unfortunately i think the president was talking politics. he made those comments much to our dismay that we believe the president did and does have the ga the president on a number of those occasions was specifically talking about immigration reform. he has been so focused on getting immigration reform done with congress that he continually told the immigrant rights community that he could not do -- he could not stop -- >> let me ask the gentleman what his opinion is on this subject. >> i think the president was correct when he said he could not make or change the law. i think he was speaking correctly. when he made the statement he has changed the law, he thought he changed the law. he doesn't think it was simply a policy decision, he stated he changed the law. as i said in my testimony, congressman, i don't believe there's anybody on this committee that believes the president has the authority to change the law. he knew he did not when he made the statement 22 times. then he changed the law.

he doesn't get to do that. >> okay. now his own dhs secretary, jay johns johns johnson stated it to enforce a duly enacted constitutional law that's beyond simple prosecutorial discretion. i think that the a least three of our witnesses believe the president has crossed that line. could you be more specific and let me start with mr. dupree. >> thank you. i think secretary johnson is correct when he says there is a line. i think in this case the president not only crossed the line but that line is far, far, far in the distance. >> that's kind of like the line he drew on syria. right? >> i think that is an apt analogy. >> thank you. >> i don't know that the constitution requires a certain number of people beyond which he

could not grant deferred action to. i don't think the constitution speaks to that degree -- >> my time is limited. >> i'm just going to quote very quickly from the opinion quoted by members of this committee and some of the witnesses and that is the cheney opinion. this is the part that's conveniently ignored. president lengths action violates constitution if at the expressly adopts a general policy which is in effect an ann of duty. >> heckler v. cheney. said the agency's decision not to prosecute or enforce, whether civil or criminal, is generally committed to an agency's absolute discretion. the olc does not quote the next sentence which says basically the reason for this is because of lack of standing. the law's standing has changed dramatically. massachusetts epa is an example. so maybe now we'll get a test to

this. but the president -- it is mind boggling that the president's supporters say that we shouldn't -- when he told us earlier that he didn't have the power -- he was just lying. that's politics. the campaign. my jaw is dropped. >> okay. good. now the final question i have -- and somebody can step up and be first. doesn't a wholesale application of prosecutorial discretion to thousands or millions or maybe several millions of people amount to a repeal of a duly enacted law and does the president have the power to do that through prosecutorial discretion. >> the president -- mr. congressman, the president could certainly pardon people. prosecutors exercise discretion on a case by case basis every time. we do see a situation where someone has alleged violations

of s.e.c. laws. there is a prosecutorial decision not to move forward on that case. that's called prosecutorial discretion. you don't see a decision being made we're not going to enforce s.e.c. laws in the united states. that would be rewriting laws which the president or executive can't do. >> i would agree with that and i would add that our constitution does confer discretion on the executive to exercise discretion in individual cases. when you do what the president has done here you cross the line from per missive action under the executive rights under article two and trenches on this congress' authority under article 1 to say what the law is. it is a legislative act. >> thank you, my time is up. >> chair recognizes the gentleman from michigan, mr. conyers, for his question. >> thank you. attorney encampia, you've talked about prosecutorial discretion and whether it can really encompass a program that allows people to come forward and

affirmatively apply for protection. do you consider this a form of prosecutorial discretion, ma'am? >> yes, congressman. basically prosecutorial discretion and the immigration context, there are over 20 different types of discretion. here what the administration has done is simply identify what the levels of priorities are and have determined that parents of u.s. citizen children and lawful permanent residents should not be deported and they will be given an opportunity to come forward. there's individual adjudication. this is not mass, blanket giving people work authorization simply because they are a parent of u.s. citizen. individuals have to many cop forward, they have to pass a criminal background check and show they meet all the eligibility criteria. only after an individual adjudicator determines that that person merits deferred action will they be able to, under existing regulations -- nothing new -- existing regulations apply for an employment authorization document.

>> of course. now let me talk about deferred action which has existed for decades. dating back more than 40 years. ins exercised prosecutorial discretion to grant non-priority status. based upon humanitarian consideration. but in this case, the administration says that it will also offer work authorization to people who receive deferred action. not amnesty or anything else. can you recall any legal authority for that, and is that a break in tradition? >> so, absolutely not. again, the president has not created any new laws. the deferred action as you mentioned yourself has existed, deferred action has existed for decades on the books and in fact the regulations, immigration

regulations section 274 8.12 specifically say -- lists out who is el zbibl figible for wor authorization. in subsection 314 explicitly says that -- i will just quote -- an ale enter who has been granted deferred action, enact an administrative to the government if the alien establishes an economic necessity for employment is eligible for a work authorization. this is existing regulations on the books for many years prior to the obama administration. there's nothing new in what the president has done. >> now, turning to chief counsel, can you tell me what new statute presidents george h.w. bush and clinton were implementing when they granted deferred enforced departure and

employment authorization to hundreds of thousands of salvadorens, haitians, liberians, after congress not to extend their temporary protected status. >> mr. conyers, the supreme court has recognized when it comes to matters of foreign concern, national security, there are issues where they have allowed deferred action. however, i want to say what i said at the hearing in my testimony. i don't believe -- i still believe actually -- that the actions of president bush and president reagan, as president obama's, are constitutional us a expect and i don't think the fact that tough's got a 30 or 40-year history of action that's unconstitutional doesn't get better with time. so i don't find -- i think it is important to point out -- >> well, okay. >> -- this is different than even enforcement free zone creation. different than even those cases. >> i get your drift.

let me ask you about whether -- this goes to you, from dupree, as well. can you tell me what new statute george h.w. bush was implementing when he granted deferred enforcement departure and employment authorization to approximately 80,000 chinese nationals at the tiananmen square massacre. >> mr. conyers, the first president bush i think was doing two things in his grants of immigration relief.

one, he was following on certain actions taken by his predecessor, president reagan, in interpreting the immigration and reform control act of 1986. i think that both presidents reagan and president bush were faithfully implementing the will of congress in issuing regulations pursuant to icra. with regard to particular grants, either of chinese nationals, tiananmen square, that is well recognized authority that when you have a foreign crisis, often one that generates large number of refugees, that the president, large part owing to his duties under the constitution to engage in foreign affairs and oversee the nation's foreign relations, often will grant protected status to persons from affected nations. >> well, the answer in both these instances were none. but i appreciate your interpret

ta ation. >> some defenders of the president's unilateral actions have asserted that his actions were merely an exercise of prosecutorial discretion. are these assertions correct or is there indeed a fundamental difference between prosecutorial discretion and many of the presidents unilateral actions? >> the short answer, if i can be short, is prosecutorial discretion, the cases refer to criminal prosecutions. the refusal to not prosecute somebody who enters the united states fraudulently in violation of its criminal laws. the office of legal counsel has said, 1990 opinion, says the president's powers do not permit the president to determine as a matter of policy discretion which statutes to enforce. obviously the president can dmot

refuse to enforce a statute he opposes for mere policy reasons. now you'd think the present olc opinion would distinguish that. they don't even cite it. there is a whole series of other ones where they don't cite it. we know the supreme court said in another case that congress is the authority in immigration matters. not the president. the president implements the law. you'd think that the olc opinion would try to distinguish that. they ignore it. >> thank you, mr. rotunda. let me bring president h.w. bush into the room here. he proposed capital gains should be lowered. congress did not enact his proposal. under president obama's exertion of executive power could president bush simply have ignored or instructed the irs not to enforce the tax code on capital gains greater than 10%. >> if president bush would have done that he would have been

exercising an unconstitutional policy that he would be implementing. it would not be legal and it would be unlawful. it is a great analogy to what's happened here. i keep going back to this but the truth of the matter is the president -- you can play the 22 times the president said "i'm not a king and i have to work with congress." but the president of the united states -- i want to read this -- >> if you will. >> very quickly. the president said, "i just took an action to change the law." and i keep saying, no one on this committee can possibly believe that the president has that authority. he just doesn't. you couldn't do it for taxes. you can't do it for immigration. >> thank you, sir. mr. dupree, madam, let me put this question jointly to you all. i am advised there may be approximately 5 million who awaited in line, complied with the law, who may fall victims of double standards. is my concern justified?

