, has appealed this decision, which is the same option that anyone has. >> right. and a private company, when they appeal, the answer is the same, pay up in five years or go out of business. >> i understand. >> i mean, the statute says 60 months, i know it very well. >> i know, we have treated states the same way we treat providers. >> all right. so they are going to have to pay up within 60 months, new york? >> i'm happy to get you information, i don't have it in front of me. >> i yield back. thank you. >> thank you both, go to the ranking member and i appreciate your staff's assistance because although it's an issue that you know is never going away before this committee, it wasn't the main subject for today. mr. cummings? >> i want to go back to the 7.3 million people who paid their premiums. and i guess around 700,000 who did not. there are all kinds of reasons, i guess, why people may not pay their premiums. a lot of people in our society are still struggling with all
7:50 pm
kinds of things. you talked about a reconciliation process, can you talk about that for a moment? >> the way that it works, individuals, the 90-day grace period is set up to have -- give individuals an opportunity to pay. at the same time, they start to receive tax credits. these tax credits are reconciled the next year on their income tax returns. if people have underpaid on their aptc, then they are likely to get a tax credit back. if they are they have overpaid -- meaning they have received a higher aptc than intended based on their income, they may owe the federal government money back and that's part of the partnership we have with irs.
7:51 pm
700,000 -- in fact, i was very pleased to know we have payment levels of 90%. this is a brand-new program. this has never been done before. by the end of '14 look back on '14 we will understand the circumstances. i expect in some cases, they may have moved, they may have got married, they may have got insured, they may have lost their income and gone on medicaid or to the uninsured ranks. we will only know that as we do a look back, and we are careful not to look back too early -- >> and these are not necessarily people trying to game the system. >> no, sir. >> i mean, i -- i see folks every day that they are still being informed as to what the affordable care act is all about. >> that's right. >> and trying to make it one -- one singer says working 9 to 5 just to stay alive. >> that's right. >> but in my district, sometimes it's working two jobs just to stay alive. and so they're struggling, trying to manage all this information, trying to do the best they can to take care of their families and many of them going through some very difficult circumstances. >> that's right. >> all right. thank you very much. >> thank you.
7:52 pm
>> the gentleman from virginia, normally the first to arrive, we just finished round three and the close. would the gentleman have some questions? >> i thank the chairman -- >> the gentleman is recognized. >> i was on the house foreign affairs committee with the secretary of state, forgive me for being late. >> i'm sure the questions there were provocative. so -- >> yes. welcome to the panel. mr. will shoesen, would it be unreasonable of us to suggest that no company, no government, no individual, should feel entirely secure and safe in the digital age? >> i would say for referring to use of online transactions on the internet and the like that there are certainly risks associated with that, just given the weaknesses and the nature of the internet as well as the competency and prevalence of
7:53 pm
hackers who might wish to exploit those weaknesses. >> the issue of securing public and private information systems, i assume is not something unique to the affordable care act? >> no, it's an issue for any computer system operated for -- by any agency, any organization. there's always a need to protect that information and certainly, as we mentioned earlier, within the federal government, gao has been identifying federal information securities, government-wide high-risk areas since 1997. >> right, since 1997? >> yes, sir. >> two administrations ago? >> probably. >> ms. tavenner, hello and welcome to our committee. >> thank you, sir.
7:54 pm
>> i think. it may not have been entirely a felicitous beginning to this hearing, but i welcome you and thank you for your work. but let me ask you a question, one of the things we hear about the rollout of the website in retrospect is that the coordination of i.t. management is disparate, not always focused, and perhaps was seen as a technical issue while, you know, cms and the department of health and human services were focused on sort of the bigger picture and the reforms getting in place and the pieces finally fitting into the mosaic. and maybe this got short shrift. and it turned out to be the achilles heel. and the whole enterprise was at risk because of this failure, which was a technology issue. in looking back on it, what lessons did you learn as a manager and is there some
7:55 pm
validity to that critique, from your point of view? >> yes, sir, i think there's some validity to that critique and some of the lessons learned and changes that we've made, early on in year one but definitely for year two, is we needed a systems integrator. we needed someone to help with the coordination. we needed a clear point of accountability. we needed better communication. and you're right, there was probably more time spent on the nontechal components and we didn't realize as the technology was as difficult as it was. so those were lessons learned. i think we've put changes in place. we are very, very happy with the number who signed up. we have -- year two is going to be an equally hard year, it won't be perfection, it will be greatly improved. and we're looking forward to finding some more uninsured and helping folks get coverage. >> thank you.
