think of? >> i appreciate that question. my goal has been to make sure i follow the rules. i don't make the rules or the regulations that interpret the statute. i try to follow them. the administrative conference of the united states is kind of the expert agency when it comes to processes. and they and you have a significant challenge in that the rules have to apply across all agencies not just the fcc. and so far be it from me to get specific and say you ought to change section 2b3 but i see my

job as trying to adhere to the statute and the rules that have been put in place to deliver on those concepts. purchase thank the gentleman. as i recognize mr. walker here i want to respond to what you just said and highlight, again, under the rules you did have the discretion to make it public and you elected not to. i think what congress should consider is compelling you to make that open and transparent rather than just simply makes it discretionary. recognize the gentleman from north carolina mr. walker for five minutes. >> thank you mr. chairman. being a relatively new member in congress, i'm learning things every day. in fact, i had already known that al gore had invented the internet, but today i found out, according to miss maloney that the president has saved the

internet. just to be curious, do you think that's a statement that's fair? do you think his involvement has saved the internet for the future? >> i think this is a much bigger issue, congressman. i think the internet is the most powerful and pervasive platform that's ever existed in the history of the planet. it has an impact of every aspect of our economy and every aspect of individuals. to exist without rules is unthinkable. >> let me go back to what you testified earlier. you testified you did not feel obligated to follow the president's suggestion. my question is what exactly was the president's suggestion? >> the president filed an ex parte say we should have title 2, and we did not follow that suggestion. we did title 2 plus 706. he did not say we should do interconnection. we did interconnection. he did not suggest that we should have the scope of

forbearance we had. >> i'm actually sort of get to the places as far as interaction with him. when you said he suggested. there is nine or ten trips to the white house. do you remember which time it was suggested as far as whether there was disagreement or agreement. >> my comment about suggestion was specifically referencing the ex parte. >> no 101 suggestion you and the president when it came to net neutrality suggestion. >> that earthquake. >> let's go back to thet the pictures, obviously of the protesters that morning. did you have any word or any idea those protesters would be showing up that morning, or were you surprised as the look you had on your face? >> i was surprised. if i had spent less time brushing my teeth, they would have missed me. they just barely caught me. >> you had no idea those guys -- you weren't tipped off they were

showing up that morning. your posture has been called by some of the outlets apologetic since this decision was made. why do you think the assumption has been made. >> apologetic. >> yes. since the decision has been made, there have been some outlets not backing up on the decision not as firm as when the decision was made. why do you think that would be categorizing. >> my goodness, congressman, i hope this is not apologetic. i said after the press conference this was my proudest day being involved in public policy for the last 40 years. there's no way i'm apologetic, i'm fiercely proud of this decision believe it's the right decision, an important decision not only for today but for tomorrow. >> you talked about a little earlier that -- i think the congressman mentioned this earlier. you talked about wall street article was wrong. you may have addressed that.

i believe that was the comment they had it wrong. specifically what did they have wrong? >> what i was addressing, "new york times" article following day, i understood the article, obviously don't have it represented here. it said there was one solution on the table. "the new york times" the following day sis there were four solutions on the table. >> so which one is accurate. >> the "times" is correct. let me be really specific. i have constantly said throughout this entire process that title 2 has always been on the table. i said in my testimony that we were looking at 706 title 2, 706 hybrid, title 2, 706 not a hybrid and title 2 by itself. >> the appearance of being an independent agency which you have claimed 12 to 15 times today, can you understand why people would have some questions

when there's meeting after meeting with the white house? is there anything the american people, congress can sia balance where there's input from the other side as opposed to one particular partisan perspective? >> you know congressman, during that period, i believe that i met more than three times as often with members of congress. my job is to take input. my job is to provide expertise on issues that are being considered. and that kind of an ongoing relationship with all aspects of government is an important role, i believe. >> thank you. my time is expired. i would yield back to the chairman. >> thank the gentleman. will now recognize miss watson coleman from new jersey. >> thank you very much, mr. chairman. mr. wheeler, thank you very much for your testimony.

thank you for your forbearance and thank you for the fact that it seems that you responded to the enormous interest and concern with net neutrality. i became -- i'm a newbie also. i became aware of net neutrality on social media. thank you so much for that. i wanted to just clarify a couple of things. first of all with respect to the comment perhaps we'll have a 60 day comment after the rule that would make the final rule not a final rule. i don't know how we would ever determine it to become a final rule. you have been -- it has been state thad have you met with the white house on several occasions during what is supposedly a controversial period of time. was the issue of net neutrality the only thing you were doing during the period of time you were considering net neutrality?

were there a variety of other issues you may have been meeting with members of the white house or at the white house? if so, just for the record might you just want to share some of those? >> thank you congresswoman. yes. so i met on national security issues. we met on trade related issues. cyber security. e-rate what was happening there. spectrum policy. the white house was obviously very, very much involved in implementing instructions to congress to repurpose spectrum. we had to work very closely with all the agencies in the white house on that. and the spectrum auctions

obviously as well. excuse me i forgot to turn off my phone. >> thank you, mr. wheeler. that gives us an illustration of the variety of issues that you had been addressing. we would love to have the opportunity to work on one thing at a time. we know you don't. we know the president doesn't, and we know we can't. to suggest that is the only thing you were doing is certainly misleading and i believe a mischaracterization of your continued statements that you were not meeting on these issues. i have no reason not to believe you. given this is such a huge issue, that everyone wants access and net neutrality, it just seems to me you were quite willing to listen to more than 4 million people, what they had to say, to

all of the motions that were filed for consideration including the president of the united states. i listen to him. i think he's really quite brilliant and has great ideas for this country. i just wanted to thank you for the opportunity to hear your testimony and to be able to gunfire you an opportunity to answer questions as to the kinds of things that are on your plate that you might have been discussing with white house. thank you very much. thank you, mr. chairman. i yield back my time. >> thank the gentlewoman. recognize five minutes. >> thank you, mr. chairman thank you, mr. wheeler for being here with us. it's been pretty well established that there were not -- with many excuses -- but the fcc did not report various meetings with white house and white house officials even though you did report to lobbyists, activists so forth.

that's well established here today. this does not seem at all as though transparency has taken place. when there's a specific area that is deliberately not reported, the appearance is that it is secretive, there is something to hide. and you are denying that today. is that true? >> yes, sir. there was no secret. i'm not sure i understood. reporting to lobbyists? >> ex parte type thing. we've got 755 entries. >> when they would file. i'm sorry. >> and there's no filing with the white house except one. >> no. >> so i mean, it gives every appearance of secrecy rather than transparency. would you agree with that? >> i think it has to do with the fact that the language of ex parte is when it is intended to affect a decision and to provide information of substantial

significance. >> you don't believe this is substantial significance? >> there was. when jeff came to see me and this is what the president said, this is what the president is going to do. that was substantial significance. >> as a general rule if someone is offering you an opinion, you would not object to an opinion being offered to you, i'm assuming? just a general rule. we all respect the first amendment, someone has an opinion, you would feel free to let them have an opinion. >> yes. >> on the other hand if someone or some group, whatever, was trying to give directives to you or the fcc whatever, you would probably be outspoken against that action. i mean, you've got someone giving an opinion. that's no problem. if someone wants to be intrusive and give orders, that may be a different scenario you would be

outspoken towards. >> i would think boy, did we get opinions on this. >> okay. you mentioned a while ago that the white house offered their opinion on this whole thing. i'd like to put up a slide we had a little earlier e-mails chief of staff senate majority leader to you. the top line up there that is in red said spoke again with the white house and told them to back off title 2. that sounds like a whole lot more than an opinion. typically you would not tell someone who is offering an opinion to back off. would you agree with that? >> i don't understand the question. >> all right. you said you don't have any problem. there's no problem typically with someone giving an opinion. this is more than opinion because the comment here tells the white house to back off. there's more than just an opinion coming from the white

house, it would appear. >> the other part about that, i had at the same point in time 90 letters from republican members of congress saying that i should not do title 2. >> i'm not talking about members -- i'm talking about this statement here, the white house. >> the point is that suggests title 2 is very much in the mix. this if i can read right -- >> said spoke again last night with the white house and told them to back off title 2. went through once again the problems it creates with us. this is more than an opinion. >> this is may. as i indicated in may i was proposing section 706 was the solution. i learned through the process of this long before the white house ever had their filing that

section 706 was not the answer. >> the white house was not providing an opinion, they were putting some sort of directives to do something otherwise or would have been saying comments to tell the white house to back off. it was more than an opinion coming from the white house. >> you know i think that you're reading into this. the fact of the matter is -- >> why else would comments be to back off if it's just an opinion. if the white house is offering an opinion, no one would be saying back off. there was more than opinion that was being presented. >> with all due respect, that's your opinion. >> it's your e-mail and the words back off are pretty strong. >> i don't think it's conclusive there is more than clearly what is stated there. >> it says, back off. it is creating problems for us. that is more than my opinion. that's an e-mail. >> that's his opinion.