>> i think it is. fear -- i feel badly for people who have been waiting in line, waiting their turn, and now, unfortunately, may be penalized and that they're moved farther back in the line precisely because they had the bad judgment to respect our laws and play by the rules. >> is 5 million an accurate count? >> that sounds right to me. i don't profess to have personal knowledge of that but that sounds right. >> madam, do you want to be hear on that question. >> sure. i completely agree that there is a need for -- to address the backlog, visa backlog. and frankly, this is where congress needs to act and pass immigration reform so that families can be reunited. however, we do have 11 million people in this country and what the president has done has said individuals who are parents of u.s. citizens, lawful residents, are low-level priority. however, he will continue enforcing the law based on the appropriations you have provided.

there is no abdication of his authority. only 4 million, 5 million people are estimated to benefit from this deferred action program and other changes. there are another 6 million-plus individuals who will be subject to deportation and detention you understand the appropriations that the president -- that the congress has allocated. >> thank you. you want to reclaim your time? >> yes, sir. in response to my colleague, here's the problem. under the president's plan, what lawyer would recommend to their client who was an unlawful immigrant in the united states that even fit under this plan, what lawyer would recommend that their client register for this knowing that to be constitutional, olc said you have to have absolute discretion and that the president on his own can cut this program off in a moment's notice. so now you've disclosed yourself publicly. you may have come out of the shadows but the light at that point will be so bright, you can

end up in a situation worse than you were to begin with. >> thank you. the red light is about to illuminate. thank you all. >> would the gentleman yield? would the gentleman from north carolina yield to the chair? >> i'll be pleased to. >> i thank the gentleman, and without objection, just one important point here in 30 seconds. gentlewoman stated that the other 6 million be subject to deportation. but the president, at the same time he signed the executive order that made it clear that those 5 million would be entitled to a legal administrative legal status only changed other rules that made it clear that the vast majority of the remaining 6 million who are already here will not be subject to action to deport them because -- >> would the gentleman yield? >> are the gentlewoman -- i will recognize the gentleman for pan additional 30 seconds so he can yield the gentleman from california. >> i have the time and i will yield. >> i would just note that it is indeed correct that the other 6 million have fallen into the new

categories. however, we have 11 million undocumented individuals. congress only appropriates sufficient funds to remove 400,000 a year. surely the chairman is not suggesting that there should be no policy on who should come first of the 400,000 of the 11 million. and i yield back. >> well, we reclaim the time. i don't want to pick those who have complied with the law. that's the direction from which i was coming. i reclaim and yield back. >> the chair recognizes the gentleman from new york for five minutes. >> thank you, mr. chairman. i'm glad that this is not a hearing on the policy because if it were a hearing on policy, i would point out that in the last congress, this committee reported -- voted for four immigration bills. none of which had report language or went to the floor. so that's how active this

committee has been -- or the house has been in trying to deal with the policy. a problem that everybody agrees with. let me ask a very few very specific legal problems with the president's power. first of all, professor rotunda, you quoted heckler versus cheney. in heckler versus cheney the supreme court sclaexplained an agency's decision not to enforce is a decision generally committed to an agency's absolute discretion." in your written remarks you distinguish cheney by saying it really focuses on standing and by saying the law on standing has evolved significantly since that decision. but do you know how many times the court in cheneying mentioned "standing" in its opinion? zero. the decision actually had nothing to do withstanding. the case involved a lawsuit against the fda brought by presidenters in who were due to be executed by lethal injection. they sued to force the fda to ban the use of these particular drugs for executions after the fda denied their petition for enforcement. it's hard to imagine that even

the most conservative judge would find standing lacking in that situation. so given the fact -- so i don't see how you find standing there and the case does stand for the proposition that the agency's decision to prosecute or enforce is at its discretion. >> please look at 470 u.s. page 831. the text at note 4, as well as note 4. in note 4 the court says, "we don't have the situation where it can justifiably be found the agency has expressly adopted a general policy that's so extreme as to mount an abdication of its statutory responsibilities. it adds a d.c. case in 1973 which found standing and ordered the agency to act. now i would have thought the olc, since it relied on this case, i think, 20 times, would vp poihave pointed out why some

that footnote was irrelevant to them. secondly, are you absolutely right. it does not use the word standing but it says in the paragraph before the text at footnote 4, is that generally the agency exercises coercive power over an individual. that's how the courts get standing. >> but generally the agency may exercise coercive power over an individual at its discretion. doesn't have to exercise -- >> i'm sorry, the court says in text at footnote 4 that we emphasize the decision is only presumptively unreviewable, the resumption may be rebutted with guidelines for the agency to follow in exercising its enforcement power. >> okay. so the court is saying that the agency has discretion in its enforcement power and the statute gives it guidelines in how to exercise that discretion. >> it says that it's

presumptively unreviewable but when it is exercising power in a way that has standing it can be reviewed. that's basically what adams v. richardson said. if i can finish the sentence. if you fast forward to massachusetts versus epa where the state of massachusetts forced the epa to institute regulations on -- with carbon dioxide pollution in global warming. and the supreme court said -- >> excuse me. you're wrong on that, too. the holding of the court says very clearly we hold only that epa must ground its reasons for action or inaction in the statute." that's if the epa wishes to deny a petition for rule making, not arbitrary, or not in accordance with law. but it is in its decision. that's just saying it can't be arbitrary and capricious. >> it would always be unreviewable. >> all right. >> the court reviewed the epa in massachusetts -- >> the court said that the epa

had that discretion. let me ask you a different question though. the statute very clearly says that certain individuals shall, upon the order of the attorney general, be removed. that would seem -- the key words "upon the order of the attorney general" -- would seem to indicate an executive branch official has discretion to decide whether those undocumented immigrants be deported or not. >> you are dealing with a complex statute and you're taking out a phrase. >> excuse me. you're dealing with a lot of complicated court decisions and taking out phrases. >> i found pretty much withholding. what i quote from the olc from their prior cases where the olc says the president doesn't have discretion to refuse and enforce law he disagrees with as a matter of policy, maybe there is a way to distinguish that but a good legal opinion would have done that. mentioned these cases. >> let me read you from the case of arizona versus u.s. which is probably the most recent, probably the most relevant case. in pare air the supreme court

said that -- supreme court relied upon the broad discretion exercised by federal immigration officials. "congress has specified which aliens may be removed from the united states and the procedures for doing so." aliens may be removed if they were convicted of certain crimes or meet other criteria set by federal law. rules a civil not a criminal matter. a principle feature of the removal system is the broad discretion exercised by immigration officials. federal officials as an initial matter must decide whether it makes sense to pursue removal at all." qed, end of discussion. >> i wonder why the president for six years thought -- >> i'm not interested -- excuse me. i asked you about the supreme court ruling. the president made the mistake and he may not have studied the issue. that's not the point. the point is the supreme court has told us that frerl federal officials as an initial matter must decide whether it makes

sense to pursue removal at all. the a principle feature of the removal system is the broad des discretion exercised by immigration officials. that would seem to justify any discretionary feature that isn't -- any discretionary program that isn't arbitrary and capricio capricious. >> time has expired. the gentleman may briefly answer the question. >> i would have thought the olc would at some point remember than sit on its haunches and vegetate tell the president for last six years you've been gone. >> but you didn't answer what the supreme court did here. >> wish i could. >> the gentleman, mr. rotunda, will be given an additional few seconds to respond again to that. >> page 531 of volume 347, court said in the enforcement of these immigration policies, quoting now, the executive branch of the government must respect the procedural safeguards of due process but the formulation of

these policies is entrusted exclusively to congress. that has become about as friendly embedded in legislative issues of our body politics as any aspect of our government. maybe you can distinguish that, too -- >> let me buttress your argument here. in pare air ver-- arizona versu the immigration law addresses immediate human concerns. undocumented workers trying to support their families pose less dangers than alien smugglers or aliens who commit a serious crime. but it goes on to say that an equities of an individual case may turn on many factors, including whether the alien has children born in the united states, long ties to community, et cetera, et cetera. so the issue here really is what is the meaning of prosecutorial discretion. has the president abused that discretion when he applies it? >> mr. chairman -- >> -- in a blanket way to 5 million people -- >> mr. chairman. >> to make a 30-second comment

to what you just said. i am not going to yield to you. i am going to ask my questions of the gentleman. >> is the president has dispensed the law. suspended the law until he says otherwise. that's -- that is not what you normally think of as prosecutorial discretion. which typically involves suspensions of the criminal law, not the immigration laws. at least in civil aspects of immigration. >> president obama cites an opinion of the justice department's office of legal counsel to justify his executive legalization of millions of unlawful aliens. isn't it true that the office of legal counsel doesn't have a particularly great track record when it comes to questions of executive power? for example, in 2012 the obama administration touted an olc opinion justifying a president's controversial recess appointments. did the supreme court subsequently rule those appointments were unconstitutional? >> he lost 9-0. >> the justice department's office of legal counsel states that the salient feature of

