ps across the middle east and northern africa as well as lone wolf individuals or groups in europe and the western hemisphere? >> it's mixed, but in the main -- not entirely but in the main, what one sees is a mixture of groups that were already radicalized and are already intent upon attacking the west or attacking western interests or destabilizing things in the middle east, rebranding themselves as isil because of this seeming success it had. and then to get to the loan wolf part you see people who have had no training, no association with it, including americans, who go on the internet and find themself shave had no training, no association with it, including americans, who go on the

internet and find themself spart, you see people who have had no training, no association with it, including americans, who go on the internet and find themself s themselves enthralled because of whatever lost souls they are or because of the violence with isil and self-radicalize and unfortunately undertake to do violence. so you see that spectrum there. you do see some effort by isil, meaning isil in syria and iraq to command and control, but it's not exclusively that way. i say all this because that's very distinctly different from the al qaeda model. the al qaeda model was a very hierarchical, very clear command and control type terrorist enemy. and that meant they had discipline and it meant they could take on big things like 9/11, but it also meant that when we started to go after them they were vulnerable to attacks on the command and control structure and on their logistics structure. isil's more resilient because it is more decentralized and informal in that kind of sense.

takes a different kind of campaign. we're highly aware of that, as is law enforcement, by the way. >> thank you. i see my time has expired. thank you, mr. chair. >> i recognize senator fisher. >> thank you, senator reed. thank you gentlemen for your service and thank you general dempsey for the many years you've served the people of this country and the military families that have been under you. thank you, sir. mr. carter earlier senator rounds had a conversation with general dempsey about the act of patience and timec and i know the general has counseled parns and what role do you see time playing in our strategy? do we have a strategy on forces, on containing isil? are we going to allow them to be

able to maintain control of territory for the next three to five years? is that going to be acceptable to us? and do you see risks with that type of strategy? >> well i think we're going to continue to strike and apply pressure to isil throughout this period. we're doing it now. we do it every day. it's had some effect. and we're going to continue every single day as we did over this past weekend to defend ourselves. against isil. including these home grown people. we have to protect ourselves in the meantime. what takes the time -- and i think this is what the chairman was getting at. what takes the time, and this is just in the nature of things getting a lasting result. a lasting result is one where not only is isil defeated but

they stay defeated. in order for them to stay defeated, there has to be somebody on that territory who is keeping the peace and governing and replacing the -- isil in the territory. that takes some time. we see ourselves, we are working with the kurds to do that, we're working with sunni tribes but that's in the nature of things. we want that to go as quickly as possible and we're hastening that to the best of our ability as are the other members of the coalition. but that's the thing that takes the time to build. but in the meantime, we have to protect ourselves and keep pressure on isil. and we'll be doing that constantly. >> i agree with you on that but -- >> would you mind? i thought about this a lot. your question is really whether patience increases risk. that's really your question. and i think patience probably does increase risk to the mission somewhat because it

extends the time when other things could happen, right? but i think were we to take more responsibility directly and union unilaterally, it creates risk to our force and creates risk to other missions that we're held accountable to accomplish globally. what i get paid for is to give advice to the secretary of defense with the jcs and the president on managing risk. to your question does risk increase due to patience, of course. but the alternative increases risk in other ways, and it's our job to manage that risk. >> as you look at managing that risk and you look at balancing it how do you reach a decision where you can maintain that patience when you know that when

isil controls that territory that they have now and they continue to advance in other areas, whether it would be in the region or in russia that that is recruitment item for them that it will inspire attacks whether it's in that region or elsewhere around the world. how do you balance that and have the risk that we face in our homeland continue what i think would be continue to grow because of possibly an overabundance of patience? >> yeah, i'll keep at it because, as i said this is the issue on which the campaign turns, correctly -- or correct? what you have to be assured of is that as we manage risk, we

look at those things which could threaten u.s. persons and facilities around the globe and the homeland. and where we see risk accruing that could have threatened that national security interest, there's no hesitance for us to act unilaterally and decisively. on the other hand, this campaign is built on the premise that it relies upon other actors. that necessarily requires a degree of patience that we need to nurture, we need to reinforce and we need to understand in the context of the other things we're trying to accomplish not only in the middle east but globally. if you're suggesting that isil's threat to the homeland could increase because of this patience, i concede that risk. we take on board the responsibility to manage it. but i would also suggest to you that we would contribute

mightily to isil's message as a movement were we to confront them on the ground directly in iraq and syria. >> if we look at patience, if we look at restraint don't you think with our restraint we're in many ways encouraging the iraqis to look elsewhere and to especially look to iran and invite them into iraq where they are because they know that that iran will be there fighting a common enemy that they both face at this point? aren't we opening that door to iran with this what i kind of view as an overabundance of patience? which to me is the greatest risk. >> when you look at what we're doing, we're trying -- by the way, the government of iran has been reaching out to iran since

roughly 2004. and they have probably increased their outreach to iran, but has very little to do with what we're doing or not doing. it has everything to do with the fact that they believe their future -- it's their turn and their particular form of governance, which is not yet inclusive as it needs to be is the right form of governance. they were going to do this whether we're there or not and whatever manner we exert our influence. >> so they have boots on the ground in iraq through no action of the united states or inaction by the united states? >> i would say that the advisers that have been sent, the isr that they're flying and some of the other capabilities they've provided to the government of iraq, i would agree with you. they would have provided that whether we were there -- >> it was a question.

it wasn't a statement. >> oh, the answer is yes, they would have been there regardless of our actions. >> thank you mr. chairman. >> thank you, mr. chairman. and thank you gentlemen for the testimony today. general dempsey, i want to join my colleagues in commending you for your decades of service and secretary carter getting caught up last week. appreciate your outstanding service as well to our country. you know there's been a lot of criticism of the president when he in august 2014 and then just a couple weeks ago at the g-7 meeting talked about how we don't have a strategy yet with regard to isis. he said that in 2014. he again said it again just a couple weeks ago. but what he really has not been criticized for and i think is something that i'd like to get your view on, is each time he's talked about the lack of a strategy he's essentially kind of put it on your plate.

each time he said, well the guys at the department of defense are kind of coming up with options. still haven't gotten them yet. dod's working this. literally said that, a version of that in august of 2014 and in june of 2015. did it take the department of defense a year to come up with a strategy to defeat isis? >> i'll take that. first of all, thank you for your conversation. thank you for everything you're doing, especially with respect to our asia pacific strategy senator. very grateful for that and your travels there and your leadership. we just spoke yesterday at the pentagon with the president about his strategy. and the strategy is the one -- >> you laid out. >> i described today. >> so he can't -- >> by the way he described

eight or nine months ago. and that doesn't -- and this is important. it involves us, and we have an important role. >> right. >> but it involves other parts of the government as well. that's one of the reasons to keep laboriously citing nine lines of effort. there really are nine lines of effort. we don't directly, for example try to interdict self-radicalized americans. the fbi does that. we don't do that. but we've got to do that while we're working on these difficult problems of iraq. >> no mr. secretary, i agree 100% with that. that's why to me again it was a little bit -- and maybe you just can't answer the question directly. i wish you would. but it just goes to process here. the president has been saying for a year we don't have a strategy and that's because the guys over at dod still haven't given me one to me is, "a," not how we develop strategy, as you

just mentioned. this needs to be all instruments of american power. the military's clearly one, but we need economic, energy, finance, diplomatic. the whole list. and that, of course, has to be developed by the white house. not by the department of defense. so i don't think it took a year for the pentagon to come up with a strategy. and despite the fact that the president, each time he said we don't have a strategy, that it was essentially your fault. i don't think it was your fault. i think it was the white house's fault. i just want to be on record saying that i think that's unfair criticism to be put at the chairman or the secretary to say, we don't have a strategy yet and it's because of dod. but i guess he can now say we do have a strategy. is this the strategy? >> this is the strategy. and it is devised by the president and the white house. we play a role in it. so i did not observe any waiting

for us to come up with a strategy. >> he said it twice. >> it was first described the end of last summer. it makes perfect -- it makes common sense that our strategy has all the common parts that the nine lines of effort describe. and yesterday's meeting was to give him an update and to get his guidance on how we go forward. we did that. we happened to be at the pentagon and the focus was on two of the nine lines of effort that we're responsible for but there were other members of the national security community which is essential to this who were present and participated in that discussion. and so -- >> okay, thank you. mr. chairman, you don't have to answer this, but i don't assume it took a year for the military to come up with options for the president. but -- >> no i'm happy to answer it. because we're frequently and constantly adapting options. but the context of when he said that, he'd asked us is there

something more we need to be doing with the sunni tribes. that's the context of that question. so the real issue is whether we should be doing more with the sunni tribes. and the outcome of that conversation and planning that went into it was the takatam air base train and assist platform. >> let me turn -- i know there's been some discussion with regard to the ndaa. i think it's a good bill, very bipartisan bill. senator reid and senator mccain should be commended for the work they did. one of the things we do is bolster the credibility where the united states is seen as working, having a strategy both supported by the executive branch and the legislative branch. and some of us think that our credibility in certain areas of the world has been weak an it's been one of the weaknesses of our national security and foreign policy strategy. but we try to do that in a number of areas.