7:56 pm
thank you for that candid response. final question, are you familiar with the bill that the chairman and i have co-authored called fitar, the federal information technology acquisition and reform act, a mouthful? >> a little bit, sir. but not completely. >> well, that bill tries to get at how the federal government manages i.t. procurement and acquisition and addresses how the federal government is managed. and i think it's based on the conclusion that it's not well managed and it's very inefficient and there are too many people with the titles cio and what could go wrong with that? the estimate is 20 of the $82 billion we spend on i.t. acquisition every year is at least inefficiently used, sometimes downright, unfortunately, wasted. is it gao's position
7:57 pm
that we do need some i.t. updates and reforms to kind of update on clinger cohen, which was almost 20 years ago, and in technology 20 years is light years. >> well, sir, that's actually outside my particular area. i focus on information security and privacy issues. we have others that -- >> but aren't -- >> but i can get that answer to you. >> that would be fine. but isn't information security related to how well we're managing our i.f. assets? >> oh, certainly. certainly there is need for improvements in how i.t. is secured within the federal government. and by -- that's an implementation issue, and we're also on record that fsma, the federal information security information act, which governs information security across the government, could be updated and clair fade. >> the ranking chairman and i have been involved in that as well. the house has certainly tried to
7:58 pm
address that. and we found bipartisan common ground on these issues. i urge you to look at the bill and see how it applies to your particular area. >> i will. >> i thank you. and mr. chairman, thank you for allowing a shameless plug for our legislation one more time. >> well, in closing, it's not shameless, but it's a good plug. you know, i'll close because ms. tavenner, we'll probably try to do everything without having you back and i think we're on the right track. this is a committee that does legislation on a very bipartisan basis in most cases and it doesn't get reported, and then we have oversight and perhaps it's not as bipartisan, and it often does get reported. i do think today's hearing was worthwhile. i believe that hopefully mr. cummings and i both expect that little bit certainty as to the security
7:59 pm
that will come out of the website. cms is critical to the american became. your role has been expanded perhaps more with the affordable care act than any item before. and mr. cummings often talks about the federal workforce. and certainly about the good work that's being done. i want to close by saying that just because we give you a hard time over item after item, just because a number of members asked about, what about these billions of dollars that were given to states for their failed websites, doesn't mean we think it's easy. just the opposite. we know it's hard. we want government to oversee itself to the greatest extent possible. and it's the reason that we do appreciate and support the gao. we do appreciate and support the inspectors general. and that we try to be if you will, their supporters in order to get the kinds of certainty
8:00 pm
and, when necessary, reforms that are necessary. so i wantu/tús to thank you forg here today. i think this was an informative hearing. and with that, mr. cummings gives me a yes, we stand adjourned. tonight on c-span3, epa straight tore gina mccarthy discusses how to stop climate change. then a discussion about the legal justification for president obama's decision to bomb isis targets in syria and iraq. the deputy command of u.s. strategic command talks about nuclear deterrence. and later, a look at turkey's role in combating isis. today, gina mccarthy, the head of the environmental protection agency, talked about how to prevent climate change and argued that doing so would
8:01 pm
benefit the economy. she spoke at an event hosted by resources for the future where she was questioned by the group's president, former congressman phil sharp. this is an hour. ladies and gentlemen, welcome to resources for the future to hear epa administrator gina mccarthy. and since she has wonderfully attracted a much larger audience for rff, i'm going to indulge a couple of moments about who we are and what we're up to, if you don't mind, or whether you mind or not. let me just quickly say i think many people realize that we are an organization that strives to achieve high-quality, objective research on major public policy questions related to energy, environment, and natural resources. our organization's been at this for more than 60 years. we also try to promote serious public discourse, which is not
8:02 pm
always a simple thing to do in the washington, d.c. area. let me suggest to you that on the climate change issues in particular, and the various policy choices, rff scholars have been working on these for more than a decade so that we have done and are doing analysis on the whole range of alternative policy approaches that our government and other governments might take, such as cap and trade, such as carbon tax, such as clean energy standard. and of course these critical new rules that are being proposed at the environmental protection agency. our folks have worked not only at the federal level of the united states but the state level and california, currently working with a number of state governments on the rule here. they have done work in europe on the european trade system, done work now in china on the proposed cap and trade systems that are being regionally adopted there, and in mexico. and ahead we'll of course be continuing that kind of analysis and consultation, but in particular i want to draw your attention to two things.
8:03 pm
one is a new series started on our website a week or two ago called "our expert forum" with respect to the clean power plan. and the second one yet to come, another series that we're going to do co-hosting with the electric power research institute, epri, on a whole variety of the questions, these will be a series of webinars, on the various questions people are raising about this rule. let me just have to do a quick note on the process that we're engaged in here after the administrator speaks. she and i will engage in some question and answer and we will at that point be inviting questions from the audience. you have on your chair a card on which you may write that down as clearly as you know how. and we will be assisted by a couple of our folks to try to get in as many questions as we can. if you're watching this online, you can use the tweet system which now my generation are
8:04 pm
discovering what that really means. and that is -- you would do that by reaching out to #askrff. well, it's my great honor and pleasure to introduce the administrator and the only comment i wanted to do that in case is, in case you haven't noticed, we are in a time not only in washington but in this country of intense part sans and idealogical conflict that for many americans is quite disturbing. one of the most remarkable things about the person we're going to hear from is somebody who is unbelievably in her career and is currently working to do is bridging many of those deep divides in our society. she has been a state regulator in republican governor states. she is now, of course, as one senate confirmation in a very unusual, not a simple battle i'm sure from her point of view, but in fact with a battle in which
8:05 pm
she won praise from many people who disagreed with the administration, disagreed with some of the policies of epa, but had to acknowledge the knowledge and the skill of her leadership. so ladies and gentlemen, it's my great pressure to introduce administrator mccarthy. >> thank you, phil. good morning, everybody. it's great to are here at rff. no wonder, i'm surrounded by epa alumni here. where's dave, dave cohen just came. how many -- i shouldn't ask how many people. it is great to be here. but the expertise and the integrity of this organization is really testament to your leadership, phil. it's a great organization and you all are filled with a passion for the work you do and
8:06 pm
you're filled with a passion for people who work here and it shows. so it is great to be here. and let me start off with a story that has been decades in the making. 40 years ago, scientists at the university of california uncovered a global crisis. chemicals in our hairspray, our refrigerators, and our air conditioners were destroying our ozone layer. the earth's protective shield against the sun's cancer-causing radiation. and the world needed a solution. and the world needed a leader. the united states at that time did not temper its resolve. despite the hesitation of other nations. american science identified the problem, and american industry innovated the solution. because we acted, the ozone layer is healing. our people are safer and our economy is stronger than ever before.