that's his opinion. >> i yield my time. >> thank the gentleman. now recognize the gentlewoman from the virgin islands. >> thank you mr. wheeler for being here this morning. i think it's so important to understand the significant attention this open internet order that generated and that that interest is primarily in the process as opposed to the content of what the open internet is. having these hearings regarding this process whether or not you've used your discretionary ability as opposed to a rule is something very interesting. i thought it would be important for us to understand the steps the fcc takes in that rule making process. now, the fcc blog contains post

from general council entitled process of governance fcc and open internet order. mr. chairman, i ask unanimous consent to enter that post into this hearing record at this time. >> without objection. >> thank you. general counsel seeks to, and i quote, create an enforceable rule that reflects public input, permits internal deliberation and is built to withstand judicial review. mr. wheeler, is it an accurate statement of the objectives of the fcc and its rule making. >> yes, ma'am. >> after the public comment period, the fcc staff review proposals in light of that public record. so we know the public comment period was actually even longer than normally is done 60 days as opposed to 30 days you were required because of the volume and interest of this. when was that done the review

in light of the public record. >> the traditional way we do it the comment period closes and you have an opportunity to review comments, then you have a period you can come in on comments and review those. >> okay. do you remember what time that was closed to begin the review process? >> we can get them for you. >> the proposed orders distributed and fcc commissioners for internal review and deliberation again is that correct? >> yes, ma'am. >> what is that timeframe. do you recall how long? >> three weeks before the vote. that's our own -- >> that's a critical portion of it, the commissioners internal deliberations. >> yes, ma'am. >> before the vote to adopt the open internet order on february 6th there were calls to disclose that order. right? >> that's right. >> is it a general fcc policy to publicly release an order before the collision votes on it? >> no, ma'am. >> and what could possibly be

that, the issue of influence, on the influence after that deliberation? what would be the reasoning behind that the rational? >> the rational is that first of all, there's been this extended period of comment and public debate. then you get to a point in time where you're actually -- the rubber meets the road and you're drafting, going back and forth anded editing a document that changes frequently as a result. that is something that is dynamic and not public. one reason you want to make sure you have full participation of all the commissioners, second as i mentioned before the opportunity to cause mischief in financial markets by misinterpretations changing glad to happy is an issue. these have always been encamera

type of editorial activities. >> after the vote there were additional steps taken p before the order is final and ready for release, correct? >> yes, ma'am. >> and you followed those? >> yes, ma'am. >> and that concludes commissioners' individual statements with their opinions, further discussion and clarification of any arguments made from dissenting statements and final cleanup edits correct? >> yes, ma'am. when those final cleanup he had it's -- edits were made by dissenters, that was midday and the following morning at 9:30 we released the item. >> the final order was released march 12th correct? >> yes, ma'am. >> so it happens to be that you did not depart in any way from your rule making process in this respect with regard to the open internet. it really has been question in

many minds the chairman and individuals, whether you used your discretionary outside of what is general rule making, right? >> that's correct. >> if you used discretion we would be hearing about something else, as to whether that discretion was appropriate or not appropriate based on the president weighing in on something that had huge importance to the people of the united states. >> i can't comment on that hypothetical, but the point of the matter is we followed precedent and procedure that has been followed for years and years by both republican and democratic commissioners. >> thank you very much. i yield the balance of my time. >> sure. sure. now recognize the gentleman from oklahoma mr. russell for five minutes. >> thank you mr. chairman. thank you chairman wheeler for your long and dedicated service to our country. i know it's often thankless. while opinions may differ, your dedication to it is appreciated. >> sir, i recognize your badge.

thank you, sir. >> thank you, sir. you stated in earlier testimony today that you came to an evolutionary decision because you determined it was reasonable for isps but not reasonable for consumers with this ruling. is it not true with this ruling federal taxes would be applied to consumers where they were once prohibited? >> i think that's in the hands of congress. you all will get to decide that. right now internet tax freedom act specifically prohibits that. whether that is changed -- >> from an information service to communication service, moving it to title 2, does it not lay the foundation for consumers being taxed? >> that's going to end up being your decision, not mine. >> was it possible when it was just an information service outside of title 2?

>> information service ss, some are taxed at state levels, some could be taxed at state levels. i want to make sure it's could because we have internet tax freedom act sitting on top of everything. it cuts both ways. >> article 1, section 8 of the constitution states that it is congress that has the power to regular regulate congress, do you believe this? >> yes, sir. >> do you believe this? >> yes, sir. >> do you believe congress would better rules in spite of the release especially in light of your testimony today where you said rules have to apply across all agencies and be considered. >> this has been, as you know, congressman, a ten-year process multiple input by multiple

congress along the way. there will be there is legislation now, which is entirely appropriate. i think what our job is is to take the instructions of congress, is stipulated in statute and interpret them in terms of the realities of the day day. and that is what we did. >> the quote that i would like to read to you by a senior vice president of the communication company. fcc chose to change the way commercial internet operated since its creation. changeing a platform that has been so successful should be done at all only after careful policy analysis, full transparency, and the congress which is constitutionally charged with determining policy. now, you and your agency

established belief adopting rules would create problems as we've seen in e-mail traffic we reviewed today. you also stated in other e-mails produced to the committee you did not intend to be a wall flower in your tenure at the commission. given the coordinated efforts, the pressure of the white house, the coincidentally timed protest and other white house statements, would it be unreasonable, then, americans to somehow feel betrayed this decision was a cave against earlier judgment and damaged reputation of fcc as independent agency? >> no. i also think that it's important to go to your key assumption there, quoting this senior vice president. the interesting thing in all of this is that there are four brightline rules. there are only four rules in this order. no blocking no throttling, no

pay prioritization and no transparency. all of the isps have been saying publicly, buying newspaper ads, running tv commercials, the subject saying, oh, we would never think of not doing that. when this person says it's going to change the basic operation of the internet there's some kind of discord there some kind of disconnect. they are saying oh we're not going to do that. then they say oh, when they require we don't do that, that's changing the operation of the internet. i think that's kind of an underlying tension going through this whole thing. >> i would hope as we move forward in the future, there's clearly going to be lawsuits in this process, continued discussion about it and that we would make sure congress regulates commercial. i personally believe that what we will see follow will be a taxation of consumers. i think had they known that they

wouldn't be so quick to click the internet "like" to get these 4 million comments. i think we've set back free information arnold access to all americans. thank you, i yield back balance of time. >> thank you. recognize gentlewoman from michigan for comments. >> thank you mr. chairman. welcome, mr. wheeler. i appreciate you being here today. my friend, my colleague stated there was a statement that you did not intend to be a wall flower. i find that refreshing. though who took ta an oath to serve are the people and to be part of regulatory process should not be wall flower. they should be actively engaged and i appreciate the passion you have distributed today. i want you to know when i came to congress, i, too, had heard a lot about net neutrality.

i had come to congress with open mind and willingness to see both sides of this issue. i also am aware over 4 million people filed public comments with the fcc. 4 million. most of them average people voting yes. i also saw the president's comments on this issue. so one of the things i want to ask of you today, mr. wheeler is to really solidify you in this position. chairman wheeler you were supported by telecom companies when president obama selected you to this position. is that correct? >> i believe so. yes, ma'am. >> and you were unanimously both sides of the house confirmed by senate as well. >> yes, ma'am. >> so it was not just one side of the house, of the senate.

it was both sides. >> yes, ma'am. >> from 1976 to 1984, you worked for the national cable television association, which is clearly representing these agencies that would be affected and eventually became the president and ceo. is that correct? >> yes, ma'am. >> from 1992 to 2004, chairman wheeler, you served as president and ceo of the cellular telecommunications and internet association. is that correct? >> yes, ma'am. >> clearly you would not be a wall flower. so you know this telecom industry very well because if there ever was such a thing as internet or isp, you would know that correct? >> i spent my professional life in this space ma'am? >> so would you -- knowing this would you push for regulations that you knowingly were aware

would damage the industry that you represented for so many years? so the decision and the regulation you advocated for your position was this would not damage but enhance? >> thank you. that's a really good question. i think there's two answers to it. number one, yes i was chief advocate chief lobbyist for those two industries when they were growth industries not the behemoth they were now, a different time. i hope i was a pretty good advocate. they were my client. my client today is the american consumer. >> yes. >> and that's who i want to make sure that i'm representing. >> yes. >> doing that you do not help the american consumer by cutting off the notices of those who provide competitive broadband service to spite your face.

