and west virginia understands this better than anybody. because this state is home to the highest rate of overdose deaths in the nation. now, addiction is not new. but since 1999, sales of powerful prescription pain medications have skyrocketed by 300%. in 2012, 259 million prescriptions were written for these drugs, which is more than enough to give every american adult their own bottle of pills. and as their use has increased, so has the misuse. some folks are prescribed these medications medications for good reason, but become addicted because they're so powerful. at the same time, we've seen a

dramatic rise in the use of heroin, which belongs to the same class as painkillers, opiods. in fact, four in five heroin users, new heroin users, started out by misusing prescription drugs. then they switched to heroin, so, this really is a gateway drug, the prescription drugs, become a gateway to heroin. between 2002 and 2013, the number of heroin related deaths in america nearly quadrupled, although the number of heroin overdoses is still far exceeded by the number of legal prescription drug overdoses. so, this crisis is taking lives. it's destroying families. it's shattering communities all across the country. that's the thing about substance abuse. i doesn't discriminate.

it touches everybody. from celebrities to college students to soccer moms to inner city kids. white, black, hispanic, young, old, rich, poor. urban, suburban, men and women. it can happen to a coal miner, a construction worker. a cop, who's taken a painkiller for a work related injury. it could happen to the doctor who writes him the prescription. now, one of the problems we have is too many families suffer in silence. feeling like they were the only ones struggling to help a loved one. and let's face it, there's still fear and shame and stigma that too often surrounds substance abuse and often prevents people from seeking the help they deserve. because you know, when people

loosely throw around words like junkie, nobody wants to be labeled in that way. and part of our goal here i think is to replace those words with words like father. or daughter or son or friend. or sister. because then, you understand there's a human element behind this. this could happen to any of us in any of our families. what if we replace a word like junkie with recovery coaches and specialists like jordan. we can't fight this epidemic without eliminating stigma. that's one of the reasons why i'm so proud of michael, who's the first person in the job of dealing with drugs in america, who actually knows what it's like to recover from an addiction. he shares his own story as a way to encourage others. to get the help they need before it's too late.

i'm proud there's some elected officials in this state who have told their stories about what's happened in their family and to themselves in order for us to start lowering those attitudes that keep people from getting help. i've made this a priority for my administration. we're not new to this. in 2010, we released our first drug control strategy. we followed that up in 2011 with a prescription drug abuse prevention plan. we're implementing those plans, partnering with communities to prevent drug use, reduce overdose deaths, help people get treatment and under the affordable care act, more health plans have to cover substance abuse disorders. the budget i sent congress would invest in things like tate overdose prevention programs, preparing more first responders to save lives and expanding

medication assists treatment programs, so, we have to make those investments rather than spending billions of dollar, taxpayer dollars on prison sentences for nonviolent drug offende offenders, we could save money and get better outcomes by getting treatment to those who need it. and we could use some of the savings to make sure law enforcement has the resources to go after the hardened criminals who are bringing hard drugs like heroin into our country. so, with no other disease do we expect people to wait until they're in a danger of themselves or others to self-diagnose and seek treatment. got a broken leg, diabetes, some sort of sickness, we understand that we got to get you help. and we also understand when it

comes to other diseases that if we don't give you help and let you suffer by yourself, then others could get sick. well, this is an illness and we got to treat it as such. we've got to change our mind set. it's one of the reasons the dea declared a national prescription drug take back day, a day when americans can safely and conveniently dispose of expired and unwanted prescription drugs in their communities because most young people who begin prescription drugs don't buy them in some dark alley. they get them from mom or dad's medicine cabinet and today, we're also announcing new actions. first, we're ensuring that federal agencies train federal health care providers who prescribe open yoids, there's a common sense idea you're implementing here, congress should follow that lead and make

this a national priority. second, and we're talking joe and i were talking on the flight over here. there is evidence that shows that medicated assists treatment if done properly in combination with behavioral therapy with counseling and 12 step programs, can work, it can be an effective strategy to support recovery, but it can't just been replacing one drug with another. it's got to be part of a package. so, we're going to identify any barriers to, that still exist that are keeping us from creating more of these treatment facilities. and incorporating them into our federal programs. private sector partners are helping out to help fight this epidemic as well. i want to give them some credit. more than 40 medical groups from the american medical association, american dental association, are committing to

concrete actions and we need to obviously work with the medical community because they're the front lines on prescribing this stuff and so, there's got to be a sense of responsibility and ownership and accountability there. we've got to expand prescriber training. increasing the use of nelaxo? i want to make sure i'm pronouncing that right. this is something that if first responders have it, can often save quickly the lives of somebody who is having an overdose. so, we want to make sure that first responders have a supply of this. we want to make sure that we're getting more physicians certified to provide medication assisted treatment. we then have broadcasters like cbs that are providing air time for education and awareness and groups like the nba have committed to running public

service announcements about drug abuse. that's just an example about some of the private sector partnerships we're forging here. the point is, i'm going to end with this. we've all got a role to play. because of young people like jordan, they remind us, these are our kids. it's not somebody else's kids. it's our kids. it's not somebody else's neighborhood. it's our neighborhood. and they deserve every chance. we've got to make sure that we're doing right by them. we're taking this seriously and the goal today is to shine a spotlight on this, all of us committed, whether we are a faith leader, elected official, law enforcement, whether we're a private citizen. a business, we've all got a role to play. you understand that here in west virginia. we want to make sure the whole country understands how urgent this problem is. so, with that, i'm going to turn it over to our moderator. michael. all right.

