what is that standard? >> there's a number of things they look at. the main thing is securing securing information. national security interest information. does this person -- >> contact with a foreign national? allowed or not allowed? unreported, i should say? >> not allowed if it's unreported. and there's rules for reporting. >> is there a document that determine s determines determines, that governs, if you will, what you will and will not give for security cleerps? >> there's a document that everyone employee is to fill out. >> that's just a couple of dudes down in the bowels of the dea that just make a random decision hoar or how is the decision made? >> they're trained on adjudication. they review if there's anything

that is red flagged for them, like past -- >> sexual misconduct is a red flag? >> sexual misconduct is a person who was disciplined, received any discipline. they on their form, check it. office of security programs does a review of that. >> the office of security, have they ever revoked somebody's security clearance for people engaging in prostitution? >> i don't know about prostitution. i know that they have revoked security clearances so other than the three from cartagena, i'm not sure. >> mr. horowitz have you looked into the security clearance possibility?

>> we didn't look into what could have happened had they been referred to the office of security programs. primarily because a concern we saw was that they weren't being referred to the office of security programs. so we weren't in a position to review what acs they doak with regard to these matters because we learned that opr, when they did finally get these allegations, never turned around and sent them to the ops. >> what do you say? >> that's one of the changes we've put in place. >> when? >> november. november of last year. we have never had in the history of dea we never had a formal mechanism for those security clearances to be reviewed upon an opr investigation. >> you're the administrator the deputy administrator, the acting administrator for almost ten years at that point and you

never had that policy in place. it seems like, well duh. >> we never had a formal policy. it would be up to the office of professional responsibility to flag an internal investigation. that had security issues and then refer that over to security programs. so we have set up a mechanism for that to happen automatically. >> so were those recommendations made before or after the report from the inspector general? >> the recommendation that security program ss that the office of professional responsibilities flagged security violations and give them to security programs was happening long before that. what we did is in cartagena made sure that the security

clearances were reviewed and then more recently, in november, set up a mechanism so that security programs and opr have a mechanism to pass on a regular basis security clearances over. >> that's just unbelievable to me. it's just -- you know there's some things you just think you just think this has to be happening. the one hand you have this problem. i mean, we've listed out the host -- this is not one incident. we're going to have some people do something stupid somewhere. people are going to make mistakes. people are going to get themselves into trouble. i get this. this is happening with such frequency, to not have that moved up the chain for you earlier not to say well, they weren't directly involved. you have to hold everybody accountable to get that thing all the way to the finish line. i don't understand why you personally don't take a hand in

that. mr. horowitz has referenced these made up categories of offenses. well, why did you make those up? >> that's how employees for the last 40 years have been charged at dea. >> nevermind the guidelines just keep doing it like we did 40 years ago? >> part of charging by the board of conduct and by the deciding officials is to look at agency precedent and government precedent precedent. >> the problem, though, and again, we have exhausted this. we're getting to the end, is that this is a problem. you say, you get called before this committee and say, oh, it's terrible. it's awful. but you, you personally have been responsible for this for more than a decade. and you didn't do anything about it. you may cry in the mirror, but i'm telling you you're in a

position to do it, and you didn't. after cartagena, that should have been a wake-up call. it took you two years to get out a memo. two years. as mr. meadows brought up. we have a lot more that we need to go through. mr. horowitz are there any other outstanding issues that you need help with from the department -- the drug enforcement agency? >> with the drug enforcement agency no. >> with the fbi? >> we have not as to this review, but as to at least four other ongoing reviews, we still do not have all the records that we need because of the fbi's continuing process of reviewing records, determining what it is allowed under its legal judgment to provide to us. go through that process, go to the attorney general and the

deputy attorney general, get their approval and get to us. so as to several ongoing reviews, we still do not have all the materials that are responsive to our request. >> mr. perkins, why does the fbi think they're so special and don't have to adhere tathe law and don't do what the other agencies are doing within the department of justice. >> we are adhering to the law. i take exception to the inspector general's comments along those lines. let me tell you, sir. there are in this latest letter dated yesterday 218 letters, we refer to them, five investigations noted. the records they wish to receive that are being delayed involved e-mail. we have turned over 35,000 e-mails to them. 215 e-mails out of 35,000 that we're working with them to go through. we believe in the rule of law. we have a real disagreement with the inspecter general. >> mr. horowitz. >> can i be clear?

they're not working with us to get us to 200 e-mails. they haven't given us the 200 e-mails. our understanding is it's because they believe they have a legal review to conduct. that's why what our understanding is is to why we're not getting them. for several of these matters these are multi months we have been waiting for them. there is no reason why we should not be getting the materials immediately. none whatsoever. i understand they have a legal position. it is different. frankly, the easiest way to resolve this, and i think on this we're in complete agreement, is that the office of legal counsel would simply issue its opinion, i think we would both say we would be very satisfied. >> and how long has this been pending? >> may will be the one-year anniversary. >> i concur with the inspector general. we will follow the olc opinion to the letter. >> why are you different than the other departments and agencies within the department

of justice? >> i can't speak for the other agencies, mr. chairman. what i can speak for is matters involving rule 60, matters involving the financial privacy act and other matters we strongly believe we have a legal responsibility to review and provide then to the inspector general. >> what are you not willing to share with the inspector general? >> any number of series of items, as i mentioned, material. >> explain that so people can understand. >> rules of criminal procedure. the secrecy rules involving grand jury information. >> you had given that to him previously. >> once matters have been reviewed. >> but it had been a long

standing practice with the fbi to provide the inspector general this material correct? >> i can't speak to that, sir. >> you can't speak to the history of the fbi document production? that's why you're here. >> yes, sir, we provide the information once there has been a legal review that we determine legally that we are on solid ground -- >> that's a change, correct? what was it before mr. mr. horowitz? >> 2010 there was no such objection from the fbi as to wiretap information fair credit recording act information, grand jury information. we got that material. in fact in a 1998 and 1999 proceedings in district court in oklahoma, the department itself took the position that we were entitled to grand jury material and twoagreed. this has all changed since 2010 with no change in the law. the only thing frankly that

occurred is several hard-hitting oig reviews about how the fbi was handling some of its national security authorities. other than that nothing changed in 2010. >> and mr. perkins that's the concern from this committee. we have hundreds of people working for the inspector general's office there in the department of justice. intended to be the fair arbiters to look under the hood and see and ferret out these problems. quite frankly, the reason that the dea and fbi are here today is they're the problem children. we've cited several times that atf and marshals and others not a problem. not an issue. they got problems in the departments within their agencies, don't get me wrong. they've got things they have to clean up, and we're going to work with them on it, but the reason you're sitting here today in a hearing, and i know we were very focused on the dea but the two agencies, the fbi as well as

the dea, are impeding the ability to understand and unearth what the problems are. >> let me clarify. there's an apples and oranges issue, with regard to this particular report that we're here today for, there are process issues within the fbi that the deputy director has made changes. the inspector yerl is aware of and those changes in our business process will eliminate these types of hold-ups. >> all of them? >> for these types of records, not having to do with the other issues he brings up. we're awaiting, as the inspector general said, if oic will render their opinion we will march forward and abide by it 100%. >> i would just add on that, i think we would both take any opinion at this point. a good or bad because this is ongoing. we completely disagree on the legal issue. and certainly, we have questioned why all of a sudden in 2010 -- >> this is why, again we're wrapping up. i got hours of questions on

this, but we're going to wrap up pretty quick. this act, the inspector general act act, authorizes, quote to have access to all records reports audits, reviews documents, papers recommendations, or other material available to the applicable establishment relates to the programs and operations with respect to which that inspector general has responsibilities under this act. doesn't sound ambiguous. doesn't sound like -- and there was no change in the law. it's just in 2010 after the inspector general was unearthing a lot of very difficult things for the agency they decided we're going to change the rules. we're going to change the rules. i'm not suggesting, mr. perkins you personally did that, but the consequence is the consequence is we have hundreds of people at the inspector general's office

who can't do their job. and you, the fbi are standing in their way. and the dea is standing in their way. we're going to keep yanking you up here, time after time after time, if we have to. you know, i'm fortunate enough to become the chairman of this committee. the very first hearing we had is on this, and i can promise, i can promise you we will continue to yank you up here as long as this continues to be a problem. the act is clear. the inspector general is to have unfettered access to all records. not just the ones you want to choose from. i don't -- this idea that an olc opinion is pending and it's going on for close to a year is just intolerable. and there's not a prevailing attitude within the fbi or the dea that believes that the inspector general work is a value to those departments and agencies. otherwise, they would want them to come in and help clear their