class-based deferred action programs, the establishment of an affirmative application process, with threshold eligibility criteria does not in and of itself cross the line between executing the law and rewriting it. this is because each program has also left room for case by case determinations giving immigration officials discretion to deny applications even if the applicant fulfills all of the program criteria. this feature of the proposed program ensures that it does not create a categorical entitlement to deferred action that could raise concerns that dhs has either impermissible attempted to rewrite or categorically declining to enforce the law with respect to a particular group of undocumented aliens. however, in president obama's deferred action for childhood arrivals, daca program, the executive legalization for immigrants who came to the u.s. as minors, the promise of discretion for u jude kaadjudic

mere pretense. if an alien applies and meets the criteria, they'll receive deferred action. in reality officials do not have the authority. by the office of legal counsel's own admission quarterback the president's daca program is suspect. >> mr. chairman, parliamentary are inkwirry. a >> i'm using my own time. >> zblad you announced that. >> the rules of the game will be the same for president obama's latest executive legalization. isn't it true that the olc would also clearly find the president's latest gambit constitutionally suspect? >> here's the situation. when you read the olc memorandum and justification for the case by case individual analysis, it goes on to state -- i wish some of the people that were protesting would state for the rest of this and see if they really like this deal so well -- the deal the president put

forward. because, as we previously noted, deferred action confers no lawful immigration status, provides no path to lawful permanent residency or citizenship and is revocable at any time in the agency's discretion. that's markedly different than what the president told the 4 million people to come out of the shadows from what he actually told them to what olc said he could do. if you look at the olc memo on the individual case by case, context and reality, no way if can be handled on a case by case basis. it is either a blanket exemption across the board, or it is not. >> i agree with that. i think the language referring to the purported case by case analysis is simply window dressing intended to confer le zbit ma

legitimacy to this conversation. >> we could pass some kind of comprehensive immigration reform and put an end to this debate. apparently many on both sides of this -- on the aisle agree with the policy. so instead of arguing process, let's get on with comprehensive immigration reform. meanwhile, it's been acknowledged 11 million people are potentially subject now to deportation. congress has spoken and is r has not appropriated anywhere close to enough money to deport everyone. as my colleague from california has said.enough money to deport. as my colleague from california has said. we have to establish some policy as to priority. what's wrong with the policies articulated by the president. >> there's nothing wrong with the policies announced by the president. in fact they are based on congress' will over the years to say that we should respect family unity and that the fact that the administration has decided to focus on the parents of u.s. citizens and lawful permanent residents is good

policy and the administration gets to decide. they have that executive discretion to decide who is a low-level priority so that they then can use and follow the law and appropriations provided by congress to focus on serious criminals, to individuals who pose national security threats, et cetera. >> thank you. professor, if the administration said in states where the states have eliminated prohibitions against marijuana, they're not going to prosecute any low-level marijuana cases, would that be constitutional is it. >> i think the supremacy clause, if there is a federal law on marijuana use, the state can't override it. >> that's right. absolutely right. can -- if the president says notwithstanding that reality, they're not going to prosecute cases, would that be constitutional? >> hon a case by case basis utilizing prosecutorial discretion, he could do that. he could not say we are no longer going to enforce the drug

laws in the united states or even particularly the marijuana laws in the united states. that individual case by case determination is critical but it is in this memo because it was the only way to justify the president's actions. >> so it would not be constitutional to not prosecute in those states? >> if the president were to determine as a matter of executive action that he was not going to enforce the laws against utilization of marijuana as a criminal act, i believe that would not be within his authority. saying on an individual basis he wants to exercise discretion, you can do that on an individual basis. >> and if you disagree with that, then that's pretty much where we are on this debate. >> pretty much. >> okay. >> now the family fairness program, i understand that president bush covered about 42% of the undocumented population. the obama administration -- this executive order covers about %

35%. can you explain how president ray zban, buseagan reagan, bush, clinton and bush, can you remind us how they can do something but all of a sudden president obama can't do essentially the same thing? >> as i said in the written testimony, congressman scott, and as i said in my opening statement, i don't believe that president bush, president clinton, president bush, president obama have the constitutional authority to do what they did. the fact that it's been done for four administrations and over 25 or 30 years, as i said, constitutional violations don't get better with time. i mean some have argued that there's statutory determination -- distinctions that are at play here. i don't take that position. i take the position that if you look at it just constitutionally, was there a constitutional basis upon which those actions were taken. frankly, i don't see it. i'm sympathetic to what they were doing. i just don't see it to be done that way.

the percentages should make no -- constitutional is not determined by the percentage of violation. if there is a violation of 1%, it is as bad as a violation of 99%. >> is there any constitutional legal distinction from a general deferment and a country-specific action? >> yeah. the supreme court has recognized the president's inherent ability to deal with matters of foreign affairs and matters of the country. >> if there is a violation, who has standing to complain? >> the great question. the standing question. you know, i think some of the states are going to try to have standing in this particular case. standing is always a difficult thing in these kind of challenges. >> if the president had just done it without talking about it, what would be the result there? >> he would have been found out. you can't do it to 4 million people. i'll be, again, brutally honest here as someone that's in favor

of comprehensive immigration reform. as lawyer i would not recommend my client take a deal where their status is revocable at any time at the agency's discretion. so maybe he would have done it. i question how many people are going to actually take part in this. >> thank you, mr. chairman. >> thank the gentleman. chair recognize the gentleman from alabama, mr. bachus for five machines. >> thank you. i think maybe listening to everyone on the panel, i think -- and most of the members on the dias, we all agree that our countries, its citizens and even our immigrants need comprehensive immigration reform. and mr. dupree said you've been frustrated for years over our inaction. so let's agree on that, just for purposes of argument. does that make what the president did constitutional if it is unconstitutional? >> well, in my view, congressman, no, it would not. i think to congressman scott's point, i think it actually has

hurt the debate because, as you see and hear here, there is a lot of agreement for the need for a constitutional path, a legal path, of immigration reform. look, when i hold my grandfather's naturalization papers up, it means a lot to me. when they call my name at the supreme court saying mr. seculo, we'll now hear from you, and i'm the grandson of that russian immigrant, i get it. but the process has to be right. unfortunately, the president's action, which i still think is not only constitutionally suspect but dangerous for the potential client, i don't think that advanced the debate because we're talking about this instead of getting real comprehensive immigration reform through. which would include border security. >> yeah. i know mr. sensenbrenner said we're here to figure out why he did what he did. i don't think that's helpful at all. i mean we would probably come up with 100 different variations on why he did it. i don't think that's material. i think it's whether it is constitutional or

unconstitutional. and i think we go back to this little book here, how our laws are made. fifth grade. i want to introduce this. >> without objection, it will be made a part of the record. >> and then we back that up with not only section 1 of article 1, but section 8 which actually says, to establish uniform rules of naturalization. and then get it to the president. clearly and simply gave it to the congress. now some of us may disagree with that. but it is the constitution. >> just a brief comment. justice jackson said president's power is at its lowest when he is acting contrary to the express or implied will of congress. the president has basically admitted the implied will of congress is not the express is

not to act in this area. at least not yet. so his power shouldn't be at the lowest. justice jackson -- justice frankfurter rather in that opinion also said that we are not dealing with a situation where there is a temporary emergency and the president's acting until he can persuade congress to act that ends on its own. neither one of those statements was discussed in the olc opinion. >> let me say this. the question has been asked -- and i think it's answered in the question -- can the president create, amend, suspend or ignore an act of congress. i think the answer is right there in "act of congress." and answer is, no. >> one of the many grievances articulated a against british rule in the declaration of independence was the king's propensity to suspend or disregard the lawful enactments of parliament. it really goes back to the very

foundations of our country. in fact, i think it was mr. scott who referred to let's discuss policy rather than process. but the point is, process matters. it mattered to our founders and it should matter to -- >> let me tell you why it ought to matter to those that are in our country without legal status. many of them came here when there was no rule of law in their country. and they came here because we have rule of law. and to come -- or even for us to allow them to come and start with a violation of rule of law actually degrades not only our citizens, but those who are here who we owe the protection of our laws, whether you agree or disagree with this, are photographer one's benefit.

and they are. liberty, liberty, liberty. that's what they talked about when they wrote these things. and this is a loves liberty. it just doesn't matter why the president did this or his motivation or whether we think it's reasonable. it violates a rule of law. does anyone disagree with that? >> i respectfully disagree, congressman bachus. and the reason again is i think we are going back and forth between is the president following the constitution and -- >> well, let me ask you this. >> the gentleman's time has expired. he can state his question very quickly. you can respond very quickly. >> does the president have the right to create an act of congress, to amend an act of congress, or to suspend an act of congress or to ignore an act of congress. and you know, this is 50 pages. >> that's the question. >> absolutely not and that is not what the president is doing here. the president is continuing to follow the act of congress by

enforcing and using the appropriations for 400,000 deportations a year. secondly, exercise -- >> he has the power to legalize what is illegal. >> no. he is not providing any legal status to individuals. this is simply a temporary reprieve from deportation. no legal status is being conferred. >> is the committee is advised that we have three votes on the floor and we will stand in recess and we will reconvene immediately after those votes. my understanding that mr. rotunda has some concerns with a flight that he doesn't want to miss and the committee will certainly work with limb to accommodate that. if you can stay, as long as possible, great. but if you need to leave during this vote period which is going to last at least a half-an-hour, we understand. we will stand in recess.