>> good afternoon, everybodiful thank you for being here today. i want to thank jordan for his really stirring comments. i think it really exemp fis for us the challenges we have, but also the success and hope that comes with recovery. we're here in west virginia today to highlight the issue, not just because of the impact it's had on west virginia. but the impact it's had across the country. but also west virginia's working together to implement strategies to really deal with this addiction and we're proud to be here to help support that. the president always gives me a lot of credit for talking openly and honestly about my recovery, but candidly, i'm one of millions of americans in recovery today and my story's not unique. maybe this part is a little unique, but i'm one of millions of americans who have been restored by getting good care

and treatment and i know the president wants what jordan and i got and that is a second chance to be restored to productive members of our communities and to give back with what we've so freely been given, so thank you, sir. with that today, we have a great panel of people who are really going to help provide us with information and insights about what more we can do on the federal level. i'm really proud to be a colleague of secretary burwell and secretary, i'm going to start, you can feel free to say anything you would like, however. i know you know, we're here in your home state of west virginia. i know we have talked, you've been personally impacted by this. but you've also made this a key priority for your agencies. maybe you could talk about your experience and what hhs is doing to deal with this issue. >> absolutely. first, i always love coming home. it's great to be home and it's

great to welcome the president to the great state of west virginiament when i became secretary, that was a priority because it is something i have personally experienced. everybody i'm sure in this room knows people personally. friends that lost to the addiction and what happens in terms of their children, their family, the community? and what you experience personally. i think that is what energizes you to act and at the department, what we focused on over the last year, figuring out an evidence based strategy. we want to get ruls and change the kind of things people have experienced personally. three things. one is changing prescribing practices. president said that 259 million, that can't be right and so, how do we work on that? second is working on medication assisted treatment. getting people the access we talked about today, being so important to people. and third is that access to naloxen. look at our colleagues in law enforcement because they're usually the front line and making sure that when something goes wrong in terms of overdose, that we can prevent those deaths

that are so impact nd this state. so, those are the three things. we're here to listen today. thank you. >> you're a mom. of a son who is struggling with in treatment now, unfortunately in prison. but you've turned your struggles into advocacy and action. you provide support for many, many parents here and around the country. for loved ones dealing with this. what has your experience been? what advice do you give parents or what advice would you give us as federal folks about how we can support parents in this battle? >> well, i think initially, i want to thank president obama for coming here today to support this cause for our community. substance abuse has, it's become an epidemic and i thank you for coming here first and foremost and i want to share just

briefly, i have been charged with being a representative for families around our area and actually, around the nation who struggle with this. if i can just share some comments that we families have in common. and then i will -- >> take your time. >> okay, thank you. >> we want to hear from you. >> i spoke this morning to a good friend of mine who was just call iing me to wish me well toy and to say, encourage me in this endeavor. and this friend of mine lost her daughter two and a half years ago to drugs and so, i don't take this charge of being here lightly. i realize that i'm here to represent families and i am grateful for that opportunity. i do want to say that as i'm speaking to you, i'm sharing my story, but i'm sharing the stories of so many other family members that are in this

community and in the nation that have this issue. and this also, it's important to know, you know, for the sake of time, i've really tried to make this concise. but this is tip of the iceberg of what families experience and endure when they love someone and care so much about someone with an addiction. we raise our children in loving homes. we teach them morals and values. the difference between right and wrong. we wonder what is happening when the grades start slipping ch when things that used to be enjoyable for our loved ones no longer interest them. we're confused as to the cause of the personality changes we see in our loved ones. we're shocked when we hear of that first dui and we're fearful when our loved ones are taken to jail for the first time. we are embarrassed when holidays approach and family members are coming in from out of town and

our leadooved ones can't intera because they're under the influence of drugs. we dread the next phone call. we can't sleep because we haven't received a phone call. we don't take vacations for fear of the next crisis. we come back from vacations because there's a crisis. we're sad and angry when valuable, but most importantly, sent mental items are missing from our home. only to find out that they're at a pawnshop or in the hands of drug dealers. we're relieved when our loved ones acknowledge they have a serious problem and understand they need help. and then we're devastateded when we help them seek treatment only to find out that there is a month long waiting list or that there's no insurance coverage or that there's a big requirement for money up front for treatment. we are sad an uncomfortable when

acquaintance ask us about aur loved ones and about every other member of our family and don't mention our loved ones. we neglect our marriages, we neglect other children in our home who are thriving becausefn all of our attention is focused on addiction. we disagree endlessly about the right way to handle this problem and after experiencing years of turmoil, we rest better when our loved ones are incarcerated because the place you never even dreamed your loved one would see is safer than them being on the street, interacting with drug dealers or pushing a needing into their arm. the ones of us who are fortunate, we lay awake at night and plans our loved one's funerals in our mind. the ones of us who aren't

actually do plan the funerals in reality of our loved ones. and this is where addiction has taken us. this is where substance abuse has taken us. now, all that being said, there is hope and that's probably the most important thing to remember here. we're so grateful to recovery point and matt and people in recovery that are helping others. we're grateful to our mayor, the mayor of huntington, steve williams, who is so tirelessly and endlessly spearheaded programs to help our community recover. don purdue, who has made it possible for people to receive treatment in our facilities. i think education is important. and i was fortunate enough to find a group called the loved ones group, developed by a man named ed hughes. it's a seven-week series that helps provide education and

information and support for family members or those who care about someone with an addiction. the final week of this program, we get to speak to people in recovery. they come and speak to our group of people there. and it inspires us because we know that recovery is possible and that it can happen. you know, for too long, we've been silent and i think this is going to answer your question. as parents and family members because the stigma of this disease and the shame we feel, we've been silent. and i think that is holding us back. we need to open our voices. so that people don't feel ashamed. this is a disease. it is sickness. but education, educating ourselves as much we can as family members and speaking out to raise awareness is critical in helping this situation. i'm almost finished. people in 12-step recovery groups and different groups rely

on a higher power. i'm a person of faith. and my faith has helped me navigate this journey that we've been on and i just want to share with you a verse that i hol dear for my own family member, who is sick, but i also offer it to others. jeremiah 29:11. for i know the plans i have for you declares the lord. plans to prosper you and not to harm you. plans to give you hope and a future. and i believe that every person in the throes of addiction and the disease of substance abuse, needs hope and a future and i believe this for their families as well. thank you so much.

>> thanks so much for sharing your story. obviously touched everybody here in terms of not only your struggle linging, but the hole on the other side. we will continue to work with parents as we deal with this epidemic. dr. michael, you have been involved this this work for many years. you're here at the local levels, we'd like to hear your experience, challenges in dealing with this issue. >> certainly. and thank you very much. welcome to west virginia, mr. president and welcome home, secretary burwell. i've been on the job only 79 days here in charleston. i came back home after being 29 years away and i knew what i was coming into when i came home. i knew there was a heroin abuse epidemic in this state. i knew we had the highest rates of hepatitis b and second highest of c, mostly due to needle sharing among addicts.