i want to provide two examples. you kind of hinted at one mr. secretary, the rebalance to the asia pacific. there's strong language in there for the support for that from the congress. very bipartisan. and how we need to be increasing troops in the asia pacific. also very much a focus that i think is an area that mr. secretary, you said we're late in the game in the arctic. you may have seen. if you haven't, i would recommend you take a look at it. "newsweek" this week talks about a cover story on the arctic. the title is actually in the race to control the arctic, the u.s. lags behind. it talks about how this is developing as the new great game. and kipling's famous phrase about a critical strategic area. how the russians are very, very involved in the arctic. mr. chairman you actually in testimony in front of this committee talked about the foreign new combat brigade, they're starting a new arctic

brigade. and they exercised in the last couple of months. and then the coast guard is saying it's a new geopolitical cold war the u.s. is in danger of losing. we're not even playing in this game at all. i just want to ask a final comment, mr. chairman. you talked about managing risks, mr. chairman. would removing our only airborne brigade, bct, in the arctic not only bct in the asia pacific what would that do to our credibility? would that bolster our credibility in the arctic or asia pacific with regard to the rebalance? and you talked about managing risk. certain he seems to me as vladimir putin is militarizing this part of world, if we're actually removing forces or moving forces are only arctic

trained forces that's a way to increase risk. because we know he views weakness as being provocative. they're making a move in the arctic. if we start withdrawing troops, the 425 in particular, i think that heightens risk. would either of you care to comment on that? >> yes. i think it increases risk, but some of the decisions -- and you're talking about the army in this case but some of the choices that the service chiefs are going to have to make as we continue to go down in terms of resources, you know, the army is tasked with going from 490,000 active where they are today to 450 in the next two year. they've got to come from someplace. >> but to put that bct on the block first to me is inviting, "a," the congress is saying, don't do it and the ndaa. but secondly, that's going to undermine our credibility not only in the arctic but undermine

the rebalance of the asia pacific. >> it sounds like you may already have some insight. >> no, i'm just trying to make sure they don't make a strategic blunder. >> we are familiar with congress telling us no on the reforms we're making not because we're trying to cut ourselves a part, but because we've got a trillion dollars, that's a t, not a b, a trillion dollars in authority. we've said from the beginning, it's a disaster. >> thank you, mr. chairman. i just do want to mention if we're looking at the ects going to the area where the congress has actually said we need to increase forces, having our only asia pacific arctic capability, which as you know general you can't develop overnight. and our only airborne capability

in the asia pacific, to me that's a blunder. sometimes they come in and have broader strategic insights than the military has on occasion not always but in my view, this time is one of them. >> oh behalf of chairman mccain, let me thank you for your at the time. and i want to thank you for your service to the nation, particularly you general dempsey as you conclude your uniformed service. and with chairman mccain's direction, i'll adjourn the hearing. thank you.

here's some of our featured programs for this weekend on the c-span networks. with the upcoming release of harper lease's new novel, c-span2's book tv focusing on the novelist. we talk about the impact of lee's book "to kill a mockingbird." her life since its publication and the events that led to the discovery and publication of her new novel. we'll we air these programs sunday evening begins at 6:30 eastern. sunday night at 10:00 hugh hewitt on hillary clinton's second run for president. on c-span saturday night starting at 8:00 eastern, commemoration of the 50th anniversary of the vietnam war with readings and remarks by

members of congress. and gop candidate carly fiorina visits with new hampshire voters. on american history tv on c-span3 saturday at 8:00 p.m. eastern on lectures in history, flagler college professor steve vogut on the actions that led to the great depression. and sunday evening at 6:30 west-selling historical novelist jeff sherra on william tecumseh sherman and why sherman is not the villain of popular legend. get the entire schedule at c-span.org. now, a discussion on a recent report examining the fiscal condition of each of the states from today's "washington journal." in is about 35 minutes. >> and we're back. here to talk about the fiscal

health of the states in this country is eileen nor.cross. she's at george mason. looking at the rankings of each states which are doing the best and which are doing the worse. let's talk about the categories you looked at o. >> we ranked the states based on our own financial reports. and we looked at the short-term and the long-term. the short-term is cash solvency. does the state have enough cash to pay short-term bills. budgetary solvency do bills match expenses. then liabilities and assets seeing where they fall there. service level solvency looks at the ratio of total taxes to total state personal income. how large are taxes, revenues and expenses to personal and state income. then trust fund insolvency.

which is breaking down their pensions and their debt relative to personal income. >> why did those five characteristics matter? >> it matters -- well, the report looks at the short-term and the long-term. the short-term's looking at, hey, can you keep the government functioning? are you looking at budgetary stress. then what are the risks going forward in terms of pension obligations and are you funding that today or it is a larger problem. >> let's take a look at the top five states. alaska north dakota south dakota, nebraska and florida are all faring the best right now. why is that? >> alaska's a little bit of an outlier. they get a lot of their revenue from oil. when oil revenues doing really well, so are alaska's revenue. north dakota also, oil-rich state. same story there. when you get to the dakotas, nebraska, these are low debt states. florida is prudently managed in terms of debt as well. these are low-debt states with

strong revenues. >> florida, to be the top five after the financial crisis and the housing market that really dragged down that state and other states like nevada, for them to now be in the top five, what have they done since the recession? >> these metrics are limited. i'm looking at 14 metrics. even a set of metrics can't give you the full picture. they've recovered a bit from the recession. revenues have rebounded. and their debt relative to other states is not as strong. you're seeing that all getting picked up in these metrics. they have a strong cash position, able to balance the budget. we only looked at fiscal 2013. they seem to have recovered a bit. >> let's look at the bottom five states. illinois, new jersey massachusetts, connecticut, new york. why? what is happening in these states that they make up the bottom five? >> these states all suffer from some of the same problems. those bottom states have very large unfunded pension liabilities. those health benefits for public

workers unfunded growing every year. some of those new jersey, illinois connecticut issued debt on top of debt to cover some of that debt, pension obligation bonds. this has been building up for a while. in 2013 they had a weak cash situation. they had to dip into assets to pay for ongoing opeg and libts. they share those characteristics. >> let's talk about new jersey. you have governors running for president in 2016. chris christie from new jersey what is he going to have to explain to potential voters about why his state is in the bottom five in dig into that a little bit more? >> again only looking at 2013, but having looked at new jersey's finances over a long period, i can say this is building for years on a pension and opeg front. those bills are coming true. new jersey and illinois are having to confront that today. some of the pension reform measures they undertook in new

jersey, they're struggling to get those implemented. i don't know that that's going to be enough. in terms of what he's doing he's inherited a problem that's been building for decades. same thing in illinois, same thing in connecticut. that did not grow overnight. >> we're talking about the fiscal health of states in this country. we want to know what the economic conditions are like in your state. here's how we've divided the line, eastern-central part of the country dial in at 202-748-mountain pacific time 202en 748-8001. you can send us a tweet or send us an e-mail journal@cspan.org. what are the issues, what are jobs like? what's the government doing to help or to hurt in your opinion. start dialing in now. we'll get to your comments and thoughts here in just a minute. is the recession that we saw back in 2008 still having an impact on some of these states? >> i think it's lingering. you're seeing the effects of

them having to make it up over time. it didn't help in the long-term abilities where they had to reduce those ongoing payments. it's a ripple effect that continues into the future. though revenues have started to rebound in most of the states. certainly not in the same position. the long-term positions, the recession didn't do them any favor. that's where you start to see the stress. >> what about liabilities, commitments that these states make medicaid spending has expanded under the affordable care act. what kind of impact is that having? >> medicaid spending is growing, not quite as maybe rapidly as some might project, but it is putting pressure on budgets. you're seeing that in these financial reports. also, you know, where they had large debts, large maybe bond issues that they're still having to deal with. you have also the unemployment insurance. that's starting to rebound a bit, too. some of those unemployment insurance trust funds. the stimulus money is gone now for the most part.