good name or ferret out problems and work to fix it. in this nation we're different. we are self-critical. i can't have this type of hearing in another nation. i probably couldn't go to colombia and have this type of hearing, but you can in the united states, but it requires good people to allow somebody to come in and check and look under the hood, which is what the inspector general's supposed to do. we've had a long hearing. i appreciate your patience. we need your help and cooperation moving forward. again, to the thousands of men and women who serve in these departments and agencies i cannot thank them enough for putting their lives on the line. my grandfather was a career fbi agent. i care about the agents. i care about law enforcement agency. but we're going to do it the right way. we're going to do it the right way. and allowing sexual harassment or misconduct to get a little slap on the wrist with two to 14 days paid leave is not

acceptable. it wasn't then. it isn't now and it shouldn't be moving forward. we're going to look towards other things we can do in law to give future administrators and directors more latitude and to the inspector general, i thank you for the report. we wouldn't have known about it without your good work and people in the agency. we thank you and this hearing stands adjourned. the road to the white house 2016 continues as candidates prepare for the upcoming primaries and caucuses. be sure to be with us tomorrow when the new hampshire republican party kicks off its so-called first in the nation leadership summit. speakers tomorrow include new

jersey governor chris christie marbo rubio and former florida governor jeb bush. our coverage gets under way at noon eastern on c-span. and then we'll continue coverage from new hampshire saturday morning with remarks from senators rand paul, ted cruz and lindsey graham. saturday coverage starts at 10:00 a.m. eastern. it will also be on c-span. >> this weekend, the c-span steens tour has partnered with comcast to learn in the history and literally life of st. augustine, florida. >> pauns deleon may or may not have been looking for the fountain of youth. a lot of people said he was out for additional property for the king of spain and attempts in gold, which is decidedly true. we do know that when he came ashore after serving for good harbor, took on water and wood.

this area presents one of the few freshwater springs in the area around 30 degrees 8 minutes. and is also the location of the 1565 first settlement of st. augustine. 42 years before the settlement of jamestown was founded and 55 years before the pilgrims landed on prelimth rock. >> the hotel was built by flagber. he's a man who was very little known outside of the state of florida. but he was one of the wealthiest men in america. he essentially had been a co-founder of standard oil company with john d. rockefeller. he was a man who always wanted to undertake some great enterprise. and as it turned out, florida was it. he realized that he needed to own the railroad between

jacksonville and st. augustine to insure that guests could get to his hotel conveniently. so clearly, the dream was beginning to grow. he was a man who had big dreams. he was a visionary. >> watch all of our events from st. augustine saturday at noon eastern on c-span2's book tv and sunday afternoon at 2:00 on american history tv on c-span3. with live coverage of the u.s. house on c-span and the senate on c-span2, here we complement that coverage by showing you the most relevant congressional hears and on weekends, c-span3 is the home to american history tv with programs that tell our nation's story, including six unique series, the civil war's 150th anniversary, visiting battlefields and key events. american artificatesactrtifacts, touring

museums. history bookshelf with the best known history writers, the presidency, looking at the policies and legacies of our commanders in chief. lecturers in history with top college professors delving into america's past, and reel america, featuring government and archival films. c-span3, created by the cable tv industry and funded by your local cable or satellite provider. watch us on tv, like us on facebook, and follow us on twitter. ahead of this year's imf world bank annual spring meetings, international monetary fund manager director christine luagarde spoke to the counsel about the economy. ceo frederick kempe joined lagarde for a discussion and moderated q & a. this is about an hour.

good morning. i'm fred kemp, president and ceo of the atlantic council. it's my pleasure to welcome this impressive and impressively large audience. we have no more seats available, and some people in our hallway. let me particularly welcome our atlantic council board members. atlantic council members members of the diplomatic core and public officials as well as our online and television audience. if i had known how popular your appearance would be madam lagarde, i might have tried to scalp the tickets. it's an even greater pleasure to introduce our speaker. a remarkable leader in navigating difficult times, and wrestling with a vast array of

challenges every day with grace, courage, and clarity. ranging from ukraine's survival to broader underlying issues we'll discuss today regarding where it global economy will draw its future strength and sustainability. after madam lagarde's opening comments, a curtain razor, as we used to call it at the wall street journal, ahead of the next week's spring meetings i'll engage in a conversation, also drawing upon audience questions here and online. so i encourage you to continue to submit your comments and questions using the hashtag hashtag #acglobalecon. it's no secret that i am the atlantic council more generally our fans of the managing director of the international monetary fund. i first ran across madam lagarde, christine, when the wall street journal europe was putting together its 2002 top

european women in business rankings. this was an inaugural effort. i was then editor there, to celebrate women pushing through the mostly male ranks of corporate europe. the jury of experts ranked her among our top ten finalists. then they had a dilemma. as a french lawyer at a partnership organization, was she really a business leader. as she chaired a chicago based company, though it was global, did she count as a european executive? but the editor intervened. and the judges were taken by her accomplishments. and the certainty that she would only achieve more. it was revolutionary that baker and mckenzie, then the world's third largest law firm had elected her as the first woman the youngest partner and second non-american to ever run the firm. our wall street journal jury marvelled edled at her consensus building skills.

such an underestimated and crucial talent she demonstrates. our jury placed her at that time number five on the list which i at the time referred to as a results of the chicago penalty. if i named the other four today, you wouldn't know them. nine years later in 2011, another jury this time at the atlantic council got it more right. when we gave her our highest recognition in new york alongside the u.n. general assembly, the atlantic counsel's global citizen award. by then, she had been finance minister in france, atop the baker mckenzie experience of steering 500 loyal egos at 60 offices around the world. good preparation for running the imf and its impressive staff of more than 160 nationalities in 182 countries, often in unstable and corrupt settings. in presenting the atlantic council's award to you madam lagarde, world economic founder

said, quote, i would define a leader with four characteristics. have a soul, have a heart, have brains, and to have good nerves. leaders by and large don't get to choose the challenges they face. they only get to choose how they address those challenges. and how you have done so in your time at the imf have been remarkable. we look forward to hearing your opening comments today, madam lagarde, on the state of the global economy, and how we might best address its most pressing challenges. we at the atlantic council often speak of how we together as the atlantic community alongside our like-minded global friends confronted a defining moment in history, perhaps as pivotal as 1919, 1945 or 1989 when the decisions of leaders like yourself and that of the member countries you represent have outsized importance. so as i turn the podium to you, let me paraphrase clous in

thanking you for making the sacrifices the public requires as such challenging times and using his words, with your soul your brain your heart, and your nerves. madam lagarde. well thank you so much, fred. and i know you're a true friend because you're one of the very few who introduces me without referring to my muscles. because people typically refer to my belonging to the synchronized swimming national team in france. so thank you for that. and don't believe that fred and i always coordinate our colors. but it so happens that we're black and white together. the council fred, board members and members in the audience, is

renowned for its capacity to actually bring together top international policymakers from both sides of the atlantic. and from further apart. this is clearly something that is in common between our two organizations. the atlantic council and the international monetary fund. next week we will be hosting the spring meetings of the world bank and the imf and we will be welcoming to washington, d.c. representatives of our 188 member countries. finance ministers, governors of central banks, and they will focus their discussion on the state of the global economy. and since our last annual meeting in october there have been a lot of developments on the global scene. i would say that it has first of all come from a big shot in the

arm as a result of the decline of oil prices. in addition to that it has had the benefit of the strong economy performance by the largest economy in the world, the united states of america. and over all, we would say macroeconomic risks have decreased. so the global recovery continues, but it is moderate and even. global recovery continues, but it is moderate and even. in too many parts of the world it is not strong enough and in too many parts of the world people don't just feel it. in addition to that, if macroeconomic risks have declined, financial and geopolitical risks have increased. it is not that overall growth is bad. no, no.

