foods. so, a fairly broad array of products up until 2012 when things began to deteriorate. the more recent export categories over the last couple of years have been concentrated in three areas, and that is frozen leg quarters, soy complex and corn. in fact last year those three accounted for 96% of our exports. and in my mind that's precariously risky. we just don't have the diversity of our marketing base to with stand the kind of declines we've seen over the last few years. there's a number of things that have happened that have attributed to these declines that i would like to briefly go over those. one cuba moved away from u.s. exporters, products such as rice, wheat and higher value foods to more price competitive

competition. we talked about brazil, canada argentina, mexico spain and vietnam. and i've seen some of those products in the market, rice for example, 25% cracked and broken, got to be sifted before it can be served in hotels and restaurants. it is cheap by the time it gets but by the time they fool with it the quality deteriorates. no doubt the strong dollar over the last several years has put some downward pressure on our exports, it's made our products more price -- higher priced products. cubans have also diversified away from us to lower priced competition. during the global recession, cuba's earnings from tourism declined along with declines in the value and volume of their all-important nickel and cobalt exports. remittances from cuban-americans also decline during that time

and put a lot of pressure on the government of cuba and limited their ability to purchase products from the u.s. and, of course, the key thing to note about the cuban market is that the term market today is a misnomer. as we talked importing food products from the united states and i'm also of the opinion that from time to time the cuban government itself gets directly involved in some of these decisions to influence what's purchased, how much and from whom. despite these constraints cuba has some potential. we've been looking at this for a long time. and become a much larger market for u.s. exports. we estimate about a billion dollar market over the next five years. what's important is cuba's demographics are favorable for growth with a population of 11 million people 99.8% of which are literate. cuba has a highly trainable

workforce of more than 5 million people. in addition, those aged 25 to 54 represent 47% of the population and are in their peak consumption years and these characteristics are very similar to the to the dominican republic to which we exported 1.4 billion in food products last year. for this potential to be realized we must see gains in consumer incomes in cuba we need to see improvements in infrastructure and logistics some of which have been discussed here today. we also need to see more stable policy regimes policy environment that would stimulate on the part of u.s. businesses. concluding the cuban market for u.s. food and agriculturally related products has the potential to exceed a billion annually and this would create 6,000 new jobs in this country. to realize that we need to see

positive changes in income, infrastructure and regulation. thank you very much. >> doctor thank you very much for that most informative testimony. doug, you mentioned that the rest of the caribbean region the market share for the united states wheat is over 80%. if cuba resumes the purchases of u.s. wheat what's your estimation the market share of u.s. wheat in cuba do you see this level of market share staying relatively stable given the economic volatility in cuba? >> first of all, i see no reason for it not to go up from zero. second of all, i see no reason it shouldn't be somewhere in that range of 80% to 90% likewise in the rest of the caribbean. >> dr. rosen you've worked on projects in mexico brazil argentina, australia japan,

iraq, indonesia singapore, philippines, malaysia and thailand. did you sing that country sing "i've been every where man" and you taught at clemson university. you're a tiger as well as an agate. thank you for your testimony. you have an impressive background. we got an opportunity to expand our competitive position of u.s. agriculture in the cuban market that the distinguished chairwoman agrees with me and i know the senator from arkansas does as well. but when farmers and ranchers explore an expansion of their business opportunity they explore the benefits and potential costs. what are some factors that could weaken our competitive position of the agricultural products in the cuban market? >> well, from our standpoint in texasiá

now is limiting factor in the movement of container cargo which would apply to a lot of the higher value food products. we don't really have service right now out of our local ports to move directly, we have to go to florida, transload then move into cuban market via usually by barge and it takes an extra several days move to that cargo. it raises the costs. it endangers those products in terms of the quality, the reliability when they get there and the condition in which they improve. improving our own logistical system is something that needs to happen. secondly within the cuban market itself the times i've been there and been with companies that have exported products particularly perishable products to be used in food shows for example, we've had trouble with reliable electrical power both at customs as well as in hotels and restaurant where's we might go periods of several hours. if you have a frozen dessert

that goes that long without power when you get done it's not exactly what you come in with and so those kind of logistical requirements are an issue. the other thing is simply the capacity of refrigerated warehouse space which would allow us to move more products into the market and more steadily over time. >> i appreciate that very much. all of you have traveled to cuba over the years. what are some of the supply chain challenges. dr. rosen you've testified on some of that. any of you like to pitch in on that? >> i think in terms of some of the issues i think you are going to see that cooperateives are going to have to figure out ways to create relationships. those relationships are the piece that's going to bridge some of these problems and gaps,

and frankly i think we need the government to be able to get out of that so that these sorts of solutions that cooperative cooperative can step in and fill those gaps. >> mr. harris? >> again, we made the first sale of race to cuba in 2001, and it was pretty seamless quite frankly. we shipped bulk rice and took advantage of their lower cost labor. we had the rice bagged on the docks in cuba for distribution from there. one of the benefits we see, mr. chairman, is that when cuba buys rice from vietnam they have to buy in extremely large vessels, 25 30, 35,000 ton vessels. because of the proximity to the u.s. we can load small vessel go not only to the port of havana but other ports within cuba that really helps them on their storage their warehousing and distribution within country.

>> we've had a lot of interaction with the cuban people. one thing they need is our technology. they have fallen behind us. they need access to more of your products including farm equipment. we have limitations what we can ship to cuba. one thing we found we took gifts of fencing tools and a set of wrenches down to them. if some of the professionals that were on our trade delegation weren't sure that wasn't a very good gift. when we took to it their farmers they had tears in their eyes. subsequent trade mission they showed fences we took down. as we get efficiencies in our shipping and bring our farmer to farmer interaction we will improve their productivity which will increase the demand for our u.s. goods. >> doug, do you have anything to add? >> i'll echo on to that. some of our biggest restrictions

to trade is us not them. you guys have the power to work on that. that's very good. as far as what i saw in cuba, their entrepreneurialship which receive shall of you guys have touched upon was outstanding. as a business owner myself, you know, that was something that really stood out to me and i think they are going to try to make anything we can do work. >> senator stabenow. >> thank you much mr. chairman. this has been an important discussion. and first, i want to underscore when you talk about cooperateives in the conversations that i've had with cuban officials first they are very proud they have created cooperateives and the ability for more decisions to be made by farmers although more to do as you say to get the government out of that position so that the farmers are the ones really

driving the train here. you talked about what they are interested in in terms of equipment and tools and so on. we talked a lot about farm equipment and tractors and the fact that the new decision that the president made was to allow farm equipment and the fact they had cooperateives, most of them didn't have one tractor and they made decisions who got a tractor and how many tractors. there's a lot of opportunities for us to be able to expand. but i think cooperateives are very much a structure going forward. >> i wonder, because you've had an opportunity to navigate from agriculture and looking at cuba's economy from a broader trading relationship, beyond exports, in terms of

commodities, when you think about how to more fully develop the farm economy in cuba what we can do what would you suggest and i'm wondering what products or services or assistance that we're leaving out of the conversation so far? what should we be focused on that we haven't been talking about? >> well, when we went down, for example, the first trip in 2002 the nutrient he had was from 1989. so to help with the livestock we kportd in feeding them was our first step. things had changed from their time of closeness with the soviet union their professionals are willing to get u.s. technology and get access through the internet. we took in when we took stiller screens down and show how to

feed it. they are a grass based economy. when they went true a drought we got reports one farmer had a report he lost two-thirds of his livestock and quote in the paper was he went to the bag, reached in and got a scoop what we trademark norgold. without this product from the u.s. i would have lost all my cattle. so we were providing technology that way, getting farm equipment as you mentioned. access to modern mixing equipment, modern milking equipment. it's only going to help our u.s. products as we improve efficiency for their farmers and it will feed their people, there's a lot of poverty in cuba, we didn't see a lot of hunger but they are all looking to increase their supply of food for their families. >> absolutely. i'm wondering mr. rosen we've

again talked about the fact of a small group of products we're exporting now. we want to do more rice, we want to do more of everything and we need more diversity in terms of our goods that we're exporting to cuba. how do you see the president's new rules governing trade, financing between the u.s. and cuba as creating more opportunities for the underrepresented cuban market and what more could we be doing? i know ultimately it's lifting the embargo and we hope they can get that done. but, hat more can we be doing right now? >> i think the encouraging thing in the new regulations is the allowance for remittances to quadruple and if they can go further that would be even further because those remittances 80% of it end up in the cuban consumer or small businesses. then those remittances represent

about, they go into about 60% of the households in cuba. so they can be quite important in terms of stimulating consumption and part of that consumption would be food products and we hope from this country. and they can also be used for business development. for example in cooperatives or private business ventures and the cuban people are very entrepreneurial. you've been there. you've seen the entrepreneurial spirit and capacity that exists but it's been harnessed. so i think remittances play a critically important role and if those could be expanded i think it would be a very positive impact on the people there. >> thank you. thank you mr. chairman. i appreciate you holding the hearing. >> thank you. senator? >> thank you, mr. chairman. mr. harris, there's been some concern expressed by some members of congress in the sense as to what would happen, who

would be obligated if the cuban buying organization failed to pay or whatever. some have concerns of perhaps the united states government would be on the hook. i guess the question is for you and the others can chime in also if the cuban buying organization fails to pay for shipment of rice or whatever, would you expect the u.s. government to compensate in your case, whoever for the shipment? >> senator, in my opinion, no. certainly we would welcome financing, that would be a wonderful opportunity for the ag industry. but we that is my job with the company is risk management. and we assess that every day. and so we assume as we take that risk that that risk is for rice and foods. >> anybody else? >> i would expect that the rules change it would be the same requirements as it is for any