8:07 pm
our fight to save the ozone layer was a defining moment in american leadership. today, with the threat of climate change, the pollution, and the problems are slightly different. but the principle that i'm asking you to think about is exactly the same. once again, the world needs a leader. once again, the leader must be the united states. that is the message that president obama took to the u.n. this week. the president said, and i quote, "we cannot condemn our children to a future beyond their capacity to repair, not when we have the means to begin repairing it right now." he's right. climate change supercharges the risks to our health and our economy. because the thing is, we don't have to choose between a healthy environment and a healthy economy.
8:08 pm
rff knows that for sure. they're not separate, they're intertwined. a world-leading economy depends on a healthy environment and a stable climate. that's why under president obama's direction, epa proposed a clean power plan to cut harmful carbon pollution that is fueling climate change from our largest sources, our power plants. i was at the climate summit this one and one thing was clear. u.s. climate action is changing the game. our leadership is spurring action from government and business leaders around the world. what's also clear is that when it comes to climate change, the most expensive thing we can do is nothing. we no longer project tomorrow's impacts we're simply tallying up today's damages both in lives
8:09 pm
lost, properties damages, as well as costs. this past decade was the hottest on record. the streets of miami flood on summer days. ocean acidification threatens washington state's oyster industry and well beyond. across the country, people grapple with floods, with fires, and severe weather. today, california is facing a historic drought with a projected job loss of more than 17,000. 20 tw 2002 was also the second costliest year in history for natural disasters with a price tag upward of $110 billion. if we see warming of 3 degrees celsius above preindustrial levels, instead of 2 degrees, we could face additional economic damages of almost 1% of global output. now, for those of you who aren't
8:10 pm
at rff, let me put that into perspective. 1% of 2014 u.s. gdp is almost $150 billion. and this is just talking about the incremental cost of going from 2 to 3 degrees. add that up, folks. think about it. absorb it. as seas rise, so do insurance premiums, medical bills, and food prices. from water scarcity to willing crops. countries -- companies like general mills and coca-cola see climate change as an absolute threat to commerce. paying more for soda means less cash to buy other thin and that chokes economies and that is what stunts job growth. the bottom line is, we don't act despite the economy, we act
8:11 pm
because of the economy. it came to -- i came to rff because you understand the power of an economy that values clean water, that values clean air, and that values our natural resources. you get that because climate isn't just about polar bears and melting ice caps. you understand that it's about protecting local economies and it's about creating jobs. as well as protecting polar bears and melting ice caps. the good news is, climate action is not just a defensive play anymore. we can advance the ball. we can turn our challenge into an opportunity to modernize our power sector and to build a low-carbon economy that will fuel growth for decades to come. that story of energy progress is being written all across america. epa's historic fuel economy
8:12 pm
standards for cars and trucks are cutting pollution. saving families money at the pump. and fueling a resurgent auto industry that added more than 250,000 jobs since 2009. automakers didn't fold, they flourished. since president obama took office wind energy has tripled and solar has grown tenfold. that's thousands of jobs that cave cannot be shipped overseas. renewable energy on public land by itself accounts for 20,000 jobs. in less than four years, the average cost of solar panels has dropped over 60%. every four minutes, another american home or business goes solar. and jobs in the solar industry are growing faster than any
8:13 pm
other sector in the united states. a study by a group, environmental entrepreneurs, shows that in the second quarter of 2014 alone, we added 12,500 clean energy jobs. america's clean energy progress is bringing down energy costs. it's bringing in good-paying jobs. and it's bringing back manufacturing in the united states. an abc poll showed that 7 in 10 americans want us to act on climate. so do public health advocates. so do business groups. so do faith leaders. so do evening orred moms and -- organized moms and grandmas who have come to our hearings, basically tell issing us and reinforcing the president's message that this is about an obligation that we have to future generations. we have over 1 million comments
8:14 pm
on our clean power plant proposal. not alm them from moms and grandmas but we have many. we have great advice from rff as well and i thank you. we want every good idea possible. so we exetended the comment period through december 1st. we have an ongoing bet how much those comments might increase and end up but it's going to be substantially more than we already have. and frankly we're looking forward to it. people want us to act. i think because the benefits are clear. from soot and smog reduction alone, every dollar we invest through the clean power plan will return $7 in health benefits. $1 to make $7. in 2030, total climate and health benefits could reach up to $93 billion.