there's some lingering effect, but i think the states are you know, on a better footing than they were a few years ago. >> there's lots of talk in washington about how we need to invest in our country. the roads highways bridges are in major need of repair. sates who are trying to attract companies to their state and have jobs -- create jobs for their constituents are looking for that investment from the federal government. does that have an impact, the infrastructure of a state, does that have an impact on their bottom line? >> sure, infrastructure spending certainly puts pressure that's another area where there's a lot of debt going on. those gas taxes don't work as -- they're not bringing the revenues they need to make those repairs in infrastructure. that's a growing area of concern. how are we going to fund that? let's rething how we're funding transportation on a state and local level because the gas tax, you can't rely on it as a strong funding source. >> how are states competing with

each other? what sort of proposals do they have taxes, et cetera, that the state of texas for example will put out there so a company leaves oklahoma and comes to texas instead and how does that help their bottom line? >> this study did not look at tax structure per se but broadly of states that have tax climates that are broad based low rate that's certainly considered a sort of institutional positive. states with tax structures new jersey and other states where they have high rate of tax and it's not necessarily favorable business climate, though i stress this state really looked at the fiscal side in a narrow away rather than the overall tax climates of states. >> jim what's it like in oklahoma? what's the fiscal condition like? >> caller: it's fairly steady. do a lot better if we get rid of the main problem but i want to make a quick statement.

the five bottom states that she mentioned have had a history of being run by liberals and too much federal government, and that's the problem. the problem is we are all taxed way too much. they should be controlled by local government on the taxation on usage. we should be able to keep 100% of what we earn and the president sits there and talks about taxing the rich more. well everyone -- if this is a free country and everyone is equal, everyone should be taxed the same regardless of what you make. just taking more money from people that put themselves out there and make more is theft. it's like being at a bus stop and having everyone stand there and then deciding to take 50% of what's in your wallet. that's robbery. >> any thoughts on that? >> again, this study didn't focus on the tax side but the debt side. i think you can see this pattern. these things aren't built

overnight. it's taking a lot of debts and not paying for those debts. that's a characteristic the bottom five states share. >> i want to show our viewers the overall map of fiscal insolvency insolvency. california in the yellow, which is poor. >> it has very large pension liabilities. they have a somewhat weak cash position in 2013. they do have a sizable amount of debt there. they're not among the worst because it's a relative ranking. you also have health care obligation. these are the biggest things when you look at their liability per capita, you have the pension and the health care obligations that factor into that large debt relative to assets. and again in that year they had something of a weak cash a weak position basically balanced -- revenues about matched expenses. so that's why they rank yellow. again, it's a relative ranking. they have to fall somewhere.

>> west jefferson, north carolina, wayne. good morning to you. you're on the air. >> caller: good morning. up here in the blue ridge mountains you could basically say there was some momentum until about 12 months ago. what poor lackluster momentum there was at least there was some. but it's died out. people up here are just treading water. and they're just hanging on. it just seems like there's this social net and it's easier for about half the people up here in the mountains to not work or get very underachieving jobs so they can keep their income low enough for the government to support and provide them enough subsistence to survive. there's a good 50% of the people up here are not self-assured enough in the economy to gamble with going out and getting a full-time job and prospering.

they've lost that dream up here. >> yeah, i'm sorry. i didn't catch the first part of your question in terms of where you're calling from. >> he's from north carolina. >> okay. that's interesting. north carolina has a somewhat mixed performance in my ranking. certainly not -- in some dimensions they do pretty well. they do not do an ablenalysis of the north carolina economy. >> i had christopher, what's going on in your state? >> caller: hey, i actually deal with this on a day-to-day basis. but my nape's christopher, i'm from tallahassee, florida, i have two statements. i believe florida is going to lead the nation in health care reform. i think we have a great opportunity here. and i think we'll do that. with small steps that we will take. and you can ask your expert. we have great potential here when it comes to proift and public to be able to take care of people. but my second comment is i took

part in a stem-cell research study at the university of florida where they put stem-cells inside me -- >> i'm going to leave it there and move on to gene in indianapolis. hi, gene. >> caller: i'd like to comment on you can compare and look in the midwest from indiana to illinois and look at it on a political spectrum, look at it in terms of the stimulus and paying off unions. look at it in terms of stable conservative governor as opposed to most governors that go to jail over at illinois. you need to do studies and really get serious about how the centralized status government gives this money out for political reasons. bls and billions. and it really does the grassroots no good at all. they pay off union, buy votes and eventually they buy generations and eventually democracy is gone because everything has been socialized. >> gene, what's going on in indiana? do you like governor pence?

is he doing a good job with the state's economy? >> caller: absolutely. pence was overwhelmed by this thing which was horrible for the local economy in indianapolis. and before him, we had one of the better governors ever. it's stable. just look at it compared to illinois. and ohio had its problems too. whenever you have these governors or political parties that try to buy the vote with goodies, look at the economic situations. >> okay. all right, gene. gene's in indiana. he's talking about illinois his neighboring state of ohio, where governor kasich wants to run for president, jumping in later this month. how are those states doing? >> i'm comparing illinois with indiana in the long run. indiana has a low level of liability, low level of debt relative to assets. they're strong there. illinois by contrast has 1.4

times liabilities to assets. that gets into that pension story. illinois' dealing with a massive unfunded mention liability. a massive amount of debt that they've been accumulateing for years and that's dragging them down. indiana seems to be more prudently managed fiscally. i focused on the fiscal side. you mentioned ohio or iowa? >> ohio. >> ohio is an interesting story. they do well on some dimensions. they seem to have a strong position in the short run, but long run their pensions jump out, number seven overall in health. but i call them trust funds. that pension bill that opeg bill, ohio's liability is massive. they dropped to 48 in trust fund solvency. that unfunded pension is 56% of total in state income. you might be doing well today. but if you don't think about those bills that come due in the future, you end up in that sort

of downward spiral. you need to be issuing debt and it doesn't get better. >> let's talk about wisconsin as well. another state, another governor who is going to be announcing on monday -- scott walker -- that he'll seek the nomination for president for republicans. how was wisconsin? >> 28th overall. a mixed picture. on the pension front they take that only gagts pretty seriously although i think the numbers are a lot worse than what the states report. they come out in the best on the pension front. they have liabilities that are about average relative to assets with the rest of the nation and net asset ratio that indicates they may be dipping into assets to pay for current spending. but they're a mixed story. someone in the middle again i have to flag them as the best in managing that pension obligation. >> mississippi, robert, what's it like in mississippi, robert?

