next will be mohamed younis. he is the glop organization's subject matter expert on the middle east and north africa. his research at gallup focuses on employment in the muslim world and focuses on relations between the muslim majority and western societies. and finally, coming with us from cairo will be rabab el madi. she is associate professor of political science at the american university in cairo. her research interests cover the areas of state civil society relations, social movements and resistance and the political economy of social policy. so now, if we may, let us turn to the short video of the -- on the street interviews with citizens in beirut, cairo, ramala, and tunis, explaining what future they want for themselves and their country.

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♪ [ applause ] >> let me express our thanks again to sky news arabia for pulling that together. and let me invite the panelists and secretary albright to come to the stage and take their seats.

so let's start, if we might, with jim zogby. >> thanks, steve. and thank you, madeline. thanks to the atlantic council for hosting this. i think i'm going to sit here and do this rather than get to the podium. let me begin by saying that what you saw is validated in all the polling we have done. remember, when we first did our poll after 9/11, there was questions what arabs think, what do they want, where are they going. and we did a wide ranging poll published in a book called "what arabs think: beliefs concerns and values." and what we found is contrary to the myth they go to bed at night, hating israel, wake up in the morning hating america, spend the day in the mosque hearing some teacher learning to hate a little more, they actually went to bed thinking about their kids and woke up in

the morning thinking about their jobs and spent the day working real hard trying to get a better life. their values and concerns stacked up pretty much with what anybody, man on the street in america would say they want with their lives. they want to prosper. they want to take care of their kids. they want to make sure when they get old somebody is going to be there for them. we reviewed nor this project our polling over the last 15 years. and basically i guess what i can say is that i found that to some degree, people are confounded in the region. about the changes that are taking place and how to respond. and they're also conflicted. in particular, conflicted about the united states. i remember after 9/11, there was this notion that why do they hate us? they hate us because they hate our values. so we polled in the region. and what we found is they actually like our values and they like our freedom and democracy. they like our education system our television programs, et cetera. they don't like the way we treat them. and so they react ed to that when asked how do you feel about

america, we don't like america. one guy said in an interview post polling, he said i feel like a jilted lover. i like america, but i don't think america likes me. look at what they do to us. move forward to 2009. we did a survey of obstacles in the region. what did people think were the biggest problems that they faced? the two problems were the israel-palestinian conflict and u.s. interference in the region. issues of democracy and economic inequality. even strife caused by religion didn't even factor much at all. toward the end of that year and into the beginning of the next year 2010, we did a poll that we do very often. we ask a series of 11 issues. and we ask people to rank them in terms of priority. in almost every country the top issues were health care and employment and education and a couple of issues. terrorism ranks a bit high in

some. corruption and nepotism in others. but those three health care, education and employment are top priorities almost everywhere and israel-palestinian factors in as well. it's an existential question almost in the arab world. interesting that questions dealing with democracy and reform of government didn't make into it the top tier at all. it wasn't a priority issue for the people that we polled in every country. we asked then about what they wanted america to do, what they thought america could be helpful with. and again it was employment education and health care and israel and palestinian. issues of democracy and reform of government, et cetera weren't there. not unlike if you were to ask americans during our gun control debate whether we thought it would be a good idea to bring the brits over to help us figure it out or bring the canadians and the swedes in to help us with health care reform. people didn't want people meddling in their internal affairs. skip forward to 2014.

we asked the very same questions again. top priorities. and as you can see again israel, palestinian, and u.s. interference were the two issues that people thought were the most destabilizing in their region. and yet given that when we -- no, let me go to this first. the top issues were resolving the arab-israeli conflict in 2014 and syria. almost scant mention was about iran and the nuclear program of iran. look at this. when we asked people how important was the challenge versus how effective was the u.s. response, this is what they said about israel-palestinian. this is what they said about ending the conflict in syria. really important, but the u.s. response limited. the nuclear program with iran not a factor at all. and yet that's how effective we were. so in other words we were good at doing what they didn't really

care much about, and not good at doing what they cared most about. importance of your country, however, maintaining good relations with the u.s.? very important in almost every country that we poll. but how effective is the u.s. at maintaining good relations with your country? we get credit for try not very effective, but we're trying at it which is actually not a bad sign. better than the other way. let's look at a couple of individual issues. syria, for example. what are the policies that the u.s. should pursue in syria? humanitarian aid for refugees, pursuing negotiations, and leaving syria alone. look at the blue. leaving syria alone in almost every country, a top issue. what they didn't want us to do was air strikes direct involvement, and weapons to the opposition. this is what i mean by the conflicted and confounded issue. syria is important.

they want syria resolved. they want the u.s. involved to help provide some leadership on it, but they don't want us to do any of those things, in part because they don't trust the judgments that we make given our past experience in the region. conflict in syria contributed to an increase in sectarian -- yes, very dramatically so. impact of syrian refugees very dramatic in every country both in the country's security and on the country's economy. in the conflict in syria, who did they side with well, look it's interesting to note that in every country in every arab country, it's with the opposition, except in lebanon, where there is a division, and in iran. turkey, on the other hand, was interesting because it was the one country where jebhut nusra and the other opposition groups did very well.

and also in iraq it was the same. then look at syria, the worst outcome. what would be the worst outcome? in almost every country the worst outcome added together was the country being partitioned or fragmenting and/or bashar al assad staying in power. iraq the best outcome for the future. most of iraq's neighbors want iraq to stay whole and do not want iraq to fragment. is isis a threat to your country? a very grave threat in most of the neighboring countries where we polled. but do they support the western-led military intervention to combat isis? only in turkey, where there was a significant majority and in iraq where opinion was divided. but still a slight majority in favor. in every other country, opposition to that. i conclude, they know what they want. they don't know how to get there. they know that the u.s. is a valuable participant in the

region but they are not confident enough to have the u.s. play the leadership role that oftentimes the u.s. wants to play or feels it ought to play. so convicted or confounded is how i would conclude. and a little lacking in confidence as well. >> thank you jim, very much. mohamed younis? >> i'm going change it up here and come stand over here a little bit. let you folks see my slides as i show them. thank you so much for including us. this is obviously an honor for gallup to be part of this initiative. i took a different approach than dr. zogby, because he has very interesting sort of topical information using public opinion research. i figured i would take the more longitudinal approach. to give you contrast of what gallup has learned polling in this region since 2005 on some topical issues but also some issues we're polling the entire world on. and look at some of the comparisons. i'll tell you a little bit about our tool. actually in response to a very off-the-cuff remark by secretary

rumsfeld in 2001, belief it or not, about the inability to poll afghans on the afghan invasion our ceo was actually watching the press conference and thought to himself why can't we start polling afghans on the u.s. invasion. so in 2001 we started a process of working with stakeholders starting to build our capacity globally, running several pilot projects in the region, and really finalizing our survey tool. in 2005 and forward is really where a lot of the data that i'll be sharing with you comes from, and a lot of the learns that i mentioned that i may not have slides for have come from. the first really important lesson that we have learned. and really, this started after the arab spring in terms of us looking back. but this is a metric you will see we have been gathering far before is leaders were sort of following the wrong metrics not not following enough of the right ones. i'll give you an example here in a second. but what we ask at gallup and one very important question is asking people how their own lives are doing.

on a scale from 0 to 10, where you ask the respondent to evaluate their current life and evaluate where they think their life will be five years from today. if they respond with a 7 or higher for today or 8 or higher for their life if five years gallup places them in what is called the thriving category. if they rate their lives at a 4 or below today and in five years, their placed into what is called the suffering category. what i'll be showing you on the next several slides is actually the rate of those who fall into the thriving category in several countries. but back to the following the right metrics. egypt gdp per capita looks still until today very promising. at the time of 2010, 2009, even -- beginning, you know, getting over the 2011 world economic forum is giving egypt and tunisia recognition bumping them up in the ranking, competitiveness in doing business is improving.

a lot of the macroeconomic indicators. and some of the economic reforms had started to take place. and things looked very positive. when you asked egyptians how they felt what was going on in egypt, this is what you found. and this is a trend. this incoherence or cognitive dissonance between gdp per capita and a lot of other economics and how people are actually rating their lives. we saw this almost similar graph in tunisia, in bahrain, in syria, and of course here in egypt. you'll actually notice that the first dip is not the arab spring the first dip is what? a spike in wheat prices in 2008-2009. so when we come around the arab spring egyptians are already registering that something is going very wrong in their world on their economy, on their expectations. but not a lot of people were picking up on it. just to show you that it's not just the middle east phenomenon, so i mentioned sort of several of the high-hitting countries in terms of instability throughout the region and what we saw.