8:15 pm
the key to making our plan ambitious and achievable is its flexibility. we'll get more into this a little bit later, i'm sure, in the question and answers. but basically, we use section 111-d of the clean air act to allow states to choose their own low-carbon path forward. the path that best works for them. flexibility means more choice and more ways to invest. that sends a powerful market signal that unleashes innovation. we want to raise the common denominator so that states everywhere can do more and they can learn from the states that are already doing more. our plan is not a one size all prescription. it boosts progress already under way in companies, city halls, and state capitols all across this nation. for years, states in the northeast have teamed up in a market-based program to curb
8:16 pm
greenhouse gases. at the same time, those states have enjoyed some of the nation's strongest economic growth. my home state of massachusetts -- go, massachusetts -- cut emissions by 40%, while their economy grew 7%. cities and states acting on climate are not slowing down. they're speeding up. and according to a new report from the carbon disclosure project, major companies like delta, google, and disney use an internal carbon price in their business decisions already. if they get it, everyone has to get it as well. why? because investors and ceos are seeing the cost of climate change and the value of taking action. that's what we need to focus on. we know a global problem needs a global solution. although we can't act for other nations, but when the united
8:17 pm
states of america leads, other nations follow. we set the bar for solutions. we set the pace for progress. years ago, it was american chemical companies like dupont and honeywell that innovated safer chemicals to replace the ones that were destroying the ozone layer. and they sold those solutions to the rest of the world. and president obama just convened a group of those companies at the white house just last week to acknowledge the continued commitment, this time to slash the use of hfcs and to announce administrative actions that will support and accelerate this transition more broadly. when it comes to the american economy, cutting pollution does not dull our competitive edge. it sharpens it. thanks to our fuel efficiency standards, the auto industry is
8:18 pm
once again a source of economic strength. the number of cars coming off american assembly lines that are made by american workers is the highest it's been in 12 years. from catalytic converters to smoke stack scrubbers, america has a legacy of innovating the world's -- i'm sorry, of innovating and we have the world's leading environmental technology sector. we account for -- that sector accounts for more than 1.5 million jobs and $44 billion in exports, just in 2008 alone. and that number keeps climbing. that's more than any big business sector like plastics and rubber products. if you want to talk return on investment, in over four decades we've cut air pollution by 70%, while our gdp has tripled. the health and economic benefits
8:19 pm
of the 1990 clean air act amendments by themselves, the costs outweigh the benefits -- i'm sorry, the benefits outweigh the costs -- [ laughter ] that was a serious mistake. nobody can quote that. i never actually completed the sentence. the benefits outweigh the costs 30-1. phil, i want to just point out that i know you champion those amendments when you were in congress and i thank you.e thos amendments when you were in congress and i thank you.d those amendments when you were in congress and i thank you. and the public health thanks you. today we have more cars, more jobs, more businesses, and less pollution, and that is how we should all define progress and that is how you build a low-carbon economy. so it is sad to see that we continue to have a small but vocal groups of critics who are saying the word economy like it's a problem. when you talk about action on climate change. but they can't hide behind the
8:20 pm
world economy -- the word economy just to protect their own special interests, because the truth is that climate change is actually in everybody's best interests. action on climate change is in everybody's best interests. and it's worrisome when we hear those critics say, and i quote, i'm not a scientist, but climate action is going to ruin the economy. well, the president has said those critics have one thing right, they're not scientists. but they're not economists but guess what, we've got some pretty good ones at epa and at noaa and at nasa and across the federal government. and if we can trust them to put astronauts in space and to tell us when our air is safe for our kids to play outside, they can keep our food safe, then these world-renowned scientists, medical professionals, and economists, everyone needs to stand up and pay attention and take action now, because we are speaking the truth about climate
8:21 pm
change. so simply put, the economy isn't a reason to fear action. it's a reason to take action. a report from the new climate economy shows that not only is global climate action affordable, but it could actually speed up economic growth. another recent study shows that the u.s. -- in the u.s., the states that are still skeptical about this -- i don't want to name names, but let me -- arkansas, louisiana, oklahoma, and texas -- that they actually see an annual benefit of about $16 billion, with a "b," if they embrace the challenge that is now before them. if they really worked to develop a plan towards a low-carbon future. you know, a sure-fire way to damage our economy is to neglect our need for a healthy environment. a health i didn't environment where we can live, work, and play. that is what is at stake here in
8:22 pm
this climate debate. when we took action to heal the ozone layer, special interests also then predicted doomsday scenarios for manufacturing. they spun stories that the economy would shut down, that supermarket refrigerators would turn off and food would spoil. and guess what. we're here, our food is okay, getting better every day, i hope. but none of those dooms day scenarios actually came true.da scenarios actually came true. and if those scare tactics sound all too familiar it's because they're the same ones that get regurgitated over and over again and the same ones we're hearing on climate change. those same fingers point at other nations dragging their feet as some kind of excuse for the united states to standstill.
8:23 pm
but we don't hide behind the inaction of other nations as an excuse for mediocrity. and we're not about stagnation. the united states is about innovation. and we don't bend to the false warnings of those who lack faith in american ingenuity and to toss aside the values that have made this country great. can you imagine president kennedy looking up and the moon and saying, nah, let's just wait for somebody else to go first. you know, when we've faced challenges before, we've acted, time and time again. and it's made our nation stronger. because we've acted, our kids don't grow up with acid rain. or toxic leaded gas fumes. because we acted we eat safer food, cleaner water, and we breathe cleaner air. because we acted, nations came together. compelled by american leadership, to save our ozone layer and to protect the health
8:24 pm
of our people.leadership, to sa layer and to protect the health of our people.compelled by amer leadership, to save our ozone layer and to protect the health of our people.leadership, to sa layer and to protect the health of our people. kofi annan called that effort the single most successful international agreement of any kind. our climate challenge is not just a responsibility we should accept. it's an opportunity that we must seize. to retool and to resurge the new technologies, new industries, and new jobs that will come with climate action. let's remind ourselves what we're capable of. let's embrace this defining moment of american leadership. we owe it to our kids to lead on climate change, not just to leave them a cleaner, safer planet, but an opportunity-rich economy for generations to come. thank you.