>> caller: robert, yes i'd like to ask information about the pension debt that some of these states have. isn't pension plan designed like an insurance plan where you put money in and gamble that you're going to get back when you need it and some people who don't live long enough don't get what they paid in? or is it that if somebody dies early, their descendants get the money? is that true? does she know that for sure? can she tell me? >> robert eileen norcross not an expert on pensions, per se, but go ahead. >> i can address that a little bit. you're talking about mortality risk in a pension plan. and that's something that you can't -- there's no way to manage that other than at this time's based on mortality, the likelihood of mortality of that

individual before they collect their pension. the risk in pensions stems from the accounting. they've been valued based on the expectation that the assets are going to perform really well. let's say 8% a year. they're using that figure to value that liability. congress argues you need to value that. the liability is larger. you have to put more aside today. economists are concerned about the investment risks that some of these plans are taking. that's something they can manage. the mortality side they can't manage except for making sure they've got accurate mortality tables. >> we're talking about the fiscal health in each of the states here in this country. george mason university out with a new report about what is happening in the states along with state rankings. you can find that if you go to their website mercadus.org.

eileen norcross is the director who put together this report that we're talking about. we're asking all of you to call in, weigh in on what's going on in your state, tell us what the fiscal conditions are like. joann in converse indiana. joann, good morning to you. go ahead. >> caller: good morning. >> you're on the air joann, it's okay. go ahead. >> caller: well, indiana unfortunately, we're more or less used slave laborers. you have to go through them to get a job or to even be looked at for a permanent job anywhere else. from your construction workers to your distribution centers and on. this minimum wage, entry level is the only way that they are even looking at people for

full-time positions. and that's why indiana's doing so well. these places take $2 per hour on each and every one of these people's pockets. some are in areas for more than one year. they're supposed to be placed in a permanent position somewhere within six months. this never happens. >> okay. eileen norcross do you have any thoughts there? >> i did not look at employment in this study or even the rate of employment. so i don't have any comment for that. but thank you for your comment. >> what about living wages? is that something that you look at when you look at a state's fiscal health? are a lot of debate in the states about raising the minimum wage. >> that's more on the economic side. so going forward may be something to look at in terms of balancing what's the fiscal picture and the economic picture. i did not look at that in this study. >> james, what's it like in

ohio? >> caller: well, it tends to be fairly cloudy these days. >> okay. >> caller: my comment has to do with the recent budget in ohio where they kind of fought over this, that and the other thing but the bottom line is the governor wanted to decrease the taxes on the people making more than $250,000. yet incomes to sales tax, which affects every person even the person like me on social security, and that tends to be a rather stark way of dealing with budget crisis. and i just want to get a comment on that. >> yeah, i haven't looked at ohio's tax rates income versus sales. certainly there are pros and cons to how you structure your tax system. i need to know a little bit more about how the income tax is structured and what they're

trying to do is get in more revenue brought in the base. how is that structured. are there a lot of exceptions to the sales tax? they're trying to lock at a structure that brings in more revenue. what's the behavioral effect, what's the fairness effect? i did not look at the tax structure in this study so i couldn't comment further. >> we'll go to pennsylvania. mike is next. what's it like in pennsylvania sh. >> good morning. yeah. in pennsylvania, i live in a small town, chambersburg, middle of the state. it seems to be holding its own. trying to support local merchants. i think they're doing okay. i wouldn't say it's great. but my question so eileen is do you have any idea of the long-term impact of fracking? there's a lot of fracking going on in pennsylvania. people claim it generates lots of jobs, but i'm not sure that

pence rainnsylvanians are making all the high wages. i'm worried about the long-term impact of environmental cleanup and the damage to roads that are beat up. i think everybody will be left holding the bag. i'm interested in your perception of what happened when all the fracking wells are in sustainment mode and the big jobs go away and what's left? >> as a comparison, might be useful to look at north dakota. because they're going through that right now. what we've seen in this study on the fiscal side, a wind fall for them. but that means they're also building up expenses. that level of expenses can't necessarily be supported by state personal income in the state so that's on the fiscal side, and look to north dakota. it's been a few years. and how is that unfolding there? see what those effects have been for locals and for people coming into the area.

>> bernadette is next in las cruces, new mexico. good morning to you. >> caller: good morning. my question to you ma'am, is how much of what is going on in new mexico or throughout the nation is dealing with agenda 21? we see an influx of mental illness here in new mexico. and wondering what is really happening right now? and to those people who aren't familiar with agenda 21, thing they should be. so i personally think that we need to revisit agenda 21 and put a stop to it. >> we'll move on to east st. louis, illinois. you're on the air. yep, you're on the air in east st. louis. go ahead. >> caller: how are you doing? i'm calling about illinois in particular. illinois is just going horribly. but the governor, he's trying to

do stuff now but he can't do anything because everybody is democrats and he's a republican. and now the local governments are trying to take all the money so everyone that's working for any local government industries or anything they're not getting their state checks so they can't pay their bills or anything. >> okay, all right. let's dig into illinois a bit and the pensions. that's a headline people have seen a lot. >> that's a great question. because i spent time looking at chicago this weekend is the tension now building between the state and localities. chicago has got a huge pension problem. the local governments are starting to feel the stress on their budgets. and as you know, the illinois state supreme court basically said look the constitution says you cannot impair these benefits. you can't touch them. that might also be extended to

opeg, those health care benefits. what you're seeing is the pressure mounting for state wide. they have little room left to maneuver in terms of how they're going to start paying for this. tax increases, budget cuts. even the chicago mayor was looking to the other state local -- not state pension but other local school district systems in order to figure out how he's going to deal with chicago's pension plan. you start to see that relationship get tense between springfield and the local governments. >> russ, what's it like in connecticut? >> caller: things are really tough here. we had a tough budget battle. the state tried to cut funds. no matter what they cut, there were outcries. it doesn't matter whether they tried to cut the governor's force card which has a long tradition. they cut out salutes at veterans

funerals and the veterans were up in arms about that. health care care for people who are disabled. we've had so many things. quick comment, one comment i want to make, this is a state that that pays more into the federal government than we get back, so our federal taxes are going to help other states. >> okay. russ connecticut one of the bottom five in this fiscal report put out by the mercatus university at georgetown university. >> connecticut's fiscal can't is not good. in 2013 they had a poor cash ratio, which means they didn't have a lot of cash on hand to cover short-term liabilities. in the long run, they have a long-term liability ratio of 1.26. that means they have liabilities 1.2 times larger than the assets behind them. large liability per capita. net asset ratio is negative which means they are probably

looking at debt financing pay as you go, and then we move on to the pension, the pension problem there. i calculate it's much larger than they do. i say they have an unfunded liability in their pension system of 76 billion. that represents about 75% of state income. that explains that pressure. it's building every year. they have to pay this out and they're having to find the money to do so, so no, they're not in great budgetary health. >> back to illinois. jane, good morning to you. >> caller: good morning. i'm scared to death about what's going on in illinois. i'd like to know if your study differentiates between people on pensioner dollars and what people on social security, like myself receive.

they get $6,000 $7,000 a month and social security no way pays that, so i'd like to see some figures. does your study address that? >> this study does not address that. we just looked at the annual financial report from the state and said you know how are they looking, cash, budget, long term. there are cities out there, however, that have unpacked illinois's pension plans and tried to address questions like that. people are trying to reform these systems are thinking about what are these formulas and what's been promised and how with rewe going to pay for this. >> again from illinois, good morning. >> caller: good morning. i'm an illinois state teachers pension. it's very small for me, because i worked halftime social security which i didn't get. illinois has had a problem because we've had a flat tax.

your first caller said we needed a flat tax where everybody paid the same. that's what we have had for over 40 years. 1.5% flat tax on state income. every time somebody ran on raising that income tax, their opponent would say, oh they want to raise it 100%. they want to raise it from 1.5 to 3. governor quinn finally got elected and didn't get elected from raising the tax, so flat tax doesn't work. our citizens are just as responsible for the mess we're in as our government. it's not all that cheating in government although i guess there's some. i don't know where it's at but we needed a progressive tax. and we're just getting further and further in the hole. >> i can speak to pensions. the problem that's going on across the united states, whether it is a local plan or a state plan, is the accounting

for years has been misleading. and it has implied you can set aside less today than is needed to fund that benefit in the future. in the case of illinois connecticut, new jersey, massachusetts, kacalifornia, these states issued bonds to make that payment. in the case of new jersey they skip a payment and issue a bond. when you're skipping on those pension payments you're basically saying look, i'm only going to pay a fraction of my credit card and then i'm going to open up another one to cover it. they're dealing with that now. tomorrow is now today and they're facing that mounting bill for how they decided to fund these systems, so the accounting is misleading across the board. it's led to this gimmickry in those few states. they're finding themselves really having to dig out now. >> columbus, ohio linda. hi there linda. welcome to the conversation. >> caller: thank you. two points.