other company. or any other country and any other business transaction. as a business owner you know it's a transaction between buyer and seller. and, you know, as mentioned, that's risk we take and we have to analyze our business as we do it, and as producers we're asking for less government interaction, not more. >> no, no. i agree totally. again i think there's a misconception and really wanted to clarify that. you know, we've talked a lot about today your testimony was excellent, very helpful as was the other panel. i guess the bottom line is has the recent administrative changes regarding trade are they going to help your business? with what's going on right now. mr. harris? >> i can respond on behalf of us. no. it's a very small step. i can tell you the day after the

president's announcement i contacted alan port and told them certainly we had an interest in doing business there and they thanked me very much for the call but had no interest in purchasing u.s. rice. so, senator, i really think that they are looking for an elimination of the embargo so that they can have the ability to create foreign exchange by selling their rum and their cigars and their citrus to the u.s. and the tourism that they need so badly. i really think that the small incremental moves that we're making are not swaying them to try to work closer with us. >> would you all agree that those are -- that's the major barrier. what's the major barrier? >> i agree. i think the answer to be with repeal of the embargo. as a wheat farmer from kansas i'm looking at june to be harvesting my wheat crop. so, you know, i would be looking, at the port in july. so if the embargo was lifted we

could be selling wheat to cuba in july or sooner. and this is what's holding it up. >> dr. rosen? >> my perception is and i've visited with the people there at the cuban intersection both this group and the previous group and there was a lot of optimism early on that we were going to change the rules, possibly lift the embargo and of course that hasn't happened. and i think in about 2011, 2012, they came to the wellization the carrots they were offered in purchasing products from 38 different states didn't work and that's when they diversified away from the united states to other countries and so they are waiting -- our perception this is a very strong signal. in their minds it may not be strong enough and they are still

waiting to see what we're going to do. >> very good. well thank you all, again, for being here. i do appreciate your testimony and it really is very, very helpful. you all are on the ground floor of this, and nobody understands it better than you all. so thank you very much. >> thank you. >> i share the comments by the distinguished senator from arkansas. in my view it's access to credit. in my view it is whether or not the banks in question and obviously the customer of those banks have an appetite for risk if we can use that again. and that has to be seen. i want to assure you all this committee stands firmly behind our efforts to see if we can't

put up those supposed obstacles you talked about. thank you for coming. this concludes the second panel of our hearing. thank you to each of our witnesses to government inaction. testimony today is valuable for lawmakers to hear first hand. we would ask any additional questions you may have have the record be submitted to the committee clerk five days by today or by 5:00 p.m. next tuesday april 28th. thank you so much. the committee is adjourned.

>> the committee is holding a mark up of four trade bills. the committee came in briefly this morning but has been recess since 11:30 as senator bernie sanders objected to the committee meeting. orrin hatch indicated the mark up will start again no later than 4:00 p.m. we'll have live coverage of that on our companion network c-span 2. the committee is marking up legislation related to pending trade measures including fast track trade promotion authority that would give the president broad authority when negotiating trade agreements and require congress to consider treaties with an up or down vote without amending people this other draft bills include the trade adjustment program that provides

federal job training. and reauthorizing and trade enforcement activities including those of u.s. customs and border protection agency. live coverage is set to start at 4:00 p.m. eastern. we hope to have that four on our companion network c-span 2 once the senate goes out. the senate will begin debate morning on the nomination of loretta lynch to be attorney general, a procedural vote is expected to take place one hour after the senate convenes tomorrow. in a confirmation vote on the nominee could take place in the afternoon if there's agreement to limit debate time. live coverage of the senate tomorrow on c-span 2. now it's a segment from today's washington journal on financial issues and the approaching fifth anniversary of the dodd-frank legislation. we'll show you as much as possible leading up to live coverage of a hearing on the fema budget that's set to start

at 4:00 p.m. eastern here on c-span 3. >> >> sir we're approaching the five year anniversary of dodd-frank the law that regulated wall street after the financial crisis. what do you think the impact of that law has been? >> it's still evolving. it's been a good law overall. some bumps in the road. some of it has not yet been fully implemented. overall it's done a reasonable job. it could be better if we get better regulations finalized. and i think if we can clean up a handful of things it will be better. overall i think it's a very good job. it kept the markets stable. >> what needs to be cleaned up? >> minor things around the ejs on clarifications on insurance companies. they are relatively minor and easy to do. if we can get by some partisan

issue. >> what are those issues? >> some people just not do anything to fix any law like dodd-frank unless they can repeat the entire thing. we won't let that happen. we're happy to try to fix it. things like insurance capital standards, easy to do but you can't dpoit the majority party keeps tying it up with unrelated items. >> the former chairman of the federal reserve recently called for an overhaul of the financial regulatory system and he wrote the system for regulated financial institutions in the united states is highly fragmented, outdated and ineffective, a multitude of federal agencies self-regulatory agencies and state authorities share oversight of the financial system under a framework riddled with regulatory gaps, loopholes and inefficiencies. >> he's right. that statement could have been said properly for the entire time i've been alive and will be able to be said until i'm dead. that's correct. we do the best we can with the

time we're able to do it. in dodd-frank we got rid of a few agencies. we didn't collapse as many as we would like. you can't do everything overnight. look, i think his comments are 100% correct. the likelihood of us being able to succeed in that direction in the near future is not very good. >> what's outdated about the regulatory system? >> i'll start with an obvious one. i don't think we need a separate agency for the sec and another one for the cftc. very few people trade real pork bellies any more. it's all paper. it's the same type of things that are traded on wall street. one agency should be able to regulate 90% of that market as opposed to splitting it down the middle. >> what about the regulations put on banks dealing with mortgages and the impact that it's still having to this day on the housing industry. first time buyers can't get in the market and buy a home because the lending restrictions are so tight. does that need to be reformed?

>> some does some doesn't. we got into southeast problems because the people who shouldn't have gotten mortgages got them. the whole idea is saying there are a group of people who are not financially yet qualified to hold a mortgage. to some degree that's correct and intended. the other part for sake ever discussion, i personally would love to able to amend dodd-frank to reward true community banks the kind of banks that know where my street is to be able to hold the mortgages. they pretty much can't do that any more. i don't think that's good for the system or any given community. it wasn't intend but that's the result of where we are at the moment. i would argue that everyone will say they agree with that but we haven't been able to get that off the dime yet. >> why aren't these community banks able told these mortgages. >> the way the rules are interpreted. they can do it. i think it should be significantly more. they should be encouraged to do it not allowed to do just a little bit. >> does the incentive still

exist for banks to give a mortgage and later on chop it up and sell it off. >> yes. that's part of the problem. i would rather see those mortgages not all of them but the majority of those mortgages held in a local bank as opposed to bundled and chopped up. we're still having some of those problems. >> why? >> because everyone is concerned about regulation. everyone says oh my god regulation is terrible. my argument is regulation is not good or bad. regulations are every where. the idea is to get the right amount of regulation targeted at the right problems. and those problems first of all they are not as easy -- they are easy to know what some of the problems are. the fixes are more difficult. number two things change. the minute you plug a hole here there's a lot of very intelligent people making a lot of people trying to find ways around the plug. >> i want to ask you about the front page story in the "wall street journal" and the "new york times" this morning. flash crash charges filed.

a trader who operated out of his london home was arrested on u.s. charges that he helped cause the dow jones industrial average plummet 1,000 points on may 6, 2010 what came to be known as the flash crash. the "new york times" wonders that they believe this raises concerns anew that one individual could manage to have such influence over the market. >> if it's true it's a real problem. i find it difficult to believe that one person could do that much damage. at the same time he may be the most brilliant guy to come around this week. if de. good for him. he exposed other problems like a computer hacker some 15-year-old kid in a foreign country can hack into computers immediately and as soon as you discover they did this you plug that hole. this case for me i don't know the details. i tread headlines. i have the same questions. if one person can do it it's a real problem and in theory if one person can do it it should

be easy to fix. >> what was he doing? explain the type of trading that he was doing. >> i don't understand it yet. if i understood it i would have done it. somebody said $40 million in eight minutes. >> he made $100 million in one day. >> i don't understand it all yet. it's something that -- i knew it was happening but i don't know the details. >> this high frequency trading that goes on, does dodd-frank deal with that. >> not much at all. >> why not? >> because you can only do so many thing. we dealt with as many problems as we could. this is a little bit of a separate issue. this didn't have much to do with the crash directly. so we were trying to deal with that issue. this issue has come to light after the dodd-frank bill was passed. there's some problems we have in actually the courts have said legal to high volume trades and i have some problems. we'll try to struggle with that.