8:25 pm
>> thanks, phil. >> well, administrator, thank you very much for a powerful and moving address there. i'm almost reluctant to ask you a question to bring us to any other direction. but let's talk about two things. one is this -- what's turning out to be a rather extraordinary week in new york and around the country and elsewhere, and you were up there, and i wonder if you just want to fill in a little more of your impressions. because my sense is it represents a part of, and we'll turn to the economics of what you're talking about, it's actually a significant shift that is occurring in the public dialogue here and around the world. >> i think that the dynamics are our climate seem to be changing. not just here in the u.s. but internationally. it was an incredibly positive experience. i think the march was a clear signal that people are getting
8:26 pm
restless. not about the -- about the actions we might take but they're getting restless that they need to see leadership here and response on an issue that they consider to be closed. we need action. but when i got -- you know, i will tell you the most fun thing was when i went to the summit. because i don't know how many of you have gone to these, but i've gone to many. i have never seen positive energy as i saw at that summit. i've never seen it. the leadership of president obama and the u.s. was clearly the hot topic. and i think it was in rooms, not just the one i was in. and people are seeing -- they're really getting a sense that because business really was the dominant factor at this summit, it was business leaders stepping up and saying, you know, you got to move here. we need change. this is costing us big money. and by the way, an economy that
8:27 pm
shifts towards low carbon is really big money too. it's better. you know, and they can do this. it was an incredibly positive moment, i think, and one where they were talking about tipping point in an entirely different context. originally we've been talking about how quickly do we need to act before the climate is out of control. and theirs was more, i think we're done talking, the tipping point is that we have solutions today. we need to put the solutions into action at this point. so it was really fun. it was very engaging. the president did great, which is also good. >> well, also, i wonder if you just want to say a quick word. may not be appreciated, i know it's not on capitol hill among the general public -- about the role that epa played internationally. not just on this issue but we have for many years, your agency and folks have engaged with other governments on trying to
8:28 pm
solve both intercountry problems but also their own problems. >> yeah, well, i think one thing that i've come to realize even more since i've been at epa is how well recognized epa is internationally. we are just seen as a world leader, bothperspective. and i think it's well earned. it's a reputation that's well earned. we spend considerable amounts of time working with other countries to try to build up their structure to address environmental protection at many levels. ask then we try to share technical assistance and information on new technologies and how to do things in ways that allow them that when they begin to embrace the environmental challenge, they can learn from our lessons and advance at a much quicker pace than we were able to do while we were developing these technologies and this understanding. i've been to china a few times and it's been mostly talking about air quality.
8:29 pm
epa was the one that successfully supported the embassy putting an air monitor in the beijing embassy. and lots of things happened there to show what the air quality really was. and it had a significant ripple effect. i've been down there to try to work with them to say, please, as you're thinking about air pollution challenges, think about climate change. because the answers may be different and actually more successful. and it will be a different way to go. when i go back to the office today, i'm meeting with a minister of hong kong, the secretary of hong kong. and i am meeting, who else am i meeting with? germany, the minister of germany, from germ 93. so this is, you know -- epa's always had a great presence on the world stage. and we continue to do that and we will continue. because pollution doesn't know any boundaries. and the more successful china is in addressing their pollution problem, the better it is for the united states of america.
8:30 pm
>> well, you just addressed us on the economic benefits and the potential cost, obviously, in a very powerful way. and that represents not just from you but we're seeing more and more of it, i think a significant shift in general thinking about this, where originally the assumption was the economic drag of anything we do about carbon is so great, we just either don't want to do it or want to defer or whatever. however, let me just push you into the recall a little bit in this regard. obviously, whatever the long-term outcome is -- there are some short-term problems that various regions and industries will face under any change in policy. and i would like to -- for you to say how you think the rule proposed as it's proposed helps navigate that. >> well, phil, first let me say that history just doesn't bear out the idea that you can't make advances in the environment without continuing to advance
8:31 pm
the economy. in fact, i would argue it's just the opposite. but we knew that that was going to be a concern. and part of the great thing about 111-d and the clean air act, and i promise not to get wonky. >> and she can, and she can. >> i promise not to try to get -- to try not to get wonky. that little section of the clean air act is a small section, and it's wide open. there's not been a lot of legal rulings that have defined it in any particularly narrow way. and when we were looking at climate change, we knew that every state is in an entirely different place in terms of how they get their energy. we wanted to make sure that we recognize that energy was structured from a regulatory and nonregulatory perspective differently. that it's delivered regionally and not state by state. we also wanted to recognize that we have great models of action
8:32 pm
from states already. you know, we have about 80% of the states that are really doing utility energy efficiency programs. we have, you know, more than three dozen states that have renewable portfolio standards. and we have many states that have highly invested in natural gas, many highly invested in wind, highly invested in solar. so the way that we decided to do this was was to look at all of the work states are doing, to try to sort of characterize those into sort of building blocks of opportunity. and we have identified looking at state conditions, what every state is doing, and where they are. and we've applied these building blocks in we think a very moderate way to establish individual state standards as a result. and then we're allowing every state to do what they want in terms of developing their own plans, that they can send to
8:33 pm