one, you already know. almost everybody talks about nobody can afford -- the working poor cannot afford the premiums for obamacare so they go with no insurance. those are people in my family. two, what people do not know -- i'm from ohio. that's governor kasich. he has brought in "my care." it is privatization of medicare and medicaid and will progress to social security that you've heard also. these companies don't pay for riders on time in a push to agencies for care. and then so they give raises to the agency and cut pay or don't pay on time independents. you want independents because

you want to know who's coming into your house and their address and their phone number. they're in your house. you want to know who they are. you can't with an agency, and if you have any questions, i'd be happy to answer. >> eileen norcross. >> i don't study the medicaid issue that closely, but thank you for your comment. i don't have anything to add to that. >> medicaid spending to go back to that which you were talking about, that's an issue for some these staidtes, the expansion of medicaid. >> that's right. it's going to put some pressure on the budget going forward. it's going to grow a little bit each year. medicaid is growing as a portion of overall state budgets. it's one of their biggest areas, so i think that pressure is going to continue. maybe if you compare other areas of spending that's one of them, of course. it may not be a dominant one, but it's going to grow. >> ken in dale city california.

go ahead. >> caller: number one, this woman has an agenda to destroy requirement retirement plans. we're carrying the baggage for the rest of the country. this is a big state and there's a lot of money here so i don't know what this agenda is to try and destroy retirement plans. if we didn't offshore all the jobs, if we had living wages people would make more money, they'd be able to put more money into those funds. >> okay. eileen norcross. >> i don't want to destroy pension plans. i think it's tragic what's happened in the accounting. again, the accounting has been misleading. if you assume these high investment returns, it gives the illusion that investment risk is going to pay for the plan. on top of that, they don't make

that annual payment regularly. we've seen in situations like new jersey and illinois they skip over it. no, i think the state should be making good on these promises. >> got to leave it there. thank you for your time. >> thank you. conservative pollster and author of "the selfie vote" on the trends in technology, the millennial generation, and on how politicians are vying for this voting block. >> technology has changed so that now if you walk into a room, not just of 20-year-olds, but of 60-year-olds what are they looking at? they're looking at their phones. for those who want to reach into the future, understand what the future of political advertising is going to look like, things like candy crush or whatever the

latest thing is -- candy crush may be fading in popularity but there's also something new popping up. >> sunday night at 8:00 eastern and pacific on c-span's qa. this week on first ladies, influence and image, we learn about lecretia garfield. she was an educated woman and a believer in humans rights. when her husband was assassinate assassinated, she returned to ohio and ensured his legacy. chester arthur, a widower, becomes president and his wife establishes white house social etiquette used by future first ladies for decades.

this sunday night at 8:00 p.m. eastern on "first ladies, influence and image." examining their influence on the presidency, from martha washington to michelle obama on c-span 3. tonight, on c-span 3, a hearing on cost overruns and delays in the construction of a new u.s. embassy in kabul. then host of npr's prairie home companion discuss the future of television technology. a government accountability office report has found that construction of a new u.s. embassy in kabul afghanistan, has gone 27% overbudget.

gao and state department officials testified about the project at a house oversight committee hearing. republican jason chaffetz chairs this three and a half hour hearing. >> committee on oversight and government reform will come to order. i appreciate you being here as we have a hearing today regarding the construction costs and delays of the united states embassy in kabul, afghanistan. the chair is authorized to declare a recess at any time. i appreciate you being here. this is an important topic. we have so many americans who

have given their lives in afghanistan, who have sacrificed away from their families to serve the united states of america and our interests there. we have a duty and a obligation to make sure that they are well housed, that they are safe, that they are secure, that they're able to do their jobs and their duty. and yet after more than a decade of fighting and great work by our united states military, we are deeply concerned about what the state department is doing or hasn't done in kabul to make sure that our embassy facility there is in proper order. the state department has invested or plans to invest more than $2.17 billion in facilities. it probably makes it the single most expensive facility that we have around the globe. and if not the most expensive, certainly one of the most expense expensive expensive. is there a threat? yes, there is a threat there.

it is a very dangerous place. is it safe? no, it is not safe there. did we hire the right contractors to put in place to make this happen? evidently not. we've had to readjust contracts. we've had to dismiss some people along the way. the budget that was projected has gone up more than 27%. is this project in kabul on time? no, it's not. it was supposed to be open last year. now it looks like 2017. is there a strategic plan? no according to the gao, there is not. are there standards in place? no there are not according to the gao. is this security plan for temp temporary facilities in place? no there is not. after more than a decade, this seems to be a fiasco. it is a mess. did we learn what we were supposed to learn when we were in iraq? evidently not. keeping americans safe who work in the foreign service in kabul afghanistan is a constant

challenge. just last week, taliban militants attacked the nato convoy just 500 yards from the united states embassy in kabul. there's an article in "the washington post" dated july 7th saying a suicide bomber rammed a car in an armored vehicle on tuesday. the second such attack against coalition troops in a week. the attacks come a week after militants targeted a coalition convoy killing two afghan civilians and wounding nearly 30. the week before militants stormed the afghan parliament in kabul in broad daylight in what appears to be a coordinated attack. these incidents make clear that we have to ensure that the men and women in these environments are safe. but after an investigation by the gao, are they safe?

no, they're not and that's not acceptable. due to the mismanagement by the state department however, it is not happening in kabul. as a result american diplomatic staff in afghanistan are being exposed to unnecessary danger. last july the government accountability office reviewed the construction of the kabul embassy facility and found the state department failed to acknowledge known risks. these risks include awarding a contractor work before the site was secured. changes in the number of staff at the complex and changes in the design of the building and security requirements. temporary facilities don't even have a security plan at this point. as a result of these failures construction would take more time, cost more money, leaving embassy staff less secure in temporary facilities. we would lay these out in even greater specifity but we would not want to give the enemy an

attack plan, but there are vulnerabilities and we have to address those. once again, the review identified a number of significant but preventable problems. the lack of planning by the state department resulted in cost overruns and delays. construction is now projected to come in at least 27% overbudget and more than three years behind schedule. part of the project was originally expected to cost $625 million. now it is projected to cost $792 million. the state department is continuing to negotiate with its contractor, so the current cost overruns could become empven larger. one of these factors is the department failing to follow its own director to have strategic facilities plan. a strategic facilities plan outlines how a particular facility will be used.

it is critical for facilities like kabul where there's a high turnover in personnel. one of the things highlighted in the gao report is there is constantly turnover in new personnel. so because the state department's poor planning in the u.s. of temporary facilities where americans must live and work, they will continue indefinitely in kabul. in fact, amazingly the state department recently requested and additional $124 million for temporary facilities. it is unclear why the state didn't do a better job planning for permanent or secure buildings which resulted in the waste of taxpayer dollars. it appears at least to me, that the effort to move toward temporary facilities is a way to get around some of the requirements that need to go

into good and better planning. the state has no standards for temporary facilities. the state department's own actions in kabul make it clear how critical such standards are. in its fiscal year state expressed to concerns to congress. as the gao pointed out, quote, the only secure protection measure specified in the contract was shatter-resistant window film, end quote. that's it. little film on the windows. i'm not expert, but i don't care shatter-resistant windows can stop a bullet, a grenade, an rpg, and yet we ask our americans to live in this high-threat environment. this means that employees were safer working 24 hours a day

rather than returning to their housing where they should be able to rest, relax, and be safe. when there are no standards or guidance, americans are unsafe. $2 billion and you're still requesting temporary facilities with no standards, no protection. we did not learn the lessons in iraq and that is a crying shame. we look forward to having this hearing and hearing the answers and responses of that but now i would like to recognize the ranking member, mr. cummings, for five minutes. >> thank you, mr. chairman, as i listened to your statement i sat here and said to myself, we're better than that. we're better than this. listening to your answers to the questions that you presented i think there's a lot to be discussed here this morning.