>> explain for those who don't know what high frequency trade cigarette and does it need regulating. >> i don't know it needs regulating. i want needs investigation to determine whether we need regulating. high frequency trade sag combination of things. usually a computer. some very smart people throwing some algorithms decide trade right now. and it's literally happens in a blink and it's all well and good as long as it's being done in a legitimate way. there are some allegations that information that they are based on is information that they were not queen titled to get which is a different problem. >> what about also the factor of people buying to look like the trade is popular and that makes the price go up and then turn around and sell it. >> buy or sell in a split second. in this case it sounds like he probably didn't even buy it. looked like he was going to buy

it and didn't which is a little bit new twist to me anyway. >> let's get to calls. we're talking about regulating wall street here with our congressman from massachusetts. an independent caller, tommy you're up first. >> representative, i lived in somerville when you were mayor. i'm a big fan of yours. i'm not a big fan of democrats but you're one of two independent democrats in congress. how do you feel about the bail out now seven years late center >> i think it was a necessary item. i never liked it. i think it was necessary to do. i think it worked. and we've gotten more than our money back with some individuals that still owe us money. individual companies. overall it wasn't done for this reason. the government, the taxpayers actually made money on the bail out. that wasn't the idea. i still think it was necessary. it was the right thing to do.

i really wish we had taken another week to tighten it up. there were a lot of holes we allowed like bonuses to wrong people. overall the concept was the right concept. it's not something that it enjoyed doing but i think it was necessary. >> tommy, how do you feel about it? >> i think it was a mistake. let these banks fail on their own. i'm sorry i know you say it could have caused a depression, but i just think ordinary people don't get rewarded for their incompetencies. >> that's the part i don't like. i'm no wonderful economist but i represent some world renown economists. i put together three round tables for mean i have 34 colleges and universities and nobel prize winners and all kind of people that know this stuff better than i. i must have had to 3040 different economists say at three different meetings or more every single one of them

suggested we had to do something fast and something big. they had different ideas what we had to do. everyone was uniform. there was not one voice amongst people, again, more train in this than i am that thought so which made me more comfortable. >> was it okay to let lehman brothers fail? >> i think the answer is it was probably okay for one company here or there. it was never about one company. it was about the economy. one company sfifrg not surviving is bad for people that work for that company. but that's not what we were doing. at least not what i was doing. we thought there were too many interconnections that if one or more a couple of these banks failed they were so interconnected they would drag everyone else down. that was the problem. that was the only problem to me worth addressing. individuals companies failing. tragedy for a different reason but not something congress should be involve. >> bank of america was asked to take on merrill during that

crisis. shareholders in return filed suits against him for not providing evidence of what merrill had on its books and bank of america has been paying since. >> like i said, i wish we had a little time to have a deeper breadth on some of the things that happened and how it happened. i have to look at it a broad brush. nitpicking, believe me there were things i didn't like. >> do you think ken lewis prevented a further meltdown? >> i don't know if he had much of a choice. there was a decision that merrill had to be taken on by somebody. whether that decision on merrill is right is a fair question. but for us congress wasn't involved in each individual decision. we were involved with a massive broad brush do we provide $800 million right now to be used by people on the front line and the answer is yes. i still think it was the right

thing to do with all the problems that arose. >> croftton, maryland, republican, you're on the air, john. good morning. >> good morning. i didn't hear me get put on the air so i guess i'm on the air. >> go ahead. >> just seemed ironic to me that the swan song for dodd-frank with christopher dodd senator christopher dodd from connecticut and barney frank from massachusetts they put this thing together. they didn't run for re-election. i always thought there was something fishy about that. i hear people say this is a problematic bill. you don't want to repeal any of it. i think the whole thing should be repealed. i think the whole government was responsible with fannie mae and freddie mac for forcing banks to give these worthless mortgages out and bundle them and then you blame the banks when they were forced to take these things and pass them on to somebody else.

then when it hit the fan everybody is blaming the banks. i understand it was a community of reinvestment program back to carter that started this. you guys forget about segal and make heroes out of dodd-frank when they show who they were when they decided not to be in congress any more sfp >> let's let the congressman responds. >> first i voted against the repeal of glass stegal. as far as i'm concerned banks were part of the problem. if i had to put in order who was top, it was the unregulated financial services industry that was probably the number one villain in all this. >> i think what john is stories was congress was putting pressure on fannie mae and

freddie mac to do more and more mortgages. >> i'll take the heat on. the pressure was never to bundle to give mortgages to people who didn't deserve it. that was never the pressure. pressure i would participate in doing is trying to get more people into home ownership. i think people like me might have pushed further than i should have. i have no rob with that. but given the choice of saying one or two people should get mortgages various those who didn't, i think home ownership is the way to middle class for most americans. is there a difficult balance? yes. did we cross the line? yeah. >> when did you to cross line? >> by not being firmer on standards, not being clear. i never knew they were giving out no doc loans. >> no documentation. >> that's crazy. at the same time i'll take my share of the responsibility for not stepping back and saying by the way how did you meet and

push what we had. we pushed to allow as many people point. how did you meet that criteria. someone said we did no documentation loans, i hope i would have said wait a minute that's not what i meant. >> how were they fannie mae and freddie mac able to do that without congress knowing what they were doing. >> that happens all the time. because people like me, i won't speak for anyone else, i was looking at the number of people whose home ownership went up percentage of home ownership was at the highest peak ever. 23%, 3% 4% higher than it should have been. which is a problem. that has nothing to do directly with saying you should have no documentation of loans, you shouldn't worry about how much anybody makes, whether they can repay the loan. doesn't mean you should take these things and bundle them and sell them and resell them again. that's a whole different ball game. and honestly that's what i said earlier. financial service like most businesses is always going fast

engineer smarter than any government including me. we're always one step behind and when we catch up on occasion, it's our responsibility so say whoa wait a minute you have gone a little too fast too far you got to stop this and on this particular case everybody was going too fast and too far because there was too much money on the table. >> mark from baltimore maryland a democrat. go ahead. >> i want to make a comment about the topic that we're just talking about, i read an article about how this sort of lending predatory lending is still going on even after the reform of the dodd-frank when it comes to the auto industry. and there's still a lot of subprime auto loans that are being bundled and sold. are are you familiar with this topic and is there any chance for reform? >> at the moment probably not because the appetite for reform is waning as you heard from the

previous caller. honestly congress always reacts better to a crisis than preventing one. the problems you outline are auto loans and subprime is real as far as i'm concern. i agree with you. i don't know that it threatens the entire economy as the other situation did because it's not quite as widespread but it is a problem and i personally would like to take more action. i think the cfpb is doing that. but i do think congress could be a little bit more proactive. >> brian from michigan independent. >> can you hear me >> we can. >> not to be critical. the last time i got a question answered was brian lamb. the other times i'm hearing the potomac two step. i want to ask the congressman i read through the lobbying bills. now instead of getting into all

of the things that your rules for lobbying, let's talk about two real quick. all lobbying, my suggestion is all lobbying has to be done in the representative's office or in the place of business where you're being lobbied from. you have to log in and log out. you don't have to state your business but log in and log out just as any admiral would when he visits a ship and an admiral is more powerful than any congressman. they have to log in and log out and the second thing is very simple. anyone including yourself or your staff members, white house staff members, anyone in 535 represent and all the staff members can never be or work for a lobbyist. i'm asking the moderator keep this man on point. don't suggest anything else. just these two points, please. >> i don't agree with either point. thank you for the call. that's pretty clear. i respect your opinion.

i think you've identified a solution to something that's not a real problem. >> why do you think it's not a real problem? >> i just think that lobbyists have been around for a long time. the girl scouts have lobbyists. what's the problem with this? everyone who comes to see me is a lobbyist. the question is how i do vote? if i vote tint ever lobbyists and only lob writists that's a problem. if i vote in interest of my constituents what's the problem? i have lots of universities in my district. every one of them have lobbyists. if they come and ask me to do something on behalf of the university then do it for the lobbyist or do it for my constituents. my vote is public. my comments are as public. i think that the solution is does not change anything. >> the perception those that the girl discounts don't have as much money as the wall street banks. >> you want to talk about campaign finance reform.

i would like to get money out of the campaigns. i'm not a good fundraiser. we spend too much money on campaigns. i've worked with anybody who has ever worked in my office to get money out of campaigns as best we can. >> let's go to hollywood, florida. cindy, a republican. hi cindy. go ahead. >> good morning congressman. actually two questions. rolled up into one. i used to be a trader. and by that i had a commodities license and i was working on my license required for stocks. back during the time die this and it was wonderful because it worked there was something in the markets called locking it up and locking it down. what it was was if the market or anything moved a certain amount automatically trading was halted. so your flash crash of 2010 could not possibly have happened.

here's my question. why did congress remove that which did protect our economy, making it fair for everybody and then second one of your other callers talked about how congress does the two step when they make bad decisions it's okay because they are in congress. which, by the way harmed everybody by removing those. and then they go well we blame everybody else. i think what the people of the united states is trying to tell you is that a, new is not always better. two, listen to the people because we're supposed to be one country first. listen to the people of the united states. if they are telling you that our economy can't do this because this is basically what these complaints are, we're spending too much money here we're spending too much money there, and, yes, you are in that

district, but, sir, you are still elected so is every member of congress. and all around this country we are telling our congress you will be unelected. >> cindy? >> i am told i can be unelected every two years. that's the democratic process. that's perfectly fine. i don't know about anybody else but i do think i listen to people who elect me and that's one of the reasons they re-elect me. again that's the democratic process. always has been. that doesn't mean every one of my 750,000 constituents agrees with me on every point or any point. means the majority do. that's how we get elected. as far as the other item goes i'm not aware congress did that. i'm going look into that after this program because i was under the impression it was done by regulation. i may be wrong. >> that would have prevented this flash crash in 2010. >> choi what she's talking about. i have to check. i thought it was done by

regulation but i'll check. even if it was done by regulation, i think she's right. the concept much what she's talking about is the way it should be. the limits should be broad because the market should be able to be flexible but again it was removed before this was this kind of computer driven trading that we have now. but i'll check. i think she makes a good point. >> this happened in 2010. why hasn't that been put back in place? >> since 2010, as you watch congress we haven't been able to agree on pretty much anything and even some of these easy reforms in dodd-frank this is a more difficult reform. this isn't dodd-frank this is something after dodd-frank. a lot of people think the market should do whatever it wants to do. there are those who think reasonable thoughtful regulation and limitation provides a more steady economic forum. that deinterstate an ongoing debate. >> is the lob jig on behalf of