so what we were doing is wlg consumer protection with the investment necessary to provide broadband services. i went back to my roots as the president of ctia when the wireless industry sent me to congress and said we need to be regulated as title 2 common carrier with forbearance and congress agreed, and that's the rules under which the wireless industry, wireless voice industry since then has had $300 billion in investment and become the marvel of the world. so the answer is yes on both front. you can't reply consumer if you're not extending broadband growth.

but my job today is representing american consumers. >> just for the record, the questioning today is inferring regulations and you eloquently stated there is a balancing of this information in your experience, bring you to this point. would you support regulations that were hurt, isps, just because the white house thought it was a good idea. >> throughout this process, i have been trying to be very independent and very thoughtful. >> lastly do you honestly believe the net neutrality will stifle invasionnovationinnovation, hurt access of the tell telecom industry given your 40 years of experience. >> no, ma'am. it's not just my opinion that counts of but when major internet service providers like sprint t-mobile, frontier

communications, like google fiber, like hundreds of rural providers say that they, too believe they will be investing and continuing to grow competitive broad bandit, i believe that's reinforcement of this point. >> thank you for your service and i yield back my time. >> thank you. now recognize the gentleman from alabama mr. palmer for five minutes. >> thank you, mr. chairman. thank you, mr. wheeler, for testifying. you claimed in your opening statement, this was the most open and transparent rule making in fcc history. is that correct? >> yes, sir. >> you've claimed in your testimony that awful your communications with the white house were properly accounted for with ex parte filings. is that correct? >> yes, sir. >> would you put up the slide, please? can we have a slide? while they are working on that

slide, i have here a copy of your ex parte filing for the president's statement on net neutrality. mr. wheeler, it's two paragraphs long. three sentences total. are we left to believe the entirety of the white house's involvement in this process can be captured in just three sentences? >> i'm now being passed. thank you. this is the letter november 10, dear miss dorsch? >> that's correct. >> i believe it has a two-page attachment with it that gets quite specific and says what brightline rules should be things such as that, wireless should be covered, things like that. >> do we have that? >> they are working on getting

it. the portion that deals with this topic is the gentleman says three sentences. >> i disagree respectfully, sir that they put in here the entire statement of the president in which he was saying this is what i think we ought to stand for. >> if the gentleman will yield -- are you telling me jeffrey came over to meet with you and just read the president's stapt? i'll yield back to mr. palmer? >> i don't think that was the question. maybe i'm confused here mr. palmer. >> let me be a little more specific. your calendar shows 2014 you had two phone calls same afternoon with counselor and president john podesta and white house office of science technology policy. is that correct? >> if the calendar says that. i don't recall talking to mr. podesta but if the calendar says

that. >> you don't recall talking to mr. podesta. could you give us an idea -- do you have any recollection of a phone call from mr. podesta that day? >> if the calendar says, i'll stipulate to it. you know, let's -- >> do you recall talking to the white house office of science and technology. >> i've talked to them multiple times. >> can you give us an idea of what was discussion in either of those calls? >> i don't recall the specific -- what was the date you were specifying. >> february of last year, 2014. >> i don't know the specifics of that call. >> do you have a recollection of having those calls? >> if my calendar says i must have. i don't have a recollection of it. the other thing, there's a whole bunch of things going on that

are relevant but i don't know what we were talking about. >> it shows up on your calendar. if you are having a difficult time remembering the calls and certainly the content of those calls, should either of those calls been recorded as ex parte contacts? >> i think there's two answers to the question. one, i don't recall the content. secondly as we've discussed previously there are specific guidelines as far as ex parte guideline rules, as far as what ex parte is. thirdly, there is and has been since the first bush administration a ruling that context with the administration and with the congress are not ex parte. >> last question here.

what other contacts do you recall that you've had with the white house staff prior to april 2014 e-mails that have been publicly released? >> you have my calendar and you have my e-mails. >> mr. chairman, i yield the balance of my time. >> recognize the gentleman from california for five minutes. >> thank you, mr. chairman. mr. chairman i just want to thank you for your service. i'm tremendously proud of not just your decision but your testimony today and how you've handled yourself particularly considering, as one of my colleagues pointed out, your background. coming from the san francisco bay area, obviously the importance to innovation for us, having constituents and friends with companies like facebook and apple, we wan to make sure we're getting it right, presence in my

district of at&t, comcast, i understand the balance you had to go through. i also understand the importance of the balance of your independence and expertise of independent commissions and relationship with the administration and congress. i actually think there's obviously a very strong argument to be made that someone like yourself and your staff are more appropriately situated to avoid some of the politics and make these decisions. having said that i was particularly taken by your comments about whether you were by appearance looking like you were second-guessing your decision and vote and your response to that i thought was very forthright and determined and clear. so that was to the decision. knowing that the process is probably as important and the perspective of the process is as important as the actual decision making, how would you respond to the question of are you

equivocating about the questions you're being asked and the process? >> so i believe that we handled this congressman just as any other issue that comes before us whether it's exciting and headline grabbing as the much more mundane things we deal with. we use established procedures and precedents very religiously. >> would you say your comments about the pride in the actual decision making you feel equally as proud of the process. >> i think the process works sir. >> okay. so you commented about the number of the input from the public, 4 million comments. would you ascribe a reason for that? i've gotten lots of input i know we all have from average every day citizens. would you describe motivation?

>> i think that the internet touches people's lives more than any other network probably in the history of mankind. everybody -- believe me, everybody has an opinion about the internet. everybody wants to talk about the internet. and so when you begin addressing issues such as will the internet continue to be fair, fast, and open those are things it doesn't take an engineering degree or computer science degree to understand. those are things you can understand that affect people individually. i think that's why we had this kind of response. >> i appreciate that. interesting sitting in this room and seeing behind you a picture of the connection of the intercontinental railway. when you look at historical

perspective how the government has handled assets of the commonwealth but also want to be fair to people investing from the private sector, whether it was railroads or television or the media, "from your perspective, one of the concerns is who benefits and who does not. usually the poorest american have benefited the least at least in the short-term. do you have any comments about this rule making and digital divide? will it help eliminate that or not doing rule making and having sort of an office of rule making how it would affect the poorest of americans? >> if you do not have access free fair, open access, then you, per se have a divide. and so when we come out and talk about how there needs to be no matter where you are, no matter

what legal content it is, that there should be open access to it. that's the predicate to not having a divide. not to say there aren't challenges that we will continue to face but that the baseline is there has to be openness. >> thank you, mr. chairman. thank you. >> thank the gentleman. now recognize the gentleman from iowa for five minutes. >> thank you mr. chairman. thank you, chairman wheeler, for being here today and sharing your insights with us. i must admire your green tie. obviously i did not get the memo. >> it is that day. >> yes. >> i have a general question -- >> i grew up with an iowa woman who is big into irish you make sure you wear a green tie sir. >> well said. i have a general question for you and then a more specific

question. in your opening statement this morning you mentioned one of the fcc's goals, let me make sure i get this correct, is to protect open internet as level playing field for innovators and entrepreneurs. mr. wheeler, i am one of those innovators and i am one of those entrepreneurs. my concern as a small businessman, mr. wheeler, i've seen firsthand what happens to private and free marketplaces when the heavy hand of the federal government gets involved. typically what happens, less innovation lower qualities higher prices, higher taxes. an example of that recently is the affordable care act, which was supposed to help level playing field for small businesses. we've seep higher prices, less innovation, higher taxes. my question to you and a question i get asked in iowa often, mr. wheeler, what steps

is the fcc going to take to ensure -- to ensure that the internet remains vibrant innovative and open when history, once again, has shown us when the heavy hand of the federal government gets involved in a free and vibrant market bad things happen. >> thank you. first of all, i'd like to identify with you as one entrepreneur to another. i, too, have been a small businessman. i started half a dozen companies. some worked, some didn't. >> that happens. >> you understand that experience as well, i'm sure. and for the decade before i took this job, i was a venture capitalist who was investing in early stage internet property cole based companies. so i know both personally from

my own entrepreneurial experience as well as from my investing experience that openness is key. if the companies i had invested in did not have open access to the distribution network, it would have been an entirely different story. the thing most interesting about the difference between -- >> tell you to guarantee it. >> what you can tell constituents, it is openness that is the core of creativity. there should be nobody acting as a gateway and saying you're only going to get on my network if you do it on my terms. the key, then, as we go to the previous discussion, what you want to do is make sure you have that gateway not blocking the openness of entrepreneurs. at the same point in time, that gateway not being retail price