3.4 in 2014. it is not bad. it's actually in line with the average growth that we have had in the last three decades. so what's not so good about it? what makes it moderate and uneven? well, it is rather that given the lingering impact of the great recession on people, it is actually generating hardship for many people around the world. including countries where more than 50% of the youth population goes unemployed. so growth is not good enough. six months ago i warned about the risk of a new mediocre. new mediocre, low growth for a long time. today, what we must do is avoid that new mediocre becomes the

new reality. we can do better and we must do better. great john fitzgerald kennedy once said, and i quote, there are risks and costs action. but they are far less than the long range risks of comfortable inaction. comfortable inaction is what must be avoided. and that's what i would like to focus on. how to lift growth today by using all available tools and policy space available. how to lift tomorrow's growth and prevent that new mediocre from becoming the new reality. and how do we work together to strengthen the international

financial system, force the development and make growth more inclusive and actually sustainable? let me begin with a quick health check of the global economy. now, those who follow the imf know that the world economic outlook will be pub lged next week so i'm not going to focus on numbers. i'm going to talk about the broader trends and policy recommendations. as i indicated earlier growth remains, and we focus it to remain moderate. roughly, roughly the same as last year. advanced economies are doing slightly better than last year and as you know the recovery is firming up in the united states and in the united kingdom. and the eurozone is doing slightly better, as well and is promising.

but if we look at the emerging and developing economies, they're doing slightly worse than last year with lower commodities being the driver. and while they still represent and will probably continue to represent about 70% of global growth this year, there is tremendous diversity within that group. remember the talk about the brakes? it has changed, and if india is a growth bright spot in that group, china is slowing, although its growth is certainly more sustainable. subsaharan africa continues to perform strongly, but russia is experiencing economic difficulties. brazil is stagnating, at best. and many parts of the middle east are beset by political and

economic turmoil. so we should not think of emerging economies as just one single group. each country faces very specific circumstances. some of them easier, some of them more difficult. so what does it imply in terms of policies? with overall growth moderate the global economy continues to face a number of significant challenges. there is, for instance what i have called last year the low low high high risk. and that is low inflation, low growth high unemployment high debt. and that will persist for a number of advanced economies. clearly as a result all policies face and levers must be utilized and it begins with demand support. how is that implemented? well, first of all, continued monetary policy accommodations

is needed especially in the euro area and in japan. fiscal policy needs to be calibrated to the strength of the recovery without ever losing sight of debt sustainability. the effectiveness of those support measures can be significantly improved because they may not work for some of them for a little while. they can be improved. for example, unclogging the channels through which monetary easing and fiscal policy work in the euro area. how? well effective in solvency frameworks are crucial to tackle the private debt overhang and deal with the private stock of no less than $900 billion euros of nonperforming loans that is blocking credit channels.

in japan the authorities need to sustain the momentum of second and the third arrow one is fiscal consolidation, the other is factor reform. if that country is going to take the full benefit of the first arrow, which was monetary easing, in order to lift both growth and inflation. third way of being more efficient, by leveraging lower oil prices to reduce energy subsidies, emerging and developing oil importers could save on average a full gdp, and those could be put to better use in order to invest in infrastructure. in education, in health. so those are some of the macroeconomic dimensions, and as i said macroeconomic risks are

decreased. what has increased, on the other hand, is the risks posed by the financial dimension. financial stability is more at risk now than it was six months ago. the new mediocre that i talked about, that new mediocre growth is not a comfortable place with respect to financial stability. financial risks have migrated. for example, they are migrated from banks, which are far more regulated and supersized and heavily tested to nonbanks. they have migrated from advanced economies to emerging markets. let's go through a few of those risks. for one, there are adverse side effects of the very low or even negative, as we clearly saw including on the primary market

today, very low if not negative interest rates, caused by otherwise necessary commodities monetary policies. these foster a higher risk tolerance on the part of investors, which can lead to overpricing. and if the low interest environment persists it can create solvency challenges for life insurers and defined benefit pension funds. so the purpose of these policies is to kickstart growth, but if it were to last longer, then it puts some of those business models at risk. or think of another one. the wide movement of exchange rates that we have observed recently. over the past six months the u.s. dollar has appreciated against a basket of major currencies by 12% in real terms.

now, some countries with more difficult macroeconomic conditions and less policy space have of course benefits from the relative depreciation of their currencies. and others, large amounts of dollar denominate edd debt these dramatic swings can be destabilizing. and this is particularly the case for corporates in the emerging market economies that are wedged between a strong u.s. dollar on the one hand, lower commodity prices on the other hand, and with my third hand higher borrowing rates. on the top of which they might not have hedged. and that is a bit of an uncertainty where we have little information. now, these risks taken individually, the ones i have just mentioned, could be manageable but we also have to

contend with a structural decline in market liquidity a risk we had flagged about six months ago. and this is due primarily to recent changes in the structure of the asset management industry, in advanced economies which have created a mismatch between the maturity of assets and of liabilities. which means that liquidity could evaporate quite quickly if everyone rushes to the exit at the same time, which could make for a bumpy road when the federal reserve begins to raise short-term rates. so this new configuration of financial risks underscores the importance of strengthening financial policies at the global level, it means insuring market liquidity in times of stress, improving macro and mike row policies for nonbanks in

particular, and following through on the regulatory reform agenda, particularly the too big to fail institutions. at the country level, it means curtailing excessive risk taking and managing existing vulnerabilities, and again, while the appropriate menu of measures should become specific, the overall set of policies can help us to list growth today. so much so for growth today. moderate, uneven, but recovery under way. what about growth tomorrow? and that's a big issue. because growth tomorrow as we analyze the potential for growth, is also moderate. in both advanced and emerging economies, potential growth is being paired down. and this largely reflects

several factors. one is lasting scars from the financial crisis that the world experiences two years back now and probably scars that we had underestimated. but also the undercurrents of changing demographics and lower productivity. so to prevent the new mediocre from becoming that new reality, structural reforms need to go hand in hand with macroeconomic and financial policies to raise confidence and generate investment. and frankly, when you look around, there are too many countries that talk about structural reforms but don't actually do structural reforms. at the debt, at the speed where they should be done. and structural reforms really span a wide range of policies. some reforms have immediate effect.

most reforms have more medium term effect. and take a bit longer to bear fruit. i'll give you an example of one i wouldn't call it a reform, but it's a set of measures which requires often reforms and a bit of creativity around ppps, for instance, but some reforms are in section of what can actually have an effect in the short term and will certainly improve productivity in the medium to long term, and this is infrastructure investment. our own research shows that boosting efficient infrastructure investment can be a powerful impetus for growth, both in the short run, to stimulate activity construction sites start employing people, and in the long run, you improve productivity, infrastructure, you make sure good people can travel properly. other reforms such as those that affect the labor, the product, and the services

market, are likely to unfold further to result over a longer term horizon yet they're essential to enhance productivity and innovation, which in turn can be powerful ant dotes to the impact of something we cannot do anything about, and that is afeathingfecting all of us, aging. we have done a bit of research, not so much on aging. but we have done some research on structural reforms and we have tried to flesh out priorities and payoffs in the area of productivity growth labor force participation and trade. let me take them very quickly one after the other. let's look at productivity growth. reversing that decline in advanced economies requires lowering barriers to entry in product and services market.

our research shows, for instance, that improving the allocation of labor and capital can significantly increase total factor productivity, pfp as it's called. another example is the potential benefit from improving answers to financial smaller businesses. remember, everybody talks about smes. you have encourage smes. of course, because they generally, most countries. certainly the advanced country, and in emerging market economies, they represent most of the employment, and they represent the largest number of companies. well, unfortunately, if we look at europe, for instance, they also hold a share of nonperforming loans that is 50% higher on average than larger corporations. so clearly putting the small business sector on a firmer footing would yield a big

payoff. this is same story in china. where small businesses play a critical role in the economy in terms of output, employment tax revenue, and innovations and where access to financing is extremely difficult. i discussed that matter with the prime minister of china, and it's one of the angles they want to use in order to stimulate activity by the corporate world. if we look at emerging market economies such as indonesia and russia they can reap productivity by easing investments. and countries like brazil india, south africa, they should certainly focus on reforming the education, labor and product markets. and in low income countries as well as in the middle east and central asia, improving governance, eradicateing corruption, or trying to, as well as financial inclusion

will help lay the foundation of a thriving private sector. so that's for the productivity improvement as far as capital and investment is concerned. if we look at labor now, there's an important set of measures that is needed to remove barriers to labor for participation. that is key to tackle inequality. and insuring a broad based growth. i'll give you a few for instances. in japan and in the euro area, there are too many tax disincentives that exist. and where a change of tax policies that would be more growth friendly, more labor supportive would be very welcome. and there could be budget neutral. in too many countries, legal in inequities still exist. and what do they do? they create barriers to greater

participation by women in the economy. we have done a very interesting study, and from all the countries we studied, 90%, 90% still had legal inequities in the books that prevent access of women to the labor market. and as we know closing the gender gap, which is one of the goals of the g-20, only by 25% a little 25%, over the next decade, could actually result in the creation of 100 million jobs. now that means something for both growth and poverty reduction. and finally, on trade. there are potentially huge global gains to be had from further trade reform and integration. as we know trade has been a major driver of economic progress over the last three decades, and yet again in 2015 and for the fourth year now,