those that don't want the provision that she's talking about the regulation she's talking about. >> it's almost always on behalf of somebody who don't want. >> right. >> when it comes to spending i want to say i have never, i've been in politics now as a conman, mayor, city councilman i've never had anyone walk into my office and say cut my program. cut the program i'm interested in. they always say cut other programs but mine is different. mine is the most important one and, therefore should never be cut. the day i get someone come in and say cut my program i think i'll be talking to someone who understands the broad base we have to deal with. >> we'll go maine, helen, democratic caller. >> hi. good morning. representative c-span had a representative from public citizen on a few days ago talking about the tpp. and she mentioned a lot of the problems with tpp and they in particular talked about financial regulations and the

implications and this trade deal for financial regulations. i am wondering if you could expand upon that and do you have any concerns about tpp in regards to financial regulations? >> i have deep concerns with tpp on many regulations. first we haven't seen tpp so narcissistic of the problem. anybody is talk they are talking about the basis of what they think they know and guessing and reading tea leaves. i usually try to stay way from that because it's dangerous. it doesn't mean i don't listen to these conversations and form my opinions but i don't make a formal opinion until i see a bill or an agreement. i didn't see the program. i don't know specifically what they were talking about. i would agree for me, i am 100% pro trade but 100% pro fair trade. i'm not looking to give anyone else an advantage. i'm not looking for an advantage for america. i want a level playing field on everything including financial

services and generally that hasn't been the case. in the asian market in general, again i won't speak to tpp in particular but in again traditional asian markets are significantly less regulated, more significantly more fluid. significantly less stable as far as i'm concerned. and the question is when we deal with any entity that does things different than us which standard are we going to? are we going to the higher standard, which is more often than not the west standard or are we going to the lower standard in and usually the race is to the bottom. that's been my problem over all. as far as the tpp goes, i won't speak to specifics because there's no agreement yet, there's nothing we have seen. otherwise it's just me guessing like everybody else. >> the trade promotion authority that will give the president fast track -- you're against it? >> i have never voted for a fast track proposal. i don't think i'll vote for this. again, i'll wait to see it but it's unlikely. >> it sounds like there was some concession made to democrats and the senate finance committee is

going to mark up the bill today and that would give the public and congress more time to read a trade bill and give the public 30 days before congress can even weigh in. >> like i said, i'll read it and i'll see. but in general the concessions to democrats are not democrats who i share this value with. not all democrats are alike. not all republicans are alike. when it comes to trade issues, there are some democrats a little bit more open to them than some of us and again, i'll look at it. and i have heard these things. when i see them i'll believe them and i'll make a final decision. i find it hard to believe they'll be able to do it in a manner that will get my vote. >> papers are also sounding today like any sort of trade agreement would be left to the next president because of the way it has all worked out, that if it were to come on the floor it would be in the throes of the 2016 election. so given that, what do you want

to hear from hillary clinton the declared democrat in the race so far, on trade? >> i want to hear something about fair trade. not just that all trade -- all trade is not the same. i think america got hurt deeply by nafta and cafta and some of the other bills we had by sending -- the whole idea's been a race to the bottom on wages for the most part as far as i'm concerned, which of course guts our middle class and sends those jobs overseas. i know in theory it creates other jobs. and i guess it does to some extent. but i want an america that has a broad base of an economy. not just an economy that's based on computers and paper. i want to make something again. the ones we do we do well. but because it's been a race to the bottom on wages a lost of companies -- i don't blame the companies. they've got to make a dollar. i blame us for having policy that's encourage that kind of race to the bottom. >> do you trust hillary clinton on trade? >> trust? yeah, i guess. it's p a matter of trust.

it's a matter of whether i agree or not. i would not have voted for nafta. that was bill clinton's signature. i'd have to listen to hillary as to how she feels about it. and also i did things 20 years ago i may not do today. things do change. some of the things i thought i was doing maybe didn't work out the way they were supposed to. i'd like to hear from her what she would do with nafta today and therefore how that would tell me inform me what she might do in the future. and for me i'm not a one-issue guy. even if i were to disagree with hillary clinton 100% on trade there's 100 other issues i want to hear about. she may overcome me on that issue. >> laurel, maryland. kathy, independent caller. >> caller: hi. how are you guys doing? >> wonderful. how are you? >> caller: good. it's nice to here a home voice. i was originally from the home state of massachusetts. >> do you still have the accent? because we don't have the accent. everybody else does. >> caller: when i say that they're surprised. i have a few comments but the

first one i want to make is that people are constantly being told by the republicans that they want -- the people wanted them and that's why they have the votes and the seats that they have. people need to know that after the 2010 sentence they jerry mandered the country to keep -- to make the seats for the republicans safe and to gerrymander more seats. a good example is south carolina. 52% of the people voted democrat and 10 out of the 13 elected positions went to republicans. 10 out of 13. 52% voted democratic. anyway, that's just a thought. this is what i wanted to say. the way the banking industry works is they have to keep 10%

capital for the dodd frank, which means if they have a million dollars they lend out 900,000. the 900,000 gets lended out, and then the bank that got 900,000 only has to keep 10%. and it keeps on going and going and going. so the original money is a factor of 9 every time you go down. so that's where you have this constant amount of money that's being shipped out and reloaned. >> okay. kathy. do you have a question? >> caller: well my -- i'm just trying to explain why the money is all out there. the people were not the problem when these mortgages were brought out. it is the fact that they were -- this process of loaning as well as the repackaging out.

but that i think is where a lot of the problem is. the people got blamed but it wasn't. it was wall street. it was repackaging things. >> okay. congressman. >> it's an interesting way to describe it. what you were describing is what caused the problem in 2008. called collateralized debt obligations. and we've kind of closed that one up a little bit. there is some reason to have collateralized debt oblthsigation but they were used one to another to another with no assets underlying the loan. we did close that one but they have not come up with collateralized loan obligations. i don't know the difference between debt and loan. someone has to explain that to me. but it's the same problem. and the problem is the congress a month ago, two months ago, we just passed a bill that basically said it was okay. now, it didn't pass the senate. so it's not law. but it was stunning to me because again, i don't agree with all your description but in general i think it was reasonable and i'm not -- because it's complicated i think a lot of people haven't really learned their lesson.

by the way i want to go back to the gerrymandering just for one second. gerrymandering's not new. it was named after another massachusetts gentleman, elbridge cherry, who was our governor and a revolutionary war hero. gerrymandering's not new. you're not going o'get rid of it. you can shift who does it. i think the democrats were better off -- it's not a pretty process. legislating never is. i think we need to get more engaged in it for the exact reasons you just mentioned. everyone knows that in 2010 i don't remember the years twl more people that voted for democratic members of the house than republican members of the house but we were down 30 seats because of jaesh manderring. democrats used to be better at it. and to be perfectly honest there are those who have to say it's not pretty, someone has to do it and we need to get back on the streets and if we get gerrymandersed we need to fight back in kind pf kind of like campaign finance reform. i don't like having to raise this money but i'm also not going to unilaterally disarm. i would say the same thing when

it comes to district drawing as well. whatever they do to us we should do to them. and i know that sounds harsh. i know that sounds nasty but it's been going on since the beginning of this country and it worked pretty well for a couple hundred years. and unfortunately politics is not necessarily a pretty thing to watch. >> owensboro, kentucky. joseph, republican. >> caller: yeah, good morning. years ago ron paul warned us of the '08 crash coming. and again him and his son is warning us of another crash that's coming. and the american people have been well served if they knew what the fed was doing and up to but they're so secretive and who they loan money to that no one can get answers from them. and my question to you, sir is do you -- would you sponsor the bill to audit the fed? we need to see what those guys are doing. thank you. >> i have not sponsored ron's bill. i assume rand has refiled it.

and by the way i want to tell you, i love ron paul. i don't agree with him on many things but he's a great man. i really respect him. on this issue it's easy to say there's another crash coming because there is. i don't know when and where. if i knew when that would make me brilliant. to say it's going to rain out, it is going to rain. where it's going to rain and when it's going to rain is a different story. i think the fed really -- first of all dodd frank did rein the fed back in. i am current flit middle of probably drafting a piece of legislation, we've already written a few letters, to actually get the fed to actually fulfill -- it was a bipartisan letter with some people i normally don't agree with anything on. the 13 three power they used to drive a hole through some of the limitations we put on it. there are many of us who agree the fed went too far on certain things and are less transparent. we're trying to fix the transparencies. auditing the fed it's a nice easy term. it doesn't get to the root of the problem. and i'm not interested in

looking behind the closed doors of every bank you that regulate because you'll end up having the banks hold back even further. i'm interested in getting the work right and getting the work right is getting them to live up by the standard of the law as i read it. >> all right. michael, townsend, massachusetts, independent yarl. >> caller: about morngood morning. >> good morning. >> caller: the making home affordable program that was funded by t.a.r.p. and i wonder that it's set to expire at the end of this year and the program's designed to help struggling homeowners. what do you expect the future of the making home affordable program will be? do you think it will be extended? and of the amount of money that was allocated from the t.a.r.p. to the making home afford ablt program, how much has been spent, and how many homeowners have actually been helped to date? >> i can't answer the two last

specific questions. but as far as it being extended i hate to tell you i think it's probably not going to be extended. i doubt it. again, the congress has shifted from when the t.a.r.p. was passed to now. the people that now run congress, the republicans never supported the t.a.r.p. and are unlikely to do so now. and even these programs that we passed, i personally thought that we tried ten different things. none of them worked the way we had hoped to be perfectly honest. there's nothing wrong with trying something you think is going to work, and if it doesn't work you try something else. i think that's -- nobody anointed me with all the correct answers. i wish that would happen, but it hasn't happened. you try to do things. and many of these home programs they worked okay for some taxpayers and some homeowners. they didn't work perfectly. and i still think we have some more work to do. and now most -- not all but a lot of the crisis has stabilized. the handful of people that are left out there now are going to be left on the lurch a little bit as these programs expire.