i also knew that mountaineers would take this kind of challenge head on. that's the kind of people there are in this state of west virginia. and so, i wanted to be part of this solution here in the state. with the help of so many community partners and my good friend and colleague at cavel huntington health department, dr. mike, wefr been able to get some programs off the ground working together and i think we're move ng the right direction. in about six week, we're going to begin our own harm reduction program here in charleston. we're going to have -- part of that will be testing for hepatitis b and c, hiv. we don't want to become another scott county, indiana, where they had an outbreak of hiv, almost 200 cases in a small rural community. we'd like to offer contra

acceptives to prevent neo natal as well. and more than anything else, what i think we'd like to do is to treat the people who come through our doors for this program with dignity and respect and the kind of love they deserve because the ultimate disease underlying every addiction from my per speck sieve is disconnection and alienation from themselves and everybody else around them. two weekends ago, i began working with west virginia university resernlers on a program of mindful -- with addicts in recovery. based off of pioneering work done at the university of washington. and one of the more pleasant surprises i've seen since i've been here is the close connection between public health and public safety. our law enforcement community has been outstanding and we've been really privileged to work with them. finally, i was able to also sit

together with delegate dr. chris stancebury to sponsor legislation. he's going to sponsor legislation to make neloxan an over the counter medication, the way it is in 14 other states. and then as you've said, mr. president, this is a multifaceted issue. it requires a lot of different people to come together to fix this. it's not a quick fix. it requires a collaborative approach with public health, mental health, schools and cool nurses. law enforcement, our own judiciary committee and our business and industry because jobs provide not only an income, they provide a sense of purpose and mean ng the lives of people. and so, i'm hoping that by the end of your visit today, mr. president, that you'll be impressed with some of the things that are going on in how much west virginians are dig gig

in to try to address this issue. thank you. >> thank you, doctor talked about the importance of public health and safety collaboration, so love to hear your thoughts and what you're doing here. >> thank the president of the united states for making this the focus. also provide me an opportunity to represent charleston and all of law enforcement effectively. i think this is where most people probably look at the person in uniform and say this is the guy that's going to tell us we need to wild more jails and walls. that's not me. if we -- this is such an epidemic and we cannot arrest our way out of this mess. what the president said earlier is true because our, we want to rest the violent drug dealers

that are creating havoc in our communities. we have our share of violent crime and we are very fortunate, our drug task force, we have a great far they are ship. they fund so many of our efforts and so on a daily basis, the bad guy gets arrested. we made a significant seizure yesterday. we really attack the supply side of this issue very well, so we're not going to back down and we're going to keep trying to remove people that are dangerous from society. what's nice about this and what i want to talk about though is the attacking as a strategy, the demand side and that's what i think is really very nice about this panel and this gathering because we've got a lot of things we can really talk about. we basically have a community of zombies, for lack of a bet r

word. they need treatment badly. they're comeing up, some don't want help yes, but at some point, they do and we want to get them help. and a couple of the strategies we've worked on, we want to attack the demand side, not so much the supply in this conversation, is that we have trained our officers in naloxen. that's been up until recently, manager our fire department and they do more of the, they can do the nasal and the iv. we trained all of our officer, regardless of their assignment, to be able to save somebody's life, administer the naz nasal and the rescue breathing mask. when interestingly though, when i went to the roll calls and started starting about this to offers, nirs, you're of like that might be more of a fire department role. more, but as we talked more and

i went county the line and saz has anybody have anybody affected by an addiction? and i've yet to go to one role call, i've been to numerous, where someone has said no. yes, my sister. my aunt. my -- and so, that's one, we just got them out into our cars in the last week, so we don't have any success stories and we don't want to have any stories, really. we want them to all be positive p, but we know the fire department will continue to administer most. but we want to be in a position to save a life, much like a child drowning and we can administer cpr. another thing we're doing is working with the united states attorney, the lead program, the law enforcement assisted diversion program and basically, since 2014, we've had 39 would be, call them low level users, that were selling drugs to support their habits. and basically, they're hit with

a stark decision at the arrest gate. you have an opportunity to go to jail or you can seek immediate treatment. and of the 39 people that have taken us up on that since 2014, just one has been rearrested. i think that's -- i think that's pretty impressive. and that's a partnership with the u.s. attorney's office and something that i think our officers are understanding what kind of problem we have and i would just say finally, because we do support everything the doctor and the health department is doing with his harm reduction plan and how we factor into shah with the needle change program. but finally, we have a handle with care program we piloted in 2013. one school on the west side and a second school and now, we do it for the wholety. i've seen smiles in the crowd because there's teachers in here.

what we've realized has been lost when police officers go to crime scenes, what are they there for? to take witness statements. arrest so-called bad guy, then leave. but who is looking out for the children? the collateral damage, the child trying to do his homework, mom and dad are fighting. we come in, arrest dad, mom cries, she's got to go to the hospital. and so that child gets left behind many, many times. we started a notification system to where the next day, our officers that were on the scene will send a notification to the principal or counselor saying handle that child with care today. maybe they need an extra day before -- so those are ways that we realize that we're not going to rest our way out of this. we have our place. we have our place and we could always use additional law enforcement resources. i'm not going to lie to you. but we're all in this together and it's affecting all of us. >> thank you, chief.

>> thank you, chief, i think that's an extraordinary example of your wlingness and partnersh partnership. going to turn to susan from the charleston gazette, who is going to ask questions of the panel that come from the community. >> thank you for coming to west virginia, mr. president, secretary and secretary, the rest of the panel. to address chronic issue of opiad addiction. the charleston gazette has done numerous stories about this issue facing west virginia and we were able to solis it hundreds of questions from our readers over the last five days for the president and the panel. and with us here is david and kate rob with their question for the president.

>> first of all, mom, kerri, there isn't a parent here who had a dry eye when you spoke. from your heart. you expressed exactly what we feel. and danny knows this, too. mr. president, i want to say, i'm going take this opportunity, it is wonderful to have an intelligent, caring, thoughtful person in your position. >> thank you. gl thank you so much for coming. this issue, my wife and i, we have five daughters. mr. president, you might relate a little bit to that. gl i can relate to that. i don't know how you did five. two keeps me busy. gl and we live here in the east end. my second older daughter,

jessica, has been battling heroin addiction for seven years. ironically, the last time we were in this room was when our daughter was in the eighth grade here at rioosevelt and was a cheerleader. she made good grades, socially involved, her future was bright, but as jordan mentioned, her life got put on hold for a long time. last month, middle of august, our daughter overdosed. we found her in her bedroom. tourniquet on her arm, sir nlg next to her. she was turning blue. my wife administered cpr. we called 911 while we were waiting, i held her and said, don't leave us yet. fortunately, i want to say this to the chief. the response was amazing.