trade will be below average. trade in terms of growth. recent efforts have been welcome. the bally agreement, which was a subset of the doha long expected nonagreement, could actually generate a lot by way of trade facilitation. estimated to actually deliver an economic boost of $1 trillion u.s. annually. not only should this bali agreement be implemented but we need to be more ambitious because trade remains a very major engine of the global economy. to lift growth create jobs, and disspell this new meek oakdiocre that is lurking on the horizon. of course it's difficult. those are political reforms and anything that is reform or requires international consensus

is difficult. they involve tough choices, tradeoffs, and there are winners and losers in the short run, but in the long run, everybody can win. so how do we win? well, our view my view is that we can only win by working together. and i'm struck by how action to lift growth is becoming increasingly country specific. you know, gone are the days when you could say, dear advanced economies, the emerging markets, low income countries. no, it's a matter that is far more complicated, which probably includes something like 128 boxes depending on what criteria you use. yet all of those issues i have referred to, macroeconomic, financial risks, prukative ativeproductivity

increases, all of that is interconnected and multilayered. so the challenge for policymakers around the world is combine the policies needed to boost today's growth with those that will how can you actually use your short game to make sure that the long game is going to work is this and to leverage those national initiatives that are needed to the benefit of the global community. and if you look at it, think of it, what is good for a country is going to end up being good for the whole community. if countries strengthen their banks, domestic banks it will not only serve them well and their clients, but it will reinforce the global financial system. if countries anticipate an hedge against currency variations and volatility it will not only serve them and their only

financial sector but it will support global stanley stability. and if they implement climate friendly policies it will benefit their population and also contribute to reducing global emissions. so to all those who will say, oh, we have to wait until the others come on board and reach an international treaty or agreement or something that is inter fundamental, no, national policies will actually take the global issue further. but we also need a multi-lateral system that can actually leverage these national benefits and help avoid inconsistencies, that could actually generate negative spillovers. in a highly interconnected world with new and dynamic centers of political and economic gravity, generally east there is simply

no alternative to what i have called new hult laterallism. so what is that is this and what needs to be done to reach that new multi-lateraliflt sm platform? first of all, everybody must find its suitable seat. emerging market in developing countries must is have is greater weight and voice this global economic institutions to reflect the actual newer reality and that of our contribution and responsibilities in the global economy. i have a clear example in mind. the imf 2010 quote at that on governance reform which is intended to precisely meet that objective. listen to that. virtually our entire membership agrees and we now only will wait

one ratification by the u.s. congress. it is overdue. so it you meet any of them tell them. [ laughter ] >> and we are not going to give up. i'm going to continue asking them to please do it. if only to assert u.s. leadership in a key institution for global financial stability. but, you know, we can't wait forever, either, so our membership is currently considering interim steps, i'm not saying substitute, interim steps tack take us a bit closer to the ult hat objective. now, there are further issues as well, to strengthen the resilience of the international financial system and that would include enhancing corporation with regional facilities and

institutions, including the new asia infrastructure investment bank as i have said three weeks ago in china. there are many institutions that are burj end over the last few years in europe in asia, in various places and we need to work together. we need to corporate, to coordinate. second option, increasing the role of the special rights as a global reserve the integration of dynamic emerging markets into the global economy. of course, firming up the imf resources which, again relates to the quote at that reform that was intended in 2010. >> as a result of that the international monetary system would be reinforced and become more stable. so that's for the international monetary system. what about the international deed allotment system? well, 2015 is really a very

special moment for development and an opportunity to make a tangible difference in the lives of a very large number of people, particularly the poorest. there are three critical issues on the 2015 agenda. one is financing for development, which will be discussed in july, the second is the new sustainable development goals that will be discussed at the united nation in september and the third one is the climate change that will be discussed in paris in december. and they all interlink in many ways. now, the imf will be a committed partner in this effort and i intend to discuss with our membership next week how we can contribute through not nice words, not good intentions but actual deliverables in the three core areas of our business, because we cannot suddenly invent ourselves as the new development experts or the

climate gurus but we have areas of business which are our core businesses where we can certainly contribute. let's look at financing first. actually we've already made a down payment by recently contributing $390 million to the ebola affected countries, including, which is very unusual for the imf, $100 million of debt relief the imf doesn't do that but on that particular occasion the board very strongly endorsed that proposal. what we have done as well is that we have set up a catastrophe and containment relief trust because we realized on the occasion of this drama that affected sierra leone new genie that we did not have the adequate instrument and we had to repurpose resources. we will in addition to that

explore the potential to increase resources for our poorest members. second core area, policy advice and analysis. we will continue to help our members with essential support for what very often the low income countries need badly, domestic resource mobilization, capital market development and where it exists deepening. in addition we will push further on macro critical issues some that people have considered a little bit on the side of our core business, but which are becoming core business and matter enormously and i'm here thinking about the role of inequality and excessive inequality the role of women in the economy and their contribution to the labor market, the energy subsidy reforms where we have extensively now published and given some very practical set of

recommendations using a range of countries that have actually either succeeded or failed and carbon taxation, which is a very interesting proposition. and we all know that the time is right to price it right and if we do that it can help us get it right on climate change. our third and last core business area is capacity building and technical assist is ans, and here we have expanding services, including through nine regional technical assistance center and seven regional training centers located in africa asia and the least. what's more, we have embarked on moocs, massive online courses which already have 10,000 active participates and 5,a 400 graduates in courses as complicated as sustainability analysis or removing energy

subsidies subsidies. as i said, we can only get it right if we work together. this applies to all the areas that i have touched on from stronger growth today to better growth tomorrow from a more resilient international monetary system to a more robust international development system. from the world we live in today to maybe a better world that we will help build. success will require a recommitment to the principles of international cooperation that have served us well for the last 70 years and particularly in moments of crisis. but this new laterallism is urgently needed to boost growth and generate confidence in our common future. wouldn't it be nice if a year from now i might come back if a year from now instead of

reswroisinging in the aiib and the silk road and this new belt out there we could also celebrate the tpp the ttip, the imf reform, a strong green fund with good governance paris 21 with actual deliverables. these are the challenges we have ahead of us. so i began this horning with a great atlantasist president can dee, i'm going to use another one interest the other side of the pond, winston churchill who once said, i they ever worry about action, only inaction. well we can and we must lift better growth today and tomorrow. thank you. [ applause ]

>> thank you so much had a.m. la guard for that very important speech and that not very entirely convincing british accent at the end of it. you're right that i failed to mention the synchronized swimming, but i also read as i was doing my research that you were a french tour guide at alcatraz prison. >> correct. >> there is so much meat in that to follow up on and we have a brief 15 minutes here to follow up. so let me try to go through some of it where i think we really need to -- to drill down just a little bit further. first of all, did the greeks repay their loan? >> yes. i've got my money back. [ laughter ] >> good. so we can get that out of the way for all the press. that is not confirmed from the imf. you met with the greek finance

minister last weekend, this week he was this moscow. i'd like to ask you two questions. what do the next steps look like and perhaps you can put that in the overall context of how resilient you believe the your row zone is both economically and structurally. you see the low oil prices the quantitative easing, the reduction in the your rows value all helps but you also point to reforms that haven't been ton et cetera. is there a light at the end of the tunnel or is it an oncoming train to quote a country western tune? >> let me take the second part of your question first and i will touch on the first part as well. you're right, i think that the your ozone has the benefit of three shots in the arm the ones that you have adjust mentioned, and that moment which is actually rare in economic

history for economic zones especially one as large as the euro zone is really a moment, a window of opportunities when countries that have not yet conducted the reforms, that have started conducting the reforms have is to actually get on with it because they have the benefit of low oil prices very low cost of financing i mean we're seeing on the secondary market negative rates even for reasonably medium term bonds, and the quantity of easing that is intended to really support and kick start the economy. so with these three factors, if they don't do economic reforms now it's to dis pair. so i very much hope that they're going to really continue the process. some of them have started and others i hope will continue. now, one thing that i would like to add as well is that since some three years ago when we were both talking about those issues and the risks on the horizon, the euro area as

monetary zone has strengthened, it has built a european systemic fund to protect itself which is endowed with over 500 billion euros, it has reinforced its fiscal union and has built a banking union and of course it can do more and better, but it is a lot stronger than it was three years ago. which takes me to the first part of your question. what is now badly needed is not to, you know talk but it is to actually get on with the work and greece authorities together with the representatives of the three institutions as we call them now have to really sit down, go through the work, focus on the objective of what is intended for the better for greece which is restoring the economy, stabilizing it and by

so doing reestablishing and reinforcing the sovereignty of the country. so we are completely committed including on weekends wherever, in athens in brussels, in washington to actually help the authorities navigate through the measures that will actually deliver on the objectives of the program while respecting some of the commitments that have been made in the course of the political cycle. it's a difficult path, but it's one that has to be walked and which will just improve the situation. >> thank you for that. let's talk a little bit about your new mediocre.