regulated so it can continue to invest. that's the kind of balance we were trying to do. i would urge you to tell your constituents the opportunity for innovation and the opportunity for the scaling that is required of invasion has never been greater because the internet is open. >> with all due respect many in iowa would say you're trying to solve a problem that doesn't exist today. i have a specific question for you. during the interview at the consumer electronics show in january, you said you had an aha moment in the summer of that year when you realized the telecommunications act of '96 applied title 2 classification to wireless phone providers that exempted them from any of its provisions. later in the year house communication subcommittee chair greg walden said he met with you in november 2014 to reiterate congressional republicans title 2 regulation of the internet. in that meeting chairman walden said you assured him you were committed to net neutrality

without classification of broadband under title 2. sounds to me like a flip-flop. can you explain that difference? >> i respect mr. walden greatly and i'm going to be testifying before him on thursday. i saw that he made that statement. i went back to the contemporaneous notes from that meeting. we have a completely different set of regulations and, in fact the notes. because my notes say that i said that we would use light touch title 2 and section 706. i don't know what's going on. all i'm saying is those are what my notes are, sir. >> thank you. i yield my time. >> thank you. now recognize the gentleman from georgia, mr. carter, for five

minutes. >> thank you, mr. chairman and thank you, mr. wheeler, for being here today. we appreciate it very much. in the support five minutes i have, i want to try to get a better understanding of two things. first of all, it just throughout the process today and through my reading and through listening, it just appears that the whole process, there was more attention paid to the white house than there was to congress. i just don't understand why that would be the case in an independent body like yours. did you serve on the transition team for the obama administration? >> yes, sir. >> you did? that is correct? so it's safe to say and true to say that you have a very close relationship with the president. is that right? >> i'm not sure that i have a close relationship with the president. i know the president. >> well, you served on his transition team. i don't think he'd have somebody who wasn't close to him on his transition team. agreed? >> okay. okay. fair enough.

fair enough. he didn't ask me to be on his transition team, let's put it that way. after the rule -- the day after the rule of a the vote for the did it strike you as being interesting at all that a fellow commissioner of yours called the new rules president obama's plan? >> everybody's entitled to their own opinion. and you know, i think it's appropriate to, to, to state something very clearly. that response to what you're saying. since taking this job, i met once with the president in the oval office. it was the first week on first couple of days on the job. it was congratulations welcome to the job. >> i understand that -- >> and in that meeting -- >> but my question -- >> in that meeting he said to me, you need to understand i will never call you. you are an independent agency.

>> then why do you think a fellow commissioner made the comment that this is president obama's plan for the internet? why do you think that someone who make that -- >> because he has been good to his word sir, and i have no idea why somebody would want to make that kind of -- >> why do you think that the democratic national committee made the statement that it's president obama's plan? >> i -- i've noticed occasionally over time that both committees will engage in hyperbole. >> so you just think it's hyperbole? >> sir -- >> do you agree with the dnc's statement? >> i believe that this is a plan that was put together by the fcc. >> so you do not agree with the dnc's statement that this is president obama's plan? >> well, let's get specific. one, he didn't have section 706 in what he sent when he when he sent something in. secondly, he didn't cover

interconnection, which we cover. thirdly, he talked about forbearing for rate regulation but not the 26 other things that we do. i think that we produced a plan that is uniquely our plan. and and is a plan that is based on the record that was established before us, and that when the president joined the 64 democratic members of congress and the millions of people and said he, too, thought this made sense that he was piling on rather than being definitive. >> well all that's fine. but, but let me ask you, through the process of this revolution of the plan did your thought process change at all? i mean, initially it appeared that you had in mind what was referred to as a hybrid 706 plan. >> you actually used the right word there. my evolution on this plan. i started out with pure 706. and then i realized as i said in my testimony that that wouldn't work because of the commercially

reasonable test. and so i started exploring title 2 kinds of -- >> did anyone lead you in this exploration? >> yes, sir. all kinds of commenters, and a lot of work that was put in to that -- >> do you think any of those commenters were influenced by the white house? >> i have no idea. >> one final question. do you feel that you paid as close attention to the white house as you paid to congress? >> sir, i believe that i have frankly spent more time discussing this issue with members of congress than with the administration and -- >> then ultimately do you feel like you listened to the input of congress more so than the white house? >> i paid full attention to the record that was established in this proceeding. and it included members of congress saying no, don't do title ii, and it included members of congress saying do do

title ii. >> again do you feel like you paid as close attention to congress as you did to the white house? >> i think my responsibility is to be responsive to all of the people who are -- >> i can't tell whether that's a yes or no. >> i think it was very responsive to congress. >> thank you very much. >> thank the gentleman. and i appreciate the gentleman's commitment to st. patrick's day as exemplified by that jacket. but the chair is prepared to rule that he has only been outdone by the gentleman from wisconsin who clearly is wearing his colors today, and we now recognize that gentleman from wisconsin for five minutes. >> thanks for hanging around so long. last month "the wall street journal" you maybe saw had an article reporting that the white house had spent months in a secretive effort to change the fcc course. this news come as a surprise to you or when you heard about it what was your reaction? >> so, there is a standard process i believe where the

white house works on developing their position. i was not a part of it. >> did it surprise you when you heard about it? >> it's not a surprise that something like that goes on. >> okay. last spring and summer you had various meetings with white house officials. did you become aware at that time that the white house was working on alternative to your original proposal? >> i had had -- i had heard rumors that the white house was looking at this, as i say, like they look at all other issues. to develop an administration position. >> okay. the white house apparently in formulating this alternative had dozens of meetings with online activists, start-ups, traditional telecommunication companies. participants were told not to -- or we believe participants were allegedly told not to discuss the process. were you aware of these meetings at the time? >> i knew that there was a

process. that there that there were this this group. i did not know who they were meeting with. >> okay. i yield the rest of my time. >> thank you. now recognize the gentleman from maryland, mr. cummings. >> mr. wheeler as we now wind down this hearing, mr. chairman i want to thank you again for your testimony. i think that there will you know, when decisions are made by various bodies, commissions quite often people are in disagreement with those decisions. and i don't think there's anything wrong with looking behind the curtain to try to figure out what the process was, because one of the things that we've been pushing very hard on in this committee is the whole ideatransparency.

and so your testimony has been very enlightening. i think we need to keep in mind, you know that, these decisions are made by people who will come to government, and they don't have to do that. but they come to government, trying to bring their own experiences to the table. their concerns and their hopes of bringing us more and more to that and more perfect union that we talk about. and so i want to thank you for all that you've done, and continue to do. and i want to thank the other commissioners and your employees. i think a lot of times in these circumstances, we forget that there are employees who have worked very hard on these issues, and trying to do it right.

and so that's very important. i'll take that back to your commissioners, and the employees. and i'm hopeful that we can move forward here, again, i've listened to you very carefully. there was a moment i mentioned to my staff, that kind of touched me a bit is when you were asked whether you backtracking on your decision. and the passion that you responded, in saying that absolutely not this is a decision that you all made and that you are proud of it, and that is something that is very important to you. you can't fake that. you can't fake it. and as a trial lawyer, i'm used to watching people testify.

and, another thing that you said, and you were very clear, is that you adhere to the rules. and i appreciate that. and i believe you. and so we look forward to continuing to work with you. and again i want to thank you for your testimony. >> thank you, sir. >> mr. chairman, i appreciate you being here today. we were made aware that the inspector general has opened an investigation of this process. are you aware of that investigation? >> no. >> it's my understanding it's not an audit it's not an inspection, but an actual investigation. would you -- will you be willing to cooperate with this investigation? >> of course. >> i think one of the key things, and it was brought up on both sides, is the process of openness and transparency. my personal opinion there could have been a lot more done to

maximize the transparency and the openness. the rules do allow you latitude to give it more transparency than you did. i think one of the things our body should look at is compelling that openness and transparency, rather than making it simply discretionary. and that's something we'll have to take back, because there are rulings that go one direction others, some people are happy some people aren't. but the idea that the public could say, have a 30-day opportunity to see the final rule, i think, rings true with a lot of people. this notion that right up until the time you voted for it, nobody outside that commission is allowed to see the final product does not -- does not lend itself well to maximizing openness and transparency. that's just my comment. it's not a question. but i do think a 30-day window would do that.