>> the remainder of that hearing is available on our website. check the video library of c-span.org. this morning on c-span3, we'll go live to capitol hill looking into sports broadcast blackouts. we'll get testimony from the fcc's media bureau chief, an attorney from the nfl and the leaders of the groups' sports fan coalition and national consumers league. that's set to start at 10:15 eastern here on c-span3. we also plan to hear from outgoing defense secretary chuck hagel. he's giving an update on his department's efforts at preventing and responding to sexual assault. that will be live starting at 1:30 eastern. we also plan to bring you remarks today from labor secretary tom perez on america's wages and strengthening the economy at 2:00 p.m. right here on c-span3. ann compton who recently retired as nbc news white house correspondent on her over 40

years covering the white house and the administrations of gerald ford through barack obama. >> we sat, we watched him listen to a group of second graders go through their drill. and andy card came and interrupted the president and whispered to him. i was stunned, i wrote it down in my reporter's notebook, 9:07 a.m. whispers, nobody interrupts a president even. fromp front of second graders. >> the president stood and said that he had to go. he went into a side room. then we heard, we discovered that it was two planes down -- two plane crashes in new york. ari fleischer came out to the pool. we were now out in the parking lot outside the school, said stay right here, the president will come talk to the pool. i said no, there are live cameras in the cafeteria. the president has to speak there. he didn't want to scare the children but he did go into that cafeteria. he said it is an apparent terrorist attack and i must return to washington. we raced to the plane. we were pushed aboard quickly. the doors slammed. and then the pentagon was hit.

>> sunday night at 8:00 eastern and pacific on c-span's q&a. now to a discussion on the state of the financial sector and the impact of regulatory law. we'll hear from former fdic chair sheila bair and the chair of the house services committee, jeff hensarling. this is 30 minutes. >> -- conclude dlad bthat big i. i concluded that bad is bad. the question is, is this organic market growth or not? i can say that since the passage of dodd-frank, and i guess we could debate causation, but the big banks have become bigger. small banks have become fewer. and i do believe that there is causation here. so what i think what i would

like to do is, in dealing with the too big to fail phenomena, is the house just literally passed i believe yesterday bipartisan bill to add a new chapter to the bankruptcy code to deal with our larger financial institutions. i do believe that should be paired ultimately -- there's so much sheila and i agree on but we may disagree on this -- i am concerned about the ability of fsot to designate -- >> that's two big acronyms. explain those for the poor people who work in the real world. and not washington. >> okay. yes. we have excel at acronyms in washington and little else. but we really have cornered the market on acronyms. the financial stability oversight council is a group of regulators who i would argue

essentially now have the ability to effectively control any large financial institution in america by designating it to be a systemically important financial institution. this includes bank holding companies with $50 billion of assets and on financial companies that, frankly, from their discretion they discern by using ill-defined terms of financial stability and systemic risk, that they pose systemic risk to the financial ability of the u.s. anyway, i just think this is a dangerous phenomena and ultimately we need to make sure -- again, that we have market discipline which i would define as having both the appearance and the reality of your own money at risk. and so to me the quest is how do we infuse more market discipline in to the system.

because there's a little bit of a faustian bargain here. so the big banks have enhanced supervision. prudential standards on the one hand. but on the other hand i'm convinced at least they enjoy the ability to borrow at lower rates, and i think it is because, again, whether you embed so many federal regulators in these financial institutions, the market is convinced the regulators will not let them fail. and this is not good for market innovation, it is not good for economic growth. frankly, it is not good for individual freedom. >> all right. so there might be one thing worse than perhaps government taking over a bank in a financial crisis and that is the crisis we saw in 2008 where it was a political fiat about who was going to be saved and who was not. the concept was created to create a rubric around winding down institutions in an orderly fashion. you agree with chairman hensarling about what he says about the dangers of fsocs?

>> right. i do think we learned, especially with the aig experience, that there are some institutions that are outside the traditional regulating banking sector which can pose systemic risk. in my view we shouldn't have sis stem sick institutions. we have them all too big to fail in a bankruptcy process both of which impose laws on shareholders and creditors and does not impose external costs that require taxpayer support for orderly resolution. so that is the end game. i think in terms of if you are going to designate -- if you are going to make a title 1 designation, the central question should be not whether you're big. the question is what happens if they fail, can they fail without a lot off external costs, then let them fail. >> if wells fargo caught a terrible bug from silicon

valley, tech evacuations would plummet and there was a mortgage crisis in california, we would save wells fargo. >> wells fargo is a regulated bank. most of their assets are in their insured bank. wells fargo would be subject to the same process the fdic has always used for resolving a failed bank. new powers really extend to activities outside the industry bank. wells fargo i think would be easier because it is a straightforward, take deposits/make loans model. usually because you don't mark to market loans it is a slow burn. have you time to prepare if you see trouble brewing. i don't want to talk about what happens to wells fargo if they fail -- they're one of the highest rated banks in the country obviously. but no, when i was at the fdic wells fargo was not the bank i'd worry about. the big derivatives books, those are the ones i'd worry about having systemic impact and very difficult to wind down. >> raise the hypothetical, a big

bank we all think of being prudentially sound gets into trouble. isn't there no doubt that the u.s. would step in this whatever way it could to save it? wouldn't you agree with that, chairman hensarling? >> well, i can't speak to what future that? >> i can't speak to what future policy holders -- policy makers would necessarily do. i can add vocate for policies i think would work best. i can say an ounce of prevention is worth a pound of cure. certainly after the crisis, i think you can make the case quite clearly that capital in leverage standards were inadequate, insufficient. i don't think you can make the case they were insufficiently complex. i'm afraid that dodd frank and bozul 1, 2, 2.5 a have are made them far more complex which i do not believe serves our economy

and our nation well. so to me again the answer is to make sure, easier said than done, that we have historically prudent capital in leverage standards in place. there's a false narrative out there. if you want the proper remedy, you have to have the proper diagnosis. to me the fundamental cause of crisis was undermining historically prudent underwriting standards in real estate. i think that any objective view of history would show that as smart and as good as regulators and lawmakers are that one of the great ironies and one of the great tragedies was not just the inability to stay off or prevent the crisis but policies actually help lead to the crisis. when roughly 70-75% of the

troubled mortgages were backstopped by the federal government through fannie and freddie. goals were ratcheted up under bush 43 and clinton. the community reinvestment act. basically the rating agency. there were a number of federal policies that help lead us to the crisis. so you know the federal governments track record on managing risks really isn't all that great. you know, they essentially told our financial institutions you for all intensive purposes have to reserve little or no capital against mortgage backed securities and sovereign debt. think grease in freddie and fannie. sheila would know better than i would.

i think 400 to 500 would go belly up. >> what's your view on capital level where banks have gone? i know sheila thinks they're insufficient, not as good as they should be. weigh in on that if you could. >> i think they need to be significantly higher and dramatically simplifiesimplifie >> banks would say they're high enough already and gone too far. >> i don't think that's true. if you look at the basis, most larger banks are 5-7%. that's still a lot of leverage. so their funding is 5% common equity. leaders of non financial commercial companies if you had that leverage. you would be bankruptcy. who would lend you money? you wouldn't be around. granted financial institutions are different and need to operate with higher levels. not that high. they need to be significantly

higher and dramatically simp simplifi simplified. these are easy to gain, create incentives. they trade one bank lending to another. to coca-cola or google, or whatever. that encourages them to become more interconnected which makes it harder to fail in an organized way. so i would scrap by in large. you need judgment on risking as well. the leverage ratio, current system is too complex. >> all of dodd frank, we're still not in a good place? >> no. we're incrementally better but not nearly as resilient -- >> so dodd frank has failed. >> i wouldn't say dodd frank has failed. >> i would. >> i've been very disappointed. one of your questions was do we have too much regulation? i'm saying by judged by quantity

we have too much. >> secondly your view on failure on dodd frank. >> i agree with sheila. i'm skeptical of risk weightings. they haven't served us well in the past. i'm also concerned by having one global or national standard because it was proven wrong again. the risk weightings given to mbs and sovereign debt to have this one central view of risk management i think has hurt us. so again, i would prefer there be again fortress balance sheets. our committee is going to do a deep dive on capital standards early in the next congress. so at this particular forum, i don't want to prejudge our hearings and committee activities. i will certainly again concur with sheila. she is quite said this.