you've coined this term, i think it's a great term. we must prevent the new mediocre from being the new reality you said. you then talk about the bottom line is that risk to global financial stability are rising and, again the new mediocre growth environment is not a comfortable place with respect to financial stability. is the new mediocre another term for secular stagnation? is this what you're worried about is this and is that what we're facing would the world kmi face a prolonged period of low growth and what impact might that have on security and stability? how great is your worry about that? >> i think it is distinct by the stagnation to identify the current economic situation. i think it's different because my concept of the low mediocre -- the new mediocre is that we can get out of t it's not something that is intended -- or that we risk seeing for a long period of

time. if the measures that i have identified earlier are taken, all tools used on the macro economic front, all space made available utilized and if financial stability is strengthened and if structural reforms can be implemented, each very specific based on countries characteristics and needs then we will not be in that new mediocre, but it's a risk that is there, which is, i believe, accentuated now by the fact that potential for growth has been affected by the three factors that i've mentioned the scars of the crisis the aging of population and particularly in the advanced economies, but also some emerging market economies and the fact that productivity is not where it should be. >> so i think that's a very good

differentiation where secular stagnation may be a description of a case that's unchangeable, a new mediocre is a warning that you're trying to avoid. >> yes. yes. >> let me get to the issues -- and let me put together the issues of the asian infrastructure investment bank and the 2010 quote at that and governance reform. you described the establishment of china's asian truer investment bank as a massive opportunity. that said, larry some percent, a member of our international advisory board you already mentioned him, this week this an op ed called the u.s. approach to the aiib a failure of strategy and tactics and said, quote, this past month may be remembered as the moment the united states lost its role as the underwriter of the global economic system. >> i tell you if he was right i think the best response so that is to ratify the reform of the

imf. >> you if i know thishd my sentence. usually i just steal your ideas this time you finished my sentence. so that is really what i was getting at. number one does the formation of the aiib in some way signal a new economic reality and in that context do talk a little bit even more in depth of this reform, is the u.s. undermining its role as the leading country to contribute to financial order is this. >> you know i think that the asian infrastructure investment bank was part of a broader project by the chinese authorities to actually divvy up growth, build infrastructure projects and stimulate growth and economic activities not only within client that, but also with many neighbors along that old silk road and down along the maritime road.

so it wasn't, you know a huge structure, if i may say, but it was part of thinking along the lines of we need to divide up broader -- and there are countries along the way pointing towards europe that will actually benefit from that and so will our internal manufacturing infrastructure. i think it has been elevated a bit because of the general context in which that bank has been now set up as of march the 31st but it's a great initiative in the sense that it's broad spectrum, it reflects the transformation of the global economy with new key players and it embraces a regional approach, which could actually be extremely stim la testify for

economies that matter more and more today than they did a few years ago. so it's both -- i think it is part of something which is broader and it really reflects a new land same for the global economy. now, what can the united states do to reinforce its natural leadership role in the global economy, as well as in the international monetary scene? it is to effectively ratify a reform which is a governance as well as a quote at that reform that was engineered by many countries particularly by the united states back in 2010. what does it do? two things. number one, it gives a bit more space to the likes of the emerging markets and some underrepresented countries, so a bit more space at the table. it reduces a little bit the participation of the europeans which has been probably excessive relative to their size in the global economy.

so you rebalance, a bit less europeans, a bit more emerging market economies. you double the quotas, which doesn't have any budgetary implications because the new arrangement to borrowers have been already earmarked and are in the united states' budget. some of it has to be put into the form of quota which gives the institution more stability. so doubling the quota, which gives more financial resources if and when a crisis occurs, and that's pretty much what it is. so the united states doesn't lose its veto right in the institution, it continues to be the key shareholder and had he been states of the imf and it takes zero financial risk. so i think it's a no-brainer but -- >> let me -- let me ask one more question that you touched on. john kerry secretary of state john kerry is here next week at

the atlanta council on -- >> he's here with you. great. >> with us really launching a campaign around these trade issues. and we are particularly highlighting the geo strategic and geo political importance of trade issues. instead of focusing on all the gains that would be had from the ttp and ttip look at the other side. what happens, is there a downside if it doesn't happen? if we get to the end of this administration there's no trade promotion authority, there's no ttip there's no tpp and there is no imf reform ratification instead of saying everything we would gain, what happens if none of that goes through, which could be an outcome. it is a possible outcome. >> well you know, i will put my sort of corporate hat for a second. i'm a big u.s. corporate and i want to invest. i know that there is a massive growing market out there in the east and if there is no

facilitation of trade, if there is no better tariff arrangements and no more alignment of standards around the world instead of necessarily investing in the united states of america i'm going to look at other investment opportunities and probably invest where there are very serious growing markets, either in terms of purchasing powers or in terms of population. you know, i always think of mr. heineken when he was investing around the world he was generally looking at where there was a lot of light because he knew that that's where people would actually buy and drink beer. well, big corporates that's what they do. if there is no facilitation, no lowering of the barriers then you have to be everywhere to expand and you have to invest outside. so to those who say it's going to reduce employment, it's going to be bad for labor i don't think so.

i really don't. >> so let me just take one question. i'm sorry that we really have run out of time. >> it's my fault, i spoke for too long. >> that was a brilliant speech. so let me -- against the wall please, you had your hand up first. >> hello robert shredder with international investor. madam director, the u.s. dollar is at an all time high along with the growth of the world we've seen the growth of indebtedness, much of it held in u.s. dollars, repayment schedules in u.s. dollars. if interest rates rise here that problem could be exacerbated. are you concerned that it could create a crisis with any of the world's currencies? >> i'm sure you listened very carefully to the risks that i've tried to identify and that's the one that i have flagged, together with the persistently low interest rate, which causes another type of risk but clearly the exchange rate and

the currency risks and the volatility that it creates is one of those rising risks. also migrating risk as we call it because it is probably going to affect for some of the emerging market economies and particularly the corporates in those economies that i've actually borrowed in u.s. dollars or pegged currencies because it's not just u.s. dollars, it's also those which have not hatched. that's where we see the potential origin of a risk that could be significant. >> thank you for that. >> and as you rightly said exacerbated by the potential rise of interest rates, you know, likely at the end of the year. >> so thank you, madam la guard. let me close and thank you on behalf of the audience and also can ask people to stay in their seats for a couple of minutes because i know you have to get

to another meeting right outside here. this was a great, terrific conversation wonderful speech. i am going to hold you to what was on the podium, we'll get you back a year from now, we'll see how we've done and i really look forward to having you back. >> i'm absolutely coming back if we can celebrate the tpp the ttip and the imf reform. [ applause ] >> next education secretary arnie duncan on the president's 2016 budget request. then a house hearing on the immigration and customs

enforcement agency. after that, u.n. ambassador samantha power on a house hearing on the president's 2016 request for the u.n. and foreign operations. labor health and human services and education. he told the committee that sequestration is impacting learning and needs to be addressed. this hearing is about an hour and 40 minutes. >> the appropriate appreciations subcommittee on labor, health and human services and education of the latest agencies will come to order.

glad to have certainly secretary duncan with us today and secretary, thank you for being here and thank you for conversations we have had prior to this hearing today that we look forward to working with you. you know one of the long-term commitments to the national government, even before it was the government under the constitution, was to do things that encouraged education. i think the land ordinance of the northwest ordinance of 1785 set aside a section in all that developed territory to be sold and used for a public school so that's how long the federal government or the national government has thought there was a role here. i'd also point out that they had no real interest in running those local schools whenever they set that aside and i'm certainly always more receptive to those things we do that encourage local school districts to try things rather than to tell them that they have to be things that apply all over the country.