so i'm glad that you're holding this very important hearing on u.s. embassy in afghanistan. i'd like to make three main points that i think we all can agree on. first and foremost, the safety of united states personnel serving overseas is a top national security priority and it's critical to our country's interests around the entire world. second, we recognize that the urgency of rapidly securing u.s. facilities abroad may cost more for faster results. however, cutting corners may have the opposite effect and careful, very careful stewardship of taxpayer funds is critical to maximizing the protection of u.s. personnel because any dollar wasted is a dollar that cannot be used to protect our personnel abroad. kabul is one of the most

dangerous places on the face of the earth. the state department ranks it as one of the most high threat, high risk locations for united states personnel. the men and women who serve our country in afghanistan recognize these risks, and it is our job to honor their service by taking all appropriate steps to provide secure facilities for their work. in 2008 and 2009 the united states rapidly increased the number of personnel in afghanistan to meet our nation's military and foreign policy goals. first, under the bush administration and then under the obama administration. this and i quote search, end of quote required facilities for united states troops and civilian personnel, including those working side by side in

reconstruction. both republicans and democrats supported this. for example, senate services committee chairman john mccain argued that it was vitally needed in afghanistan and that delays would put american lives at risk. this dramatic increase in personnel created a difficult challenge for state department officials planning for facility and security requirements. on one hand they had to increase united states footprint on the ground in a safe and secure way. on the other hand, they did not want to repeat the same mistakes that were made in iraq. when the united states compound became a massive expensive fortress, even as u.s. presidents subsided. according to the government

accountability office, which has an official testifying hear today, and i quote, the dynamic and unpredictable operating environment of afghanistan has produced changing facility needs that have continually outpaced existing existing capeabilityies at the posts, end of quote. a department official will explain the effects of this rush to accommodate the surge. the state did not fully follow its cost and risk policies in part of the facility needs. despite in you areurgency, gao also found that the state department could have and should have man planned better. could have and should have but didn't. the state department contributed

to construction delays and cost increases by failing to follow its own risk assessment and planning policies. there's something awfully wrong with that picture. gao also found that the department's original contracts did not include adequate security measures for temporary facilities. this led to inconsistent security measures, more contract modifications, increased costs and further delays according to gao. finally, mr. chairman i want to thank you for agreeing to my request to invite -- here today. the people we hire and train to protect our facilities are just as important to our security as the walls we build. this company provides security at our facilities in afghanistan under a contract that is scheduled to run through 2017 at

a projected cost of $723 million. in october 2014, the state department's office of inspector general issued a report with some very troubling findings. egis lacked required documentation showing that its personnel underwent mandatory investigations and training. egis billed the government for more than $8 million in questionable costs, including through the use of prohibited invoices. i am curious to learn what has egis learned about billing and what personnel they have in place considering they're

getting $723 million of hard-earned taxpayer dollars. the ig also found that egis held the passports of third country nationals longer than necessary, raising concerns about the company's compliance with regulations about trafficking in persons. that is of great concern to me. in the past, our committee has investigated the actions of private security contracts in iraq where we witnessed shocking fraud and abuse. the current ig report does not include findings of nearly the same magnitude but these are important areas that we would like egis to explain and explain thoroughly. we understand that some of these issues may have been addressed and we thank them for being here today. our goal is to make sure that we carry forward our past

oversights to make sure those lessons have, in fact, have been learned and anything that needed to be corrected was corrected or is being corrected. i thank you again for this hearing. >> i hold the record open for five legislative days. will now recognize our panel of witnesses. we're pleased to welcome mr. michael courts, director of international affairs and trade at the united states government accountability office. appreciate the work you and your staff do. we're pleased to have lydia muniz. we appreciate you coming before our committee again. the honorable gregory starr assistant secretary of the diplomatic bureau. we appreciate your participation here today.

mr. blanc. the honorable donald hays senior inspector at the office of inspector general. and mr. michael gulino. welcome all. witnesses are to be sworn before they testify, so if you will please rise and raise your right hands. do you solemnly swear and affirm that the testimony you're about to give will be the truth, the whole truth, and nothing but the truth? thank you. please be seated. let the record reflect that all witnesses answered in the affirmative. we appreciate if you would limit your testimony to five minutes. your entire written record will be made part of the record. with that, we would like to begin with mr. courts. you're recognized for five

minutes. >> good morning, mr. chairman. this testimony is based on a gao report dealing with a subject that we issued in may of this year. this work is part of a series of gao engagements to review the state's efforts to manage construction and the efficiency and other aspects of its operations overseas. gao was asked to testify this morning. the primary message of my testimony this morning is that costs have risen and schedules have been extended significantly for two construction contracts that the state awarded in 2009 and 2010 and further cost increases are likely.

it lacks specific security standards for facilities. further state's lack of facility planning has led to coordination challenges and could lead to further problems. my first point is that costs for the two construction contracts have increased by about 27% from about 625 to almost $793 million. the projected completion of these projects has been delayed by over three years and is now slated for the fall of 2015. state didn't follow its own policies. when these risks, such as delays in the sequencing of the two contracts, materialized, it led to increased costs and extended schedules. my second point is that state

has billed over $100 million in temporary buildings, that it has no security standards that are specifically specifically tailored to these type of facilities. state applied alternative security measures that resulted in differing levels of security for temporary offices and housing. the state took corrective action that increased cost and extended schedules. the post current facility needs include changes in the security situation and new capabilities that will be required as a result of the draw down of the

u.s. military there. while stake holders within state are working to identify and prioritize facility needs their efforts lack a facilities plans approach. in summary pursuing multiyear construction on a multioperational facility compound in a dangerous environment such as afghanistan presents distinct challenges and considerable risk. addressing the challenges gao has identified should be a high priority. mr. chairman and ranking member cummings, this concludes my prepared remarks. >> thank you. ms. muniz. am i pronouncing that right?

>> close enough. chairman chaffetz i appreciate the opportunity to appear before you today to discuss the state department's construction projects in kabul afghanistan. from the beginning the goal has been to deliver secure facilities in those working in afghanistan. use in 2005, obo completed a new office buildings, three new residential buildings, and support facilities to support the needs of the facility. obo awarded two contracts to provide additional capacity. the projects included additional classified and unclassified office buildings, residential and support facilities as well as security and infrastructure

upgrades. they provided nonpermanent facilities. the total project budget was $881 million. in spite of fluid conditions in managing a construction project i'm pleased to report that the unclassified annex will be completed this month. in october 2016 the classified annex will be completed and the following october will see the delivery of the final two residential facilities with 432 units. when completed, the embassy compound will have the capacity for nearly 1500 desks and over 800 residential units.

these accomplishments will continue to be achieved. these include the termination of the fiscal year 2009 contract and the fiscal 2010 contract. an increase in scope. additional security requirements as the security situation in afghanistan deteriorated. modifications to the old chancery building to make it more functional for posts in the short term. and the closure of the pakistani border from november 2011 to july 2012 temporarily eliminating the project's most direct ground shipping route.