i also think that the interactions with those who have an opinion is fine. it's a healthy one. but the lack of disclosure about those, roverly redacting e-mails, does lead one to believe that there was a bit more of a secret type of communication going on there. and i think you can understand at least i hope that you can appreciate why some people would come to -- come to that conclusion. particularly given the dramatic change in the policy that you took. nevertheless, i think this is a good and healthy hearing. we appreciate your participation. that's what this process is about. there are fact finding things that we engage in and i appreciate your participation here today. we do have a number of outstanding requests from the fcc that we would appreciate your providing that information to this committee. some take a little bit longer in time. some are fairly easy. but we appreciate your staff who have to do a lot of this work

and thank them for those efforts. this committee now stands adjourned.

and we are live on capitol hill this morning. defense secretary ashton carter and joint chiefs chair general martin dempsey will be testifying before the house armed services committee today. they'll be questioned about efforts to combat isis and defense programs overall. we expect this hearing to get under way in just a couple of moments. live coverage here on c-span3.

before we ask unanimous consent that noncommittee members if any be allowed to participate in today's hearing, after all committee members have had an opportunity to ask questions. and by way of explanation i might say that one of our committee members has tentatively been appointed to another committee. and his replacement has tentatively been named, mr. russell from oklahoma. but it has not been ratified by the republican conference yet. so mr. russell is with us today but without objection noncommittee members will be recognized at the appropriate time. let me welcome our distinguished witnesses to today's hearing.

secretary carter, thank you for being with us. you have been in this room in a variety of capacities over the years. but this is the first hearing since you were confirmed as secretary of defense roughly a month ago. and we are very glad to have you with us. general dempsey, thank you for being here. and i want to say again, all the committee members appreciated your participation in our retreat about a month ago at annapolis. the fact that you would take time to come out there, meet with us, and discuss some of the challenges we face was extremely helpful, and meant a lot, and we are very grateful for that. for being here today and for your many years of service. as y'all know, this committee has done things a little differently this year. rather than start out talking about the president's budget we have spent the last two months looking at the national security challenges that we face around

the world. and i think that has put us in a better place to be able to look at the administration's budget request, and a number of the other issues that are before us. i would say for me, one of the key takeaways from the last two months has been the growing threat to our technological superiority. we have had classified and unclassified sessions on that. and to me it is one of the key challenges we face. and as i mentioned mr. secretary as i was perusing my bookshelf i came upon a very brilliant addition called keeping the edge managing defense for the future. edited by one ashton b. carter and john p. white. and there is a particular chapter talking about the technological edge that i had

made some notes in, where essentially it said two of the things we have to do to maintain the technological edge, is to align our defense procurement practices with market forces, and secondly, to remain the world's fastest integrator of commercial technology in to defense systems. i kind of wonder how we're doing these days. i think that's very relevant for today. i just had a meeting with one of the leading defense thinkers last week that talked about the challenge of integrating commercial technology into defense articles, and how we are not doing as well as we should. as you know, reform is a major priority of this committee on both sides of the aisle. mr. smith certainly shares my concern, as do, i think all the members here. and so that's one of the topics that we want to talk with you about. there are many others including the president's request for the authorization to use military

force against isis. we've had several sessions on that with a lot of concerns with the wording that has come to us from the administration. i know members will want to ask questions about that and other topics. before we get to those, let me yield to the distinguished ranking member sit-in for today, the distinguished gentle lady from california, ms. davis, for any comments she'd like to make. >> thank you very much mr. chairman. secretary carter chairman dempsey, thank you both for being here today. i want to first send our best wishes to the ranking member adam smith. we all know that he's been through a difficult time. and we wish him a quick and a speedy recovery. i want to ask unanimous consent that we put his remarks and his opening statement into the record. >> without objection. >> chairman dempsey this will likely be your last time before this committee. you're probably going to find some excuse to get you back, i'm sure.

while i'm sure you aren't too broken up about not coming back, we will surely miss your thoughtful discourse and your care of our young service members. thank you very much. sir, for your service. and secretary carter i bet you'd rather have waited until after the ndaa was complete before coming up and speaking with us. but i think that it presents a great opportunity to help shape the budget during a very difficult time and your expertise, your insights, are going to be very well received. thank you, sir. sequestration is obviously at the forefront of everyone's minds. but we must also remember that we are still engaged in two conflicts facing unconditional threats halfway around the world, while still battling suicide, sexual assault, and retention and recruitment issues here at home. but these are only a few of the discussion points that we face when looking at the budget. we have to look beyond just defense to the entire budget and we realize that cuts to other portions of the federal budget

will affect the department of defense more often than we realize. it was just yesterday that the secretaries and the service chiefs spoke about of those who consider going in to the service, roughly 75% do not meet the requirements today. and we have to be mindful of that, and maybe that's what we call a whole government approach to that particular issue. we must also ensure that this budget is in line with our national security strategy. we cannot address conflicts around the globe if our strategy is not in line with current threats and our budgetary situation. we should not be finding piecemeal ways of fixing these problems in our budget, but we really do, and i know the chairman believes in this, rolling all of our sleeves up and working to the in addressing sequestration as a whole. i look forward to both of your statements here today, as well as the opportunity for an honest and open dialogue. thank you, again. thank you mr. chairman. >> thank the gentle lady. mr. secretary, again, thank you for being here. without objection your full

written statement will be made part of the record. please proceed. >> thank you very much chairman thornberry. thank you, congresswoman davis. thank you also. and all the members of the committee, thank you for having me here today. it's a pleasure to be with you once again. i've had the opportunity to speak with many of you before but this is my first time testifying as the secretary of defense. and i know that all of you, all of you on the committee including the 23 veterans, on this committee share the same devotion that i do to what is the finest fighting force the world has ever known. and to the defense of our great country. and i thank you for that. and i hope that my tenure as secretary of defense will be marked by partnership with you on their behalf. i'm here to present the president's budget for the

department of defense for this year fiscal year 2016, and i strongly support the president in requesting a defense budget above the artificial caps of the budget control act. that is above so-called sequester levels. next year, and in the years thereafter. i also share the president's desire to find a way forward that upholds the fundamental principles behind the bipartisan budget act of 2013. and i support his commitment to vetoing any bill that locks in sequestration, because to do otherwise would be both unsafe, and wasteful. the administration's therefore proposing to increase the defense budget in line with the projections submitted to congress last year. halting the decline in defense spending imposed by the budget control act while giving us the resources we need to execute our

nation's defense strategy. as the chairman noted, strategy comes first. and that's the appropriate way to think about the budget. but, and i want to be very clear about this, under sequestration which is set to return in 197 days, our nation will be less secure. and mr. chairman, as you and your colleagues have said, sequestration threatens our military's readiness. it threatens the size of our war fighting forces, the capabilities of our air and naval fleets and ultimately the lives of our men and women in uniform. and the joint chiefs have said the same. and the great tragedy is that this corrosive damage to our national security is not a result of objective factors, logic, reason instead sequester is purely the fallout of

political gridlock. its purpose was to compel prudent compromise on our long-term fiscal challenges. a compromise that never came. and this has been compounded in recent years, because the defense department has suffered a double whammy. the worst of both worlds. that has coupled mindless sequestration with constraints on our ability to reform. we need your help with both. and i know that chairman thornberry, ranking member smith, and others on this committee, are as dedicated to reform as i am. and i appreciate the -- your dedication to it and the opportunity to work with you. because we at the pentagon can and we must do better at getting value for the defense dollar. there are significant savings to be found across dod, and we're committed to pursuing them. but at the same time i have to note that in the past several

years, painful, but necessary reforms proposed by dod reforms involving elimination of overhead, and unneeded infrastructure, retirement of older systems, and reasonable adjustments in compensation have been denied by congress at the same time that sequestration has loomed. if confronted with sequestration level budgets and continued obstacles to reform i do not believe that we can simply keep making incremental cuts. we would have to change the shape and not just the size, of our military. significantly impacting parts of our defense strategy. we cannot meet sequester with further half measures. as secretary of defense i will not send troops in to a fight with outdated equipment inadequate readiness, or ineffective doctrine. but everything else is on the table. including parts of our budget

that have long been considered inviolate. this may lead to decisions that no americans including members of congress, want us to make. now i'm not afraid to ask the difficult questions. but if we're stuck with sequestration's budget cuts over the long-term our entire nation will have to live with the answers. so instead of sequestration, i urge you to embrace the alternative. the alternative. building the force of the future. powerful enough to underwrite our strategy. equipped with boldly new technology as the chairman stressed. leading in domains like cyber and space. being lean and efficient throughout the enterprise. showing resolve to friends and potential foes alike and attracting and remaintaintaining the