i guess one of my biggest concerns with the budget that's submitted is it appears to be well beyond the money that the law would currently allow us to spend on -- on these issues and i hope we can work together to find the common ground of prioritizing even in the early stages of marking up the budget the kinds of things that where you believe and we agree would have the most impact on making education work better for families and students. i was encouraged that the budget emphasizes funding for core education programs like title 1 and idea things that we long ago told local districts they had to participate in, and generally promised a significantly higher level of support than the federal government has already provided. so i was glad to see you looking in that direction. i'm concerned that we overreach

into too many education issues as you and i have talked about. state cap tolls in hasn't cases are a long way from where education really has to meet the students' needs, let alone the national capitol. we need to be looking at that. i also want to talk later about the idea of a proposed framework for a federal college rating system. i think it's hard to come up with a truly unbiased rating or ranking system and frankly i haven't yet been persuaded there's a reason for that. we have such advertiser sit in higher education and diverse ways of both delivering a product and measuring whether that product has impacted the people that are served by that institution in a way that really advances them. so i think this is going to be an area that i'm going to be concerned about, as you know, but hopefully we can work

together to meet the goals of this committee which is to achieve the right funding levels and the right policy help you achieve the right policy levels for the department. so glad you're here today and i'm also glad -- i recognize senator murray as she joins us the ranking member of this committee. >> thank you very much, mr. chairman. you know, this is a very timely hearing of the department of education's budget. so i also serve as the ranking member on the senate health education and pensions committee, senator alexander is here as well, the chair of that. as you know, we began this week marking a bipartisan bill to authorize the elementary and secondary education act. that compromises a small step in the right direction to fix the badly broken no child left behind law. it will give states and districts flexibility while also maintaining federal guardrails to ensure all of our students have access to a quality education and we will continue to work on this bill today and

senator alexander i'm assuming will be able to move it out so congratulations to you on that. i look forward to working with all of my colleagues to improve our bipartisan compromise and actually get this bill signed into law and i want to thank you, mr. secretary, for all your leadership and for your staff's assistance to get the bill as far along as it is. i look forward to continuing to improve the bill with your help and for our work on this committee we will need to make sure that we make the right investments to improve education and expand opportunities for all americans. i believe the only way to create sustainable economic growth is from the middle out not from the top down. education is an important investment to ensure our government works for all of our families, not just the wealthiest few so more people get the opportunity to learn and to work hard and succeed. not only that a quality education system is also essential to our nation's economic competitively. the investments that we make today will help ensure that america's work force in the

years ahead will be able to take -- to create and take on the jobs of the 21st century. of course, last month the senate debated and passed a budget resolution, unfortunately i believe that that budget proposal and the one that passed the house fails to support investments that we do need in education. by contrast, the president's budget pro he owe poefl would invest in students educators schools and communities to make sure that every american has access to high quality education from the cradle through their career. in 2013 i was very proud to work with democrats and republicans to break through the gridlock and dysfunction here to reach an agreement that rolled back those automatic cuts tortoise cal years 2014 and 2015. that deal as we all know prevented another government shut down, it moved us away from the constant crises and it restored critical investments in education and research and defense jobs and a lot more and it really helped get our economy

moving again. so we need to work on ways to build that agreement lift the caps and restore those investments for the coming year and beyond. the president's budget would do that. it would roll back cuts to both defense and non defense discretionary sending. democrats and republicans both agree that sequestration is terrible policy. we worked together to address this before and i hope we can work with colleagues on both sides of the aisle in both chambers to come to a compromise avoid another crisis and ensure that we are investing in our communities. the department of education's budget proposal starts with our youngest learner's. i am a former preschool teacher i have seen firsthand the kind of transformation that early learning can inspire in a child. i should -- i believe that we should be investing more in children not less. the president's budget would increase funding for the preschool development grants program. right now this program is helping 18 states expand high

quality early learning programs for low and middle income children and families but the need to expand high quality early learning programs doesn't just exist this 18 of our states in fact 36 states actually applied last year, including my home state of washington. this budget proposal would continue this program and that i believe my state and the others to earn grants to expand early learning. in our country we believe that all students should have access to a quality public education, regardless of where they're from or how they learn or how much money their parents headache. congress established title 1 in the nation's education bill to provide federal resources so students from all backgrounds get the support they need to succeed succeed, but today across the country inequality in our education system persists. some schools simply don't offer the same opportunities as others. mr. secretary, i was very pleased to see that the department's budget proposal proposes an increase in title 1

funding. those resources will help close the gaps in education and the achievements so all of our students do have access to high quality education that puts them on a path to graduate from high school and college and be career ready. mr. secretary, i do want to raise a concern on impact aid. impact aid is what gives our students and schools a in our military and tribal you kmunlts federal support and stability. as you know, impacted aid is critical for communities in washington state and across the country. your budget would eliminate $67 million for the federal property program within impact aid. now, i've made very clear that i oppose those cuts just as the bipartisan majority of my colleagues do. also, mr. secretary, as you know, our country will need a highly skilled work force to take on the jobs of the 21st century. in congress we should be working to make college more affordable, to reduce the crushing burden of student debt and to give americans the chance to further

their education and training and skills. so i am pleased at your proposal will help make college more affordable by increasing investments in the pel grant program. in addition last year congress came together to pass the work force invasion and opportunity act with strong bipartisan support and in that bill we strengthened the connections between adult education and work force systems and i'm pleased that your budget proposes resources to support integrating those systems so more workers can connect with available job positions. in our country, as i said we believe all students should have access to a quality public education. so thank you secretary duncan for being here today to share the department's vision for achieving that goal. overall the president's budget proposes several important investments that will help prepare all students for the challenges of the coming century and they will help establish long-term and broad based economic growth from the middle out so that families more families, have the chance to get ahead, not just those at the

top. i am very hopeful that democrats and republicans can work together to make investments we need to make to make sure every american gets the chance to learn. thank you. mr. chair hand. >> mr. secretary, thank you again for being here as you start your seventh year and into your seventh year as secretary is of education i look forward -- i appreciate your dedication to this cause and the work you've done. i might say before we start i think we have a vote scheduled at 11:00, but i think it's only one vote. so my goal would be just to continue the hearing if that's okay with you and we'll try to go over in different times and cast that one vote and take advantage both of our time and your time in the best possible way. mr. secretary, glad you're here and look forward to your testimony. >> thank you so much. mr. chairman, ranking had he been murray and members of the subcommittee. i'm pleased to talk to you today about how we can continue important progress and expand

educational opportunity for every child in america. thanks to the hard work of america's teachers, principals, families, communities and very importantly the students themselves for the first time ever four out of five students are completing high school on time high school graduation rights are at record highs drop out rates are at historic lows and we've seen significant drops -- reductions in dropout rates for minority students. in college enrollment for african-american and hispanic students is up by more than a million since 2008 and more stew it tents than ever are graduating from college. getting to this point has required huge and difficult challenges in our schools, but these changes haven't been easy but they are working so build upon our current momentum its imperative to give schools and educators the support, resources and funding they need. this is not the time to turn back the clock on progress that our schools, children and our nation is making. at the end of 2013 policymakers

under senator murray and representative ryan's bipartisan leadership came together to partially reverse sequestration and pay for higher levels of discretionary funding with long-term reforms. this agreement while limited allowed us to invest in critical areas from strengthening our military to research and our schools. in 2014 congress was able to restore some sequestration cuts to title 1 which served is our poor children and ida which serves children with special needs. the president's 2016 budget builds on this progress by reversing sequestration and paying for it with common sense spending cuts and closing tax loopholes. the president's budget also proposes additional deficit reduction and would reduce debt as a share of our economy. the president has made it clear that he will not accept a budget that locks in sequestration which would bring both defense and non defense funding to their lowest levels in a decade. the reality today is that states and districts and families and

student need more smarter resources to prepare all students both for their future and for their now. to that end our budget reflects four main priorities, first ensuring that all young people have the chance to learn and succeed and our request includes a $1 billion increase for title 1 to help close resource and equity gaps. second as senator murray talked passionately about we want to help states expand high quality preschool and our budget includes $75 billion in mandatory funding to work with states to make voluntary preschool available to all low and moderate income four year olds. it also includes $750 million to continue and expand preschool development grants where there's so much demand as we see across the nation. third, supporting educators, including by investing $2.3 billion to improve teacher and principal effectiveness. finally, improving post secondary access, affordability and outcomes, most notably through america's college promise, which would make two

years of community college free for responsible students and that idea has been led by senator alexander's state of tb. across these areas we commit to supporting and spreading local invasion, it's not invasion coming from interest she or anyone else in washington, but local invasions like those through the invested invasion program. we've received more than 2800 applications for this program and unfortunately we only had resources to fund about 140 of these fantastic local ideas. our aim is to focus on using and developing evidence to maximize results both for students and for taxpayers. through first in the world we're aim to go promote student success at scale, a set aside for my authority serving institutions and historically black colleges and universities will support their critical contributions to this work. we also here had an overwhelming response to the competition, 460 applicants and we were able to fund only 24. educators in schools need support to advance their progress.