less than five minutes. the emts and the police officers were there. the police officers were sympathetic. they were helpful. the emts administering nackant coupled with the cpr saved our daughter's life and she is now in recovery. this is her fourth time. it usually, it usually takes more than one time. and we think this one will be the one. we are full of hope. but we understand the pain. the pain in this room, the pain that families feel. the concern we have is access. where do you get the treatment? how do you get the treatment and you, kerri, you mentioned it. as soon as this overdose happened, we called hot lines and we got numbers to call and we called those numbers and they said, well, there's a three-month wait or well, we don't take medicaid cards or this wasn't the facility that

could handle your type of problem. the other problem is you can't always go out of state. what if the facility is across the river. we're a border state. we need to be able to have that ability to go to the facility that may be best for our children. the bottom line is we need resources. and we need to find a way to put those resources into effect. so that we have the facilities because there are so many people that want help like our daughter. but it took forever to find a place for her. right now, she's in michigan. that was the best we could do. why can't we have lots of these types of facilities with trained staff here in west virginia? close to home. and lastly, i want to say one of the best provisions of the affordable care act is that it does require coverage for drug treatment and thank you for

that. but one of the concerns is that if there aren't facilities available, then the treatment coverage can be a loose rat, so we have to close that gap. and i think the biggest issue there is are you concerned as sometimes we get concerned given the current political climate tharks the affordable care act will be weakened or repealed? either before the end of your term or in the next term, what are your feelings about your commitment to that program and to the drug rehabilitation part of that program? >> first of all, as with kerri, i just want to thank you and your wife for sharing your story. and you're right. if you are a parent, then listening to kerri or you, you can relate. i -- i told somebody one of my

favorite sayings i ever heard about having children is it's like having your heart walking around outside of your body. all you care about is making sure they're okay. but they're so vulnerable outside and you're just as a parent, always navigating just trying to figure out how do i make sure they're going to be okay. and when something like this4;v happens, and i think it's something that you sharing your story, kerri and you sharing your story, sir, really emphasizes, this is happening in families everywhere with great parents who love their kids. obviously, there are a lot of kids who are in less stable homes and are more vulnerable, but the way this kind of

phenomenon is penetrating all communities means that we have to understand that there's no us and they here. there's no us and them. this is all of us in every skal school, every community and every neighborhood and it could be your child. so, the, i think the first thing to do and this conversation's been so helpful. is to understand that this is an american problem. that cuts across dproup groups and political affiliations. because once we understand that, then i think we're in a position to deal with it together. as opposed to turning it into another political football. that's point number one. point number two.

one of my goals when i came into office was for us to restore a sense of balance when it came to deal i dealing with drugs. and this was true for illegal drugs, but true for legal, but overprescribed drugs. for a long time, our goal has been to deal with the supply side. and as the chief said, we're very aggressive. i promise you, there's no backing off. us trying to make sure that some mexican heroin cartel is not getting heroin into west virginia or some place else in this country. we've got a lot of terrific agents and border patrols and officials, we have ramped up aggressively. under my -- in our addiction effort, so we don't tstop that.

if there's somebody mick making hundreds of millions of dollars off the destruction of our kids, we're going to go after them. we don't apologize for that. but we were underinvesting and even with the changes we made continue to underinvest in the demand side and the prevention and the treatment that is so necessary and this is a real opportunity. it's an important moment for us because if we can start thinking intelligently about treatment on the opoids and prescription drug sides we should have treatment when it comes to heroin and maybe they start thinking well, we should have treatment when it comes to other narcotics and

drugs that are affecting and devastating families and potentially in different ways. but for a long time, i think treatment was seen as a second class citizen to intervention and arrest and incarceration, and that mind set needs to change. the good news is we're seeing that mind set changing and it is on a bipartisan basis. which i think is really interesting. to go back because i want to make sure that people understand, we're putting an end to the old politics on this. democrats and republicans were both responsible for wanting to look tough on the war on drugs. and ramping up incarceration. it wasn't just one side or another. and now, both at the same time are realizing you know what? what are we doing here? why is it that we're willing to invest $20,000 a year in incarcerating a young person when we might have spent a few thousand dollars on the front end to avoid them going to prison in the first place.

and that mind set means that resources hopefully will start channelling in a new direction. but we got to make sure that the money is following the insight. i think we're at the stage now where people are starting to realize we need more treatment, but the budgets are not yet reflective of that awareness. and that's going to require congress, so, in our budget for example, we're proposing an additional $133 million for inhansed treatment and prevention programs. but it's also going to involve states, state legislatures, counties, local governments, all also recognizing this is something every community needs and we can't be stigmatizing this. having a treatment facility is just like having a health clinic

for any other illness because it's affecting people just as much and we know how to do this when we do it smartly. think about smoking. and i can say this as an exsmoker who is still chews on nicorette, which is okay, it's expensive, but i can afford it. better not start. if you look at how drastically we've been able to reduce the smoking rates despite the fact we never outlawed smoking, but what we did was we just enhanced education, made it more difficult for kids to access it, stopped peddling it, stopped advertising it. took some of the money out of it and over time, a public health model had a drastic impact on smoking and nicorette is,

nicotine is as addictive as any of the drugs we're talking about, so, if we can do it on that, there's no reason we can't do it here as well, but it requires a change in mind set and additional money. last point i'll make on the insurance side. you were absolutely right that insurance coverage is not enough if there's no treatment center for you to apply that insurance. so, we're going to have the build and fund and support more treatment centers locally. on the other hand, if there is a treatment center, you don't have energy, jou might have to mortgage your house and i'm proud of the fact that a affordable care act, obamacare, which did all right, i won't get on a soap box here, but there's

17 million people who have health insurance who didn't have it and by the way, our overall costs for health care have been at the going up at the slowest rate in mi lif time. after we passed the law, so it's not bankrupting the government, not bankrupting the state. but one of the things that, one of the things it does is requires private insurance, that's sold on the marketplace, subsy dice diazed, have to provide coverage for substance abuse programs and given the prevalence of what's happening to our children and to our schools, the notion that we would not have our insurance policies cover this, they're going to cover a broken leg. but they're not going to cover a situation where your child might die? that doesn't make any sense. and so, i think that we're

trying to nudge that along through the marketplaces. but i think one of the things we need to do is to have consumer groups and medical associations and others really push more to say this is something vital and everybody should have coverage because you don't know if it's going to be your child and that's the most important point here. candy or kerri, you know, is carrying a particular burden and i was most touched when she talked about her other children. but i thought about malia and sasha. it's not, they're wonderful girls, but they're teenagers. they do some things. and i remember me being a teenager. and i've written about this. i did some stuff.