we have someone at fhfa who's done a much better job and targeted these programs a little better. but again, you can only do so much over so much time, and i think that a lot of these programs are going to expire p. some of them already have. >> litset's hear from kevin indiana, republican. >> hi kevin. >> caller: yeah. i'm appreciating your time here. talking about the issues. as best as you can. to stay in office. my question is during 2008, and everybody predicted this, at that time i was working at a factory as an electrician and what i didn't understand is why gas just kept going up and up. a lot of people can't afford these loans. some people that got loans maybe wouldn't today. some of them are still in their homes. and some of them are still

successful. i just want to know how much of an impact do you think with everybody talking about gas being $5 a gallon back in 2008, between 5 and 4, why did we act like there was no resources and no way to, you know, adjust financially about the gas situation? there's, what, six years later right? we're at half. we've got all this oil. and i'm just -- i think when the american people call in on these shows not everybody gets -- i'm a business owner. so i don't have to go to my factory job anymore every day. i just think that's why people question the federal reserve. they question the senators. they question the process of democracy, which is what you talk about. but in general, like congress should be proactive about, okay.

well how do people lose their homes? well, if they're spending an extra $150 a week to go to their job that's an hour away because it's a good-paying job, that affects their paycheck and their monthly payment on their house. so i guess my question is why didn't we look into that? and why were we lied to and said there's no oil? >> okay, kevin. >> i don't think anybody said there's no oil. but it's a matter of -- again, at the time the u.s. wasn't doing fracking and fracking is what's really punched up the amount of energy that's here. i think you have to understand that when people talk about congress a lot of people talk about it as if it's one person making one decision. it's 435 members of the house, 100 members of the senate, and a president. all of whom are strong-willed individuals. all of whom come from different corners of the country. all of whom have different ideas on most every issue. and it would be nice if one person could run the country as

long as that one person was me. if it wasn't me, i probably wouldn't be too happy. so therefore, democracy has always been messy. it will always be messy. there are always going to be arguments on the big important issues. as there were in 2008. as there still are on financial policies and financial services. that's what we do here. and honestly the only alternative is dictatorship and, again, as i said, i'm for dictatorship as long as i'm the dictator. other than that i'm for democracy with all the messiness that it has always had and always will have. and by the way, i want to be real clear. i think americans should question all of the things you just mentioned and more. i do too. it's one of the reasons that led me to politics is many of the questions, why is this happening, why isn't that happening? why are these bad things happening and why can't these good things happen to people like me? that's what drove me to get into politics, to be perfectly honest. i think that if there was a single answer that would answer all those questions, i don't know it. i just know it as a -- kind of a

street battle. but no one gets killed at. >> congressman capuano's been in congress. this is his ninth term representing the 7th district. democrat representative of the financial services committee ranking top democrat on the housing and insurance subcommittee. we'll go to cornelia in -- >> last year. >> last year? oh. sorry about that. but still in financial services. >> yes. >> we'll go to cottonwood idaho, republican, cornelia. go ahead. >> caller: good morning, everybody. i would like to thank this representative. he's honestly the first democrat i've heard on c-span in many, many years that does not constantly every other sentence demonize republicans and say oh, it's the republicans' fault for this, republicans' fault for that. >> i could if you wanted me to. >> caller: but anyway to be honest honest, you have an italian name, it looks like and you've got to have some catholicism in

your background. >> yes, i do. >> caller: i hope you do not support abortion. >> well, i support choice. >> caller: well, anyway through the obamacare they're trying to force nuns to provide services that are against their conscience, and i just think obamacare is government top-down health care that we need to start over and do something that is actually constructive for our country. and i do think health savings accounts should be explained to the american people. and i heard once that if the government put a million dollars in every american citizen's health savings account it would actually be less expensive than obamacare. >> okay, cornelia we've got troun. so could run. so we'll have the congressman respond. >> first of all, i'm pro choice. therefore not imposing my personal morals on others. others will make their own

decisions. as far as obamacare goes, look, again, as always that was not a perfect law. i would change half of that right this minute. but health care from the top down, isn't that medicare and medicaid that we all love so much? now, personally, if you made me thelma proper we were just talking-b i would have simply taken medicare and medicaid and expanded the eligibility pool which would have covered lots of people, most people. and when people would have been i think more satisfied with it. let's understand. the people that oppose obamacare, at least here in washington, not the individuals, the very same people that have opposed med sxair medicaid now for 40 years. they just think everybody should be on their own in health care. and i understand that position. i just don't agree with it. and i don't agree with it because i've been to emergency rooms and every time i go to an emergency room i don't have what it takes and i don't want to have it to turn and say to 20% of the people in an emergency room you miss 90-year-old woman because you broke a hip you don't get fixed because don't

have health care. you 10-year-old child because you broke your arm on the little league field you don't get fixed because your parents don't have health care. i want to live in a country where we fix our people. that's number one. i'm not going to defend everything about obamacare. we have many problems with it myself. but it's a big bill and i get to vote yes or no and my question is always is the bill moving us in a direction we want to go in in general or is it not? and in health care situation obamacare, the aca my final answer is yes, it's not far by any means. i disagree with you on the presumption we're forcing nuns to do something against their religion. the law is pretty clear not on the aca but on the constitution that the government -- we cannot allow people to say this is my religious belief and therefore i'm imposing my religious belief on you. and i am a catholic. and i love my church, and i respect my church's opinion on

most things. and i think they're perfectly entitled to have their opinion. they're not entitled to tell non-catholics or even some catholics but they're not entitled to tell anyone else what to believe. period. they're entitled to offer their beliefs and to have people choose it on their own. not to impose it on someone else. and i would say the same thing about health care. >> congressman capuano thank you very much for your time this morning. appreciate the conversation. >> appreciate it. thank you. while we wait for the hearing to get under way on the fema budget here's another portion from today's "washington journal." we want to welcome back to our table congressman reed ribl congressman of wisconsin sits on the foreign affairs committee. i want to begin with what's dominating the front pages this morning, that's the situation in yemen. saudis, "new york times" announcing a halt to bombing of yemen rebels. according to the papers this morning the obama administration has put pressure on the saudis

to stop the bombing and they are saying what they did up until this point was effective. >> but we're also getting reports that they re-engauged today as well. sought saudis pull back and then they re-engauged and i think you're going to see the region continually in turmoil. yemen doesn't have a stabilized government. there's obviously an overthrow going on. the region is upset about it. they're nervous about it. the saudis, the jordanians, the egyptians are all concerned. so they're going to be playing a role there to make sure that the iranians don't get a little bit -- don't play in their back yard too much. >> so the inside of the "washington times" this morning, campaign against yemen rebels enters a new phase according to the saudis. and that could include ground operations. what do you make of that? >> i don't think it will include u.s. ground operations but it could include saudi ground operations for sure. i mean listen, this sunni-shia kind of tug of war that's been going on in the middle east is going to continue to expand.

and you see the activity going on with isis north in syria and iraq. and there's a lot of tension that's taking place in that entire region as well as north africa. and so it should not surprise any of us that regional players are going to try to stabilize things so that they don't have it infiltrateing into their own countries. i don't think we should be surprised by the reaction of the saudis. they're right there. they're next-door neighbors. >> do you agree with the actions they've been taking? do you agree with the administration's moves to move warships into the area? >> well, the administration's move to move warships i do agree with, and it's more about keeping shipping lanes open in the straits of hormuz and the red sea to make sure that you don't have any way of cutting off commerce that's taking place there because that would dramatically affect the economies in saudi arabia egypt, israel, jordan. if they cannot move goods and services through either the straits of hormuz or into the red sea you've got a real problem. i think that move was the correct move to make by the

united states government. but i also think it would be a little hypocritical for us to criticize what the saudis are doing when they're right there in the region and they probably have better intel than we do by the way. >> the foreign minister of iran wrote in the paper on monday an opinion piece where he outlined the situation between the saudis and iran and what's happening in yemen and he wrote, "if one were to begin serious discussions of the calamities the region faces, yemen would be a good place to start. iran," he wrote, "has offered a reasonable and practical approach to this unnecessary crisis. our plan calls for a cease-fire humanitarian significance and facilitation of an intra-yemeni dialogue leading to the formation of an inclusive broad-based national unity government." >> well, it sounds pretty good, doesn't it? when you put it that way it sounds really good. but it's not consistent with the iranian action in the region. the iranians have been one of the key players in disrupting the government in yemen. they've been one of the key

players in increasing and facilitating the violence that's taking place in yemen. so i have a tendency to disregard a political statement that was really intended more for the iranian people to see than it was necessarily for any type of resolution in the region. >> what do you think this all means for the deal, the negotiations of a nuclear arms agreement with iran? >> the more that iran continues to be a sponsor of -- a state sponsor of terrorism regionally, the less likelihood that a deal can be reached. in part because you're going to have members of congress revolting on the whole idea in rejecting it. i mean stop and think of what a nuclear armed iran might look like or what they would do. and so this does not help them at all. i don't think it helps the negotiations at all. and having the iranians shipping arms and weapons and whatnot into yemen is not necessarily constructive at this point. >> so do you agree with what