epa, to say that i can get here this way the best and we're not prescribing, we're just opening up opportunities. and frankly, it's a result, phil, of both knowing that every state is different, but also knowing that climate change has the uniqueness of really being able to be tackled in many, many different ways. but the challenge we wanted was to do what states have told us for a long time, which is, just tell us the goal and get away. and the interesting thing is now that we've done that, they kind of want more direction. but we'll walk through that. we have left it open. and i think that provides them an opportunity to design plans that aren't just smart environmentally, but are really smart economically. and really smart from an energy perspective. that's the challenge. start there how do you want your state to grow, then look at what it means for carbon. and if they're not looking at renewables and they're not looking at energy efficiency as part of that, then they're making a big mistake for their economy more broadly, a mistake
8:34 pm
that most of the states are not making. >> well, let me ask you, in that regard, under your leadership on this particular rule, i think everyone, your critics and others, agree that there has never been such an unprecedented effort by the agency to reach out before formulating the proposal and then now in the follow-up. so i don't know if you can quickly give us, out of all those millions of people that are coming at you, any sort of -- what you're hearing back that's sort of essential in your view at this point. >> well, it is unprecedented, and i think it's an acknowledgement that climate change is an unprecedented challenge for us. and we know that it has to be handled ini
8:35 pm
larger conversation so states and the utilities and stakeholders are getting their arms around the full opportunities here. we're here -- you know, we had tremendous conversations before the rule. those conversations haven't at all stopped. they are beginning to gel around some key things. around some key questions and challenges. i mean, you're going to see us put out a technical document soon that's going to look at how you translate the intensity goal that we have put in the rule into a mass-based approach, because as folks probably know, there are nine states that have a market-based system in new england and mid-atlantic states and they want to know what it means for them a little bit more definitively and they want to also solicit interests in other states doing similar things, because one of the things we tried to point out, phil, is that when you do take a market-based approach, when you do act regionally, the costs
8:36 pm
associated with actions go way down. and it almost matches much better the way that life works these days. because what you're seeing with states being aggressive on renewable portfolio sxards and they're meeting their standard by building a wind farm in another state. you know. so we had to understand those complexities and open it up. but there are those types of issues. and we fully intend, even though it is a comment period and we'll docket all these things, we're not slowing down in the conversations because we're learning a lot. they continue to be incredibly positive. incredible. especially when we have meetings where the energy and environmental folks are at the available. it's when they go back to their respective corners that we have a less robust conversation. and that's part of the value here is the learning that's going on, that comes with knowing that they're all responsible to think this through, that it's not just going to be the environmental folks that put together this
8:37 pm
plan. it's been an incredible learning experience and one in which i think you'll see many states, like montana last friday, saying, you know, we have options here. >> well, now, just in the privacy of this room -- >> oh, yes, i'm sure it is. >> among your critics and -- >> that will make my press people nervous. >> what galls you most about some of the allegations that are made? you don't necessarily have to answer that. >> thank you. >> yes, she does. >> you know, the only thing that concerns me about it is that the vast majority of the conversations we're having, really almost all of them, are incredibly positive. there are some states that are raising specific issues, either about the number or the framework that we've laid out that is suggesting that we may be looking for too much too soon and there are issues related to that. and i think people know me well enough, phil, that there's going to be changes between proposal
8:38 pm
and final. because we listen. and i really think that the reason to do the conversations is to listen. the thing that bothers me the most is that people who aren't in the process, when you hear about, you know, different letters coming in or petitions filed, they're just out of sync with the conversation. and i don't want the general public to think that that's how the conversation's going, because it's not. it doesn't reflect the rigor or the robustness and the collaborative nature of these conversations. >> well, i find just in the things that i hear around this town, in washington, and in conferences around the country, is the amazing number of people who you're regulating, they will have to make decisions and changes. and instead of adopting a resistance, angry, negative road, they talk about how we can work constructively with you. i've been around this town long enough to know, that's not the common approach.
8:39 pm
>> i have to believe that people are paying attention to the issue of climate change in every state. and in every home. i think people are worried. i was -- had five minutes of watching the news this morning and just given the rainstorm that we just had, it's amazing what you're seeing with the intensity of storms. and i think people are worried and frankly i think people really want leadership on these issues. and they want to know that we're not all in our separate corners duking it out. and so i think that many of the states see enormous value in approaching it with this broad a range of opportunities. and you know, i think my goal is to make sure that many of the states stand up and can, as early as possible, say, i can make this work for me. i can make it work for my reductions, meeting that target. but i can also make it work for
8:40 pm
my economy and i can make it work for my energy sector. that's what -- that's the goal. >> well, let's turn to a question that's come from our audience here. dallas bertrah, who's one of our main leaders doing the analysis and public discussion of these issues, is going to -- >> thank you. is this working? can you hear me? >> yes, i understand. >> lots of questions have come in, lots of areas, but several of them follow up on what you were saying just a moment ago, administrator mccarthy, about how the epa chose to set its goal and setting targets for states under the clean power plan. that is, can you address the effort to try to balance costs across states, to give credit or reward for early action, and what other considerations were driving the process? >> well, one of the challenges that we have, and we continue to have in the comment period, is to explain the difference between regulating under this
8:41 pm
section of the clean air act and what congress might do to adopt a cap and trade program, or a market-based solution. this is not that. this is 111-d which looks at what can we do to get some best practices out there, to reduce in this particular sector, which is just the fossil fuel have fired plants. how we got to the standards, we just looked at moderately applying those four -- what we call -- what do we call them? bench -- building blocks, thank you. some reason i kept thinking benchmarks. building blocks. and it's basically shifting to cleaner supplies and getting the waste out of the system, whether it's at the facility or more generally. and it's pretty simple. we looked at what other states have been age to do, what their progress is, how they've been able to take advantage of it, what kind of pace that it takes