let's look at ukraine. i thought this would be particularly interesting because we're of course at the atlantic council. gdp per capita in ukraine. let's look at how cranians have been rating their lives. so you see that there is certainly something there. now, i need to be very clear. i'm not claiming this is a predictor for instability and i'm not claiming there is any cause sal relationship between the variables, we're just saying something is going on. and there are a lot more metrics that we have learned to follow very closely beyond just the top line gdp or other metrics, rankings that we are used to. to give you a positive example, it's not all negative. on the positive side, here is colombia. this is i think the desired outcome for most countries, certainly a much more healthy relationship between the macroeconomic realities and how people are evaluating their lives. just for a context, in egypt leading up to 2011, the only people whose life evaluation scores were improving were the

top 10 percentile in income which is not a surprise to many of white house are familiar with the country. so i want to look at thriving and life evaluation from a different perspective now and examine some of the acute conflicts, at least just two that we have unfolding in the region. instead of showing you a thriving rate percentage, i want to show you the average numeric score of a country on that scale from 0 to 10, both today and in five years. let's take a look at syria. this is how syrians have been leading their lives. in our study i should mention that in 2013 due to the security situation, we had to exclude governance. that reduced our sample to representing -- we lost about 9 to 10% of the population. so to put it more simply, we in addition to that we had to substitute a quarter of our psus based on a security situation. but nonetheless, you see that life today in syria continues to be just horribly rate and declining.

interesting that hope seems to somehow be holding on. we did do a series of topical polls with syrians about when they thought the conflict would end, and various kind of aspects on where things were going. most of them did not see it ending soon. this was in 2013. so maybe have changed since then. but life evaluation clearly reflecting the reality for syrians on the ground here is yemen. and again, clearly yemenese knew something was going on with their country before a lot of us were following them in the headlines. and it really drives home the point that as leaders, as policymaker, whether you're leading yemen or somebody leading the country trying to help yemen these metrics become absolutely essential to understanding what is really underlying the changes that are taking place here. bread and butter issues. i was very hesitant to either title this subject bread and butter issues, the greater jihad or it's the bread and butter issues, stupid. but it depends on sort of what sort of the aisle you want to

sit on. but since this is a bipartisan effort, i figured i would leave it as bread and butter issues and let people decide. but on a serious note one of the underlying premises of this task force that i wholeheartedly agree with is the idea that movements like isis are a symptom and not a cause. if that's the case, i would argue that to understand the cause is to actually address the issues that they capitalize on, the grievances that they very effectively use to get people to either idealogically support them or even if not idealogically support them like we see in iraq, people who feel they're likely a better alternative than the other choices they have. so let's jump into some of these issues. one of the things that we ask all over the world, in the last 12 months, was there a time, have there been times when you did not have enough money to buy food for your family that you and your family needed. and i wanted to compare latin america and the post soviet eurasia countries on these

issues. dr. steve graham is with us here today. in his book i very much agree with drives home the point that a big miss for us us being the u.s. sort of policy world since 9/11 even and the arab spring is that we've lost the ability to really compare and look at other countries that have made it across the world. so establishing democracy is not something we're trying to invent in the middle east. improving economies is not something that we're trying to do for the first time ever. there are actually other parts of the world that have seen a relative amount of success. what lessons learned from those other parts of the world can be applied to the middle east? certainly not all of them. but maybe some of them. not enough money for food. there is the post soviet eurasia countries making significant progress on that item here is the middle east that is the median average of middle east countries. this includes the gcc and many countries that have no issue whatsoever relatively speaking, or for most people with access to food. so you see an increasing trend of concern on that front.

payroll to population. gallup measures employment four to six way depending on the surveys you're talking about. our most useful metric has been payroll to population. this is respondents 15 and older who work at least 30 hours for an employer for pay. here is latin america and the caribbean. obviously post soviet eurasia will be a little higher, as expected there is the middle east. basically, no progress. since the arab spring on the regional level. does this -- is this the story everywhere? absolutely not. we had great conversation over lunch about dubai uae, for example, being there are pockets that are exceptions to this reality. but in terms of really delivering on the jobs issue in the region, we've quite frankly seen a lot of talk and very little in the way of delivery. do you feel safe walking alone at night? this has been a huge country in the countries that did see

uprisings. so again, the middle east median average, there is egypt with a serious collapse during the arab spring. and then a significant rebound. the egypt wave here in 2014 was actually three weeks president assisi assumed office. there is iraq, jordan, lebanon, and tunisia there at the end. safe walking alone at night, something that has very much dramatically shifted in the countries, particularly where we saw any kind of uprising, protest, unrest. reputation in government. corruption widespread throughout the government in this country or not? middle east flat at 70. almost no improvement or decline. there is egypt. and we actually asked this question in a different way. but i wanted to use the most recent data for you here. significant at least expectation that things will improve in that

last reading of 2014. but consistently on government and corruption and business, egypt is consistently one of the highest. not a surprise. iraq surprisingly, a little bit of improvement. lebanon and tunisia. i apologize. tunisia there at the end. desire to emigrate. one of the issues that unfortunately has remained with us and was referenced in the video we just saw. when we asked respondents ideally, if you had the opportunity, would you like to move permanently to another country, or would you prefer to continue living in this country? so right now we're look agent the percent of those who said no, i would like to move. i would like to leave my country permanently there is the median average there is egypt. iraq. tunisia. significant improvement in tunisia. significant hope of people maybe seeing things improving and not

having to sort of run away from a bad situation. jordan and lebanon at the very end. but think about this. until now, 15 to 30% of respondents in this country, this is pretty reflective of everywhere expect the gcc countries, 15 to 30% want to get out. they want to leave. the steve jobs, the zuckerbergs, all of these people, a lot of them are still trying to leave. and i think one thing for this task force to consider is in terms of sustainable policy until you can, number one, stop that phenomenon from taking place, but equally important i think for the u.s. number two, connect with the expats all over the world that are leaving these countries and succeeding that actually want to improve things in their own country. how do we form a strategy to not necessarily politicize, but at least connect those networks and communities of expats that are very serious about wanting to give something back and don't

necessarily see as bleak of a future maybe or as security focused the lens of the future for the region as some of us in this city tend to. i wanted to share very few slides from iraq because i think our latest polling there really demonstrates what happens when societies lose faith in local and national institutions, and how movements like isis and others really effectively capitalize on them. this is that same thriving rate i shared with you at the very beginning of this presentation. this is iraq, broken into isil held area, disputed areas, baghdad, iraqi kurdistan, and southern iraq. so here i am using based obviously on proxy or dummy categories for regions of the country. but baghdad predominantly shia, slightly predominantly shia and southern iraq overwhelmingly shia are the only two regions where we've seen thriving come back since that disastrous september 13 reading as maliki was in the full thrust of his

approach of governance. iraqi kurdistan and the disputed area, isil held territories still much, much lower in their thriving rates since september 2013 through december 2014. to jog your memory, august is when prime minister took over. june-july is when mosul went to isis. this is six months after prime minister abed ii is in office. let's look at confidence in the military. again, a similar dynamic where the shia majority areas excuse me baghdad and southern iraq see a significant improvement. some improvement in the disputed areas. but again isil-held in iraqi kurdistan, still some pretty significant loss of confidence in the military. you'll notice that very last is the total, the national average. and you'll notice on this slide, and i should have show you'd the previous slide, it almost tells you nothing. because there is not a lot of

fluctuation on that level of analysis. but when you look locally you see a lot. confidence in national government unlike thriving and national institutions we did see a bounceback in the political appetite if you will in giving the new prime minister a chance. in iraq do you have confidence in each of the following? how about the national government? confidence shot pretty significantly back september of 2014. do you disapprove or approve of the way prime minister, in this case nuri al maliki is handling his job as prime minister? this is september 2013. 13% of people in iraqi kurdistan approved of prime minister nuri al maliki's job performance. may 2014, even worse. to a point where barely a majority in baghdad and only a majority in the south approved of prime minister al maliki's approach at governance. and very promise i will, i think, at least initially, in december of 2014 a huge

resurgence of at least a chance for this new political leader to strike a new page. what i would challenge us to think about is how much should we stake as policymakers on these very fleeting approvals-disapprovals versus how much should we stake as policymakers on the thriving underlying bread and butter issues. my argument would be we're a lot better off focusing on those issues. perhaps we have to deal with these issues. but so much of our rpms, if you will as washington, tends fob focused on this part. a lot less tends fob focused on the other part. using these statistics, iraq as an example. thank you. [ applause ] >> mohamed thank you so much. i would now like to turn to rabab al madi.