and i've been very honest about it. and so, what i think about is therefore but for the grace of god. and that's one we have to remember and when we do, i think we've got a chance to make a real change, but thaing for sharing your story. >> this was from natalie liberty who is a principal at ruth line elementary school and she says as the principal of an elementary school, i see the harm being done to kids born addicted or living traumatic chaotic drug environment. many of the kids have any number of learning behavioral problems among entering preschool and kindergarten. how can the community ensbeer during the early years when brain growth stimuli is most critical? thank you. >> well, i'll make sure to get the doctor involved in this one

as well. and i know that others through hhs were working on this a lot. i'll just make two quick comments. number one, we know that you learn more between the time you're born and 3 years old than you will ever learn the rest of your life. you are a sponge at that age. and so, the more we can invest in early childhood education, prenatal education for parents. home visitation, with at risk moms. and we know who they are. if you're poor, teenage single mom, who maybe doesn't have a lot of support, then you are just much more likely to not know how to express the love you have for your child effectively, even if you love them just as much. you just don't have the tools,

so, that is got to be an emphasis at the state and local levels. that's where we can really make a difference. but us being able to target at risk parents, new parents, young parents, that can be extraordinarily helpful. the second thing that i'll just say and then maybe doctor, you might want to chime in on this. and here, i'm going to be a little controversial, but i'm in my last term -- it's not like my poll numbers -- i figure i can say it. i think one of the benefits of conversation like this is to highlight the fact that income and race make a difference. here.

you know, the truth of the matter is that poor communities are more vulnerable. vulnerable. one of the useful things about this forum is we're all vulnerable, but it's almost like if you're healthy and you get sick, you have more anti-bodies and resistance, and if your body is already weakened and you get sick, you're more vulnerable. there are some communities that we know are more vulnerable, and the kids there are more vulnerable. and part of what i hope this discussion does is to remind us that just as it could be malia or sasha or kaca carrie's kids y

of our kids, those kids who don't always look like us, they're just as precious and their parents are -- [ applause ] and their parents are much less equipped than you, sir, or i would be in terms of dealing with this stuff. and we've got to get them help too, so i think the doctor earlier talked about the importance of jobs and economic development and broad-based approaches so that growth helps everybody. there is some connection to substance abuse and the vulnerabilities that communities have, and we've got -- and let's face it. part of the reason west virginia probably has more cases partly has to do with the economics

that have been taking place in some of these communities, which is why it's so important for us to also push on that front as well. but doctor, any thoughts on that question about the vulnerability of children and how we can get to them quicker more effectively? >> yes, mr. president. one of the things i'm hoping to kick off next week is a discussion probably about one of the most important studies people have never heard of. the baseline study was done with 17,000 at kaiser permenante in southern california. everybody has a score from 0 to 10. the higher you are on that scale, the more likely you are to have problems with addiction with iv drug use, with smoking, with obesity, with all the public health problems we're really seeing right now.

i think a trauma informed community is the first step in addressing why people are using drugs in the first place. mr. president, you're absolutely right. what happens in those early years and reaching out to those families that are risk is really the first step, i think, in truncating this. if we don't, what we're going to be doing 25, 30 years from now is having the same discussion about why these kids are abusing drugs, obese, and so on and so forth, and so i think that is really important to have that open discussion about that because it happens in good families as well as in families who are disadvantaged. but i agree with you. it happens probably more often in families that are disadvantaged and it perpetuates the cycle of poverty as well. >> for those of us who are more advantaged, the disadvantaged communities create the markets that then seep into the more advantaged communities, right?

so the reason we have a fire department is because if your neighbor's house is burning down, you don't want to just leave it to the neighbor to figure out whether or not he can afford to put out the fire. you have an interest in making sure that fire gets put out before it burns your house. well, the same is true with drugs. that child who's poor, you may think, well, i don't have to worry about that kid. it's not my kid. my kid's going to be okay. but if you start seeing more and more kids who are more and more involved in the drug trade, over time that migrates into every community and that's part of the reason why we've got to care about every kid out here and make sure they're vulnerable. >> if i can add on to that

issue, handle with care is about to go statewide. the handle with care program will fix some of those issues. i know we're talking about addiction and others born with addiction. handle with care may not fix that, but it will at least alert the proper authorities that a child is struggling because of some trauma or substance abuse in the home. >> i think it is a really smart program. before i came down, i really hadn't heard about that and i would like to see us advertise this more across the country and adopt this as a best practices. [ applause ] >> i want to thank everyone for coming today, and i want to particularly thank our incredible panel here in sharing their experience, but i think also giving us some ideas and your innovation can really help

spur replication around the country, so i really want to thank you for doing that. for closing comments, i would ask the president to say a few things. >> i've been talking too much. i want to say three things. one is we were just talking about the handle with care program and the gentleman here talked about his daughter's life's being saved by emt and police officers on the spot. our law enforcement officers sometimes get a lot of attention when something bad happens. they don't get enough attention every single day when they're out there saving lives, doing the right thing, looking out for people. and when i talk to law enforcement, there is an incredible sense of compassion and empathy. most folks aren't in there just

to try to be hard nosed. most of time they're just trying to help folks, so number one they deserve our thanks. but number two the more we're supporting innovative policing that isn't just thinking my job is to clean up a mess after it happens, but rather i'm part of the community and i need to be part of preventing crime and stuff from happening in the first place, i think we have to encourage that mind-set in a lot of law enforcement. i'm really proud of them, so they deserve some applause for that. [ applause ] second thing i want to emphasize, we live in a time where our politics gets so polarized. we've got talk radio and we've got the internet. it seems like every year sort of

the rhetoric ratchets up about how this party is destroying this country or those folks are unpatriotic or they're evil or what have you. and i am deeply encouraged by the fact that on this issue we're seeing bipartisanship and we haven't seen some of that rhetoric. and i hope that that continues because that's how we'll solve this problem. the elected officials who are here, they represent i think that best tradition, and i just want to commend them for that because that's how we'll be able to get stuff done at the congressional level and at the state and local levels as well. finally, i want to once again thank carrie and the parents we heard from here. you know, we are just so grateful that you're willing to share your story. it'll save lives, and we want

you to know you're in our thoughts and prayers. we want to just give you all the encouragement in the world, but just as importantly or more importantly we want to give your children encouragement because they've got great parents. these things could happen to any of us, but we want them to know we love them and are looking out for them as well. all right? thank you, everybody. [ applause ] all right. you were great. >> thank you. [ applause ] ♪

c-span has your best access to congress with live coverage from capitol hill. in the closing months of the year, the house and senate have several key items to address. on thursday, it's the vote for the next speaker of the house. >> i've shown my colleagues what i think success looks like, what i think it takes to unify and lead, and how my family commitments come first. i have left this decision in their hands, and should they agree with these requests, then i am happy and i am willing to get to work. >> that's all the deadline for a highway funding bill impacting roads, bridges, and mass transit projects across the country.