you've seen so far in these negotiations? the frailmework. >> i actually wrote an op-ed piece a few weeks ago that the framework is bad. i don't think we can have any acceptance of a nuclear-armed iran. not today, not ten years, not 15 years from now that just will serve to destabilize a very difficult region. there are some tough neighbors in the neighborhood there. this is not helpful in my opinion. >> okay. so then what should be happening? >> i think the strategy originally that brought the iranians to the table was these very, very tough sanctions. you had literally the entire world with their foot on the neck of the iranians. and they were feeling it. and that pressure, those extreme sanctions were what caused them to come to the table to begin with. and it was at that point, that real pressure point that i felt the region and the united states in particular but the civilized world actually had its position of strength to get the iranians to stand down on nuclear power

in its totality. they don't really need it. why would a country so oil-rich and carbon-rich particularly with natural gas need to go to the extreme expense of building nuclear power when they can build natural gas power plants to turn the lights on in their country and have consistent reliable, low-cost energy if it wasn't about nuclear weapons? and it's not. it's not about electrical power. it's about nuclear weapons in my opinion. >> what do you think about the role that russia is playing in all of this? news reports are that they plan to sell weapons to iran. >> this is the result of in my opinion -- this is the result of the american government showing weakness in the debate. and as long as we continue to pull away, as long as we continue to keep the sanctions off the table or are willing to pull the sanctions back, you should expect that in the vacuum of the u.s. power in the region that another power will emerge. and that's what you're seeing with russia right now.

>> the president has said, though, that these sanctions will be -- they will be eased slowly, that this is not something that just happens right away and that iran has to take the steps outlined in any sort of deal. >> and in fact the sanctions in their entirety can't be removed without the approval of the congress. however, the sanctions have been relaxed already. just the fact that russia is now able to sell weapons into iran shows you that the sanctions have already been relaxed. and so it was the wrong move at the wrong time, at the very precise moment where we actually had our biggest amount of leverage, our strongest position that we-h we took the foot off the gas. >> so what do you think? does any sort of deal if it comes to fruition does it pass the house and the senate? >> it's really going to be dependent on what it looks like. i'm not going to take a prejudgment because what we're really talking about is the prenegotiation of negotiation that's supposed to happen by june 30th. whether it can pass the house or senate, i'm going to wait and

see what the documents are. >> we're talking with reed ribble, republican of wisconsin. you can join the conversation. republicans 202-748-8001. democrats 202-748-8000. and independents, 202-748-8002. let me go back to the situation in yemen. get your reaction to this tweet from the iranian leader rouhani who tweeted out "our powerful yet peace-seeking military should serve as a model to those bombing the oppressed women and children in yemen." referring to the efforts by saudi arabia. and this is something that the administration said to the saudi leaders, that your efforts under way are sending the wrong message and could have the impact that you're not looking for. >> yeah, well it's possible. but you have to remember why the saudis have made a decision to do what they're doing. and that is because women and children were being killed prior to that. and al qaeda in the arabian peninsula had a very strong foothold in yemen. the restraint that was going on

with a stabilized government on al qaeda was working to the degree that it could work in that region. however, the idea that the iranians are not going to have some type of response this threat in yemen in my opinion anyway has been greatly caused in many respects by the actions of the iranians. and so it seems a little bit hypocritical for the iranians to take the position that they're taking. that was a political statement, not necessarily a policy one. >> so we're against iran when it comes to yemen. we're trying to work with iran on a nuclear arms deal. and we're with them when it comes to fighting isis in iraq. >> and therein lies the complexity of the entire region and this ongoing sunni-shia tug of war that's taking place inside the middle east. it's interesting as you look at some countries have been able to find a peaceful coalition between sunni and shia and when they do that it works.

>> give us dpam plzexamples of that. >> you could look at qatar. a predominantly sunni nation, about 25% shia, and yet you don't see all the upheaval there that you see in other parts. so a more secularized government rather than a religious-based government is better able to provide a level of freedom for these various sectarian views of islam to actually emerge and function within society. >> david ignatius's column today in the "washington post," a tricky diplomatic two-step is what he writes. "president obama has been trying since his september 2013 address to the united nations to convince saudi arabia and the other persian gulf allies that the united states is truly committed to their security. so far he hasn't been very successful. but he'll try again next month at a camp david summit meeting. obama's approach is part of a big strategic idea for the middle east that would be described as a dual engagement. on the one hand, the united states is seeking an agreement with iran to limit its nuclear weapons. on the other the u.s. wants to

bolster the saudis and their neighbors through new u.s. military commitments." what do you make of this? >> we're seeing that military commitment taking place. just a few weeks ago the obama administration authorized, and i think correctly, the sale of certain arms to the nation of egypt. you've got a lot of threats going on in north africa as well. so to the degree that we can facilitate the ability of these nations to stand on their own two feet and provide for their own security, i think that that's a wise move to make. it's better than having u.s. soldiers on the ground doing the fighting for them. but also through that level of strength it does have a tendency to camp down some of the threats that occur around you because the cost of an incursion of any type becomes very great. >> let's get to calls. bernie is in port st. lucie florida for the democrats. you're up first. >> caller: good morning congressman and thanks for taking my call. my question is with the other

countries keeping the sanctions on, you know, i want to know if the congressman feels that russia especially along with the other countries will keep these sanctions and how long does he think that will last because without doing anything but continuing sanctions i don't think we're moving in the right direction toward his comment. >> okay. >> it's a fair question. i mean, the idea of whether or not sanctions work and who actually pays the price on sanctions, i think that's been an ongoing debate literally through all of history as nations have used the vehicle or method of sanctions to try to change behavior in a particular area of the world. and so -- but in this case there is real documentation that sanctions were actually working. and so the idea that we would begin to ease up or remove, eliminate, soften sanctions at the very moment that they were being effective seemed to me to

be the wrong move because in this case they actually were working. that's a good question. >> armand in minneapolis, an independent caller. >> caller: hi. good morning. one of the main thing that after all these years i keep thinking about is that why is that we haven't managed to bring about a regime change in a country that the regime is not wanted by its people and it's been there by terror and force and we are not doing anything and yet we are just beating around the bush. >> are you speaking of iran? >> caller: correct. >> okay. let's talk a little bit about that. if you look at the last 10 or 15 years there were moments at times where it seemed like the iranian people were going to be standing up and trying to actually change the government there. and at that point the u.s.

decided to be silent back in 2009 and 2010. and as a result they decided to take the strategy that they're on right now. i do believe that had we sent a signal of support at that time you might have actually seen the iranian people grab hold of their government and begin to change it for the better. the iranian people themselves are bright. they're intelligent. well educated. they have the ability to manage an economy and had there been a little bit of assistance from the west at that moment in time and a sign of support maybe a regime change would have happened at that moment. but now history has passed by and we find ourselves in this place. >> gary, indiana. victor. independent caller. hi, victor. you're on the air with the congressman. go ahead. >> caller: we have a destabilization in the middle east, and the united states government has played such hypocrisy. you go back to when the shah was in iran and was ousted and

ayatollah khameini took over. and the betrayal of the shah with his own people and the hypocrisy of the united states government supporting that betrayal. and then you're going to go back to the iran-contra affair where the united states was providing weapons for iran and other places. and these people see the hypocrisy of this country. then coming to iraq where george bush sr. went into iraq after the united states government supported iraq to fight of this iran in a ten-year war and we provided mustard gas and weapons of mass destruction. people aren't as ignorant as the american government would try to suggest that they are. the same thing when russia invaded afghanistan. and osama bin laden was financed and supported to fight against russia. now, we're in afghanistan. they've seen the inconsistency of integrity. and when saddam hussein took

kuwait, the people was not aware that kuwait used to be part of iraq. and then we went over there and destabilized all that's going on in the middle east. and we pitted nation against nation and then we flip-flop and then we attack the nation. here we supported saddam hussein. we supported osama bin laden. then they become our mortal enemies. >> okay. victor. let's have the congressman give us his thoughts. >> i think you're highlighting one of the complexities that exist -- >> appropriations subcommittee. today we'll be -- i'd like to welcome administrator fugate. administrator of fema. appreciate very much you being here. also senator shaheen. i appreciate you being here as well. we're here to discuss the fiscal 2016 budget for your agency. before i get into the substance of your budget i'd like to take a moment and thank you for sending roy wright to fargo

several weeks ago. it was very helpful. and actually his visit there pertains to one of the subjects that i'll bring up later today, which is talking about how we coordinate flood mapping and flood insurance with communities' efforts to build permanent flood protection. doing a fine job and i think that's something that can be helpful around the country. the focus for today's hearing -- at least my focus will be on three areas. effective stewardship of the disaster relief fund fema's efforts to buy down risk before a disaster occurs, and measuring preparedness levels of the nation after years of investment. disaster relief fund or drf is fema's biggest tool in aiding disaster victims rebuilding their communities and ensuring

resiliency and future disasters. congress took a major step several years ago to stabilize the drf by establishing a formula for its funding. as a result fema must now focus on ensuring the funds are managed and distributed in an effective and efficient manner to respond to recover from and mitigate against disasters. congress took steps in 2013 to help reduce the overall cost of disasters in the sandy recovery improvement act, section 428 of that act provided for alternative procedures in certain projects to grant -- to allow grantees to receive full project granting up front on agreed-to estimates. that option should reduce administrative costs, start recovery projects faster and likely reduce some of the challenges currently being experienced with deobligation of funds after projects are closed.