8:42 pm
to do these things. and we took a moderate approach to each one so that they'd have flexibility to take whatever approach they wanted, relying more heavily on building block two than one than three. then we gave each date a goal and that's how we articulated the overall reduction we would achieve. now, there are many states that have wanted us to recognize actions that have happened earlier. and we're looking at that and we'll take those comments very seriously. but the one caution i would sort of lay down at this point is, it's not going to look like a cap and trade program. this is not about carbon offsets. this is not about achieving a particular national target. it never was. it is about applying the clean air act in a way that's going to be legally defensible but still be aggressive in terms of achieving the reductions. >> just to follow up on that in more detail, it is obvious you
8:43 pm
set different goals for different states. >> we did. >> as i understand it on your calculation of their potential, i'm sure some are challenging -- >> yes. >> -- that specific goal. but that is not the common way of most of the way we've regulated at federal level. is it? i may be in error on that. >> no, it is not the regular way. but this is a very unusual statute and a very unusual pollutant. and i'm trying to make sure that i regulate it in a way that makes the most sense and can allow the most cost effective approaches to come to the fore. and i think this is probably the only way that you would do this fairly and reasonably. but i do think it's still within the confines of how 111-d tells us we should operate. and as far as i know, we are getting a broad range of comments from states, some of which said you let those states off too easy, but you're asking too much of me. then you have -- and the
8:44 pm
finger-pointing goes in many directions. but i think it's all continuing to be a healthy debate. and you may see adjustments in state levels, you may see adjustments in the framework. because we are getting great comments. but i do think all in all we're going to be achieving the significant levels of reductions through this program in a way that really gives great deference to the confines of the clean air act. >> my impression, going back to our earlier question, is that, you know, what -- some critics have always feared is the dampening of the economy. yet what this -- my impression is your effort to set these goals was to recognize some people got a harder task in the near term to do and that -- and, in fact, this takes that into account. whether it works out that way or not -- >> that's what it's supposed to do. you just cannot think of this task as being about a specific facility. without thinking about the
8:45 pm
context in which that facility operates. they're heavily regulated. not just environmentally but from an energy perspective. and we have to thaink about tha if we're going to design it in a way that maintains reliability and affordability of our energy system. and that is one of our primary considerations. but once you open it up, it's just -- i think it's just going to be amazing. because i already know that states are thinking big thoughts about this. and at a point in time -- i'm not sure we could have done this five or ten -- five years ago, maybe. not so ten years ago. not just -- not because of public opinion, but because we did not have sort of the choices we have today. the efficiency programs are amazing and the ability of our technology to make those accessible and affordable for people is amazing.
8:46 pm
solar, solar is now competitive in some areas of this country. i don't think anyone -- maybe you guys projected it here. but i'm not sure anybody projected that. but that's the great thing and part of the message, the economic message, is that when you need to innovate solutions, the united states of america, we look for that. you know, to basically sit back and say, we are where we are, we don't know where we're going. you know. it's just not the case with us. and you know as well as i do that when we were talking about catalytic converters on cars originally, you couldn't possibly do that. we tried to expand them to suvs and vans. oh, you couldn't do that. and none of that was the case. and man, the industry we have now is just great. but to transfer that energy and enthusiasm away -- sort of away from a focus on pollution control to a focus on susta sustainable energy and renewables and energy efficiency, i just think it
8:47 pm
couldn't have been a better platform for success. >> we have a number of questions coming from all sides about natural gas. >> yes. >> there's questions about the role of natural gas and compliance under the clean power plan and whether states -- how the epa will feel about states trying to take natural gas into account in demonstrating compliance. there's a lot of concern about expanded development of natural gas and concern about fracking. and recently the epa's initiatives regarding the control of methane and methane leakage. could you address that area generally? >> does it need to be one sentence? let me start off by saying that natural gas in the u.s. has been a game changer. the abundance of low-cost natural gas has really started an energy transition that we are really taking advantage of and hoping to follow through our 111-d process. so it's been a significant
8:48 pm
benefit to the united states. it's been a significant benefit to air quality. because it's allowed us some room to address pollution -- pollutants like mercury in a way that maintains reliability because it's accessible and it's affordable. we recognize, and i think the president does that methane remains an issue of concern with the natural gas sector. both oil and natural gas. we've taken some regulatory steps on that, in that arena, to take a look at how you regulate vocs from new and repeated fracking operations. but we know there's more to be done and part of the challenge the president laid on us was to basically put out some white papers, get some better data in, look at the whole oil and gas m methane leak opportunities as well as releases and see what
8:49 pm
the numbers show the leaks are coming from and look for strategies for getting at it using all kynes of tools. so we recognize that's a challenge. we also recognize honestly that water remains a significant concern in many areas. states are really stepping up in terms of regulating that. but i think it's made a big difference. and i recognize there's lots of concern about whether or not there's going to be too much reliance on natural gas, is that going to squeeze out the ability for renewables to move forward? again, i'd only remind you the president's plan and epa's actions is very multi-faceted. it's not focused on any one energy supply. as you're looking at the numbers, i think you can see from numbers i've already stated that states are pretty bullish on renewables at this point and they're bullish on efficiencies and they're looking at all kinds of energy supplies. and while it's a great transition and i expect 111-d will help accelerate that, i'm not in the business of picking winners and losers. i'm in the business of reducing carbon pollution.