i am concerned of one world view or one national view of risk management. i think it is one again going to be better handled by market mechanisms with respect to dodd frank. large banks have become larger. small banks have become fewer. taxpayers have become poorer. it is more difficult now for working families to purchase a home even though a local community bank may actually want to lend them money. as the consumer financial protection bureau or well named as it may be has begin us one national standard dealing with a debt to income ratio that federal reserve data itself has said that rough aly a third of african-americans and hispanics would no longer qualify because of standard on debt to income. that's part of the legacy of dodd frank.

all of a sudden, as we implement standards on credit cards, we are finding the dreaded annual fees to come back. many perks are leaving. free checking is becoming a thing of the past. i think in terms -- my particular congressional district, certainly not a mic microcosm. i represent an urban, suburban area. my 435th of america, the average working family is worse off with their household finances than they were four years ago. i would just say at some point, and i'll end on this. the sheer weight, volume, complexity, uncertainty of the regulatory burden slows economic growth. that's what we're seeing today.

i hope 2 to 2.5% gdp growth doesn't become our norm. everyone if regulators get it totally right. i'm thinking in terms of my fifth grade son and seventh grade daughter. when every teacher gives homework on the same night, it doesn't all get done. when regulators pile regulation on top of regulation, it is harmful to economic growth. it's usually our small businesses, our innovators, entrepreneurs that suffer the most. it makes us a less dynamic economy and less prosperous society. >> let's turn from small business to wall street. most of you here, i'm sure all here are customers of big banks on wall street. we have an audience response question. if you grab your lab tops there. the first question -- it's a

little bit loaded. it assumes the negative. try to be open minded about whether you agree or not. >> is this wall street or wall street journal? >> wall street journal is the highest rated news brand is all of america. when it comes to wall street itself, agreed or not agreed, one or two. do you trust it or not? i'll be quite interested to see a what the response is. so they do trust wall street. pretty interesting. so at least are from big companies they feel they're served by wall street. to that point our investment bank still a threat to the financial system. have they been sufficiently isolated where they can fail and take losses in a way that won't imperil the rest of the banking system? >> so that's what banks have increased their capital of their regulated -- most big ones are regulated big holding companies

now which may or may not add value depending on perspective. they're relatively safer. i do worry especially that the use of insured policies market. making. that should be outside the safety net program. if i had one beef with investment bankings, i think investment banks should sale. when i got a call early in 2008 when i got a call early in the morning i said so what basically. investment banks fail. that's what we still want to have and should have. a lot of work that's going on now with resolution plannings to make sure when you have banking components, it can be severed off and put into a bankruptcy process. >> derivatives that comes to your point another issue which we ran into. doesn't feel that has been resolved.

>> investment banks threat to american financial stability or not? >> well again financial stability is actually a term of art used in dodd frank. although it's ill defined. i suppose you could argue -- regardless of the investment banks, i fear we are making some of the same mistakes today that we made leading into the crisis. i want to make that point. certainly by fiat or internal management decisions, we have far stronger balance sheets than we had at one time. i still question at some point you cannot have economic growth without some risk taking. i'm still not sure at what point do our federal regulators regardless how enlightened they may be to decide what is good

financial intermediate yags and what is bad. what is too risky? a time not long ago apple was floundering in one of our large investment banks took a risk on apple. we know where that has all led. would that happen today? i don't know. to use añi ridiculous example a i don't have data because little data exists, i suppose you might be able to make the case north korea has a stable economy. zero economic growth is stable. >> would you agree with the idea we've turned the banking sector into a regulated facility? if you look at returns on equity for the financial sector compared to electric utilities in the country, they're almost equivalent. they're 9% on return of equity over the last year or so. at least from the capital market, they're telling you they're about the same.

would you agree with the fact they are in essence regulated utilities? >> well, that's an excellent question. i don't know the answer. i will say this. it doesn't take too many years of service in washington to turn you to con spear tore yal. it is clear to me there are at least some in the political left who's ultimate goal is to treat our large financial institutions as functional utilities so that capital can be allocated on a political basis and to some extent that's what we saw with affordable housing goals fannie and freddie and congressional leaders. the economy blew up. so i do not think it to be a good thing in america to turn them to functional utilities. i think we're probably -- you know -- on the way to doing that

now. i wouldn't say we're there today. since we're the christmas season, as i look at the ghosts of christmas yet to come, if these things are unchanged, you know, we may wake up 10 to 15 years from now and that's what we have. >> we have to move quickly because we're out of town. do you agree with the fact regulated or not? >> i don't think there are. there's risk being taken. it doesn't reflect something that would be a pay structure for public utility. regulators are trying too other much. i think they run the banks for them. they can't do that. we need higher capital letters. one of them will do something stupid. to make sure the market takes losses and understands in advance. those are the two places i focus, bring market discipline back. market can discipline institutions. regulatory cannot. >> let me ask you an important

question. you are going to have keys to the -- part of the kingdom -- come next year. >> i do. >> what's going to be the most important realistic legislative change that you think you can bring to the financial services sector? >> regrettably i don't know the answer to your question. it's a priority to figure out is the white house going to be open for business. i don't know the answer to that. at the moment i'm fearful. many in this room may know there was a bipartisan agreement on a tax extender package that the white house decided to blow up. those of us particularly in the house would argue the president moved in a most extra constitutional fashion in dealing with our immigration laws. so there was a time for example on fundamental housing reform i thought between the house passed bill, quarter warner bill and

white house's white paper which is regrettably getting dust on shelves and most people's hard drives that we could come to agreement there. we've passed a number of bills in my committee that have been bipartisan. they're modest bills by definition. they're aimed at creating regulatory relief for institutions and job start up bills aimed at issues like crowd funding, onramp in order to hold down capital costs for our entrepreneurial ventures. i'm hopeful we can get those on the president's desk. i must admit i'm pessimistic at the moment given the two moves by the president. >> so you don't see a lot of change? >> i don't know. i try to be an optimist. otherwise as a member of congress you have lots of opportunities to crawl many the

fetal position and weep. i'll give the white house a chance. i'm going to start off in the committee that i have the honor of chairing of going back and passing ining all these bills passed on a bipartisan basis and put them on shelby's desk, counter part in the senate and see what he'll sign. >> on the real world of the economy. >> questions for our panel. >> want to get them some drinks? okay. >> sense we're the last thing standing between them and -- >> we are. even more entertaining. >> i'm curious if you feel the same way about lehman versus bear sterns. i was interested in your answer on that. >> by the time lehman -- everybody knew they were in serious trouble. this went on months. the idea this was a sudden failure is not accurate.

by the time that happened -- hindsight is 20/20. it was a tough decision for hank paulson and tim and others to make. in retrospect the system was so unstable at that point it was a band trigger. the reserve breaking the buck. the wholesale funding markets, blanks especially in europe and u.s. as well on short term wholesale funding from the money fund industry. we haven't fix had the either. we have half of it fixed. i think by that time the system had seized up so much. they were also i think -- dick foles was banking on a bailout. they let bear sterns go down. how could they possibly let it go down? they did. there were some people saying maybe it's good that happened because it will get everybody up in congress to deal with this. i do think there are probably

mm you ares that should ha s th -- are probably measures that should have been taken earlier. there could have been acquisition to avoid the bankruptcy. >> compared to 2007 before the crisis really unfolded, with all caveats about the limitation of dodd frank and things that need to still happen and small banks and larger banks getting bigger, is the financial sector in the united states healthier than it was in 2006-07 and by healthier, i mean is it more stable? a greater contributor to growth in the united states? >> i think it's -- better not as well as they should be but better. they're more resilient in that sense. my personal view the monetary policy played a role in the

search for yield and why they're buying more of these backed securities. more poor mortgages backing them. we've had the same dynamic now and had it five years now. with the near zero policies. it's in different places now. >> is that a yes or no? >> so i think the system is more stable. the risk are potentially greater. >> risks are greater? >> potentially i do. we don't know how this is going to turn out. >> go on about that. >> look. i think financial assets of my view are inflated. the good news and bad news is wealthier people tend to own financial assets more than working families unlike mortgages. if there's a -- people that own them are in better position to absorb losses. banks are desperate to make loans. government is on the way to