what i would like you to do if you would, rabab to tell us your own views what public opinion is right now in the region, what are citizens in the region thinking about right now, and how does it line up with what you have heard here and what we have seen in terms of the polling data. are you with us? >> yes i am. i am, steve. hello, everyone. so it would be audacious for me to sit here and just you know, tell you what every citizen in the region believes. but i would say in general i didn't hear anything today that comes across as completely you know, unacceptable or something that i have not seen through any interactions or my studies or my political activism. overall, i tend to agree with the picture that was painted by james and mohamed. having said that, i think there

is a number of points that i would like to reiterate. one of them is that we are not freaks of nature, right. so basically, just like james said, and just like the person who came up first in the video said, we are just normal human beings. we eat. we think. well want to have fun. we make love, just anyone else anywhere in the world. so i think the idea of cultural specificity, that there is something wrong or exceptional about this region needs to be rethought. i thought this was the case with arab spring, right you know with all the euphoria about all those young people going out and seeking freedom and dignity and social justice. there was an understanding that they're just like everyone else. but unfortunately, with the turn of events, we went back to

addressing citizens of the middle east in the arab world in particular as, you know, some form of international actors who tend to have very strange choices, either of the dictatorship, religious, or military who just hate the u.s. so on and so forth. and i think anything that we see in the public opinion, once we analyze it it becomes completely clear how this is a rational reaction to their own experiences, right. so when people are given a choice between or have to make a choice between their personal safety and their freedom between the safety of their children and being able to live in a democracy, they rationally they tend to choose their own personal safety. an that's just a human instinct.

the idea is not those choices they make it's understanding what circumstances we put them in in order for them to have to make a choice between issues of bread and butter on one hand or security on the one hand, and democracy and freedom and dignity on the other hand. the other thing that i think we need to understand about public opinion in the region nowadays and for a few years to come is that this is a state of flux. things are changing so fast and idea that the u.s. administration or any administration or even regimes from the region focusing on stability and governability, i think this is the wrong bet. the idea is to question at what

cost is stability or governability being brought about. the idea is to think about the governmentality. the only way forward for this region is to have a kind of stability that does not come at the expense of people's dignity, their freedom, and their bread and butter issues. the other thing i want to commend on, and this was made in steve's introduction, the idea of thinking about what is going on in the region in terms of a crisis, this is not a crisis or a series of crises. this is a historic transformation. an historic transformations, as we have even in europe, in the 18th and 19th century up until the mid 20th century and the u.s. those kind of historic transformations are messy.

they take a long time and they need to run their course. so the idea that they can be addressed or that we can, you know, seek mechanical conclusions between what people think today and accordingly how we address this. so if we look at egypt, for example, and we see a pool or in the region in general saying that democracy is not a -- and that bread and butter issues is a priority. this should not full us into thinking that people do not care about freedom and digsy. because democracy is a means to an end. so, yes, if their dignity or freedom will not come through a particular system or a particular regime, they are very well aware that they need to seek it elsewhere. this does not mean that they have quote/unquote a different

set of values. they're all universal values of this region -- no one wants to be beaten up in a police station. that's what human dignity translates into. the people who left their jobs to stand in front of polling stations throughout the region since 2011 are scenes that we've never seen before. those are people when they were given a choice to seek out freedom properly that they actually risked much more than standing in lines. they risked their own lives. so thinking that you know, in terms there is a ladder of priorities, you know. those people need to be fed first, and then have some religion and then they would be fine because they don't care about freedom. it doesn't work this way. they need a number of things, all of them at the same time.

sometimes they prioritize the urgent needs of survival, you know, their security or their bread and butter issues. but that for them is not because they tend to not value freedom or dignity. that's because sometimes most often they're pushed to having to make such a choice. the final thing i want to comment on and then we can go to questions is the focus on procedural versus strategic issues. i think if we conceive of what is going on in the region as a crisis and according to either urgency of asking people questions about procedural matters such as, you know do you want elections or don't you want elections?

do you want the u.s. to intervene in syria or not to? i think we're missing the point. because in those transformations, the important issues are much more structural and strategic. they're not just procedural and technical. the idea is not to give them elections. the idea is to make sure that there is an environment that will lead to a political system that reflects their choices, that will be responsive. elections become a means to this. same thing with the issue of syria. intervention or no intervention i think misses the point because that's a technical issue. that's a procedural issue. that's for people, you know, in the policy making world to decide. but this decision should be

based on a more in-depth understanding of what is going on. the idea is not to put forward elections or have an air strike in order to momentarily solve a crisis. the idea is to guarantee enough conducive circumstances to allow the people to allow the people in this region to work for what they have been striving for years. an idea that they shouldn't, i think most of the people i talked to and i work with, including even the person who runs that venue that i'm in today, they've made huge sacrifices for what they saw as a better future coming with you know, the arab spring. this guy lost his job and started a small business. and they're ready to make those sacrifices. but up until a point where they can see first of all that it's

even risking their lives is okay, but as long as they can see a future. unfortunately, both regional powers and international powers have put the majority of citizens of this region in a position whereby they lost all faith that there can be a better future, that they need -- some of them need to resort to violence and extremism. whereas our point of remedy was the hope that came with arab spring and that was completely shattered. and hence, from the euphoria that i have felt, you know, for a couple of years after 2011 i think what the polls and the presentations of today are missing is a feeling of despair

and intense frustration that the citizens of this region are feeling. thank you. >> thank you very much. that was extremely helpful. and i think it showed the power of mixing polling data and then anecdotal data. because rabab you helped us i think to understand how in the polling data, democracy and freedom could be a low priority in the face of security or bread and butter issues. but as you point out that does not mean that it is not an important element of where the people in the region want to go. it is a question of priorities and responding to the circumstances in which they find themselves. so i think we're off to a terrific start in terms of trying to get some input and

appreciation in the region. and also this mixing of the anecdotal and the polling is a very powerful tool. and we will try to use that in the course of the study. we're a little bit running behind timewise. we have a firm 4:00 stop. and what i would like to propose to do is rather than conducting a dialogue within the panel, i would like to turn to secretary albright and give her a moment to comment on what she has heard. and then i think we'll go right to the audience and to our twitter followers and get as many questions in as we can before the 4:00 stops. so madeline, do you want to comment on what you heard? >> first of all, it truly was interesting. i made a lot of different note, and we have a lot to look at. i think the question for our task force, however, is to look at the data and then try to figure out how we approach the longer term parts. since a lot of the issues have

to do with immediate polling and the question of security, jobs, et cetera, and look a little bit at -- and i would just make this suggestion. there is a paradox here. well want to know what they want to do and how they can act. and they to some extent want us to have the united states do something, but they don't particularly like some of the things we do. so there are for the u.s. damned if you do, damned if you don't. i think that what is worth looking at, and i have done an awful lot of polling in eastern europe at a time immediately after the fall of the wall. and it was very, very similar to what you were talking about thriving versus suffering and how people see their own personal situation versus what is going on in the country. so i would be interested. we don't have to get an answer now, in who you actually poll. what is the age group, what are their jobs? because one of the things we found in eastern europe was that it really made a difference. and it has a lot to what rabab

has to say whether you're quote, somebody who -- i always hate this term, an intellectual versus somebody who is a worker has a very different approach to this, and kind of dividing that up. but the other part here that i think we need to know is to what extend the people in the country know that this is up to them, that we can provide suggestions, but i think we really immediate to figure out and ultimately institutional development i think is important. as somebody who heads a democratic institute, i find it hard to think that democracy is not important. but democracy has to deliver. people want to vote and eat. and part of the issue is a lack of faith in institutions. i stole this statement from somebody. but i use it because of the role of social media. what has happened is people are talking to their governments on 21st century technology from tahrir square. the government hears them on 20th century technology and is providing 19th century