best americans to our mission. americans like elite cyberwar yores i met last week when i visited our cyber command. that's the alternative that we can have without sequestration. so mr. chairman, the world in 2014 was more complicated than anyone could have predicted. given today's security environment, the president's proposed increase in defense spending over last year's budget is responsible prudent and essential for providing our troops what they need and what they fully deserve. thank you, and i look forward to your questions. >> thank you sir. general dempsey i'm not quite ready to let you go so i'm not going to talk about this being one of your last hearings. but thank you for being here, and please make any oral comments you'd like to make. >> thank you, chairman, congresswoman davis, distinguished members of the committee, i appreciate the opportunity to provide you an update on our armed forces, and

to discuss the defense budget for 2016. and i will add it has been a rare privilege to have represented the armed forces of the united states, the men and women who serve around the world, before this committee to live up to our article 1, section 8 responsibility together. and so if this is my last hearing, i thank you for the opportunity and if it's not, until we meet again. i'd ask you, chairman to submit my written statement for the record and i'll defer the many -- i'll defer mention in my opening statement of the many security challenges we face because i'm quite confident they will be addressed in questions. but i will say the global security environment is as uncertain as i've seen in my 40 years of service. and, we're at a point where our national aspirations are at risk of exceeding our available resources. we have heard the congress loud and clear as it has challenged us to become more efficient and

to determine the minimum essential requirements we need to do what the nation asks us to do. and pb 16 is actually that answer. in my judgment this budget represents a responsible combination of capability, capacity, and readiness. it's what we need to remain at the bottom edge of manageable risk against our national security strategy. there is no slack. i've been here for four years now, and we've watched our budget authority decline. i'm reporting to you today there is no slack no margin left for error, nor for response to strategic surprise. funding lower than pb-16 and a lack of flexibility to make the internal reforms that we need to make will put us in a situation where we'll have to adjust our national security strategy. that doesn't mean it disappears in its entirety but we will have to make some adjustments to the way we do business.

you may decide that's a good thing. i will certainly be willing to have that conversation with you. for the past 25 years the united states military has secured the global commons we've deterred adversaries, we've reassured our allies and we've responded to crises and to conflict principally by maintaining our presence abroad. it's been our strategy to shape the international environment by our forward presence and by building relationships with regional partners. in general terms, one third of our force is forward deployed. one-third has just returned. and the other third is preparing to go. of necessity, even at that, there have been certain capabilities who actually operate half the time deployed and half the time back at home. and this, as you know, puts a significant strain on the men and women and their families who serve in those particular specialties. sequestration will fundamentally and significantly change the way we deploy the force and the way we shape the security

environment. we will be at the end of the day, if sequestration is imposed, 20% smaller, and our forward presence will be reduced by more than a third. we'll have less influence and we will be less responsive. conflict will take longer to resolve, and will create more casualties, and cost more. in an age when we are less certain about what will happen next. but i think we would agree quite certainly that it will happen more quickly we will be further away, and less ready than we need to be. simply stated, sequestration will result in a dramatic change in how we protect our nation, and how we promote our national security interests. mr. chairman members of this committee, our men and women in uniform are performing around the globe with extraordinary courage, character, and professionalism. we owe them and their families clarity, and importantly, predictability on everything from policy to compensation, health care equipment training and readiness.

settling down uncertainty in our decision making processes, and getting us out of the cycle that we've been in, which has been one year at a time will help us keep the right people, which after all is our decisive edge as a nation in our all-volunteer force. and we will be able to maintain the military that the american people deserve and frankly expect. i'm grateful for the continued support to our men and women in uniform from this committee and from the congress of the united states and i look forward to your questions. >> thank you, sir. i might also note that we have mr. michael mccord the comptroller of the department who is available with us to answer questions and mr. mccord i might just warn you that audit came up several times yesterday with the service chiefs and if somebody else doesn't ask about it, i'm going to at the end, because there is concern that some of the defense white agencies are going to be the holdup, rather than the

services. and we'll get into that as appropriate. mr. secretary i very much appreciate your willingness to work with us and the senate on various reform issues. i think you make excellent points about the need to find greater efficiency in the department. but -- and again, thinking back to what you wrote 15 years ago as the chairman just said our security environment is incredibly more complicated than we could have imagined in the year 2000 when you wrote those words. and so it seems to me that even more than efficiency some sort of reform, and especially reform in how we acquire goods and services, is needed to make the department more agile. because there's no way we're going to predict what's happening, and if we -- if it takes us 20 years to field a new system, there is no way we will be up with technology, or

meeting the threat so the need for agility is even a higher priority, in my mind than the need for efficiency. do you have any comments about how that interplays? >> i think that's very wise. it's not just about saving money. if we can't keep up with the pace at which technology is changing in the world as a whole, and we can't turn technological corners faster than a typical program duration now, in the department of defense, which lasts years and years and years, we're not going to be the most modern military. so it's not just a matter of saving money. it's a matter of being the best. and the word agility is a perfect one. back when that was written, it was even apparent then, 15 years ago, that the era in which all the technology of consequence defense was developed within the

department of defense, and within the united states it was even apparent then that that era was coming to an end. now, a lot of technology of vital importance to defense, is out there in the world. we need to be the fastest and the first to have it in order to keep up with and keep ahead of all our opponents. so i couldn't agree with you more. >> and let me ask about one other area of reform. a number of people are concerned about the reductions in end strength for especially the army and the marine corps and yet as one looks at the pentagon, you haven't seen commensurate reductions in the number of folks who work there. so there is interest, including from a number of people who've come out of the obama administration to streamline the bureaucracy in the department, and thin out some of those layers that add cost and time to -- that affect this agility

we were talking about. is that something that is on your radar screen? and is there a chance we could work to the to give you some authorities to move folks around, but have the effect of thinning that out, and lowering the bureaucratic hassles? >> i would very much welcome and appreciate your help in that regard. now a lot of that is on us. we need to do it ourselves. but in many cases we would benefit from legislative help. but if as you use the example of end strength, if all we're doing in a period of straightened budget is shrinking tooth and the tail remains the same size, that's an unjustifiable way of managing the place. so we've got to got to got to get out these headquarters these offices that were set up once upon a time seemed like a good idea at the time but have

lost their purpose, or lost their way, or lost their vitality, and we need to be aggressive with ourselves and rigorous. i would very much appreciate your help in working with you, and i don't know who those people are that you said but i associate myself with them. >> well i think there's interest on that on both sides of the aisle again. mr. chairman let me just ask you one question, when you were kind enough to be with us at our retreat you said, and you said we could quote you that the president's budget level was the lower ragged edge of what it takes to defend the country. the president has requested $561 billion in base, $51 billion in oco for a total of $612 billion when you put it together. is it still your opinion that that is the bare minimum. i don't want to put words in your mouth. but how would you describe how that that figure $612 billion, meets the national security needs of the country for the

coming fiscal year? >> thank you, chairman. as i mentioned at our retreat or your retreat where you were kind enough to invite me the strategy that we developed in 2012 if you recall, we submitted a budget to support that strategy in 2012 and then in '13 and '14 and the budget has been continually pushing down from that level at which we said we could achieve our strategy at moderate risk. we're now at the point where the risk to the strategy has increased. and what we're reporting to you, as a group of joint chiefs, is that we've reached the edge of that. so anything below that level of budget support however you choose to knit it together for the total amount will cause us to have to adjust our strategy. it's as simple as that. some of those adjustments will not be life altering if you will, or security environment altering, and some very well may

be. >> thank you. ms. davis? >> thank you, mr. chairman. in line i think with the discussion that we're going to have today, could you go back and be a little more specific in terms not just the authorities that you need, but flexibility? how can we get that best value for the dollar that you were suggesting? what is it that -- what is it that the congress has denied actually in terms of that flexibility in the past, and what would you like to see? how can we best work together on that? >> well thank you, and i'll give you some examples. and i realize this is not a popularity contest. in terms of these proposals. because they're tough things to do. and that's why there's been debate over them. >> that's why you're here. >> i think that's why we're all here. we have to do what we have to do for the country's defense.