loosening mortgage standards. commercial real estate -- i think you're seeing same behaviors over and again. regulators are trying to restrain it. how much can they do that? monetary policy gets everywhere. >> why should a regulator be inside the bank and say lend it 3 six and a half times and not seven? let the banks do what they do. >> everybody would agree if a mortgage borrower should have a down payment. how leverage the borrow is a standard for safe and sound lending. maybe the numbers are arbitrary. the fact banks are looking at leverage of the borrower. it impacts their ability to pay back the loan. >> you disagree with that and say given the platform to make their decisions and let the chips fall where they may right? >> well, i'm repeating myself

for the third time. i think the answer is the proper application of capital and leverage standards not to embed federal regulators into our investment banks and our commercial banks to substitute their decision making for those who are actually in the marketplace. but i would say this again. we have now seen the single greatest fiscal stimulus and monetary stimulus in the history of america. we have seen the most profound rewrite of our capital markets, laws since the new deal. yet we continue to be mired eight years after the crisis in a very mediocre growth economy. still 95% roughly of our mortgages are either guaranteed or provided by the federal government. they still ultimately appear on

the federal taxpayer ballot sheet. we still don't have a sustainable housing finance system. i don't believe we have solved the problem of too big to fail. again i would argue the larger banks are enjoying funding advantage. if anything, we have doubled down on a lot of policies that brought us here in the first place. listen, i'm not an investment professional. i fear there are a number of asset bubbles within our which that have been brought about by extra ordinary measures of 2008 that somehow have mored into the ordinary measures. i salute sheila for work she did. she had a very tough job. at the time i was a minority member of the house which is like the may tag repairman. the phone doesn't ring and you

don't have a lot to do. applaud and salute sheila for making tough decisions. at some point does the cure prove worse than the illness. >> let me ask you again. maybe a rhetorical at this point. is the financial system now compared to 2006-2007 healthier if you define by being more stable and greater contributor to growth? >> i think you can make the case on perhaps some criteria more stable. i think the cost is -- at what price is stability -- i believe i have the stat right. we have startups almost 25 or 30 year generational low. we have a higher percentage of the work force working for larger companies. so at what price do you pay for

this stability. how much economic growth are you willing to pay for this so called stability. i'm not convinced we're not again seeing the calm before the storm. i can't give a simple yes or no to the question. i think frankly we're having the wrong policy decision. i don't want to say all of dodd frank is bad. to quote me it's 86.9% bad. so yes the increased capital standards by in large has been a good thing. some good can come out of this living will concept. it's being abused and used as a tool for the federal government to micro manage our institutions. there are aspects that have been helpful. all in all i consider dodd frank to be a failure. i'm fearful that we are

replanting the same seeds that left the crisis in the first place. >> chairman, you get the last word. please join me in thanking chairman, sheila. [ applause ] . we're live now on capitol hill in the center of the screen senator chuck grassly, ranking member on the senate judiciary committee. that's john mccain, cosenator of the leagues that impose sports blackouts. you may recall the federal communications commission, fcc, earlier this year repealed sports blackout rules which prohibited cable and satellite operators from airing any sports event that had been blocked out by a local broadcast station. in addition to senator mccain leading off the hearing, other witnesses include the fcc media bureau chief, attorney for nfl, and the leaders of the group sports fan coalition and national consumers league.

it should get underway shortly. there are votes underway on the floor of the u.s. senate. that may delay the start of this just a bit. the other cosponsor of this legislation is richard bloomingthal of connecticut and likely to chair this committee hearing.

senator bloomingthal is on his way.

don't forget, did you stop by when you were there and see the biggest bull and bore?

>> i'm supposed to be at a foreign relations meeting. can i go ahead? >> you go first. then we'll give opening statements. >> i thank you mr. chairman and ranking member grassly. i thank you for letting me testify and thank you for making this hearing happen. senator bloomingthales advocating for consumers valuable partner to work with on this issue in the area rules and regulations far often leave consumers holding the short end of the stick. i'm here to discuss sports blackouts and to explain why the

continued use of policies failed to serve the interest of consumers, in this case loyal sports fans. i will truncate my opening statement just to say the simple fact is the rules as they are today only serve to benefit sports leagues and member teams at the expense of hardworking fan who is support them so loyally through money, time, passion. just last year during the nfl wildcard playoffs, fans of the cincinnati bengals, indianapolis colts, green bay packers came close to experiencing blackouts when those games hadn't sold out just days before the kickoff. the blackouts in these regions were only averted at the last minute local businesses bought up tickets to bring the total above the nfl required threshold. there's something wrong with the situation in which the nfl can say to all those fans who made the league what it is today you better purchase tickets or else.

the nfl and teams have been benefitted from myriad public benefits including exemption from antitrust rules, specialized tax status and tax that subsidize their multibillion sports stadiums. these benefits carry a responsibility back to the public and obligation to treat loyal fans with fairness. we've been chipping at rules for some time. there's still a lot of work to do. i'm happy mr. chairman to join you and introduce the fans act aim a aimed to eliminate the plaq blackouts. this ends blackouts in those circumstances when there are disputes between broadcasters, cable, satellite companies that result in blackouts. we would strongly prefer the league take the initiative it's

and demonstrate leadership by conforming policies and practices. let's be clear. should the league fail to act, we should do everything we can to stand up for consumers by advancing the fans act and other initiatives. i look forward to hearing from the witnesses on the following panel on ways we can work together to finally blow the whistle on sports blackouts once and for all. i'd like to say again mr. chairman, you come from a state which is huge as far as sports broadcasting is concerned. i particularly admire your courage on this issue. again, it's just unconsciousable to have average fans be deprived of the ability to see activity in a stadium they paid for. so, it's a no brainer in many respects. if we aren't able to succeed, it's frankly a triumph of special interest over the public interests. i want to thank you for your leadership and thank the ranking member who as always have the greatest admiration for and

respect. thank you. >> thank you so much senator mccain. i really appreciate you being here. i know it's a busy day and time of our closeding days of this session. i want to express my personal thanks for your leadership and courage in sponsoring this bill and working with me on it. i look forward to continuing our work together. i know you have another meeting. certainly you should feel free at any time to leave despite the powerful and rivetting remarks i'm about to give. i know you'll find it difficult to break away. >> thank you. thank you. i'd also like the to invite senator grassly to come to arizona for the super bowl and join many of his constituents who are smart enough to spend the winter with us. thank you. >> thank you senator mccain. >> we are going to give opening remarks and then unfortunately going to have to take a recess

because of the votes that are ongoing right now. we're going to come back at the end of those votes, we hope not long in a little while to continue the hearing at that point with the remainder of the witnesses. i will give my opening remarks. then senator grassly will give his. as senator mccain said, americans really love sports and they deserve to see them on their terms, not on terms that are described by the professional sports leagues in blacking out what they think americans should see rather than what americans want to see on their terms. the competitive teams of professional football, baseball, hockey, basketball leagues represent a rich and vibrant part of our american culture. they contribute immensely to what makes america the greatest country in the history of the

world. professional sports leagues generate billions of, thousands of jobs and critical economic activity in multiple industries. the super bowl is in fact the highest rated event on television. last year the nfl playoffs collectively accounted for ten most watched sporting events of the entire year. so these games are part of what makes america great. most of these games were carried on free over the air television. i believe we ought to keep it that way. sports fans power this media and measure channel degreesing juggernaut by purchasing tickets and merchandise, watching games on tv and supporting their teams through thick and thin. these billion professional sports leagues derive almost half of their revenue from licensing tv rights to cable broadcasts and regional sports networks. some estimate those rights cost

upwards of $17 billion a year. a large bill, a large cost that is increasingly passed on to consumers in the form of higher monthly rates for cable and paid tv. we have evidence of it at this very table when we've had recent hearings on some of the posed mergers. sadly, in return, fans in the public are often treated like a fumbled football. sometimes even a kicked football. when places like buffalo, new york fail to sell out, it's 74,000 person stadium, bills game is blacked out for local fans. when powerful cable companies and broadcasters fail to reach an agreement, it's often the threat of holding sports programming hostage that is used to negotiate higher fees. and by the way, higher rates

before consumers. even the internet can't escape blackouts. when fans live too close to their favorite baseball team but not close enough to actually watch them on television, they face online blackouts that force them to drive to the next city to catch a game. these blackouts are loathed by fans and rightly so. hated by consumers and by most industry stakeholders in the business of television. good news is we can do something about it. nfl, nba, mlb and nhl receive tremendous assistance, huge benefits from the congress in putting their brands, their sport and advertising before the american people. this public assistance takes several forms but chief among them is the antitrust exception enjoyed by the four major sports leagues.