the gao report on afghanistan suggested that the costs and schedule that the project increased. while these are important tools i reject the notion that more thorough assessments would have an impact on the kabul project. the material changes and challenges to the projects were not known and could not have been anticipated at the time of development and award of the projects. cost increases and delays were unavoidable. the gao report also suggests that the kabul project was not appropriately planned for the mission's needs. i also reject this notion. the kabul project was planned, designed, and awarded to provide the office and residential facilities as well as all necessary support and infrastructure required at that time. afghanistan is a fluid environment and differs markedly

from normal operations. periodic reviews during and after the project are essential to ensure that the mission's evolving needs are addressed. afghanistan construction is critical to the state department's mission. with every day and with every decision, we do our best to deliver a platform that enables staff to perform their duties safely and securely and we'll continue this effort until our work in kabul is complete. i look forward to answering your questions. >> mr. starr, you're now recognized for five minutes. >> good morning. thank you for your invitation to appear today to discuss security and construction developments of the u.s. embassy in kabul afghanistan. our efforts in afghanistan and our determination to support the afghan government are the highest importance to the

department and to the administration. i, along with my colleagues at the department of state, look forward to working with you to examine the issues. our national interests sometimes require us to operate in very dangerous places. we identify the risks. we take deliberate and prudent steps to mitigate them. the department has made important strides in that regard. i personally discussed, plan, and strategize with my counterpart on at least a weekly basis, usually more than that. we plan with a wide array of department interlocktures at the mission in kabul. however, we can never foresee and mitigate all the potential

pit pitfalls in an environment like afghanistan. insurgents have employed a wide variety and range of attacks including suicide bombings assassination attempts kidnappings, and complex attacks. just last week there was an attack near our compound and like past attacks, our security facilities and measures performed as they should and continue to protect our people. in addition to operating in a challenging security environment, we have our supply route impeded and closed for extended period of times without notice. it slowed our ability to get materials to the site, but we ultimately found alternate routes and our mission never ceased. embassy kabul is not just a construction site. it is one of the largest functions embassy in the world

with a large number of director and high contractor personnel, which requires a significant amount of support. although we have experienced periods of elevated an targeted violence, which has halted all movements, we have resumed movements and we continue to build. when my colleague at the office of the inspector general has brought issues to our attention, we have made changes in short order to ensure mistakes are not prolonged or duplicated. we have learned lessons due to the thorough inspection of the gao and the aig -- ig reports. our facilities have proven time and time again they can withstand the most complex attacks. building facilities in this environment is not easy, and it

is certainly not without risks delays and unforeseen circumstances and costs. due to a fluid and evolving security environment we must evolve and adapt to the conditions and circumstances that are presented to us. we work constantly to improve our practices and protect our people. we continue to reevaluate and at times, despite the inherent setbacks it may cause, we must chart new courses in order to advance the bigger picture of completing the mission to secure our people. as i will close, i will say that i am confident and pleased that despite the unforeseen challenges and setbacks department personnel in kabul are better prepared and better secured today. i want to thank congress for the resources that you have provided over the years to strengthen and reenforce this vitally important

diplomatic platform. as the assistant secretary for diplomatic security, i work every day with my colleagues in the department of state to ensure a safe environment for the people. thank you. i will glad to answer any of the questions that you may have. >> mr. blanc you're recognized for five minutes. >> thank you for the opportunity to appear before you today to discuss the future of mission afghanistan with my colleagues lydia muniz and greg starr. please allow me to begin once again by thanking the members of the committee for your continued support for our mission. i would like to particularly honor the dedication of thousands of american military personnel, diplomats, and assistance professionals who have served and continue to serve in afghanistan. we began our mission in late

2001 to ensure that the country would never be used by al qaeda or extremists as a haven to launch attacks against the united states. since 2001, our goal has been to foster the development of an afghanistan that is sovereign unified, democratic, and self-sufficient. in short, the development of afghanistan as -- we cannot achieve this without smart diplomacy. afghanistan is undeniably a dangerous place. when we ask our people to go into harm's way we do so because their work is vital to our national security and we are all of us obligated to provide

them with the resources they need to do their job safely and well. unction we will continue to make improvements to adapt to a political, security, and planning environment. ongoing security upgrades will create an embassy compound that is designed to minimize threats and sustain u.s. diplomacy. in keeping with president obama's plan for a phase drawn down of u.s. military forces to an embassy-based presence, we'll have life support services that will increase our flexibility and self-sufficiency.

we're bringing satellite locations closer to the main compound. installing advanced early warning technologies. we continue to work with our afghan partners to assess emerge emerging threats and develop effective prevention strategies. of course, none of these measures is perfect. while we constantly examine our security method,sss, i want -- we will continue to scrutinize the environment in afghanistan to seize opportunities to improve security where possible. surging our civilian staff to support the military footprint and now drawing down to a smaller and more sustainable level. to be effective, the business of diplomacy must be conducted in

person. the reporting they provide is vital to an agency that determines long-term u.s. strategy. they build relationships with afghanistan's current and future leaders make sure u.s. policymakers are informed and positions are heard. this work is critical to our efforts to fight al qaeda assist the afghan government against their insurgency, and bolster security and stability of the afghan state. since september 11 2001 we have made significant progress. u.s. diplomacy has helped the afghan government build an national army and police forces to provide opportunity for millions of afghans. we have seen the country make great strides. but many challenges remain. institutions must be further

strengthening to give the government further legitimatecylegitimacy. afghanistan's ability to provide a security apparatus must be bolstered in the face of persistent threats in order to remain a partner. fostering afghanistan's development is the only sustainable way to address u.s. security concerns in the region and it will require continuing assistance. at the same time, we will continue to find ways to address the real risks our team in afghanistan faces. thank you very much, and i'm happy to answer questions. >> thank you. mr. hays, you're now recognized for five minutes. >> thank you for inviting me to testify on behalf of the office of the inspector general for the department of state. my testimony will focus on the construction projects and related security issues of the

embassy in kabul. the embassy is a fortified compound composed of two adjacent campuses near the city. they total 36 acres and are a mix of structures and a construction site. the department leases several residences outside the embassy walls to provide adequate setback for enhanced security for those sections of the wall. at the time of our inspection, over 1,000 employees were stationed in afghanistan. due to the massive construction underway the embassy compound employees were forced to weave their way to get to work. a number of agencies were still in temporary facilities awaiting completion of their new offices.

we had 21 inspectors conducting over 600 interviews and reviewing hundreds of documents and 70 oversight reviews. when we arrived, the security situation was deteriorating in and around kabul necessitating additional security projects. the team found the bureau of diplomatic security was engaged in constructing a number of building projects both in and off embassy compound. during our inspection it spent $1.35 billion betweenphysial physphysial fiscal years 2002 and 2013. these projects include the expansion of warehouse marine security guard quarters, construction to housing facilities, and other projects in kabul outside the embassy

including the completion of contract guard sleeping quarters and other warehouse facilities. the need for security enhancement to the exterior wall was first identified and funded by ds in 2009. ds considered these enhancements urgent given the embassy's location, the middle of kabul. large buildings adjacent to the compound were a growing security threat. the team made classified recommendations with regard to security enhancements. necessary security enhancements, temporary housing were similarly characterized as urgent and founded by ds in 2011. approximately 70% of the 800 u.s. government employees and contract workers living on the u.s. compound were housed in temporary containerized housing units called shoes at the time of the inspection. most of these lacked adequate

overhead and side protection. during the course of the on site inspection, both embassy senior management team expressed concern over lack of progress to the exterior wall and temporary housing. they were not initiated despite serious implication of not completing them. based on interviews this issue caused considerable friction between ds and oboe at the time. definitely ds wishing that the expeditiously completed these projects while oboe wanted it to finish after it met design and construction standards. in response oboe's project manager explained there was a

lack of progress due to a number of factors, including the number of projects underway and equipment on the compound. as a result the contractor stated it was required to phase in projects to work efficiently and safely. the desire there was no way to carry out these enhancements until current construction projects were completed. washington raised concerns about the apparent inability of ds and oboe to work together in cankabul. the team met with oboe and the assistant secretary on several occasions. they stated they would work together to address these situations. oboe would work with ds to

address current security projects. on following the meeting, the undersecretary assured the team that high-level meetings would be conducted to eliminate outstanding issues and to proceed with the recommendations on security enhancements. in our classified report we recommend oboe coordinate with ds in the embassy to develop and execute a master plan of all ongoing projects. thank you. >> thank you. could you repeat that last -- the last two sentences there that you said. >> in our classified report, under the section titled "construction project management" we recommended that oboe coordinate with ds and the embassy to execute a master plan for all ongoing and planned projects, including those funded by ds and to date their

recommendation remains open and is a serious concern. >> i didn't hear that last part and i appreciate you repeating it. >> thank you for the invitation and opportunity to present testimony before this committee today. i am pleased to represent egis and all of our employees worldwide on this matter. egis is a u.s. company based in mcclain virginia. we provide security and risk management whose focus is to support necessary for our clients so they can undertake their missions in a complex and high threat operational environments. we handle everything from protective security to the