this isn't about spending money for its own sake, it's about making prudent investments to ensure excellence and equity for every student. quickly before i close i want to thank senator alexander and senator mile an hour a for their good faith bipartisan work to try to fix the broken no child left behind. it's been long overdue, we're moving to real work and i can't ask you to work any harder or smarter. there's a long way to go, but we really appreciate your combined leadership and hope that we can get this to a good spot. thank you so much. i will be happy to take any questions you might have. thank you, mr. chairman. >> thank you mr. secretary. i'll ask a couple of questions and we can have another round of questions if members here want to have that i'm sure i will have more than one series of questions. on the higher education ranking system or the rating system, it's been a year and a half now, i think, where the department has been talking about coming up

with criteria. that criteria still looks like to me that it's not very difficult, even talking about how many intangible things there are in higher education. i'm wondering why after looking at this as long as you have and the criteria still being as nebulous as it has, why are we still talking about this and what's the future -- or what's the purpose of having this rating system? >> first of all, i appreciate your past leadership as the university president senator alexander the same so you have some real knowledge of this. we've always come at this with a real sense of humility and there's a lot we know we can't do and we can't begin to capture all the ways in which higher education has value from creating a healthy democracy. we come at this with real humility. we think there are some bay i can is and key areas where there has been a huge lack of transparency. it's very very difficult for families to figure this stuff

out. better understanding access and affordability and completion of depression and whether folks can get a decent job at the back end. we think this is a huge decision that young people make whether they're first generation college goers, whether they have two college educated parents i can't tell you how many young people i've met with where this process is overwhelming and being able to get better information out to the nation's young people and their families about graduation rates, what's a grant, what's a loan, what do outcomes look like. we want to make it easier. it's having to me, we have 7,000 institutions of higher education roughly, hawk about a huge diversity, it should be a very efficient marketplace, it's not. it's a very ticket one for young people to penetrate. we look forward to working with you. i'm happy to come back with you and your staff and talk it through, but we want to do everything we can to get good information out to young people and their families and help them

make better and more informed choices. >> i would just say, mr. secretary, i think one of the reasons that the federal government has been able to be involved in higher education in a pretty significant way financially since world war ii with growing and different and a multiplicity of ways to help students get there, but we still have the best higher education system in the world sths the one place where the federal government has been willing to make a financial commitment and not try to run the system. all these schools are accredited and if you qualify for the financial assistance then you choose among accredited programs and that's created a great diversity of options for people to look at that do meet different student needs at different levels. people like she who are their first person this their family to graduate from college often have a different set of aspirational goals and a sense of what college might mean to

them as opposed to somebody who is a fourth generation harvard student who probably has not only a different set of goals but likely to make a whole lot more money. you know eight hours at a community college that allows you to get a better job than you otherwise would have had, is that a plus or a mooins in this system? whether you graduated or not. i just think with all the challenges out there that this is one -- i can't find very many people in higher education -- i'm going to concede there might be one but i haven't found one yet hocks this really adds to the system rather than adds to the confusion in the system that might be there already. while i'm there let me also -- on the other side the sort of gainful employment side which seems to be particularly focused at the for profit side of higher education, where are you headed there in terms of what you would

consider a gainful employment allocation between what somebody was making and the student loan they were trying to pay off and how would you measure that? >> just to be very, very clear that this is not just focused on the for profit sector, there are fantastic actors in the for profit sector but there are bad actors in the for profit sector. we had to take some action earlier this week and the institution will have a chance to reply, but the findings that we -- we are putting forward are pretty stunning pretty egregious and the waste of taxpayers' money which i think none of would support none of us will feel good about and leaving young people in a worse position than when they started. we want to make sure young people are getting real is skills to lead to real jobs and a better financial situation. when young people are taking on massive debt who are already struggling who are often already in a disadvantaged position and end up in a worse position because of this, i think we do them a great disservice and

taxpayers a great disservice. where there are good actors providing real skills and providing a ladder to the middle class we want them to grow and prosper and serve more young people but where you have actors tar taking advantage of a massive influx of taxpayer resources and leaving people this a worse position than when they started that's not something i think you or i or any of us should feel good about supporting. >> i may come back. i'm going to go ahead and go to senator murray but i may come back later and ask where you came up with this 8% of total earnings as a ceiling for what would be the right ratio to look at. we can come back to that later. senator murray. >> mr. chairman thank you very much. mr. secretary, last week the national research council released a report and recommendations for how to apply the science of development and early learning to building the work force needed for high quality programs serving young

children. the report noted that its recommendations will require significant resources and in the past few years congress has provided your department with funding since fq 11 forays to the top early learning challenge grants and preschool development grants, washington state has used race to the top funding to invest in its work torse. how is your department working with the department of health and human services to administer these grants and address work force issues that are outlined in that report? >> so we were happy to help participate in that report, the findings maek a lot of logical sense to someone like you who knows this field intimately. all of the applicants from all the states those we funded and couldn't fund, all 36 applicants for our grants described their efforts to provide comparable salaries and strengthen the work force so we know how kritly important this is. we fully support those findings. with we think, you know, candidly we were ahead of the study and encouraging these things and states totally get

it. so the real challenge senator murray that you talked about is we simply don't have the resources to get behind people who know what the right thing to do is, they just don't have the dollars to do that. there is so much unmet need, waiting list of thousands of thousands of children in virtually every state i visit and this has become a total bipartisan issue in the real world. we had more republican governors than democratic investing today. we just have to get past the dysfunction here this washington and look at what's happening out there. so new mexico, nevada, the new governor of texas who is a strong conservative said the most important item was getting more resources for early childhood education, alabama, georgia. one of my most heart breaking calls you obviously are very unhappy that we couldn't fund washington. one of my toughest calls was with the governor of mississippi who desperately wanted resources and as much needed as it is across the state we know how bad the need is in mississippi, how great the need is. we simply didn't have the

dollars to fund it. i really would love folks here this washington to come together look at the bipartisan agreement and states across the nation and figure out how we can get children off these waiting lists and get them into kindergarten prepared to be successful, not have them start school a year to 16 months behind. that serves nobody well. >> and it is worrisome for our competitive gleebl work force in the future because other countries are investing. >> my number won't be exact but we look at other industrial iced nation ns terms of providing access. united states ranks like 26th or 29th. it is no badge of honor and it's just a vast majority of these industrialized countries understand how important this is and they have provided greater access. we're trying to lead the world this college graduation rates high school graduation rates. we should think about leading the world this access to high quality early learning and we know all the brain science, we know all the research, the return on investment and the fact that so many countries have

invested significantly more in provided greater access than we have, we should be ashamed of ourselves. and we should want to do better for our kids and for our nation's economic competitiveness as you said. >> thank you. mr. secretary is as you know achievement gaps between our low income students and all students continue to exist, it's about 11% in both reading and matt. the title 1 grants to local education agencies was created to help eliminate those gaps. your budget proposal would increase funding for the program by about a billion dollars. full can you talk a little bit about what's been the impact of the reductions to title 1 funding that have been made since 2010? >> there are two things that have both happening at the same time and neither is good. one is the reduction in real resources for our poorer children and two is we have across the nation an increase of children who are eligible for these resources. so greater need, less resources.

i'm convinced as are you as i assume virtually everyone on this committee is is that the best way for us to end cycles of poverty and move children and families out of poverty is to give them a great education and world class education. if we do that they have a world of opportunity and they can enter the middle class. if we exacerbate or perpetuate those gaps we are part of the problem. so we need those resources, whether it's access to better after school programs, whether it's access to ap classes, access to the best teachers. whatever it might be our children, particularly our poorest children deserve this. when we have less resources to help more children who are poor and if our goal is to reduce income inequality and increase social mobility, the best way we can do that, this fact, i would say, you know, by the far the best way is by providing a high quality education to every child. you mentioned achievement gaps. our achievement gaps are

insidious. i'm very pleased on the high school graduation rates we're closing those gaps but we have a long time to go. i prefer to talk about opportunity gaps as you know far too many irn ch, poor children who live in disadvantaged communities do not have the opportunities that the raelt yer counterparts do. the children of the wealthy often get more the children of the poor often get less. that is unfair that is unamerican. this is a step to try and rectify that problem. >> thank you very much. thank you, mr. care man. >> senator. >> thank you, mr. chairman. welcome to our committee hearing and we want to thank you for your hard work and your efforts to help make sure that our federal response to needs and education around the country are met and at that same time though, recognize, too, that we have very limited availability of funds and a programs that will solve all the problems in elementary and secondary