responses. so there is no confidence in the institutions. and yet institutions need to be built in order to be able to deliver the jobs, education, and health care. >> can i just make a point about the make a point about the -- the attitude that people have towards their lives. we have been asking what i like to call the reagan questions, are you better off than you were. do you think you're going to be better off in the next few years? are your children going to be better off than you? and are you better off than your parents? and we ask a right track/wrong track data. we've got the data over the last 15 years and it's fascinating. it's an interesting way of looking at people and then looking at the demographics within. and we largely find not a big shift among the different age groups or gender groups interests. if there's hope in the country it's widespread if there's a lack of hope it seems to be widespread across the demographic groups. >> i think one of the things we

might do, if the two of you are willing, is have a dialogue with you about the other data you have that might be relevant. and secondly if there are questions that we can formulate or maybe come from our working groups that we might commend to you and that you might go out on in the next couple of months, that would help us drill down on some of the things we've learned, that would be a wonderful part in parallel track to the working groups and contribution to the studies. we can go to that and talk about that as a follow-up to this conference. let me open the floor to the questions from the audience and via twitter, jessica is our twitter source of twitter questions there. she is i will look to jessica when we have a twitter question and we will put that into the mix. for those of you in the hall here, i know it's a little dark, if you would raise your hand, i would hopefully see it. and after you are acknowledged, please wait for the mike. we have microphones, which will

come to you from the sides. would you state your name and your affiliation i would ask the questioners and responders to be brief and to the point. because we want to try to get as many questions in between now and 4:00 as we can. let me begin with ambassador faillie. >> let me thank you for such a proactive task. i think there are a couple of timelines we need to have a better understanding of so we as ambassadors and others can help. >> could you hold the mic closer. >> the first timeline is i hope such a discourse and discussion should lead to better enriched discussion with the 2016 elections. in the united states. i think it's important i hope some important contribution to define the discourse in the foreign policy and the regional discussion. as to the timeline you have for your own project, it's important for us to understand the road

map. so that your description versus your description of what should take place, is important for us to understand at what stage have you finished with understanding what describing what's taking place, versus the policies and prescribing for it. that's another issue for us. the other point i have is the -- view of the united states of what was the region versus what the region wants from the united states. unfortunately although we are in a global technology and super highway and others i don't think the regions fully understand the dynamics inside the united states. who is that involving and what the united states sees as its own role so further description of what's taking place in the united states might help in at least setting expectations of the region. i think that's that might be too much atask to ask but i think it's important. thank you. >> i think those are very

important points. i think one of the things, though i would say ambassador, we're trying to get in the study, and madeline you might want to jump in on this. we think a step-back look needs to begin with what the region wants for itself. what is the conversation that is going on in the region? what are their thoughts and expectations of what they want for themselves? that seems to us to be the starting point to then have a conversation, well what might the united states and europe and other countries be able to do to help. and how to make that how to do it in a way that is acceptable and positive for the region. so we will get do that interaction, but we really want to start with a better appreciation of what's going on in the region. and we say the region as if it was all one thing and of course

the situations are very different, country to country and that's also something we need to get grounded on as we move toward some recommendations. thank you very much. in the back there, yes, ma'am. you -- yes? exactly right. >> speak loudly, there's a lot of ventilator noise back here. >> amanda rand corporation. i have a question. do you think that the growing anti-isis contingent throughout the region would be enough of a basis for the united states to create a relationship with those people or with people on social networks? do you think that that would lay enough of a groundwork for some more stronger relationship between the united states and middle east countries and citizens as well? >> mohammed, you want to take that? >> i think it was for rabab.

i'm sorry, rabab, you want to take that? thank you. >> i just so let me first very deeply comment on what secretary albright said. i think people in the region are very well aware that you know, they are the doers, they are the main actors. and they don't look to the u.s. to bring them to bring them anything. i mean the arab spring was not, not come out of you know any kind of u.s. plan or support. i still remember vividly secretary clinton coming on tv on the 26th of january 2011, to say that they think that the regime is stable and will be responsive to its people. so it was totally you know the plan of this region, the people who knew very well what they wanted. the idea of doomed if you do doomed if you don't i think this has nothing to do with

people's perception in the region. this has to do with how this strategically, the u.s. for different regions has positioned itself as the policemen of the world and a uni polar power and what not. it's the status that comes with the position and with the continuing asking of the christmas. so how account u.s. help? what are we supposed to do? and that's why in one of james' parts of his presentation there was i can't remember which crisis. but there was a part where there was a question about leave us alone in a crisis. that was an option and many opted for that option -- leave us alone. so i think the patients are clearly set. in terms of the anti-isis, the question, i don't think that being anti-isis is enough.

for people of the region to bond with the u.s. and believe with, believe in the capacity of the administration or the following administration to deliver. because we can have common enemies, but that doesn't necessarily make us friends, right? plus i mean there's, there's a lot of talk in the region about you know anti- about isis being an outcome of different forms of u.s. policy in the past all the way from the invasion of iraq to the position on palestine. not supporting the arab spring enough. and hence, this is seen as an outcome. that now the u.s. you know complains about but it's part of, its doing in a way.

so i think that the only, you know, as i said this is not enough. what you need to do is to be, to proactively seek hussein understand and want what they believe in. and to understand that you're not you know the u.s. cannot be the leader, but if anything it should just try to coordinate between its own national interests and what people in the region might be striving for. >> mohammed, you want to say a word about that? >> speaking anecdotally and i do want to address your methods question. i want to push back and say, when you're the biggest actor in the room you're always going to be damned if you do, damned if you don't. i'm saying this is somebody who has committed a significant portion of public opinion. public opinion absolutely matters. making the most appealing decision that's going to please the street in cairo i think if you've been watching what's

happening in the last two years, that's not a strategy. but in many cases public opinion will take you to a place that's not very consistent with our values with, democratic values with a lot of values. so public opinion is extremely important. but when you craft policy. i would very much caution against deciding which policy is going to be popular. what was very popular in egypt just 18 months ago in my poll, gallup was bashing u.s. aid. u.s. aid was, nobody wanted to touch it. 80-something% of egyptians did not want u.s. aid. felt it was a bad influence on egypt. go have that conversation in any coffee shop in egypt they have a very different attitude. so what we have seen in the region with public opinion. it has been effectively manipulated in some

environments to provide a very convenient fact pattern for whatever powers are trying to operate. from the regimes in the region to isis to the muslim brotherhood to al qaeda, to elite groups fondling sort of the ebb and flow of public opinion can be extremely disastrous. it doesn't mean that we should ignore people's opinions, but it means that in my personal view we should give a lot less credence to this damned if you do damned if you don't problem. think that's a reality for the u.s. >> i would take issue with that. this is an important issue so let's do it. >> my sense is the damned if you do, damned if you don't is right. the policy options have not been -- actually been good ones for us to carry out. and yet there's a reason we're damned and that has to do with the trajectory, a history that we have in the region that has not been awfully pretty. whendy my book "arab voices" and

i went around the country talking about the myths that americans have about arabs. someday in the conversation, somebody would say what are the myths that arabs have about us? and i would say the first one is that they think we're really smart. and i would give a little bit of a giggle just about that much. they said what do you mean? i say they think that we are all powerful, and that we make decisions based all the time on our interests. so when something happens that's really stupid, they think we actually knew what we were doing and got the outcome we wanted. we invaded iraq so iran would become more powerful so the arabs would have to turn to us for more weapons, all part of a master plan. and the master plan, they couldn't explain our stupidity. frankly, they couldn't. that's an issue we have to wrestle with as americans, if we're going to look at ourselves as the agent for this change, i think i'm with you, that this project ought to be what do arabs drnarab s -- we need to understand what the arab world wants.

one thing that confounds the whole study is they don't look at us as the positive agent of change. we look at ourselves in the mirror and see a great bunch of guys. don't see us in the same way. that's a problem we have to wrestle with as americans. >> people compare this to eastern europe. what happened in eastern europe is they wanted to be like the west. and that is not what's happening here. >> and i think that president obama said in 2011 i love that speech when he said -- we didn't start this referring to the arab spring. we didn't start it, we can't direct it, we can't determine its outcome. there's a sense of humility we have to have as we approach this he then said what we can do is help them in the ways they want help from us. that's the conversation we need to have is that one. you hit the nail on the head a couple of times on that one. >> in an open-ended question when we ask people, this is true for muslim majority countries

and arab countries. what is the number one thing you admire most about america liberty and freedom are the first thing they say and technology is the second thing they say. i'm in no way saying people in that region don't want the outcomes of democracy and good governance. i'm saying that democracy has a really bad brand with those people and absolutely we've made a plethora of very bad policy decisions in the region. especially in the last 15 years. but moving forward. my point was we should not simply just do what's popular. because what's popular, what has become popular at this late date in the arab spring is not something that we can get behind in a lot of countries. >> i'm going to bring this to a close with and we'll do some other questions. i think there are two cautions. one, just because it's short-term popularity is not a true chart for a future of a prosperous and stable middle east an i think people in the middle east will know that.