but it is tough. and it falls in to three categories. and i'm using the categories that i've learned from the chairman. one is in the acquisition area. where we need to have the discipline to stop things that aren't working. to not pretend that something is going to work when it isn't. just to keep going. that we can afford it when we can't. just to keep going. then we have to stop it and all the money on it has been wasted. so in the acquisition area -- >> is there one particular area that when you make that statement, that you're thinking about, that needs work? >> yeah i -- well there's one is the process and the paperwork which is ridiculous. and which leads to these perverse results. because the system can sort of keep suggesting to itself that it's doing the right thing. and the other thing is the incentives that we -- remember

we don't do anything in the pentagon -- we don't build anything in the pentagon. we contract out to our excellent industry. so we depend upon our industry and the incentives that we give them that to provide what we need that are included in contracts and other relationship is another place that's critical to think about in the area of acquisition. then there's compensation. how we compensate our troops, our retirees families, all very important, very sensitive issues. but important part of our spending. and then a third is the one the chairman was mentioning a moment ago which is kind of the overhead. the people overhead. the facilities infrastructure and i know base closings are not a wonderfully popular thing either. but at some point when the budget comes down, you need to make sure that you're taking away the tail the same way you took away the tooth. i organize in those three categories which i think are the same ones that the chairman

does. but these are difficult chases, and no question about it we can only do these things when we do them together. i know they're hard. >> and general, did you want to comment on that, as well? and flexibility for the service chiefs i know that there's some concern that goldwater nichols has created some constraints. perhaps it's time to address those. >> speaking as a former service chief, the service chiefs have been uniquely limited in their influence over the acquisition process. in terms of identifying requirements, and then it passes into the acquisition community. neither side is trying to in some way limit the other. but there's no kind of life cycle responsibility. so the -- so the requirements grow, and the procurement time lines stretch. and i'll just give you an example. many of you in this room probably have an iphone. iphone 6 i would imagine. the first iphone was introduced

to the market eight years ago. so in eight years, we've got six variations of iphone. that's not the way we deliver our information technologies. >> thank you. thank you mr. chairman. go on to the others. >> thank the gentle lady. >> mr. chairman, thank you. general dempsey thank you for your service. and so secretary carter. welcome to this hearing today. and your new leadership of our nation and our military and i would like to start with a article that i read back in december this year and then get to a question. the article is titled down the opium rat hole. if you spent 13 years pounding money down a rat hole with little to show for it you might wake up one morning and say, hey, i'm going to start pounding money down the rat hole. unfortunately, the united states government does not think that way. and when that rat hole is

afghanistan, the billions are essentially without end. mr. secretary, when i listen to all the threats to a strong military and i have camp lejeune down in my district and i think about all the problems we are faced with, it brings me to this question. we have nine years of an obligation, an agreement that was not voted on by the congress and of course the president did not have to bring it to the congress, i understand that so i'm not being critical but here we are in a almost desperate situation to fund our military so we will have an adequate and strong military and then you read articles like this, and there's one more that came out this week that says this is from john sotko by the way,

afghanistan cannot manage billions in aid u.s. inspector finds. there are people on this committee in both parties and we have met unofficial i with mr. sopko for two years and listened to him, and i'm going to ask you and mr. mccord how in the world can we, for nine more years, continue to spend millions and billions of dollars in a country that we have very little accountability? and we had general campbell here last week, and i was very impressed with him. let me take that clear. but the point is that we will continue to put money down the rat hole and never say that it's time to stop putting money in the rat hole. why in the world can't an administration, and i'd say this if you were secretary of defense with george bush or the next president, whoever it might be why can't people like yourself,

sir, be honest with the american people who pay our salaries who pay for the military, and say you know what? we need to rethink where we are. we need to have a benchmark. we need to say in three years, if this has not been accomplished, and we have not reduced the waste of money, then we might need to change our policy and start pulling out. i want to ask you sir, with mr. mccord there are you going to bring in john someko and these other people to tell you about the absolutely waste of money in afghanistan that is taking away from us rebuilding our military? >> well thank you for that congressman, and you're very straightforward question, i'll try to give you a very traitforward and honest answer there. kind of two parts to it. one is, the effectiveness, and the controls on contingency contracting. in afghanistan, and before that in iraq.

there were and persist issues with contingency contracting going back years now. i know that mr. sopko tracks them. and i remember when i was under secretary for acquisition technology and logistics the difficulties in teaching our people to do contingency contracting in such a way that there were always that contracts were awarded properly. that they were overseen when they were being executed. and that was not happening. in afghanistan in many places. i think the department's improved over these long years of war. but it's not perfect yet by any means. it's not where it should be. so i want to associate myself with your argument i guess indirectly, and mr. sopko's we've got some work to do. on the strategic question of afghanistan, i would say the following.

it to me rat hole doesn't quite capture where we are in afghanistan. i certainly hope that where we are in afghanistan is that we are going to be able over the next couple of years to increasingly turn the security, the basic security for that place over to the afghan security forces that we have build in such a way that it doesn't -- that country doesn't pose a threat to the united states anymore. which is the reason we got in there in the first place. now that's a difficult task. general campbell is doing it, as well as anyone can possibly expect and we have in president ghani in afghanistan one new ingredient, which is a very bright one. this is somebody who when i visited in my first week in office, kabul, the first thing he said to me was, would you

please go back and thank americans, and especially thank american service members for what they've done here and are doing here in afghanistan. that's a whole different atmosphere. so in partnership with him over the next couple of years, our objective is to stang the afghan security forces up on their feet so that we can have a very small presence there in the future, not the big force we've had, and leave it in a circumstance where it doesn't threaten us anymore. that's the plan we have. you can never say a plan is 100% probability of being successful but i think this has a high probability of being successful. ghani is an important new ingredient in that. >> thank you. >> gentlemen, we've got the largest committee in congress. in order to get everybody a chance to ask questions i'm going to ask members to limit their time to five minutes. if at any point you need to supplement and add because if a question lasts three minutes and

you've got two minutes to answer it it puts you in a tough position. so feel free to add any that you need to at the end. >> thank you, mr. chairman. secretary carter and general dempsey, thank you for coming today. secretary carter it was a pleasure working with you in the past, and i'm glad to have you back. as i mentioned in the service chiefs and secretary's hearing yesterday i appreciate your sharing the dangers of sequestration. it is a short-sighted policy that undermines our nation's ability to project power, work with our friends and allies and protect our citizens and i hope that our congress can show the courage to repeal this bill. now while our nation faces challenges across the globe we have made strategic choices in developing a focus in the asia pacific region. mr. secretary, it is my understanding that in many areas such as infrastructure

maintenance, when we take cuts today we end up paying far more in the future. can you talk about areas where we would likely see increased future cost, if sequestration cuts funding today? and if you could make your answers brief, please. >> i'll give you simple example of why sequestration is wasteful, as well as damaging to security. and that is when we are forced by the suddenness of it to curtail the number of things of the overall size of our procurement in such a way that we drive up unit costs. or we prolong the duration of a contract. you all know that a short-term contract you pay more for than a long-term contract. that's the kind of thing we're driven to by sequester. and it's obvious to anybody who's contracted with somebody to get their lawn mowed or

something, that that is economically inefficient. so it's more than strategically dangerous as the chairman rightly said, it's wasteful. which is not what people want. >> thank you very much. also i have another question for you. can you comment on how broadly speaking the fy-16 budget supports the strategic rebalance to the asia pacific region? how important was removal of the restrictions on the government of japan funds for the relocation of the marines in last year's defense bill? and also are you looking to activate the guam oversight committee, which i felt was a helpful internet tool to the dod. and how is revision of the u.s./japan defense guidelines going and how important is that to our bilateral relationship with japan? >> well, thank you. just the asia pacific so-called rebalance is central to our

strategy. that's where half of humanity lives. that's where half of the economy of the world is. and you know, strategy means keeping everything in perspective. and while we're -- while we're focused as we need to be on isil, afghanistan, which is already mentioned ukraine, and other trouble spots elsewhere in the world we have to remember that this is where much of our future lies. and the american military presence there has been the central factor that has kept paegs and stability, and therefore prosperity going in that region. we need to keep that going and you mentioned japan. and the revision of the guidelines there. this is a extremely important development. by the way, prime minister abe will be visiting the united states shortly. this is an opportunity for japan

to become a -- help us maintain the peace in the asia pacific region, but the guidelines are global in scope. so it gives a military that is quite capability in japan, and a country that shares a lot of our strategic objectives and basic values a new way of helping us out. in the region and around the world is a very positive thing. >> thank you very much secretary. my time is almost out so i don't have time for the third question. so mr. chairman i yield back. >> thank the gentle lady. mr. forbes. >> thank you mr. chairman. chairman dempsey, the country owes you a great deal of gratitude. we thank you for your service, all you've done for this committee, and for the country. mr. secretary, we thank you for being here today and it was my full intention to come in here and applaud you and talk about how talented you were, which i believe that to be the case and realize what a difficult job you have until i heard your opening remarks. and let me just ask this