facilities that house canines. our team of dedicated professionals include employees from 47 of the 50 united states as well as four national employees from nepal and afghanistan. beginning in 2012 under task order 10 to our worldwide protective services program which i'll refer to as wps agents works in close concert with the department of state to meet all operational and contractual requirements. the department of state office of inspector general initiated an audit. the audit covered the start-up period of the contract. mr. chairman, ranking member cummings, we fully acknowledge

there was some administrative and logistic issues in the early part of that contract. since that time and well before the issuance of the report we have worked to address and correct these logistical issues. this includes thorough documentation for recordkeeping accurate time card and billing administration. the report also raised concern that passports did not post trafficking in persons which we call tips. i want to ensure the committee that egis maintains vigilant human rights and tips compliance programs. we have werefined our programs to make sure employees are aware at

all times where their passport is and the status of it. tips posters are displayed in english and nepali in prominent locations throughout the embassy site where they work. egis has worked closely with the department of state and the dod and the international private security committee to establish private security contractor standards. it's what i called a super charged quality management system that ensures compliance and professional management of security contractors with an emphasis on vigilant protection of human rights. i'm proud to report that egis was the first u.s. security company to earn its security certification. this is obtained through a vigorous external and complete independent audit of our system

in mcclain as well as on the ground in afghanistan. our employees and representatives abide by the egis code of conduct, which is based upon our cornerstone core value of integrity and commitment to respect responsibility diversity, and inclusion. we also maintain stringent anti-corruption and whistle-blowing policies as well as a policy of zero tolerance for retaliation. in conclusion, i'd like to thank the committee for the opportunity to participate in this discussion and to thank the department of state for the opportunity to support its critical operations in afghanistan. mr. chairman, i'm proud of all the egis men and women. >> thank you. i'll now recognize myself for five minutes.

ms. muniz, you joined o eded obo in 2009, correct? >> yes that's right. >> and then you became the director in 2011? >> i believe that's right. >> my understanding is you went to the ribbon-cutting there in kabul in 2010. >> i believe it was a ground breaking. >> ground breaking. since you've been the director, have you been back to afghanistan? >> no, not since i've been director. >> this is our biggest project in the world, correct? >> one of our biggest. >> what's bigger than this, cost wise? >> i would say there are several that are on this scale, including islamabad? >> you think that's going to be in excess of $2 billion? >> no. that won't be in excess of $2 billion. >> is there embassy complex that's going to be bigger than

this? this is 2.17 billion. >> we have a number of high level and critical projects in the department. kabul, baghdad consulates in lahore, krachi. i have been to all of those places. >> we'll have you come back to talk about mexico. i would like you to spend more time. you were the in mexico city but some of the consulates in tomalipes. we'll come back to that. is there a strategic facilities plan for the kabul em ba si construction? >> i'm very glad you asked about the strategic facilities plan. it's important to note that the policy that the gao referred to which had been suspended applied not at all to the type of

project that is kabul effectively. i would like to highlight the fact that you mentioned this was adopted in the '90s and was just recently suspended. it was repealed because the process had been superceded by an improved process. but in the time in which it was in place only 16 of these facilities master plans have been done. let pe go first to quote what they do and explain why kabul wasn't an appropriate place in which to do this sort of facilities plan. then i can talk about the type of plans we did do. the long range facilities program will be directed at posts not covered in the regular are capital or security capital programs. the long range facility program is intended to provide a clear definition to post requirements such that stake holderers and decision makerers have the relevant data prior to making decisions to fund and execute projects. the decision based on the growth

and staff and growing needs in kabul, we hadder already paed the decision to invest in growth in kabul. the long-range facilities plan was a tool developed to address those posts with nagging infrastructure and deferred maintenance needs that were never making it to our program list. back to the question of whether planning was conducted which is a valid question. at the time we developed the scoper for the embassy kabul compound, a kpre hen he sieve plan was done as a stand alone facility. assuming a continued d.o.d. presence until modifications or draw-downs were made to that presence. so it was master planned. ta plan was designed and is currently being executed. things get messy when you are

working on an occupied compound around hundreds of temporary facilities where you are squeezing the construction project in amongst those. but, yes a master plan was conducted. it was developed. it was designed. it's being built. there are ongoing reviews of what needs be done in that environment. because in the six years since the the. what are new needs in the situation that's continually evolving. we started with a master plan and we'll make modifications until we have the right combination of facilities and security features in place in kabul. >> i appreciate that lengthy answer. i beg indulgence from my colleagues as we start to ask

questions. is that masterer plan something you can provide to this committee? >> yes. the reason i pause is that this aster plan is made up of many documents which sort of look at all -- >> no doubt there are many documents. all i'm asking for is the original plan and the updated plan. because to hear you say it there is no problems. to hear mr. courts and mr. hayes you are spending hundred huhs of millions of dollars in addition to what was origin fally planned. you are three years behind schedule. we have people living this temporary facilities that aren't secure. let me read part of this page 16 of this gaoer report. between 2009 and 2010 contracts states should have conducteded four cost containment studies and six rain/snow mix risk assessments. for the 2009 contract -- didn't conduct either type of

assessment. in your written statement you wrote i reject the notion that more thorough cost of risk assessments would have had a material impact on the cost or schedule of the project. i would argue there would have been further delaying of permanent facilities. you said cost increases and project delays weren't voibl. you said the gao has suggested that the kabul project wasn't appropriate planned to take into account the mission needs and the maximum account possible. we are left begging. who should we believe? they don't have an agenda gao. you have an inspeck tor general. they both cite a host of problems. look at how mr. hayes concluded his assessment. you can't get the d.s. people if the same room with the folks.

i will go to page 17. diplomatic security is interested office. this relates to the cost containment studies. according to the attendee list no one participated in the meetings related and officials we speak with indicated they were not aware of the study and the security recommendations. we can't even get diplomatic security to be part of the discussion in one of the most dangerous places on the face of the planet makes no sense to us. in isolation you're saying we don't need to do better planning. we have a great facilities plan. i have two independent groups that looked as this over the course of a year saying you're wrong, that there is a problem. we in congress are look at funding this to the tune of more than $2 billion. you're coming in late. we have people that aren't

secure secure. we have always known afg is dangerous are. it has been dangerous and will continue to be dangerous. it's a fortress of cement. it's a very difficult thing. we have people sacrificing for this country. they are living in a hooch that's substandard and not secure. i have gone past pi time. i struggle to figurer out since you became the deputy director why you think things are going better. every metric i'm looking at is worse in this particular case. every one. name one thing that's going better in afg since you began. >> i guess what i would say is the way you have constructed the sentence is complicated. let me be very clear about this. kabul and afghanistan are are

complex, involving environments. the security situation is deteriorated. the numbers of desks have gone up. the movement and post needs in and around an ongoing construction project have continued to evolve. those projects were awarded since i have been there. i have watched the team work tirelessly with colleagues if dip lolomatic security to do the best they can. >> the security isn't even in the meetings. >> and keep the project moving forward. >> i think the engineering study is a valid point. diplomatic security was invited. there were no diplomatic security items added to the value engineering list. >> that's the point of having

them in the meeting is to get their perspective in a high risk assessment. we have been therer for more than a decade. i want to give mr. courts and mr. hayes an opportunity to offer perspective. then i need to allow others to answer questions. >> i would first acknowledge that kabul is a challenging environment. there is no way to limb naught all risk especially in a place like afg. that's why adequate cost containment and risk assessment is so important in a place like that. where the impact of the cost and skenl skenl is greater when problems are en countered. if state followed its own policies earlier. for example, part of the 2009 contract it probably could have better managed risk. it may not have limb mated all the risk but might have better managed some of it. it would have given a chance to develop mitigation strategies prior to soliciting the 2010

contract. when they did a risk assessment and cost containment study for the 2010 contract they identified risks, some of which came to pass. one was a problem with the sequencing. another was the site my colleague mentioned. there were a mub of things that were not unpredictable. state did predict the problems. >> both findings of the report and gao mirror each other. we were concerned about the lack of the plan that projected into the future. we are concerned about the security of our people and the compound. when we came back we raised the issues. there was tension