secondly, i just have to add a footnote. america does have its own interests. and sometimes those interests contradicted the preferences of the people in the region. and when your country is attacked, from that region, you have to respond and do things that many times are not going to be popular in that region so one of the things we have to do if we get this kind of understanding of the region is we're going to have to put it through the filter of our own national interests. jessica, do we have any twitter questions at this point? no. odie? i think the big issue that i have seen from these graphs and data it's jobs, jobs, jobs. you have young people who want prosperity. so the big challenge short-term is how do you create jobs?

do you create jobs through innovation? the area, the region has a lot of liquidity. people talk about the chinese. >> which -- >> $2.5 million in foreign exchange reserves. if you look at that region, they have an equal amount of money. how do you bring entrepreneurs to the region? how do you get people to invest? that's in my view the big challenge. i say innovation, not invitation. >> very good point. we have a task force that is working on that very question. and i think you are supporting them and we will that's clearly a part of the study. jessica, do you have a twitter question here? >> we do. we've got a question from twitter, and the twitteratti want to know how can we harness public/private partnerships better to better meet the needs and wants of the people in the region? >> i would refer you back to president obama's, the same speech i'm talking about. the may 2011 speech on, it was

the fifth anniversary, the, fifth anniversary of cairo. fourth anniversary of the cairo speech. because he talked about all of that. then when he said here's what we can do and what he talked about was, a fund that would promote the public/private partnerships. that would create investment in small, medium-sized enterprises to create jobs, to help build the middle class in tunisia and egypt. because they were going to be the catalysts that were going to make democracy move forward. we couldn't teach drois, we could rather create the structures that would enable it. and i thought that that speech was very thoughtful in that regard. think there are plenty of ideas out there. oda. but i think the question is getting the will on the part of government to make those programs available and actually push them forward. i know aig aid does have programs from our end like that they're underfunded but they're

areas where foreign aid programs awed to be is creating enterprise funds in public/private partnerships. >> what happened as a result of the cairo speech, secretary clinton wanted to have this partners for the new beginning. i chair that we is public/private partnerships and tunisia is a very good example. there's a local chapter there, because we're depending on the local. we just had an investor conference in tunisia in order to bring public/private partnerships together. i think that's a model works very well for trying to figure out how to develop this economic, the jobs jobs jobs. we are now down to the 4:00 hour, so i'm going to take one more question, brief question, brief response. and then we're going to adjourn. and those of you who have to leave can do so. those who want to stay, we will have a reception out in the hall there and hopefully a number of you can continue this conversation after we adjourn.

there was a hand up here. ma'am? yes. please? >> hi, my name is erica and i'm actually with usaid. so thank you for speaking to some of the work we do. actually i was just wondering if you could perhaps talk a little bit more about maybe what role usaid in particular or u.s. government aid can have in the region. because a lot of the findings were very interesting. and you know, talk to you know some of the needs that they have in terms of wellness, like jobs as the other gentleman was saying. in addition to the specific question about public/private partnerships, some of the discussions that we have been having have been around should we get back to more basic development projects such as infrastructure building or

education or some of the more sort of core basic nitty-gritty projects that aid is traditionally known for doing. >> anyone want to take that? >> sure, i would strongly advise just from the polling and my anecdotal experiences traveling through the region. the latter projects that you suggested, the current minister of tamween i don't know how to translate to english. the basic sort of subcity needs that poor people go to in egypt has recently become a superstar simply for improving the way in which domestic subsidized bread is processed through the ovens that people go stand in front of every day in cairo to get bread. usaid should be helping fix that usaid should be helping fix the water system. helping fixing nursing in a place like egypt, or any other country. i happen tore mow familiar with that example, because usaid is

most active there. those are the projects that are apolitical, that nobody can blacklist, it will be very hard to convince people that the u.s. government has embarked on a process to poison egypt's water because they're helping with the infrastructure of the water system. that's one crazy theory that probably will not get too much play. but those kinds of projects demonstrate number one you're in it for the long haul. number two, you're not interested in any kind of short-term political gain. you're not doing this because there's a protest in that remember. you're doing that because of your long-term commitment to the people and this region. you demonstrate that this is the interests of america and the american people moving forward in the long-term. that's what has value. >> my opinion is demand-driven, make the projects demand-driven. that's where polling can help and where partners on the ground can help and i think foreign aid used to be more supply-driven. i think has increasingly gone in the movement toward being more

demand driven. >> we've come to the end of our time. i want to think rabab and jim and mohammed and secretary yale albright for participating in our panel. first families take vacation time and like presidents and first ladies, a good read can be the perfect companion for your summer journeys. what better book than one that peers inside the personal life of every first lady in american history. first ladies presidential historians on the lives of 45 iconic american women. inspiring stories of fascinating women who survived the scrutiny of the white house.

great summertime read. available from public affairs as a hard cover or e-book. through your favorite book store or online bookseller. republican presidential candidate senator ted cruz criticized treasury department officials for not testifying before a subcommittee hearing this month on the health care federal exchanges and subsidies. ranking member senator chris kunitz of delaware said they couldn't testify because there's ongoing litigation. the supreme court is expected to rendary decision on the case this month. the hearing reviewing the issue is about 90 minutes.

>> this hearing will come to order. welcome, everybody, welcome to the members of this committee. before we get to the substance of the hearing, i want to take just a few minutes to discuss the empty table before us. it's a symbol for how little regard the obama administration seems to have for the american people. two weeks ago this committee sent a letter to three current employees of the u.s. treasury department, requesting their attendance at this hearing to talk about treasury's role in developing the obamacare exchange subsidy rule. which is hurting millions of people across this country. and which is directly contrary to the statutory text of the underlying bill. specifically this committee sent letters to mark mazur, assistant

secretary for tax policy and treasury to emily mcma han, deputy assistant secretary for tax policy at treasury and was serving as the acting assistant secretary for tax policy when the rule was written and finalized and to cameron atherton deputy tax lenl slative council for tax policy and treasury. shortly after these invitation letters were sent, the treasury department reached out to my staff and brazenly indicated they did not intend to send any witnesses. i would note our former attorney general, eric holder, the first attorney general in the history of this country to be held in contempt of congress. these three empty seats demonstrate the ongoing contempt for congress and for the american people that is manifested by the obama administration.

for the treasury department to tell the united states senate they have no time, they will not even answer questions, about how they promulgated rule-making in direct conflict with statutory text. is the height of arrogance. the beginning of this hearing was to give them an opportunity to come and answer questions, to recognized oversite responsibility given to the senate, given to congress by the united states constitution. by their absence, i take it the administration is saying they are not subject to oversight. and yet at the end of the day the american people provide the ultimate oversight. given that the administration refused to cooperate in this hearing it my hope that the full

committee will takes it to the next level of invoking compulsory process so that members of the executive branch will be made to answer whether they tried to follow the law or whether they were instructed by political operatives to disregard the law in the interest of a political outcome. that's a question the executive needs to answer. and the purpose of this hearing is to begin getting to the bottom of it. now i can understand why the administration is reluctant. to engage in this discussion. i can understand why both in substance after over five years of obama administration kair, we have seen that millions of people are hurting under it

people are promised by the president, if you like your health insurance plan, you can keep your health insurance plan. millions of people discovered that promise was false that it was knowingly, deliberately false. as millions of americans had their health insurance plans canceled. the president promised the american people, if you like your doctor, you can keep your doctor. that, too we now know, was a statement that was knowingly deliberately false. today as a consequence of obamacare, millions of americans have lost their jobs and have been forced into part-time work, have lost their health insurance, have lost their doctors and are facing skyrocketing insurance premiums. so i can understand why the administration would be reluctant to defend that record on the merits. i can also understand why the administration does not want to answer questions about the underlying legal question.