in early november, the nation will reach its debt limit and in december temporary government funding will expire with a possible government shutdown on the horizon. stay with c-span for live coverage of congress on tv on the radio, and online at c-sp c-span.org. this is house speaker john boehner's last week in congress. he retires friday. his fellow ohio members just finished paying tribute to him on house floor. representative paul ryan of wisconsin receiving support from various caucuses within the republican party. he's the frontrunner. representative daniel webster of florida is also running. tomorrow the house will meet behind closed doors to choose their candidate and the full house will vote on thursday at 9:00 a.m. follow our coverage for the speaker's race on the c-span networks or online at c-span.org. the government oversight reform

committee issued a final motion to impeach the irs commissioner john koskinen. in a tweet he said moments ago we filed papers to impeach irs commissioner koskinen, destruction of evidence, and false statements under oath among the charges. this happens after earlier this week the department of justice decided not to file charges against lois lerner. and the motion today comes after the commissioner's appearance before a committee. the senate finance committee heard from him earlier today and this hearing is about two hours. >> the committee will come to order and i want to welcome everyone to this morning's hearing. in may 2013, the treasury inspector general for tax administration revealed in the run-up to the 2012 and 2010

elections the irs targeted certain organizations with extra and undue scrutiny. needless to say, we take this matter very seriously. indeed at the time both republicans and democrats condemned the agency's actions. and as the senate committee with exclusive legislative and oversight jurisdiction over the irs, the finance committee launched a bipartisan investigation into the matter. on august 5th of this year after more than two years of investigation, we released a 375-page bipartisan investigative committee report that included approximately 4700 pages of exhibits. this report is, i believe, the definitive record of what occurred at the irs and why. as we all know, last week the department of justice stated publicly that they would not be pressing criminal charges with

regard to these events at the irs. this has led some to argue that the justice department is corrupt or biassed in some way. i believe the committee's report speaks for itself on this matter and in my opinion, rather than fueling the echo chamber, we would do better to focus on what we know actually happened and what changes need to take place to make sure it doesn't happen again. that's why we're here today. the committee's report included 10 major findings that formed the basis of various recommendations for changes we believe the agency should make to ensure the irs' actions remain above board. the purpose of today's hearing is to hear directly from the irs about their response to our report. toward that end, i want to thank commissioner koskinen for being here today and for the agency's thoughtful response to our recommendations. in that response, the irs

indicated that they have implemented all of the bipartisan recommendations from the report that are within the agency's control as well as a strike that majority and minority recommendations. our overall goal here should be to restore the creditability of the irs. while i want to commend the irs for the efforts they have made thus far, it is my understanding that up to now most of the changes they've made have been procedural in nature and very little has been done to begin work on the needed structural changes at the agency. today i hope to hear more details as to why these types of changes are being delayed. at the same time, i believe the finance committee should consider statutory changes. for example, there was bipartisan agreement on the report in the need to update the hatch act to ensure with regard to political activities irs employees receive the same

considerations as employees of other highly sensitive agencies like the federal election commission and the federal bureau of investigation. in addition as the majority views and the report noted and as i have stated publicly on multiple occasions, i have serious concern about the influence of labor union active at the irs. while i am not anti-union and why i do not oppose collective bargaining in general, we know 2/3 of irs workers are represented by an union organization that is very politically active and that a fair number of irs employees work full-time for the benefit of that union. i don't think it's much of a stretch to argue that such a strong union presence could have contributed to a politicized argument at irs. generally with agencies that have important law enforcement obligations or perform other

highly sensitive work. while i expect there to be some resistance to this idea, i think it is only reasonable that we take the time to consider whether the irs should be placed in a similar category. i hope today we can have a good discussion and get commissioner koskinen's views on these and other legislative proposals. ultimately the theme i want to stress most today is accountability. our report clearly shows that political targeting at the irs resulted from a number of bad decisions made by a number of different officials. however, as of yet very few of these individuals have been held accountable while others have since received bonuses and promotions. i am more concerned that the irs lacks the necessary structural and procedural mechanisms to ensure as an agency it remains accountable. the recommendations we included in our report were designed to provide this type of accountability. and i look forward to discussing our ideas in more detail today.

before i conclude, i just want to briefly comment on the ongoing effort at the irs regarding the political activities of 501c organizations. this is an issue that deeply concerns a number of people throughout the country, including members of this committee. as we know regulations proposed in 2013 were criticized by people and organizations across the political spectrum and were subsequently withdrawn. that proposal would have created nonsensical rules and dubious speech restrictions. oddly enough it would have created stricter standards for 501c organizations that exist for public charities, which would be a perverse reversal of roles for these types of organizations. i think it's fair to say that agencies still carries with it a

cloud of perceived political bias. therefore i would caution mr. koskinen and others in the administration that have made this regulation a priority to focus instead on actions to restore the irs's creditability than to abandon any effort to inject more rules and restrictions into the political process. i expect that members of the committee will want to discuss this matter today as well as once again it is an issue that is on the minds of many people. with that, i'll turn to our distinguished co-chairman, senator wyden for his opening remarks. >> thank you very much, mr. chairman. in early august, the finance committee released the final report on the bipartisan inquiry we undertook to examine the irs' processing of applications for tax exempt status. our investigation looked back at the period between 2010 and 2013. the committee reviewed 1.5 million pages of e-mails and

documents and conducted interviews with more than 30 irs officials. the finance committee inquiry colleagues was the only bipartisan inquiry on either side of capitol hill. what we found on a bipartisan basis was alarming bureaucratic dysfunction. many applicants for tax exempt status were treated badly. for example, between 2010 and late 2011 a total of 290 applications for tax exempt status had been set aside for review. only two applications had been resolved successfully. not 200. two. that was unacceptable mismanagement. the investigation, however, did not find any evidence of criminal wrongdoing.