essentially every company is bound by this price fixing. sports leagues are an exception. almost a unique exception to this antitrust rule. in the broadcasting act of 1961, congress granted a special exemption from the rules that govern other companies permitting professional sports leagues to coordinate and fix prices for negotiating broadcast rights. the country affords these teams their special status because of their special role in american culture. but that doesn't give them the right to abuse this privilege. the government certainly shouldn't endorse abusive behavior. the public benefit come with a public trust. the fcc recognized that when they threw a flag in september on nfl antifan blackout policy.

chairman wheeler of the fcc announced at that meeting and i'm quoting "federal government should not be a party to sports teams keeping fans from viewing the games. period." i'm grateful that all five fcc commissioners joined together in a bipartisan vote and repealed their blackout rule as i had called for their doing along with senator mccain, senator brown, congressman higgins and many more. but despite the fcc's actions in september, sports leagues and the nfl in particular retain the po tore blackout games through their private contract agreements. i believe these blackout policies are antifan and anticonsumer because they disregard the public trust that the leagues have because of this special benefits and public benefits that they receive and

because of the trust they have to their fans and the teams. and more over, these policies are in the front to direct and indirect investment made by federal and local governments that provided tax exemptions, enhanced public transportation, infrastructure to stadiums and exemptions as i've mentioned from the antitrust law. that's why i've joined with senator mccain to introduce s 1721 furthering access and networks for sports act, fans act. that's why i've joined in seeking support from my colleagues. i believe that support is growing that we have momentum on our side. this bipartisan bill leverages the antitrust exemptions that leagues enjoy against the -- to

instruct anyone carrying their games that they can no longer hold sports programming hostage for higher fees and cable rates. it would make more live games available on the internet. i want to make one thing clear. this bill does not use the heavy hand of government to force the sports leagues to do anything. it doesn't require them to end blackouts with the threat of fines or enforcement actions. it does end the blank check from the government to the leagues and it takes away congress's

implicit endorsement of blackout policies. fundamentally it represent s a bargain to the leagues. they can continue enjoying exemptions from existing law if they treat fans fairly. if they want to continue their blackout policy, government won't stop them. they'll no longer get the special public benefits and protection from antitrust enforcement they currently have. i want to know particularly that this hearing is a fact finding mission. we obviously are not going to pass this bill out of the senate or congress this year. i look forward to a lively debate and senator mccain and i are open and committed to working with stakeholders on their ideas for changes and edits before reintroducing this bill again next congress which we expect to do. thank you very much. i yield to senator grassly.

>> sure. i thank you mr. chairman. you've been very thorough in your explanation and purpose of the legislation. i particularly compliment you for take on a strong, powerful force you're taking on. that's what has to be done if you're going to make changes sometimes. i thank the witnesses who are here and look forward to your testimony. i think we can all agree on one fundamental notion. no one likes sports blackouts. the sport leagues and their member teams don't like them. television providers don't like them. of course sports fans definitely don't like them. a particular issue in iowa is that we don't have major league teams so the entire state won way or another falls within the blackout territory of six different teams, cardinal, royals, twins, brewers, cubs,

white sox. i can tell you the periodic blackouts are very frustrating to experience for fans of my state. so there is no question that blackouts are exacerbating experience and disfavored. the question is how to minimize blackouts and maximum benefits to consumers while respecting the rights of private parties to negotiate with each other at arm's length. on that note, i'll add one other comment. as we all know, the federal communications commission voted unanimously in september to eliminate sports blackout. i think as a general matter, the federal government shouldn't be in the business of mandating policies or parties that otherwise negotiate. at the same time i think we need to be mindful of the flip side. more specifically as a general

rule, the federal government shouldn't be in the business of mandating which provisions should and shouldn't be in public contracts. any time such a step is proposed, we should tread carefully. the chairman just said he's beginning discussions on this and consideration of this. i'm happy to join in that dialogue. i thank the witnesses once again and look forward to the hearing of the start of that dialogue. >> thanks senator grassly and for your excellent remarks. we are going to apologize, take a recess now. i want to thank the witnesses the for your patience. we'll be back literally as soon as we can. we'll take the second panel at that time. again, my thank and apologies. we'll be right back. thank you.

senate judiciary committee. the ranking republican chuck grassly making their opening

statements in a hearing that's looking into sports blackouts and antitrust exemptions. they'll hear later on from the fcc media bureau chief and attorney for nfl and leaders of the group's sports fan coalition and national consumers league. all of that still to come as there are several votes left on the senate floor going on now. follow that on cspan 2. we'll have live coverage of this hearing when it resumes here on cspan 3. we think shortly after 11:00 or so. in the meantime, we'll show you discussion part of the foreign policy initiative 2014 conference. the panel is focussing on the russia ukraine conflict u.s. policy in that region and long term strategy and goals of russian president vladimir putin. welcome back everybody. thank you as we move to the second panel discussion of the

afternoon. looking at the second of the major obvious crisis that we face in the world today. putin's challenge to the west. to moderate this discussion, it's a pleasure to welcome jamie, a fellow foreign policy initiative, correspondent for the daily beast. he's reported for the new republic, for radio free yurngs radio liberty. jamie has travelled the world and written for multiple locations but has expertise looking at eastern europe and russia. we couldn't have a better moderator for this conversation. he's a great colleague and friend. you'll enjoy his talent as a moderator. >> thank you chris. we have an amazing panel today. i'm going to be brief introducing our panelists. starting my left david crammer who stepped down four years as director of president freedom house. he's now at the cane institute.

previous to that served in the bush administration and state department and has expertise in ukraine, europe, central and eastern europe. and then our tv reporter and anchor for voice of america. she's covered ukraine extensively. it's to democratic revolutions. she's a widow of an investigative reporter who was allegedly murdered by government authorities in 2000. after her husband's death she formed a foundation in honor of her late husband which is dedicated to promoting the rights of journalists and free speech. to i immediate left is peter ponsrav,s producer and television producer who spent many years in moscow producing reality tv. he's written this book which i cannot recommend highly enough.

he's also the coauthor of a report for the institute of modern russia, reality about kremlin disinformation. also very worth reading. we have several copies out front. so the theme of the panel today is putin's threat to the west. i think it's important we understand the topic as the threat that putin poses to the west. not just ukraine and not just his neighbors but to the values and to the liberal international order a that the united states has upheld for the past 70 years. each of our speakers has particular expertise in certain parts, certain areas of russia and ukraine. i'm going to start with david. i wanted to ask you david now that you're out of freedom house and say what you want. >> now that i have freedom. >> you're liberated from freedom house. how much -- past six years obama

foreign policy. how much can we with attribute what's happened with russia, deterioration in bilateral relationship we've seen. russia invading neighbors. how much is attributed do you think to specific policies of the obama administration, missteps they've made? or how much was inevitable which vladimir putin came back to power in 2010 or 2012? >> jamie, thanks. thanks to fpi for inviting me to be on this panel with a dear friend and peter. it's great to be here. let me start by answering this way which is the bush administration policy wasn't terribly good on russia either. i don't think the obama administration has been better. i don't think the obama team learned from mistakes we made. we did not despite claims the bush administration took a

finger lagging approach toward human rights. we stopped raising issues for the most part and went silent. i wish we were guilty of the charge we took a finger wagging approach to on russia. we didn't. and we also didn't do much after russia invaded georgia. i think that was also a mistake. the obama administration came in, wanted to wipe the slate clean, start over. that idea wasn't necessarily wrong in concept, but the execution of it was. i had warned as others did that there were some concerns we had about the reset approach that the operation would go silent on human rights issues continuing the silence of bush administration. a major difference they would throw the neighbors under the bus. there would be a russian eccentric approach. other countries including ukraine would be neglected. the the third thing i warned about in 2009 was missile

defense decision. unfortunately i say all three of those concerns came to be true. more fundamentally i would say the administration lacked real understanding of what was happening in moscow. it didn't understand the nature of the putin regime which is a thoroughly corrupt rotten regime where putin is he ll bent on staying in power no matter what even if it includes invading neighbors. putin in his circle they're determined to stay in power in order to protect the gains they've gotten over the years in power. it becomes a vicious circle. so the bulk of the problem i argue is in moscow. the problem here in this city has been a lack of understanding that the problem is in moscow. the inability to develop a serious relationship with the regime that goes in such an an

thet kal direction wes aconspire to. >> it's been seven ho months since russia invaded ukraine. i use that word specifically because so many people in this town and other capitals don't want to use that word. russia has pin vaded ukraine. the invasion happened in march. you saw senator mccain here earlier. he told us that the ukrainian people basically lost hope in the united states. i was in ukraine last month monitoring the election, two months ago. i got a similar message from hip. would you agree is this do you think that the ukrainian people are basically in this for themselves at this point? >> that's how they probably feel. unfortunately they -- one thing they remember in 1994 they signed the agreement. they always repeating that. we sign had the agreement. united states, great britain, and russia guarantee -- take the

responsibility to guarantee our sovereignty, territorial integrity. it didn't happen. i'm explaining to them that unfortunately, yes we signed an agreement, but that was very simple piece of paper. they didn't -- the agreement doesn't have particular responsibility. what has to be done if something like invasion happened. they do feel betrayed by western powers, and they're asking for help. they are fighting this war -- i'm impressed how in two or three months ukrainian army become a real force. because i think putin goal is to destroy weaken or destroy the ukrainian military and economic

capabilitie capabilities. they were able to actually fight back. at this point, putin controls only 10% of the one area. it's not a big territory. i mean, crimea. right. actually the most pro russian regions in ukraine. there are eight russian speaking in ukraine. crimea is pro russian i would say. putin failed understanding that. he saw he would be much more successful steering up that pro-russian feelings in those territories. he mixed up russian speaking with russians. it's not the same.