8:50 pm
and that's where i'm going. >> well, to follow up on that, there are -- and the focus on international issues that has emerged just in the last week, contributes to the international climate change negotiations. coming in paris. >> well, i think judging from the tone of the discussion at the u.n., it's seen as a very big deal not only for us in terms of having an aggressive goal but also the opportunity for our goal to influence how other countries are going to come to the table. i think it's an important step forward and it's recognized as such. >> as you recognize on this international question -- and i do think there's great value in this in terms of moving the international community, but one of the things in our domestic politics that we fail to look at is a number of other nations have been out front fighting on
8:51 pm
this issue to get action, a number of them including china and others are taking aggressive actions on the technology front, things that should over time pay off. none of this in most people's judgment adds up to what is necessary, but my point is the notion that we're acting alone is in and of itself just factually wrong. now, how hard and how much we go at it is a whole other issue. excuse me for lecturing. >> no, that was great. phil, just to add on to that, i think the confusing thing is the climate discussion thus far has been about what will governments commit to do. the changing dynamic that i'm seeing is the business community, the private sector. it's really not what we're going to get with 111-d, it's what is our market going to drive as a result of signals like this? and there's a variety of them. and i don't think it captures the flavor of when you turn a corner from requiring something
8:52 pm
from a public health perspective to recognizing that it is actually going to transform the market and allow you to protect your business interests and grow them. that's the -- that's a game changer. and i just -- it's palpable when you were walking around the summit at the u.n. the meetings i went to were driven by large companies and small making commitments. they were standing up. it wasn't governments adding up what their poll sis might project, they get, blah, blah, blah. it was like standing up, i'm done. let's just call it a day and go. >> well, i think what that represents is your articulating a very significant change in the view that private sector energy, one, is absolutely essential to that, but it is happening. and the other is a paradigm shift that many of our scholars talk about and you have and others that we're not going to get from the national government a top-down imposed policy. we're not going to get ain the
8:53 pm
international community a top-down imposed timetables. we're going to get this role and that's what it assumes we'll do. and one thing i humorously alluding to, states wanting choices but then saying ooh, don't give me so many choices kind of thing. the notion of multistate plans. that's the most unusual opportunity to hear about this and probably the most limited experience in many states with how to work with their fellow states. most of us believe that's a cheaper way to go. however, let's suppose i'm in a state where i just don't think i can make that work plit click or i don't have time for that. the multistate option is always talked about. >> you do have simpler options but they tend to be more expensive. one of the reason to have this
8:54 pm
challenge is to try to avoid the last-minute political drama around this. and let's get real people sitting at a table. and i think it's going to make a difference. but it's only going to make a difference if people keep encouraging their states to think about this in the most positive way they can. you don't really need to agree with climate change to agree that there is a path forward to achieve these reductions. and people do have to keep in mind that, again, this is the clean air act. we have a good history of getting the reductions that we are putting out as requirements under regulations, and this is not going to be an exception. and so to maintain that flexi e flexibility to use it as you can and boost and move forward in the direction your state want, now is the time to be having those discussions. >> also it might be worth reminding people, the endurance of the clean air act is very significant in american public
8:55 pm
policy. there are some critics on the sideline that are hoping they can outlive you in office, that are hoping they been outlive this administration and somehow all this will disappear. i don't know if you want to comment. >> i'm not planning on going anywhere. you know, i do think the clean air act has been remarkable. i think it's acknowledged internationally. that's what gives comfort. but one of the things that's also good about it from a business perspective is that it does provide a certain path forward. the business industry and markets are always looking for long-term signals. we just gave a very big long-term signal that i believe and what i'm hearing is really opening the door to investments in the united states. and that is a very good thing. people should keep in mind and
8:56 pm
be comforted that it's heard three times by the supreme court. there's nowhere else to go. they said, yep, move forward. that's what we're doing. so i think it's as strong as signal as we possibly can that the u.s. is open to looking at how to devise a low carbon economy and get it moving and running in a way that's going to entice investments. and i think that's good for everybody. >> well, madam administrator, let me tell you, we deeply appreciate your taking time with us today and the work you're doing. and if i get it right, i'd like to borrow an expression from your boston backyard that you did wicked good. >> thank you, sir. thanks, everyone. >> that's all right. we need to get it back. but also, i think the media are
8:58 pm
some of the issues they've raised -- >> sure. i think as you probably know we took pretty broad comment on this rule and we should have because it's a big rule and it deserves it. i mentioned the one about making sure that people understand how to translate the intensity into a mass-based goal. we also put in the proposal an alternative on how to address renewable energy sources and how to account for those. there's been a lot of feedback in a positive way on that. there's been a lot of discussion about how we handled nuclear energy. there's been some questions about whether we're clear enough about the range of compliance options that would be available to states, for example, where we count new natural gas plants and those kinds of things, which we can clarify but a final rule should. so there are a variety of things that have been raised. and the reason why i'm excited about it is that they're gelling
8:59 pm
around some really concrete things that the agency really needs to thing about. they're exactly what you hope for in a rule-making process. so i'm pretty excited about it. >> how confident are you that the new comment period deadline won't extend the finalization that you're expecting in june? and how important it is to get this finished before this administration is out of office? is there a concern that a republican might drag its feet or not implement the rule? >> well, i actually made the decision to extend the comment period because we had more to talk about, and the kind of setting that we're allowed to do in a comment period. and i'm excited by it. we're still working to the june deadline, but i don't want anyone to think that we're arbitrarily cutting off discussion for any purpose other than to make sure be get this rule right and we focus on implementing it as quickly as possible. and that's what we're going to do. >> you mentioned that a number of stakeholders were concerned about the way early action would
9:00 pm
be treated. >> it is. >> is that a particular area where you might revisit the way the rules -- >> yeah, we're going to look at whether or not there are other things that we didn't consider and think about, but one of the reasons that i brought up the idea of a market-based approach is that this isn't about developing a market-based approach where you look at a particular year and then, you know, and it's really all about where states are today, where these facilities are, what's available to them and how far they can move forward. but we've received a lot of suggestions that really fall within the category of a fairness, are we being asked too much, is somebody else not being asked enough. and we'll take a look at those comments, and we think there are adjustments that can be made, but we'll look through them. >> -- good rule internationally well, so i'm wondering the rest of the administration's climate plan, how did s
52 Views
IN COLLECTIONS
CSPAN3 Television Archive Television Archive News Search ServiceUploaded by TV Archive on