the statutory text is straightforward. and at the end of the day, it is not a complicated question. what the administration did is took statutory language of an exchange established by a state and through transmogrification that would make harry houdini shake his head in wonderment, defined the federal government's exchange as an exchange established by a state. the question this hearing and the next panel hopefully will get to is was that an attempt by an executive agency to follow the law? to carry out the president's constitutional obligation to take care that the laws be faithfully executed? or was it instead a deliberate effort to ignore the law driven

by political and partisan objectives from political appointees at the treasury department and the white house? this is a question of exceptional importance, because if the executive refuses to implement the laws passed by congress, then the basic protections of our constitution become ephemeral. that's the purpose of this hearing. i'm disappointed that the administration has chosen not even to engage in this conversation. with that, i'll recognize the ranking member senator koounts. >> senator cruz i thought i would comment by opening in this very same room we had a three-hour mark-up of the senate judiciary committee of a distinct but important issue patent litigation reform. at the conclusion of his remarks i was compelled to whisper to my staff counsel that i thought

senator cruz on that topic got it exactly right. i will not be saying this -- >> i hope that comment is not used against you in your next campaign. >> hopefully, it will not. >> i just mentioned at the outset by way of saying while we may have found agreement on the important issues of a constitutionally-protected right this morning, we will approach from today's discussion and this hearing, of a somewhat different perspective. i find it unremarkable that the witnesses requested for today did not appear. the administration has ongoing litigation, litigation before the supreme court which is expected to be resolved very soon and it's my understanding that they were not comfortable sending a will to this hearing under those circumstances. and i find that unremarkable. congress has a way of compelling cooperation with oversight which it has not done. so the simple fact is that we're left with a so-called hearing

about the rule-making process in a senate judiciary subcommittee with witnesses who are not in any way involved in the rule-making process. it is my hope that we will move past this political theater and on or back to the substance of the judiciary committee. thank you. >> we'll go ahead and give each senator who sheer a chance to make a brief opening statement before we move on to the next panel. and the senator on this side of the aisle who was here next was senator sessions. >> thank you, mr. chairman. as a long-time practitioner in federal court 15 years practicing before federal judges i developed such a great respect for those men and women who lead those courts, the judicial process that we go

through. the legal process that we go through. and in alabama and states all over the nation, we presume laws are passed, juries are told that the executive enforces the laws and the people expect that. that's the whole essence of the american legal system. and the president of the united states is in fact the chief law enforcement officers in america. he has be a absolute duty to see that laws are faithfully executed. i've seen in my time here, the presence of both parties acquiescing into policies they don't like because the law was to the contrary. we have to a degree. i don't believe we've ever seen a president of the united states who is so willing to just ignore plain law to advance a political agenda, this threatens law in america. american people acquiese in court decisions every day.

many of which they strongly disagree with but they acquiesce, because that's our system. but part of their acquiescence is a grudging belief that somewhere, somebody is following through on legal procedures and what's happening to them in the courtroom is a result of some sort of fair and decent process. and i do believe senator cruz, that we're not in a healthy relationship right now. and if if we get to the point where the american people believe that the supreme court, five members out of nine, of the supreme court, are just advocating and imposing their views instead of faithfully following classical interpretive policies of law, then i think we have threatened the foundation of this republic.

our full and firm belief is that the strength of this republic is founded on the angelo-american rule of law which we basically inherited. we just celebrate the 800th anniversary of the magna carta. so mr. chairman, thank you for having this hearing and i don't believe the president is entitled to do what he wants to no matter what the law says. >> thank you, senator sessions senator blumenthal? >> thank you, mr. chairman. and i want to join with my colleague senator in expressing my appreciation for your very eloquent remarks even though we voted on opposite sides of the issue and for your having this hearing. because i think it's a topic that well merits attention and scrutiny. if i had been asked for my advice by these witnesses and i

wasn't i would have probably given them counsel that appearing here to talk about these issues literally on the eve or perhaps a few days before the united states supreme court rules on almost directly related questions of law and possibly fact, would have been imprudent. and even foolhardy and might have been purr received as improper. the timing of this hearing -- perceived. -- in relation to the united states supreme court decision predetermined the outcome of their appearing here. and i would respectfully suggest mr. chairman, these same witnesses be invited at some later point certainly consideration by the full judiciary committee of any compulsory process should await another invitation at a

different time. i do not mean to suggest the empty table was used as a prop for an argument may be misperceived. but i would strongly urge that this committee revisit the potential testimony from these witnesses on another occasion. on the issue at hand, contrary to the arguments of many partisan opponents, i firmly believe that the right decision will be to uphold this law. both the act itself and plainly overwhelming evidence from its consideration of passage demonstrate its nationwide scope. everybody involved understood when it was being debated. and when it was being passed. the tax credit would be available regardless of which government entity set up an exchange. the act simply would not have worked any other way.

the financial support for universal coverage would not have been there without this understanding. and so i welcome the scrutiny and oversight and hope that we will find a path where we can really on a very bipartisan basis, work together. thank you, mr. chairman. >> thank you senator blumenthal. senator hatch? >> thank you, mr. chairman. let me begin by thanking the chairman for convening what i consider to be an important hearing and i'm disappointed by the first panel's decision not to appear hered to and testify. here we are investigating a hugely important issue, whether obamacare authorizes subsidies for health care plan purchased through the federal exchange and the administrative's representative won't even talk to us. would you think the administration would jump at this opportunity to tell the public how it determined that the text of obamacare means the exact opposite of what it says.

how it determined that established by state means established by the federal government. i can only conclude that the administration's refusal to participate today means that it has no really good explanation. it decidedle early on that subsidies needed to be available in federal exchange if the law was to work the way the president envisioned and didn't particularly care what the statute actually said. some of the things about this whole process are disturbing. you have a congress that pass as hugely consequential bill. after the people of massachusetts elect a republican senator to stop the bill from moving forward. you have a president that then decides to rewrite the law, through administrative fiat, the says what he wish it is said, than what congress actually wrote. now you have a senior administration official refusing to even show up to explain how they arrived at their anti-textural reading of the

statute. these are not the actions of an executive branch accountable to the rule of law. these are the actions of an executive branch willing to bend the law to suit political purposes. i've spoken many times about president obama's disturbing disregard for the rule of law which the obamacare subsidy rule is just one example. last month i published an article with the ucla law review explaining how the president is rewroting of obamacare con tra convenients important constitutional checks on his authority. after the court case challenging the president's action. i would like to quote from that article. what's ultimately at stake here is the president's obligation to follow the law. faced with a statute that doesn't operate quite the way he envisioned, president obama decided to disregard the parts of the law he doesn't like, and instead implement a different statute. but the constitution doesn't give the president leave to unilaterally rewrite laws. the power to amend laws lies

with congress and until congress amends the statute, the president is bound to the text congress passed unquote. now the article b entered into the record. and -- >> without objection. >> i'm glad we have a second panel who can talk about the administration's path to determining that subsidies can be offered on federally established exchange. even though obamacare provides no such authority. now i wish the administration would take this as seriously as we do. let me just say, i lived through the whole obamacare matter and heard all sides and got tremendously involved in it, naturally, because i've done a lot of health care legislation over my 39 years in congress. and i have to say one of the principal arguments by some that you know that the people would

have to go, the exchange would have to be set up by the state and the argument behind is is that's the only way you're going to get people to sign up for it because that's where the money goes. and that argument was used on more than one occasion. and all i can say is, is i'm very concerned about this whole issue. the statute is unambiguous. it's amazing to me that we've come this far. without somebody admitting that hey, they made a mistake. and we would have to rewrite the law so can you do what they've just unilaterally decided to do without any real legal authority to do it thank you, mr. chairman. >> thank you senator hatch. senator white house? >> thank you, chairman i want to echo the comments of my colleagues about the empty chairs here, senator blumenthal and i have both been the attorneys general of our states, we've had the obligation to

provide advice to government officials on how to respond when their agency is the subject of ongoing litigation. and i concur fully with the remarks of senator blooming that will and i concur fully with his recommendation that once that impediment is lifted, the chairman should consider having the witnesses return. i think it could be a constructive hearing, if it were not for that impediment, which i think is a real and genuine one. in rhode island we aren't very affected by king v burwell because we did set up a state exchange. our state exchange has been quite a success. we've just hit 500 businesses having achieved health care through our exchange. which has a business plan as well as the individual plan. thousands of families have achieved coverage, our major primary care practice groups are