unfortunately, there seems to be some reluctance on the part of grantees to embrace that program. so i want to better understand what that reluctance is as i think this is an innovative idea to allow projects to move forward more expeditiously. we mentioned deobligations because i know that this is a real concern to the states. ware project's expenditures are questioned in an audit, fema appropriately has the ability or the authority to deobligate funds. however, that authority has been exercised years in some cases after project approvals and often well after project completion in response to audits by the inspector general. and so we need to find a balance between any waste, fraud, or abuse findings and decisions made under the pressure of responding to a disaster. so again i applaud you for fema's efforts to work with

grantees through the new procurement disaster assistance teams. i hope these teams will help grantees avoid some of the common mistakes while managing the response to the disaster. but clearly there is a real concern on the part of states about the possibility of deobligating funds. i understand that, having served as a governor for ten years. i know that senator shaheen understands it very well too. based on her ten years as governor. so we do have to find ways to mitigate that concern better address the challenge that it poses between states being able to go ahead and undertake these projects in a timely way with confidence, that they're following the rules, but at the same time making sure we don't have waste fraud and abuse. we have to do both. and it is a challenge. i also -- you and i have discussed and agreed,

administrator in the past, that fema's hazard and premitigation disaster programs as well as risk map are critical to buying down damage that would otherwise be seen in future disasters, especially flooding. the key is that disaster mitigation focuses on the actual hazard. and that the funding is effective in preventing or mitigating that type of disaster whether it be flood, fire, or other natural disaster. the example that i've used in our discussions and that i've worked on with i think probably you and certainly members of your agency is where we have flooding and roads get washed out. and fema provides funding to help replace those roads. and you can replace the road exactly like it was in a sense, but if that is at a level where it continues to wash out and be flooded that doesn't make much sense because we just repeat the problem. we keep stepping in the same hole.

so the ability to make sure that you replace the road in a way where you mitigate against some of those problems is cost effective for everybody concerned. you pay for it once instead of three, four, five times. and the locality's better served because they have a usable role. so i think this is an important area that we'll explore in addition in this hearing. and i know you have some thoughts on that. with respect to preparedness effort, the administration has submitted its proposal to consolidate grants into the national preparedness grant program or the mp -- npgp. while the authorizing committees should consider this proposal, i believe that fema could be doing more to assess the return on investment that the government has made in our nation's preparedness. what is the level of preparedness across the nation.

how are training and exercise efforts integrated with these grants. how can we better measure the effectiveness of grant programs in raising the preparedness level. waent to talk we want to talk about where we are in terms of preparedness as a nation, what your opinion is in that respect and what we're doing to continue to improve it. fiscal year -- the fis qual year 2016 request also includes funds to start 19 modernization for your grant systems. so the question here is will that modernization effort improve the ability of states to report preparedness levels? i think we talk about some cost savings. always a good thing. but also we want to talk about the effectiveness of the program. so i look forward to hearing from you on these and other priorities that you have for this year. and with that i will turn to ranking member senator shaheen for any opening comments that she may have. >> thank you mr. chairman. and welcome, administrator

fugate. and your staff members who are here. we appreciate your coming this afternoon. as the chairman says as a former governor i also recognize how critical fema's activities are be when states have emergencies and even more personally, having been in a tornado at one point in my past, i very personally benefited from the efforts that fema has made to help people who are victims of disaster. so i appreciate that your work is critical and understand that currently all 50 states including new hampshire and some tribal areas have an active disaster with fema and understand that the costs to rebuild are growing. in the 1990s fema was appropriated an average of $3 billion a year for disaster costs, and yet one decade later average costs have tripled to over 9.5 billion a year.

disaster types are also more varied and complex. in the last five years along with the anticipated floods tornadoes, wildfires hurricanes the nation has had an earthquake on the east coast, a superstorm sandy in the northeast, landslides in the west, a bombing at the boston marathon active shooters in public places, and unprecedented snow in the northeast. and further impacts from a cyberattack are constantly materializing. so it has been a very busy time at fema. now, because these events have become more common and more intense, this makes our mitigation efforts increasingly critical. we can't continue just to make investments and rebuilding after an event occurs. we must pay equal attention to preventing damage from occurring in the first place. and these efforts are not only critically important to vulnerable communities but also

to the federal budget. i was pleased to see the administration's request for significant increase in mitigation efforts to better prepare for and reduce the impacts of flooding and other types of natural disasters. for every dollar we invest in these activities we save up to $4 in rebuilding costs and that is in fact a smart investment. each state territory, major urban area, and several tribes have ongoing preparedness projects with the agency as well. these activities have an immediate and real impact on citizens, on businesses, and on our first responders. administrator fugate i look forward to working with you to ensure fema's support role is delivered in a user-friendly way, both from your headquarters and your regional offices. so again thank you for being here today and i look forward to your testimony. thank you, mr. chairman. >> thank you, senator shaheen.

i'd also offer an opportunity for senator baldwin. any opening statement you might have. >> thank you, mr. chairman and ranking member. i don't want to give an extensive opening statement but i will, like you, mr. chairman, preview the focus of my questions following your testimony. will be the issue of rail safety and the prospect for derailment or explosion as we see a lot of train traffic through our state and particularly from the chairman's region of the world. so just as that, i thank you for being here and i look forward to asking you questions following your testimony. >> with that, administrator fugate, we turn to you for your opening statement. >> well, senators mr. chairman thank you. the first thing i want to talk about is i want to thank you and your staffs for something that

isn't always seen as something that's glamorous but it's a key part of the constitutional separation of powers. and that is the budgeting process. the fact that the administration comes forward with recommendations but ultimately congress must determine where we apply our taxpayers' dollars is a deliberative process that we participate in. it's not easy. our staff spent a lot of time over it. we're not going to agree on everything. but it is the difference between having continuing resolutions with uncertainty and knowing what the intent of congress was with a budget that makes a difference in our ability to execute the mission. it isn't always going to be the highest priority that some people think we should be working on but i understand the hard work you put in, the staff put in to get to those numbers, to get to the budgets to ensure that we have the resources to do our job if you have determined against all the priorities of government. so first of all, i understand our role here is to present our budget but i also understand it's the role of you to make those decisions to figure out

how we're going to fund all of government, and we're part of that discussion. so we just appreciate that. the second thing i want to talk about is -- and i want to save more time for your questions because i think there's a lot of things we want to talk about. but when i got to fema, it was a real challenge for me to be able to talk to you and tell you about what we were doing. i could more easily tell you how much money we had spent. but i couldn't tell you what that had actually accomplished. and even within the programs i found that we were oftentimes doing things because we had been doing them without really understanding, well-s there another way to look at this? and i told the staff when i got here, and i'd come from the state of florida, enjoy your budget. this is the last one that's going to go up. we knew what was happening across the country knew the economy was in trouble and the years of budgets just incrementally going up each year and you were able to basically achieve your mission because you're going to get a little more each year was over. and it didn't mean you didn't have needs but you did have to look at your budget differently because if you were going to

find or free up money for the things you thought you needed to do they were going to come from the things that you had been doing that either you were going to do differently or find different ways to accomplish that. to a certain degree we were doing that well before sequestration came in. and even with that we had focused on the mission and not used that as an excuse but rather looked at how do we get more efficiencies and savings. but we also needed to coalesce around a lot of different moving pieces of fema and to something we could articulate and tell people this is what we have to be focused on. first thing, you have to build for the catastrophic disaster. if you don't, your risk is we'll have the next katrina. because systems do not scale up. if you're not building for the big event and you don't understand that's why you're putting your teams together building your programs. if you only build to what you're capable of doing that larger disaster will be a failure. that doesn't mean you have to ask for more money.

but you have to look at systems designed around catastrophic disaster response. second thing is you have to build your programs around the people you serve. and as senator hoeven points out, when that's not the case you see the mismatch between trying to serve our communities and how they need the programs to work for them versus what may be easy for us to administer. and so oftentimes we found we had defaulted to those that are easy to administer, weren't really focused as much on the people we're serving. and that mismatch oftentimes has played out in survivors' communities not getting the full support they should have gotten in a disaster. you have to go to where the disasters are. i tell people just because it works at 500 c street doesn't mean it's going to work out on a train derailment in the middle of nowhere with poor communications. you have to building a system that goes to where the disaster is, not what works in washington, d.c. you have to buy down your future risk. we have to do a better job of understanding that we can no

longer subsidize risk and come back to the first dollar every time there's a disaster if local governments and states are not doing their part to reduce future risk. re just can't keep dealing with every disaster and building it back, as senator hoeven says the way it was only to rebuild it time and time again. we have to do that differently. we have to look at risk reduction. and then the last thing, we oftentimes at fema, and as your committee staff will tell you, have not been good stewards of the basic functions of our programs. whether it's i.t., personnel. a lot of things that may not be things people want to talk about in disaster. but if you don't have the foundational systems of your management working right you're not going to build that catastrophic disaster response team. it goes from how you hire people to how you build your systems, how you set up your architecture for i.t. so we look at these five areas and draw all of our programs through that lens of are we as a nation building the capability to respond to catastrophic disasters? not just what fema does but through all those grant dollars.