chairman hatch and i both took time to speak about our views on the senate floor when the report was issued. the focus of today's hearing, however, is what the irs is doing to guarantee once and for all that this type of deeply troubling mismanagement never happens again. the finance committee's report included 36 recommendations. 18 were bipartisan. 12 were democratic. 6 were republican. among them set minimum training standards for managers in the exempt organization office to ensure that these employees can adequately perform their duties. institute a standard policy that employees must reach a decision on all tax exempt applications within 270 days of when they're filed. three, create a position with the taxpayer advocates office dedicated solely to helping organizations apply for tax exempt status and several others.

i would like to thank the commissioner for responding to those recommendations into a letter he sent to chairman and i. my takeaway from the letter it is the commissioner's view is there's been genuine progress to clean up the mess and i look forward to hearing his assessment in further detail this morning. while the commissioner is here, i also want to address the problem that cuoccurred in martinsburg, west virginia. they deleted backup tapes that deleted e-mails that were within the scope of the committee's inquiry was ongoing. it was completely unacceptable and inexcusable. there are also reports that there was some lying afterward. commissioner, that can just not happen again. i want to hear what the irs is doing this morning to fix it. finally on friday the committee received a detailed letter from

the department of justice concerning their investigation into this matter. i ask for unanimous consent that be entered into the record. i want to be clear on this point. the vast majority of americans want disclosure in political spending. they want all sides to be more open and more straightforward on these issues. the american people overwhelmingly disapprove of the citizens united decision that knocked down some of the key limits on political campaign spending. if there's no oversight of who receives 501c status, meaning anybody could get it and hide their donor list, then political spending will be hidden even deeper in the shadows, so my request to you on this point, mr. commissioner, is that you all work with this committee,

democrats and republicans, you work with committee in a bipartisan fashion to get this right. thank you very much, mr. chairman. >> thank you, senator wydewyden. today's witness commissioner koskinen. he was confirmed to this position in december of 2013. prior to his appointment to lead the irs he served for four years at freddy mack where he served for a period as the acting chief executive officer. before that time, commissioner koskinen held various high-profile positions in public service, including president of the u.s. soccer foundation, deputy mayor of the district of columbia, and president clinton's chair of the presence council on year 2000 conversion. the commissioner spent more than two decades in the private sector including time as ceo of

the paul mary company. commissioner koskinen has a law degree from yale university school of law. we want to thank you once again for being here today. you can proceed with your opening remarks. i ask you, if you can, to limit your opening statement to five minutes. >> right. chairman hatch, ranking member, and members of the committee, thank you for the opportunity to discuss the work the irs has been doing to correct the mistakes associated with the process of tax exempt status two years ago. the irs must continue to do everything possible to make sure all individuals and organizations can be confident that they will be treated fairly in their dealings with this agency. they need to know they will receive fair, unbiased treatment regardless of their political affiliation, their position on political issues, or whom they've supported in the last election. when someone hears from us

regarding their tax return, they need to understand it's only because of something that is or should be on their return and no other factors. and if someone else has the same issue regarding that return, they'll hear from us as well within the limits of our bungt resources. it's important because even with our declining resources, the irs will audit 1 million taxpayers this year. the situation described by the inspector general in his may 2013 report should never have happened and we are doing everything possible to ensure that the mistakes referenced in the ig's report and reflected in the committee's bipartisan report do not happen again. it's part of our work to move forward we have implemented all of the report's recommendations from the ig. the ig noted our efforts in a follow-up report issued march of this year. as to the finance committee's own investigation, i'm pleased to report as noted the irs has accepted all the recommendations

in the committee's report that are within our control, that includes recommendations in the majority report and the minority report. let me briefly summarize the actions we have taken thus far. we've taken steps to ensure the determination process for tax exempt status is transparent and information on the procedures. we have reduced the processing times for applications for tax exempt status and we're committed to resolving all cases within 270 days as the committee has recommended. as a result of the work we have taken over the last two years is down to 112 days. we continue to develop new training and workshops for employees on a number of critical issues connected with the application process for tax exempt status. we have established procedures to ensure that applications undergo a neutral review process. this includes training employees on the proper way to request

additional information is needed. treasury and the irs has noted our drafting guidance on social welfare and non-social welfare activities of 501c organizations as recommended by the inspector general. to ensure our accountability in the determination process, the irs has done a number of things, including requiring managers to conduct periodic workload reviews their employees. information is regularly shared up the chain of command with me and other irs leaders. our efforts to improve accountability also included centralizing our exempt organization work forces, so leaders now work in the same location as employees who process applications for tax exempt status. we've also taken actions to ensure risks are managed more effectively in the exempt organization area and throughout the irs.

we now have an agency wide enterprise risk management program providing for the regular identification and analysis of risks to be eliminated or managed across the agency. to ensure we properly respond to requests under the freedom of information act, we're developing standard procedures for employees to use when they search for information and we will provide training to those employees on those procedures. as recommended my both the committee and the gao, we are tighteni tightening internal controls. although the gao recently found no evidence of unfair or biassed audit selections, we agree with them that tightening the controls will reduce the risk that any unfair selections would occur in the future. another issue is the need for us to improve our records retention process. we've initiated a process to secure the e-mail records of all senior officials of the agency. in addition we're taking steps to ensure employees preserve

official records created when they send messages using our office communicator system. while we continue working to kplem the committee's recommendations, we appreciate the committee's bipartisan issues. these include accelerating due dates for information returns, allowing the irs to require minimum kw minimum qualifications for paid tax preparers. i'd encourage to committee to consider two other options. this concludes my opening statement and i'd be happy to take your questions. >> thank you, mr. commissioner. again, i appreciate the way your agency has worked with this committee on our recommendations, but i also want to emphasize that there remains

several open issues stemming from the targeting of conservative groups, and i want to get your response on two of those issues. the first is i understand there's at least one group caught up in the targeting that is still waiting on a determination. can you commit that your agency is moving with all appropriate expediency to resolve any remaining open applications? >> yes, we will do that. i can't talk about any application, but we're down to just a handful. several of those are in litigation. in some cases we're still waiting for responses, but as i noted we have reduced the backlog and a new application today will get processed on that average of 112 days. >> secondly, in my opening statement i mentioned the irs and treasury department's 2013 proposal to restrict the free speech of certain groups by americans by rewriting rules of