question because you heard chairman thornberry mention the phrase that if we get the -- anything below the president's budget, that we would go below the lower ragged edge of what we need for national defense. do you agree with that? >> i do. >> and would you therefore say if we're going below that lower ragged edge, that it would be a crisis for national defense if we went to sequestration, as opposed to the budget the president's proposed? so that would be yes? >> yeah, yeah. >> would you also say that that would be devastating to defense if we went there? >> devastating. >> then help me with this because what really took me back is when you said that you supported the president's position to veto any bill that didn't do away with sequestration, because you do understand that the president's position is that he would be veto any bill that doesn't do away with sequestration, not just for national defense, but also for everything else. do you understand that's the president's position? >> i do. >> so then what you're telling me is the secretary of defense,

you would be prepared to support a veto that would end up with a crisis for national defense, and be devastating to national defense, unless the president can also get all the funding he needs for epa, irs, and all the other nondefense items that he's proposed in the budget. is that your position? >> what we need for defense, congressman, is two things. we need stability -- >> no, no that's not my question, and i don't known cut you off. but as the chairman said i only have five minutes. i just need to have you tell this committee that is the secretary of defense you're coming in here today and saying that unless the president gets a full sequestration taking off the limits of spending that he has on epa irs, and other nondefense matters, you would rather have a crisis when it comes to national defense funding? >> no, that's not -- >> then would you support a bill that this committee would pass that would do away with sequestration for national

defense, only? >> no the president -- no, i would not. >> so then you would -- >> and i'll tell you why. we need relief from sequestration across the board. every other manager of an agency in the government -- >> mr. secretary, you're not managing all these other agencies. you're coming in here today telling us that you would be prepared to accept a crisis for national defense, unless the president gets the funding he needs for epa or the internal revenue service or all these other programs he has across the country? >> no i -- no congressman. i take a view of national defense and national security that is that takes in to account the fact that to protect ourselves, and as part of security, we need the department of homeland security -- >> i'm not saying that. but i'm saying you don't necessarily need the internal revenue service -- >> we need our law enforcement agencies. i think each of those budgets can be looked at in their own terms. >> mr. secretary you are the expert on defense and what we

need is that testimony today. and what bothers me is when you'll come in here and say that you'd rather have a crisis in national defense, which is what the president's saying by the way, than to cut or have a cap on any nondefense spending that could be in anywhere else in the government. and i just find that a travesty. let me just say this -- >> i think what the president's saying, congressman, and which i agree with is that we need relief from sequester across the board. it's no way to run -- >> but you're the expert on defense. and we may argue on irs or epa but what we need is when you come in here as secretary of defense to tell us that you're not willing to accept a crisis in national defense if you can't get everything you want with the irs or epa some of these other funding programs. and just to put it on the line, when you talked about the flexibility that you need in department of defense, let's just recognize also that sometimes congress has to hold up flexibility if we'd have given it to the pentagon in the '80s we wouldn't have stealth platforms, we wouldn't have

precision munitions, you probably wouldn't have jointness and also sometimes when you talk about these outside cuts to facilities, remember what we did to the joint forces command. oh, we cut that down and said we're going to save all the money. all we did is take all those jobs and spral liez themcentralize them. so we need to make sure, mr. secretary, and i just say this with all due respect, that we're dealing with a crisis we have in national defense. that's what this committee should be about and what the pentagon should be and we shouldn't have to hinge that on the irs or the perks, a. with that, mr. chairman, i yield back. >> thank you, mr. chairman, and welcome, secretary carter. it's great to have you and i look forward to working with you and have appreciated your insight and knowledge just in the brief testimony you have been able to make today. chairman dempsey, it's great to see you. as we may not see you again, i want to reiterate how much i

appreciated your forthcoming testimony before this committee. and just to address briefly the sequestration, i share the view you have that we have to deal with it across the board. as we know, how we defend our country does not exist in isolation. i come from a state that is heavily invested in education and it is that educated community that leads so often on developing all the it technologies that all the service chiefs have acknowledged and are very important to how we move forward in defending our country we remain agile. to protect our country, we have to invest in our minds in anything else. it's all linked. i appreciate your acknowledging of that. but two weeks ago this committee had the chance to discuss the proposed against isil with general austin and the secretary, so i thank you for

your presence here today to continue that discussion. at that hearing, i asked general austin about the complexity of the challenges that the united states has to address to successfully confront isil. i liken it to a multi-dimensional chess game. iraq's engagement, i think highlights the complexity of the challenge rooted as it is in a highly complex region and underscores the need for congress to way in and think through the assistance that we are providing to the iraqi government as well as other partners. so with that in mind, secretary carter, how does iran's engagement with the iraqi government and its military efforts to confront isil complicate our efforts to ensure a plurlistic order?

it was the unwillingness to create an inclusive governmenting structure. so as the iraqi government seeks out iran's help and is receiving it, how do you see it complicated our efforts going forward? and then general dempsey, how does it complicate our military efforts? >> it can complicate our efforts, and that's why we need to watch this very closely because, as you say, it is sectarianism which brought the iraqi security forces to the low point in the first place. and we are supporting a government of iraq that is multisectarian and that encompasses the entire country. that is our preference. so our preference is that all

operations to combat isil, which we obviously support, are conducted with the knowledge and authority o of the iraqi government. we support them in doing that. when there are other who is are conducting operations without the authority of the iraqi government, that is the face of sectarianism rising again in iraq iraq. >> so are you -- >> we're very concerned about that. >> are you saying what's happening in tikrit is without the authority of the iraqi government independent of it? >> no, but you're asking me would i be concerned about purely sectarian military activity there and i would be concerned about that. and i am concerned that the iraqi government be controlling and the security forces be controlling in directing all

military activity excuse me on iraqi soil and that's why the nature of some of the militia activities and so forth is so concern ing concerning o to us. >> general dempsey? >> many terms of how it complicates things militarily, we're building the iraqi security forces to to contribute to inclusivity. and they are being the kind of internal media blitz by the popular mobilization forces has made them popular because they did succeed in pushing back on isil in and around tikrit although they are not having as much success as originally report ed reported. so we have the, of trying to make sure the security forces remain the force of stability in the future and not this mobilization force. and secondly, there's just an issue of deconflicting air space, ground space and decision space. so it does make it complicated.

>> thank you for being here today. general demp sere, we appreciate your service to our country. and secretary carter best wishes in your position. i am very pleased in a way to see the concern being expressed about defense sequestration. many of us have been talking about this for the last two years. in particular, general thank you for pointing out the issue of readiness putting our troops at risk. this needs to be addressed, but it should also be put in the context that bobwood ward, the respected journalist identified that this was the president's policy. and so i believe that i hope he makes every effort to change that policy because the consequence it was revealed yesterday by secretary james and that we'll have the smallest air force since it was created in

1947. the smallest army since 1939. the smallest navy since 1916. i believe the american people are at risk and this needs to be addressed. and it should be pointed out, and i don't want to finger point, but the facts are clear. the house republicans twice voted to address a defense sequestration, but it was never taken up by the former u.s. senate. as we look at the world today, i'm very concerned. general kain testified earlier this year about the spread of radical islam across north africa, central africa, the middle east, central asia and i'm just so concerned that safe havens are being created, which can attack the american people. and in light of that boko haram last week, mr. secretary indicated that they would be a part of isil.

what is our policy to address this particular situation in central africa? >> as you say, the isil phenomenon is me it's a sizing. there are groups that may be one of them that are rebranding themselves as isil, joining isil, getting a new lease on life by affiliateing with this movement. and it is the ability of this movement to spread through social media to motivate younger members of groups that already existed, but whose younger members are particularly attract ed to the isil ideology that make s it so dangerous and make s it so important to combat it wherever it arises. >> and has there been any progress on releasing the

kidnapped young girls in the region? >> you're speaking of the ones that were kidnapped a long time ago. >> by boko haram. >> the best i can say about that in here is that we continue to assist in trying to locate them and return them to their homes. but that effort still continues. >> it's a clear indication of the bar barety of the people we're facing. i want to commend you on your visit to afghanistan. you expressed concern about a draw down and how it should be conditions based. and then action has been properly taken. what are the conditions that you're looking at in regard to the draw down. >> there are conditions on the

ground in terms of the strength of the afghan security forces, the performance of the security forces. they are conducting operations, as we speak, in the valley, which are very impressive and unprecedented in the scale and complexity of an operation that the afghan security forces do by themselves. they are absorbing enablers and so they are beginning to -- the afghan forces operate independently and that's one set of conditions that's very important. another one i mentioned earlier is the successful creation of national unity government with president gauny and abdullah. their willingness and ability to do that and what that could mean for the political development and coherence of afghanistan so they are both