adapting the way in which they practice to take advantage of some of the innovation programs. in the affordable care act. they are seeing better care for their patients their patients are seeing longer hours, simpler processes, more support for prevention and other types of less costly ways of dealing with people's health so we're seeing really better care delivered in a less-costly way that is simpler and clearer, less bedevilled by the confusion and duplication that had been the hallmark of our health care system. we're seeing it at the national level through the savings the pioneer acos have just been put through the innovation center as an approved nationwide process. because they were able to demonstrate to the actuary hundreds of millions of dollars in savings all accompanied by

better simpler care for the individuals whom they serve. so i think we have a continuing process that we're obliged to pursue to make sure that the american health care system, which remains by 30 to 50% more expensive per capita than all of the countries that we compete with the other industrialized countries. and i think that gives us an obligation to really try to keep our eye on the ball. and to make sure that we're reducing the cost of care while maintaining or actually likely even improving the quality of care that our people receive. there's absolutely no reason that we should continue to be the country that has the highest per capita costs in the developed world. and yet has health care

outcomes as measured by things like length of life that equate to countries like greece and croatia. we can do a lot better. the affordable care act is a tool that is already being proven to do a lot better. and in my view the exchange are a tool for continuing to drive the health care system in that direction. away from duplication, away from fee for service. away from confusion. unfortunately behind the political language that sand the political fights that have accompanied the affordable care act. they're just an awful lot of americans who particularly those who have had a loved one or who themselves have had a very serious illness and have had to deal with the american health care system and they've seen firsthand what a complex burdensome inefficient bedevilling system it was.

and i think that particularly in this area of lowering costs by improving the quality of care, the affordable care act has really made some important breakthroughs. we want to encourage those breakthroughs to make us more internationally competitive and to provide a better human, humane result frankly for the people of the country and at least in rhode island the state exchange is helping our state manage a problem and steer itself in that direction. so thank you very much for the time and with my time expiring i'll yield back. >> thank you senator whitehouse, i'll make a couple of observations and then we'll welcome the second panel. one, when it comes to discussions of cost and limiting health care and health insurance costs, i think on the merits, obamacare has been an abject failure. president obama promised the american people, if this law

passed, that the average family would receive a $2500 decrease in health insurance premiums. i think you'll be hard-pressed to find many family force whom that is the case. indeed the average family in america under obamacare has not seen any health insurance premium dekreerks rather the average health insurance premium increase has been over $3,000. that's $5,500 difference out of hard-working american who is are struggling to pay the bills and they're discovering under obamacare they have higher co-pays, less coverage and they're paying more. i would also note that the administration's justification for not being here is the pendency of king versus burwell. and yet, ms. mcmahon, one of the three witnesses who was called here today testified before the house oversight committee on july 31st 2013 while the hulby

case, with the same underlying issue was pending. the record was open in that case, yet the administration sent a witness. and yet here they're unwilling to answer those same questions about whether the administration is willing to comply with the law. >> the letter this committee sent to treasury secretary jack lew on may 27th without obligation, i'm going to enter that letter into the record and i'll hold the record open for a week. for any additional materials the senator would wish to enter. with that i would like to welcome the second panel to the table and we'll start immediately as soon as you can be seated.

i would like to introduce briefly the members of the panel. we have mr. michael carven, he's a partner at jones day he is the lead lawyer in king versus burwell. and he has the distinction of being my very first boss in private practice which i'm sure many will hold him to account for all of of the mistakes i've made since then. we've got mr. michael cannon, who is the director of health policy studies at the cato institute. he is a learned and well-respected scholar on questions of economics and health care.

we have professor andy graywall, who is an associate professor of law at the university of iowa college of law in iowa city. we have ms. elisabeth b.wydra, the chief counsel of the constitutional accountability center here in washington, d.c. and we have mr. robert weiner a partner at arnold and porter. i would like to ask each of the witnesses to stand and be sworn in please. would you raise your right hands? [ witnesses are sworn ] >> thank you very much. mr. carven, we'll start with you.

please turn your microphone on. >> is it on now? thank you. i was talking about the importance of the hearing, a number of senators have already indicated. while the policy issues here obviously very important. i think the real issue for the hearing is the rule of law. is this going to be a nation governed by laws enacted by this body pursuant to constitutional prerogatives? or is it going to be governed by the policy preferences of unelected bureaucrats? and i think that's exactly what happened in this case i think this is an extraordinarily simple case and i think the irs has not interpreted the law. but very dramatically revised the law and that's because the law simply says that you receive subsidyies on exchange established by the state under section 1311 and the irs has transformed that into something that where you receive subsidies once an exchange is established by hhs under 1321.

anyone who speaks english knows that's not a reasonable interpretation of that language. the proponents of the irs rule have argued, they can't dispute that the plain language commands the opposite of what the rule says, so they try to change the subject. they say well you've ripped that language out of context, and the language is contrary to the underlying purpose of the statute. in reality. neither of those is true. in fact the context in which those words reside confirms in every way that the plain language means exactly what it says. following that plain language is really the only way to implement the broader purposes of the affordable care act. for example, in terms of context it's argued that this is an unusual place to put a restriction on subsidies. but the reality is that section 36 b is the only provision in the act that deals with the

availability of subsidies, and the reality is it's the only restriction for example that makes it clear that you need to make a purchase off of the exchange in order to receive the subsidies. far from being an unusual place to put the restrictions of statutes, the only logical place in context makes that clear. in terms of the statute's broader purposes the plain text of section 1311 of the act makes it clear that a principal purpose of the act is to make sure that states run the exchange and not the federal government. it's stated in the mandatory. the states shall establish and operate these exchange. and one of the principal problems with the irs rule is it dramatically undermines that statutorily stated purpose. since the irs rule makes the subsidies available regardless of whether states have established an exchange it provides the states no incentives to undertake this difficult and arduous task. so the irs ruled dramatically

undermines one of the stated purposes of the aca, which is to have states establish the exchange. none of the proponents of the rule can explain why any reasonable person, reasonable legislature would have thought all the states or most of the states would have done this, if they were provided no incentive to do so and they can't explain any incentive other than conditioning the subsidies. the notion that there's some purpose out there to have subsidies in all states is simply a fiction invented by the obama administration. there's no text there's no legislative history anywhere suggesting that congress intended to make subsidies available on exchange that are established by hhs. therefore, the purpose argument is not any effort to discern congressional intent through the normal means of expressing legislative intent, it's actually a unilateral effort to impose the executive branch's

own purposes in contra distinction to the legislature. we have a specific statutory provision that tells what you the limitation is in 36 b. we have a specific statutory provision, section 1311 that tells you why they impose that limitation. and there is no legislative history which contradicts either of those statutorily enacted texts. so any legislative material and any justice on the supreme court has looked at there is no purpose that would justify the irs's revision of the code. i think my final point i'll make is the proponents of the act can't even agree on the rationale behind why the irs's revision is okay. the solicitor general invented this term of art theory in the supreme court. you won't see that term of art theory anywhere in the irs' discussion of the rule at the time they did it. so this is a post-doc invention by the solicitor general that's not even consistent with what the irs came up with.

the media explanation for all of this is that a giant mistake that nobody really understood what was going on. but neither the solicitor general nor the irs has bought into this notion that this was simply a matter of oversight. so all of the various rationales that have been offered up for this bureaucratic revision of the statute's plain text are not only unpersuasive, they're actually at odds with each other. thank you. >> thank you mr. carven. mr. cannon? >> thank you chairman cruz. thank you, mr. chairman, ranking member kunitz to discuss what we do know about how the irs developed its health insurance premium tax credit rule of may 23rd, 2012. the rule that's being challenged in king v. burwell and the rule that implements the tax provision revisions of the patient protection affordable care act. two federal courts have found that that rule expand the the reach of the aca's employer

mandate beyond the clear limits congress imposed on the irs's authorities. unlawfully subjecting 250,000 employers and 57 million workers to that tax. one of the workers is kevin pace. a jazz musician, who lives not far from here in northern virginia. accord together "washington post," pace lost $8,000 of income in the first year the irs unlawfully imposed that mandate on his employer as a direct result of that position of that mandate. this illegal tax reduces a typical affected worker's income by nearly $1,000 and has eliminated nearly a quarter million jobs. those federal courts found the iris' tax credit rule unlawfully expand the reach of the aca's individual mandate. the irs is currently subjecting 11 million taxpayers to an illegal result of $1100 each.