education, for example. the states and local governments have the primary -- primary responsibility of funding and hiring of teachers and all the rest that goes into making our nation a nation of opportunity for good education, and i think working out a division of responsibility for what programs are best handled by the local office holders and people who are responsible for operating our schools and colleges that we -- that we not encroach too much on the incentives that we have that are created at the local level to benefit special -- special needs. i know title 1 of the higher education act -- or element reand secondary education act where money is recruited and you have money that goes to local governments to encourage people to go into education and help

upgrade the quality of our students. what is your assessment during your time as secretary about the importance of our funding programs of that kind? >> first i want to publicly apologize to you and why to your state as i did to senator murray privately that that was one of the hardest series of calls i had was with your governor who knows how far behind so many children in your state start who desperately wanted our resources and we simply couldn't fund down the slate far enough we simply ran out of money. by -- you know as a nation we have a long way to go by virtually every measure, mississippi sadly on educational achievements is near the bottom. so there's no place arguably with greater need than your state so i want you to know how badly i felt about that and feel about that and hope going forward we can do more to help. where we have resources to help close, again, not just achievement gaps what i call opportunity gaps, that is critically important. when we see high school

graduation rates at all time highs and we see black and latino high school dropout rates cut by about half and 45% respectively, when you see every group of children graduating from high school at higher rates, black children lat know children english language earners, students with disabilities, poor children that is fantastic progress and i am so thankful for the hard work that teachers and educators and parents and ultimately students are doing around the nation. the issue is how do we get better faster. our dropout rate is still too high our graduation rate is not high stuff enough and we need these resources to give children a chance to be successful in life. >> if we find a way to add money for some of these programs you wouldn't recommend to the president that he veto the bill, would you? >> if we can find some more resources to support what's working, that's very, very important. >> thank you mr. chairman. >> if i could quickly add, sorry, not too long on too long

we need to invest in those programs like title 1, but we also need to invest in invasion and again there's so much great local work going on where people are starting to get outside extraordinary results for young people who historically struggled weather it's in rural tennessee or appalachia, what we don't do in education is take to scale what's working we should invest in those core programs, we also need to invest in education. there's amazing work going on out there, we just don't look at those benefits enough. it's an important federal role, it doesn't begin at the state and local level. we can do better together there about. >> thank you, senator cochran. >> mr. chairman, thank you. first of all, mr. secretary, thank you for your service the fact that your tenure has been long in the obama administration shows that you really have --

really a real commitment to education, and really now over the span of your tenure, really seen what works and what doesn't. we really want to thank you for your advocacy and steadfastness. i want to associate my remarks with the senator from washington, senator murray. in order to meet our needs, we have to focus on lifting the gaps. there's no two ways about it i know there are colleges who want to lift the defense caps. and i don't argue that in this committee or even on the floor. i think we have to look at raising the caps in the domestic programs. they're intertwined, let me tell you how i see it, one county two people three programs. one county anne arundel county in maryland. the home of the united states naval academy. the home of fort meade and other intel agencies. three programs impact aide,

idea. two people, they have names like rosa and jack. rosa was a child who was stigma stigmatized and bullied in school because she has downs syndrome and the word retarded had become a bullying invitation. working on a bipartisan basis with senator enzy, we passed rosa's law. he had the same challenges in his own state to remove the stigma. rosa is in this county then there's jack he's part of the 1%. not the 1% that makes doeses of dollars, but the 1% that is a genius. jack is a genius, in high school he has invented a test for pancreatic cancer. if you talk to his mother a nurse, she had to forage to find the programs to help jack. and then he goes on to win the intel scholarship and invent

this stunning discovery. so what is it? you talk then to the republican county executive. he didn't even know about impact aide. then i tell him he's a compassionate post, because the army at ft. immediate so loves the educational program and the linkage to kennedy krygier, idea in its underfunded. then the javitz program, they laugh about it because it's so small, so skimpy so spartan, so my point is, while we look at innovation and aren't we cool and we're doing brave new ideas and we're going to scale up and follow the hoop dreams. i'm worried about these bread and butter programs, i associate with myself with impact aide. if we're going to support the troops, let's support where the troops live. we're proud of those troops, we love them there. and quite frankly, they're good for our economy. and we sure are proud of them. >> idea is continually

underfunded. that's a bread and butter program in every state. that takes me to the javitz program, the program for the gifted and talented. i have kept that program alive. tell me what your plans are, we know what we can do on impact aide. i think there's a commitment for idea, do you even know what i'm talking about? that's not an argumentative question, it's not meant to be argumentative, but that's my point, these children are a national resource. i'm not talking about the 1% genius, i'm talking in our schools. and there's a presumption that only rich kids are smart, you and i don't believe that. where are we on the javitz program, and what is the department of education's commitment on that what have you identified if any the need for that. and why did you cut it? >> i'll start. >> from 10 million. of any program to be picked on

you took it from 10 million to 9 million for the whole country. we could use that in just the delmarva peninsula many. >> i'll start and turn it over to our budget director to walk that through. i want to thank you for your service. my service pales in comparison to what you've done. and -- in terms of longevity and impact, thank you for everything you've done. it's been a joy working with you. on all these things, again, i hate that so often because of the dysfunction in washington we have to make these choices between what is the bread and butter programs you talk about or doing more innovative stuff or doing more preschool. we should be doing all of the above and hold ourselves accountable for results, if we're not getting results, we should scale back. in all of these things it shouldn't be either or we shouldn't be forced to choose too often with things like sequester caps. whether it's jarvis gifted and talented. whether it's ida whether it's title i, all these things we should be supporting, we should

be building upon, we should do more early childhood. >> tell me what you're doing for the gifted and talented. >> the javitz program is one of the smaller programs that got eliminated over the last few years, it had almost $8 million in it. the priority has been for the larger programs. some of the smaller programs over time have been cut back. again, as secretary -- >> i know they've been cut back you told me what i already know. tell me what you do to help these children in the department of education, and what is the identification of need? or do you even know? >> i think the approach is to take all children, look at them provide the support for the general programs look at things that are innovative there's not always, congress has made decisions in the past. these weren't things proposed by the administration. 53 programs have been eliminated since 2010. when you go through the process

like the reauthorization, you can affirm that that's the kind of program that should be continued, you can put money into it in appropriations. >> do you know what you do at the department of education? >> >>. >> do you think about them? >> we think about every child every single day? >> i don't want to hear -- i'm asking about this population. every child is special, i understand that. >> we do the best we can to provide a world class education to every single child. >> do you think about the talent pool we have to identify them and help the teachers know how to best develop them? >> to be clear we don't identify, that's done at the local level. >>. >> this proves my point. >> thank you. we have the opportunity here to have both the ranking member and the chairman of the full committee, and the ranking

member and the chairman of the authorizing committee, so that gives us a lot of strength on this committee, and senator alexander is the chairman of that committee and an important member of this one. >> thanks. mr. secretary, welcome. thanks for your nice comments about senator murray and our work on fixing no child left behind. i think senator murray must have been a good preschool teacher, in preschool, you learn to work well together and she understands that, whether it's working on the budget or no child left behind, which is a tough nut to crack, she's been good to work with, and we've made a lot of progress. let me throw the compliment back. sometimes the president doesn't get much credit for working well with congress. i want to thank you and president obama for your public comments and the private way you've worked with us in creating an environment, where we have a better chance to succeed on no child left behind. we have strong opinions on this, everybody does. you've been very constructive

and helpful, so has the president, i thank you for that. >> i'd like to talk about higher education, and i'll just ask a single question and let you make an answer. not long ago. we asked a distinguished group of higher education officials to look at higher education and give us a report about how we could simplify federal rules and regulations. they reported -- they gave us 59 specific recommendations, very good reports. not a sermon. it's specific things we can do. you and i have talked about it a number of times. they put them in order they even told us what the top 10 were. and senator mccull ski and i and bennett and burr are going to take as many of those as we can, put them into legislation, try to make it a part of our reauthorizing of the higher education act. 12 of the 59 were things that the department by itself could

fix. three of the top 10 were things that the department by itself could fix. now, these aren't things that secretary duncan and president obama by themselves did, secretary alexander and president bush did some of them. this is going all the way back to 1965. what they found was, that for example vanderbilt university hired the boston consulting group, to tell it how much it cost vanderbilt it's nonhospital part of vanderbilt how much federal regulations cost vanderbilt in one year. it's $150 million. that's 11,000 on every student's tuition, 11% of all their money. it's just a jungle of red tape. national academy of sciences has said that an administrator's time on investigations is 42% administrative time. that's billions of more dollars of wasted money, now, most of