that's why i think what we have -- the situation we have now that he's trying to -- he failed to stir up. there was no uprising -- pro russian uprising in the east of ukraine. now he's using every possible force to take over. i don't think he -- i don't think we can hope he would give up. i don't think so. >> peter, the previous two speakers talk about hard power, consideration of invasions of countries and whatnot. can you tell us about the threat that the russian disinformation apparatus poses to the west? i think there's a difference between disinformation and propaganda that you have written about quite perceptively. can you tell us how that represents a threat to us? >> i was coauthor to michael vice who was researching what we thought would be propaganda. we realized we needed a new

glossary to talk about what russians were doing. since the middle 2000s russian military intelligence have been developing a different theory of war which is total and permanent war which doesn't necessarily involve kinetic action. whether it focuses on psychological informations. we have a small department in a much bigger military apparatus. the brits kind of got rid of eigit after the cold war. in russia everything is moved away. the way they talk about it is nothing like all the stuff we're obsessed with. they talk about information for demoralization, essentially a weapon. it's a whole different way of approaching the concept of what information can do.

obviously their strength is in russian language and populations where they watch russian tv because there they have full control over the om in estonia collated situation because essentially in the russian concept of psychological war, everything is a weapon, not just media, ngos, the church, everything, so basically society becomes this endless what militaries call phase one operation before the actual soldiers come in, phase one, shaping opinions and sort of blackmailing and creating the context for military, but now we have phase one operations all the time in latvia and estonia so they're like what do we do? if we start banning their channels it's liberal democracy. it's a way of attacking liberal democracy from inside the fabric rather than from outside. so it goes on and on.

>> is there something that's actually more pernicious and more frightening about this conflict that we have with russia now? if you look at the cold war, very predictable. there were soviet communists, they had an ideology, it was in a book, you could read it, marxism, lennonism, we knew who their allies were around the world. today it's completely a different story, very hard to decipher. the kremlin has allies ranging from hungarian fascists to german ex-communists, and it's an incredibly adaptable ideology, if they even have an ideology, in many ways less predictable. would you say this current crisis, new cold war, what not, how is it different from the old and is it more threatening? that's for all of you. >> i think the comparisons to cold war are incredibly unhelpful. the problem, the danger is, just throw away all the stuff about

the cold war, it gets in the way, and even about the great game. look, the danger for me is russia is pioneering this now, this new form of third-generation nonconnecting whatever. the question for me is does this become the new paradigm? we mentioned isis previously. isis did something similar with the information. they didn't get bottomed up. russians didn't get topped out. what if this is the future and we have -- we're about to face a danger of disinformation and we have none of the capacity to deal with it? that's what fryattens me. russia's aims, they're very different and sort of like adapted to various circumstances. one thing in serbia, they do an operation there. it's very operational. there is a ground narrative and we have to understand in its own weird way russia is at war with only one country, this one. they don't care about -- >> estonia. >> a couple people do, but most

people don't care. the whole point is if they can find a narrative trick, a little informational provocation to, you know, undermine article 5, to show that 1991 transition was joke, that america is a paper tiger, then america's reputation is undermined. it's interesting. we are in a space of pure information war. but the consequences can be quite bad if american cents und undermine the way the russians want to. >> unfortunately for a long time, and you asked david the first question about is it a result of our -- that we didn't do anything seeing what was going on in russia, i think, yes, we are very improved from the policy of the previous bush administration. unfortunately, we are -- we were closing eyes on every thing that russia did in the last 15, 20 years. the first proxy war happened

in -- then again georgia, now we have ukraine. but we didn't do -- we didn't do anything back then because we thought, okay, something going on in that part of the world, it just -- the soviet union just broke up, nobodied up really what's going on. and russia back then were already trying to take territory and destabilize the regions around them to control them. but -- what was i talking about? >> closing our eyes to -- >> yes. i think we are still in denial a little bit. and the western society kind of played a part because look now russia developed. it's all plutocracy and corrupt

activities. they used foreign bank. they used foreign governments. they used european banks to watch their money. and now they've become so pow powerful that it's hard to find a way to fight it. i think the decision to actually put sanctions on russia is a very good decision because first we have to destroy them economically and then see what we can do else. >> the price of oil may be held -- >> if i could just touch upon what was said. i think i've argued for sanctions since day one. i supported the legislation that was passed in 2012 over the objections of the obama administration. but sanctions alone aren't going to do the trick. not helping ukraine defend itself against russia's invasion and aggression is an enormous mistake. ukraine is not a member of nato so we don't have article 5 responsibilities with ukraine. but nevertheless, ukraine is a critically important country in

the heart of europe that is essential to fulfilling the vision e nonetheless waited by george h.w. bush years ago. and if russia doesn't stop the ukraine, i want's ukraine today, it will be moldova tomorrow. it will be estonia, latvia, again, not necessarily crossing the border though that is happening -- >> five guys in a government building. >> exactly, but also stirring up locals if they can. the other point i would just make is what distinguishes i would say and makes russia a bigger threat to us than china is china tends to be regime neutral, which is to say china's willing to work with other governments around the world whether the democracies are authoritarian regimes, they don't particularly care. they don't necessarily view the advance of democracy and other countries even in asia as a threat to china itself. russia views the progression of democracy, liberalization, efforts to integrate into europe as a threat to russia. putin views it as a threat

because if it can happen in ukraine, it can happen in russia. that's what spooked him act the events in last november, 2004 in ukraine. he says the u.s. state department is responsible for that because he refews to believe that indigenous populations on their own could demand democracy rule of law, end of corruption, and having worked in the state department, and no disrespect to my colleagues there, they couldn't organize a parade on c-span. [ laughter ] >> glad to go back there? >> maybe not. not after that comment. and the state department does great work. i worked there for eight years. but state department doesn't spawn revolution. other nonsense. but it gets to peter's point, which is we are viewed as being responsible and behind all these movement ts around the world. we wake up every day if putin's

mind thinking about russia when, in fact, most of the mistakes are we don't think about russia. missile defense, having worked in the obama administration when it was first launched, really had nothing to do with russia. >> right. >> and then we did try to bring russia in on missile defense with the rice/gates meetings with the russian counterparts the end of 2007, 2008. you had the reset policy which could not be more accommodating to russia in trying to extend a hand and restore relations, and putin just slapped the hand away and views us a threat. going back years, not just in the past years. >> maybe mitt romney might have had a point when he said -- >> yes. >> -- russia was our greatest global adversary several years ago. i think we're going to open it up to questions since we have such a short amount of time here. who in the audience would like to ask -- the lady over there.

>> okay. sorry. hi. my name is shareese. i'm a member of the alexander hamilton society of the mason chapter. i just had a question based on putin's obsession with security and the fact that, you know, there is stipulation he might want to cree trito create a buffer zone around russia again. do you think if he does try anything like this that our ball tick allies might secede to him based on the fact -- out of the fear that they think we might not come to help based on what's happened historically? >> i actually want to give credit to the president for his trip to estonia in december where i think he did give reassurances to the baltic states. that said, two days after the president was there, russian forces kidnapped an estonian security force from estonian territory, which was a huge signal not just to estonia but to us. but i was in estonia recently

and am in touch with people in the ball ticks pip think they're nervous and they should be nervous but i do think they feel that article 5 means something and i think nato deserves some credit for doing what it's done to beef up the security of neighbors of russia. but that said, we have to think not in the old-school terms of thousands of troops and tanks crossing the border. it's stirring up local populations along the russian -- estonian and russian latvian border with lithuania. that's where the problem can become. peter, you said latvia in particular is vulnerable because of the banking influence of russia and the russian money and chris walker is here, he knows latvia much better than i do. so i think there should be reason for concern but not for alarm. >> one of the great stories in the past year has been the real -- maybe not surprising b