the authority to levy tax and to spend federal dollars rests with congress alone. in king v. burwell four virginia taxpayers allege that the rule is subjecting them to illegal taxes. the supreme court heard arguments in march and will rule this month. a ruling for the challengers would invalidate that rule. create an estimated 237,000 new jobs free more than 57 million americans from illegal taxes and increase affected workers' earnings by nearly $1,000. my co-author, jonathan adler and i have written at length about how neither the aco or legislative branch provide any history. they squarely foreclosure the irs' interpretation. for the remainder of my testimony i would like to discuss the troubling picture that emerges from what little we know about how the irs developed this rule. and why we know so little about how the irs developed this rule.

the available evidence suggested that irs officials recognize that the aca did not give them the authority to impose these taxes, yet they impose these taxes anyway. treasury and they used legislation rejected by congress in order to support their theory of congressional intent and they failed to consider important dimensions of this issue. the irs' proposal to implement these taxes and subsidies in federal exchange states met immediate and sustained criticism including from some members of this committee as far back as 2011. the administrative record offers no support or substantive explanation, no statutory support, the plain meaning of the tax credit eligibility requirement that recipients must enroll in health insurance through an exchange established by the state. the administrative record contradicts arguments the

government offered before the supreme court and reveals those arguments to be post-hoc rationalizations. mr. carvin mentioned the term of art argument the solicitor general made before the supreme court. what little we know about the administrative record shows that dispositively that the irs did not believe this was a term of art. the irs attempted to hide its actions and reasoning from congressional scrutiny. according to an article in the "washington post" which interviewed several members -- several officials at the treasury department and irs who were involved in the development of this rule, one former official said, quote, the overriding concern was not generating negative news stories. the overriding concern of the officials who wrote this rule was not the law but avoiding negative news stories. the irs continues to try to avoid scrutiny. in december of 2011, the then-ranking member of the

senate finance committee, a member who's here today, senator hatch, sent a letter to the department of the treasury after the promulgation of this proposed rule and before it was finalized, disputing the legality of the rule and asking the treasury department to turn over all documents related to the development of this rule and the irs' reasoning behind this rule. the irs and the treasury department have been ignoring that request for 3 1/2 years. the irs is taxing and spending the american people's money without permission from or accountability to congress. the american people need to know how this happened and that begins with transparency. i thank you very much for your time, and i look forward to your questions. >> thank you, mr. cannon. professor grewal? >> thank you very much, mr. chairman. i suspect if the irs had shown up today, it would tell you that it tried to carefully obey its statutory authority when it issued regulations under section 36-b. i want to explain why that's nearly impossible to believe. at the outset, i'll say i don't

take any particular position on the king v. burwell issue and don't know whether obamacare is a good idea or bad idea. that's why i'm sitting here in the middle. but i do want to discuss three circumstances where other regulations under 36-b clearly contradict the legislative language. and if you think established by the state is clear, you'll think these ones are very clear, even offered a case of beer on twitter to anybody who could come up with some colorful counterargument. in the first circumstance, a statute plainly grants credits only to citizens when their income falls within a particular range. 100% to 400% of the relevant poverty line amount. irs doesn't like that result and potentially expanded credits to several million persons below the 100% amount. again, if you think established by the state is clear, a statute that refers to 100% to 400% is far clearer.

and the second circumstance is the aca has two related provisions. one provision says that if you're a large employer and you offer health insurance to your employees, we want you to automatically enroll all those employees in coverage, and the department of regulations will issue regulations saying as much. if you're going to have a plan, get everybody in there. as a sweetener to this, the persons who are enrolled won't get credits under section 36-b because they're going to be getting coverage under the employer plan. with no credits, that means there's no penalties on employers when they automatically enroll employees in their existing plan. the irs does not like that result, and it has issued a regulation saying that in some circumstances, you will actually get a credit under section 36-b even though you are getting coverage by your employer and the employer will relatedly get hit with the penalty. the third category i want to discuss relates to unlawful aliens. congress recognizes that some very low-income persons who are here lawfully can't get

medicaid. some states say, well, all right, you're not a citizen, but we'll help you, but please wait five years before you apply for medicaid. the statute section 36-b says that, okay, we'll help you out with credits on the federal -- sorry, on the state exchanges and arguably the federal exchanges. if you are here lawfully, you, yourself, can get a credit for policies purchased on an exchange. the treasury has issued a regulation saying even if you are here unlawfully and you meet the income requirements, you are eligible for a credit. the statute is very clear that says you must be here lawfully to get this benefit of this special rule. all of these three provisions may be good ideas in the abstract. i don't know. they seem reasonable on one level, but they clearly violate the relevant statutory language. in closing, i just want to emphasize that as we talk about the treasury expanding 36-b, we don't give enough attention to the fact that an expansion of

36-b means more penalties from employers. unlawful credits lead to unlawful penalty collections. the fact that the irs in expanding section 36-b is illegally collecting penalties from private businesses should receive more attention. thank you, mr. chairman. >> thank you, professor. miss wydra? >> thank you, chairman cruz, ranking member coons, and members of the subcommittee for inviting me here to testify before you today. i must take issue, i'm afraid, however, with the substantive premise of today's hearing. at least as reflected in its title which suggests that the treasury department rewrote the affordable care act when it ensured that tax credits would be available nationwide to all americans who need them. far from rewriting the statute, i would assert that the treasury department applied the aca according to its text statute design and purpose when it interpreted the act and made this rule. similarly, i must take issue,

i'm afraid, with my esteemed colleague, mr. carvin. what you just heard him describe a few moments ago is not how statutory interpretation works. how you heard him describe the affordable care act is also not how anyone involved in enacting the statute understood the law to work. republican and democratic members and staffers alike involved in drafting the law have made clear that no one understood the law to preclude tax credits for residents of states that opted to use the federal fallback provided to them in the law instead of electing to set up an exchange for themselves. to the contrary, statements by members of congress at the time and reports drafted by committees and the cbo all assumed that tax credits would be available in every state on any exchange without making a distinction between state-run, and federally facilitated exchanges. did any members of congress stand up at that time and profess the vision of the tax

credit provision that we heard mr. carvin and other critics of the treasury rule put forth? as mr. carvin had to admit when the supreme court asked him this very question? there were none. but i'd like to back up for a moment to talk about the language of the statute, itself, because i think it's important to correct what i see as some mischaracterizations. as justice scalia reiterated last year, it is a fundamental cannon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme. in other words, not plucking a forward phrase out of a statute and using it to defeat the very fundamental purpose of the entire act which in this case was to provide affordable health insurance for all americans. to help achieve this aim of broadening access to health care and insurance, the statute provides for the establishment of exchanges on which individuals can purchase quality affordable health insurance. section 1311 provides that,

"each state shall not later than january 1st, 2014, establish an american health benefit exchange." the act clarifies, however, that there is, "state flexibility in meeting this requirement." a state may elect to set up the exchange for itself or if a state chooses not to establish an exchange or cannot establish an exchange that meets the act's requirements, then hhs, according to the statute, shall establish and operate such exchange within the state. when the statute then uses the term, an exchange is established by the state in the statute, it refers to exchanges established at the state level by the state as well as exchanges established at the state level by hhs standing in the shoes of the state. now, with respect to the eligibility for tax credits allowing individuals to afford to purchase insurance on these exchanges, the act expressly presents income level as the method by which an individual is determined to be eligible or not for tax credits, not the entity which runs the health insurance exchange in that state. what about the phrase seized

upon by critics of the treasury department's rule found in the provision for calculating the amount of the tax credit from -- who purchased a policy on an exchange established by the state? well, you could pluck a forward phrase out of moby dick and say it was a story about a sunday whale watching cruise. that's not how you read a book and not how the supreme court tells us you read a statute, either. reading the law to provide tax credits nationwide on both state-run and federally facilitated exchanges allows the provisions of the aca to work harmoniously which is something the supreme court has told us clearly is something that should be a guidepost when we're reading statutes. in contrast, the reading asserted by the king challengers would deny effects to the regulatory scheme by subverting the act structure and design and basic purpose and rendering important provisions absurd. something the supreme court has told us we should avoid when reading statutes. i believe the interpretation of the law re