that have funded local and state capabilities. are we building the capability to respond to the nation's kafrkts disasters? so that mr. chairman i'm available to respond to your questions. >> again, thank you administrator, for being here today. we'll begin the questions. we'll start with rounds of five minutes. and i want to go right to the concern that has come up in regard to hurricane sandy and claims for homeowners who have not received the proper resolution on their claims. they've had issues with the insurance company and it appears particularly with engineering companies that have worked on adjusting their claims and as it turns out these claims were not adjusted properly and it appears that homeowners were shortchanged on recovery they're entitled to. and my understanding is

there's -- out of the 144 claims, 144,000, excuse me claims that were made that there's on the order of 2,200 cases where the engineering report may have been fraudulent, improper where the interest company didn't provide the proper reimbursement to the homeowner. this is obviously a very serious concern, and we need to make sure we understand exactly what happened. and hold those responsible accountable. and correct it. i also am aware that administrator roth, the dhs inspector general, is conducting a full investigation, and we look forward to his report. but i'd like you to respond as to exactly what are the actions that you're taking and what is the current status of this matter

matter? >> well, the actual cases you mentioned, i believe those are the cases that are actually being litigated. we're concerned there may be people who did not choose to litigate that may also have had questionable engineering reports. very simply we're approaching this from if they are owed more money we pay. if it's fraud we refer that to the i.g. and justice. if we're finding litigation costs are going to exceed what the claims were, we're willing to settle. so those are the cases that are in litigation. we are working toward settlement. there are additional hearings taking place as we move toward that. but we're prepared to reopen the other cases where there may have been engineering firms or concerns of allegation that involve these firms as to how accurate the findings were in determining what the damages were. so we're in the process to begin in this next month opening up claims process to the people who had policies served. if they got the full amount of the $250,000, they've gotten

what their insurance will pay. but those that did not receive that still had concerns. we're going to open up a process to be looking at those with the same scrutiny we've been looking at those that have been in litigation. but this goes back to being survivor-centric. i think we found that through our right your wrongs in our own program we put more emphasis on assuring the solvency of the policy at his nidp funds. would not put too much emphasis on servicing those claims. there should have been no reason if it was eligible under the policy to be paid. there's money centive for anybody not to. we're still look at what was the systemic root cause. we think it comes back to there was more emphasis on not making overpayments because the insurance companies would have to get that money back and reimburse fema. and that seemed to drive more of this than making sure there was equal weight given to paying what the policy should have

paid. as we get through that we'll provide more updates. we're currently focused right now on resolving the current litigation going back to the people that filed claims, and then going back to the systemic issues as both the i.g. is looking at it as well as atoernlgza attorney generals in both the states and new jersey as well as new york to look at fundamental issues as well as any impropriety that was taking place. we'll address the impropriety on the front end but we're also look at the structural issues that got us -- we want to build this program back. there's equal weight given to ensuring full payment on claims without the overbearing penalty of having to pay money back driving decision-making. >> so my understanding is there are 144,000 cases or claims that included engineering services. so you're saying that for those 144,000 cases you've set up a process whereby they can in

essence apply for any -- to address any shortfall that they may have suffered and get the reimbursement that they're entitled to? >> yes, sir. we brought in people from across fema and detailed the flood insurance program to set this up. we'll be announcing it coming live this next month. we're going to triage and start with those that were involved in certain firms that we saw concerns with. and then as we get those we're opening it up to anybody else. and again, if there was any concerns or questions about their claims process, we're not going to predetermine that until they call us and we start working that and see what we find. >> you'll start that process when? >> our goal is to start it next month. >> okay. and you've already taken steps to address the administrator who was overseeing the program. i understand that's correct. and are there going to be further changes in personnel or are you awaiting the inspector general's report at this point? >> well, right now we've had

some staff changes. i brought in an experienced senior executive service to take over and lead the program pf we have detailed people into the program to provide the initial surge help and we'll be evaluating that with the assistance of the i.g. and others, what additional steps might be needed if we find things that suggest there was any impropriety among our staff. >> thank you. >> administrator fugate senator hoeven has asked a number of my questions around this issue. but one of the things that i found as troubling, almost as troubling as the obligations of fraud by a number of the insurance companies were conversations that i had with my colleagues about raising concerns they had heard from their constituents in new york and new jersey about what was happening to them. they had raised it with the

program and that they had not gotten any attention to that until after the segment on "60 minutes" really highlighted what had happened there. so i wonder if you could speak to that sure that when complaints are brought before the agency, that they are taken seriously and there's some mechanism whereabout those are examined and responded to in a substantive way. >> yes senator the personnel moves were being made prior to the 60 minutes. i had to free up staff to bring them in and that too many more time. this came to my attention as something that was out there but it was like we saw one or two cases and i refer to the staff and said look guys what's going on? we need to address this and focus on again, if we owe more money, why aren't we paying it.

we found ourselves in a situation because we were working through and weren't able to directly engage. as the process kept continuing i became more and more as frustrated as anybody why we cannot get to resolving these cases. if we owe money we pay. if there is allegations of fraud, there's a mechanism to handle that. if we're having a dispute, litigation costs are greater than settlement would be, why aren't we moving to settle? i wasn't getting the response i wanted. we were already making changes but had to free people up to reassign people and start the process of changing out the leadership. and that was probably you know, it started that really right after thanksgiving holidays. we had made the decision we were going to make changes but we had to start that process of getting them in place and getting them up to speed to start dealing

with this. >> well i appreciate that. i'm glad to hear that you were already taking action. one of the things pointed out in the "60 minutes" segment, trs a class action attorney that brought a number of these cases to the agency -- and it was presented as taking that level of attention before it rose to the point of -- until it rose to the point of somebody -- this is the kind of thing we ought to be on the lookout for every day as we try to make government work as effectively and efficiently as possible. so i would look forward to hearing more about the reforms you put in place so this kind of abuse doesn't happen again in

the future. i want to go back to one of the challenges you pointed out in your opening statement about putting together a budget for fema that works given all of the unknowns you're dealing with. and as you point out, you have stasters that you can't and in advance and number of severity and type, and so you have to plan for that. i wonder if you can spend a few minutes talking a little bit about how you do that planning process. what's involved? how you allocate resources in thinking about what may be coming up. >> the first part is we do deliberate planning with communities based upon various scenarios you're not going to have catastrophic disasters unless you have a large risk. it tends to geographically

define where it is. it tells us where we have to do that. we do that and identified what the capabilities are. this drives the initiatives in our areas we need to focus on to build capability. one of the things that happened when you fully funded the drf, we've been able to maintain a healthy balance. we weren't in the situation we were in 2011 with irene where we were out of money and congress was having to very quickly do a supplemental. by maintaining a balance of a billion dollars in the fund at the end of the year we prepared for those no notice earthquakes or other events that gives us funding to do the initial response and ensures congress has a time to do a process in determining supplemental versus we're running out of money and having to make quick decisions without all of the information. so maintaining that balance gives us that initial push for a response to a catastrophic

disaster. we did this in sandy as well it was not about fema having to shut down or not do our jobs because we didn't have immediate funding. by maintaining that balance and allowing for that balance to stay there it protects the ability of congress to do deliberative findings when supplementals are requested versus having to respond to what in many cases is preliminary data. that makes much more sense and support that effort having had communities in new hampshire who are affected by hurricane irene and some still affected by that, appreciate it's much more important to have the funding there to continue the relief efforts throughout that process. the one thing i would say and i understand the point that you're making about planning for major disasters, for areas where they

hit significant populations. the one thing i hear from people in new hampshire, even though it may be a small community or may be even one farm one neighborhood, people there are affected just as dramatically by disasters as large communities like new york or some of the communities in new jersey. the efforts of fema make such a difference and so important. >> i agree 100%. we look at the worst disasters to make sure we have enough capacity as a nation. that ensures when you have that disaster in your home state and we may have tornadoes in the south and earthquake on the west coast, we're not pulling resources out of your state when you still need them. this goes into a planning and drives some of our assumptions that we don't have one disaster at a time.

>> as i mentioned i plan to focus my training and oil safety and disaster preparedness in that regard. it's an issue i'm heavily involved in as my state has become one of the most heavily traveled routsz routes to bring oil into the refinery and jurisdiction over fema i've been very involved in a very enthusiastic supporter of the response act. the subcommittee working together experts and establish best practices for responding to oil train derailment and i look forward to working with the chairman and ranking members with this subcommittee to ensure that fema grant programs are adequately funded to provide training and for first responders to respond to oil

train accidents. you identified capability per catastrophic disasters a strategic priority. in wisconsin certainly my constituents who live on the rail corridors and state emergency management personnel have identified the increasing frequency of oil trains passing through their communities as a catastrophic disaster waiting to happen. the growing number of oil train explosions suggest it is not a matter of if but when. additional train accidents will occur and certainly we worry a lot about one in wisconsin. and i want to ensure that fema is doing all within its power to build its capacity to respond to such an incident were it to

happen. i would like to hear first off where and how the growing threat of oil trains -- oil train accidents fits into your strategic priorities and what fema plans to do in response to this significantly increasing volume of oil train traffic? >> senator as we're not the regulatory agency over the prevention, i want to talk about consequences, are we building capacity and capabilities responding to the likely impacts? from the most most immediate fire fighting operation which we've been working to update training but also what happens happens in it occurs in a populated area, you have warning systems and what think of as the emergency response system and

aemergency alerts, working with states to make sure they have those systems ready to go to warn and evacuate populations and support the states if they need additional personnel to do search and rescue and communications equipment to support those responses. but looking at the grant program, that's really where most of the resources will be utilized in this. although the intent of the homeland security grants are to build capability for terrorism, it's also understood the same type of capabilities you have to build would be the type you would have to respond to a train derailment. we don't preclude it. we make sure that as we identify new threats that we look at our grand language if there are things that can be used for that. we don't want to subtract from the preparation such as terrorism, but other