501c-4 social welfare organizations. i know we disagree on the need for changes to the rules governing c-4 organizations and i know you have committed that no new rules will take effect until 2014, but this leaves open the irs will make proposals this year or next year creating confusion or uncertainty regarding the free speech of certain groups and their ability to engage in civic activities like non-partisan voter registration or candidate forums. can you tell the committee whether any new proposals will be released before 2017 and if so, when do you expect that to happen? >> we are following up on a recommendation of the inspector general who said the facts and circumstances standard, which has been used for the last

years, is confusing and was part of the problem employees had in interpreting the applications from c-4 organizations across the spectrum. it is, as you noted, just before my confirmation hearing draft regulations went thout that generated 160,000 comments. many of them agreeing restricting the use of bipartisan/non-partisan get out the vote campaigns, candidate forms. we're taking those into consideration. but it is clear to us that in fact what we're trying to do is not change the rules of the game. what we're trying to do is make them clearer not only for irs employees, but to have a clearer set of guidelines for those organizing these organizations and for those operating them. when you're running one of those organizations, you ought to be able to be confident that you

know what the rules are. no one is going to second guess you on the interpretation of what the facts and circumstances are. it would be important to clarify, not change, but clarify the rules under which organizations operation. that is our goal and intent. >> can you tell the committee whether any new proposals will be released before 2017 and if so, when you expect that to be? >> we don't have a timeline. we are continuing to finish our view of all those comments and continue to review the told statutory framework the congress has set up. we've made it clear that we have no intention of influencing the next election. on the other hand, when we issue these -- reissue them in the new format that we think will be more acceptable to people, it will be open to public comment for 90 days. we'll have a public hearing about it. we've committed we'll keep the committees updated on the progress.

at this point, we don't have a timeline. we'd hope that we would be able to provide these new proposed rules early enough next year so that the work on them could be completed well in advance of the election so there wouldn't be any confusion. the work we're doing now is not focused on changing, but clarifying the rules. once we get those out, people on all sides will understand much better what it is we're talking about within the existing standards of operation. i think the clarity will benefit everyone. >> the irs unable to meet its basic duties of answering taxpayer phone calls and protecting against tax fraud, i encourage you to stop spending time on counterproductive proposals. commissioner koskinen, you've mentioned several ways the irs has adjusted its operations to serve taxpayers better and even more fairly.

one area in which the irs needs to continue to strive to do better is in protecting taxpayers identifying information and the vast amount of financial information that the irs maintains about taxpayers. the irs also needs to do better in preventing stolen identity refund fraud. you've mentioned the regulation of paid tax return preparers, but i know there's concern providing such authority could lead to more bureaucracy and potential harm to taxpayers. just one last question. will you commit today that if the irs were to be provided authority to regulate paid tax return prepares, that the irs will utilize the secular 230 framework that's already in place, not create another new regulatory regime, and commit to fully cooperating with this committee in the regulation of

paid tax return preparers? >> i'm happy to commit to both of those positions. we fully intend to use the 230 regulatory framework. in fact, if we were given the authority to require minimum qualifications for prepares, we would run it the same way we set up the program in 2010, which was under section 230, the regulation 230, so we have no intention of expanding that or changing it. the legislation you're talking about would simply make clear we have the authority to run the program as it was originally set up so there will be no surprises. people will no exactly what it looks like because that's what we did for almost a year. >> thank you, senator wyden. >> thank you very much, mr. chairman. i appreciate you pointing out this question of the tax preparers because this is another area you and i have worked on in a bipartisan fashion with all our colleagues.

on the question of 501 c-4 rules because this is an area where there's been spirited debate, i think it is very much in the public interest that the agency clarify the rules for americans to follow in elections. and i would urge you as i did in my opening statement to work with us on a bipartisan basis -- you've heard me say that a couple of times this morning. that's what's so important if you're going to come up with a approach that's substantively right and sustainable. chairman grassley and i, commissioner koskinen, have been you wi following these new reports about the question of the irs cell phone tracking. the irs obtained and received training for hailstorm cell site simulator, a device that connects metadata from phones that connect to it.

many companies have taken to tracking their employees movements through cell phone trackers in order to avoid triggering a taxable presence in foreign countries. now obviously the irs has an important role to play in combatting money laundering and drug trafficking and international tax dodging. i view enforcement and protection of personal privacy must not be mutually exclusive. we've got to have both, so commissioner, what can you tell us this morning in an open session about the irs' use of cell site simulators? >> it's only used in criminal investigations. it can only be used with a court order. it can only be used based on probable cause of criminal activity. what it does is allow you to see point to point where communications are taking place.

it does not allow you to overhear -- the technique -- the voice communications you may pick up texting, but it follows the justice department's rules and it requires probable cause in regard to criminal investigations. it is not used in civil matters at all. >> how frequent have these investigations gone forward? in other words, how frequently are irs criminal investigators obtaining location data about the people it is investigating? >> i'll have to get you that information. i don't know how frequent it is. i just know it is used in casing of money laundering and organized crime. >> can i have that answer within 30 days? >> you certainly can. >> on the recommendations we're talking about this morning, i have tried to make clear i believe the way the irs handled the 501c-4 applications was a unmitigated disaster. in effect, the hand fisted methods for screening

applications basically let them pile up for what seemed like eternity and virtually none were processed. certainly the agency made unacceptable mistakes in its response to congressional inquirie inquiries, particularly taking months to inform the committee that lois lerner's hard drive failed. in your view, what is the most important change that you have made in terms of responding to our bipartisan recommendations? what's the most important change and why? >> i think the most important change -- and it's a combination of many of the recommendations -- is to encourage and in fact require the free flow of information from the bottom of the organization to the top. that what we're trying to ensure is if there is a problem anywhere in the organization about anything that employees

feel empowered and in fact feel responsible to note that problem, report it to their managers, and if they feel that's not appropriate or they're concerned about that, to report it up through the organization. our organization has its own independent line of communication any employee can use. i've now talked to almost 17,000 irs employees telling them i want them all to view themselves as individual risk managers. i have an e-mail box that i've gotten about 1,000 suggestions from employees in. i've tried to get them to understand they should feel comfortable sending me problems, concerns, or suggestions. one of the problems that let to that inordinate and unacceptable delay was that the problem never moved all the way up the chain of command. it was, in fact, stuck in the middle. the chairman mentioned about structural change. it was because there were people in cincinnati and people in washington who didn't have very good communication. so if the communication works

better, if there are regular reports where the problems are, if there are issues where we know applications are stuck, that information should be shared, not hidden. >> one last question for you, commissioner, and it deals with the records and recordkeeping. obviously backup tapes were erased that shouldn't have been. though there's no evidence that the tapes were deliberately destroyed to hide evidence, now there have been some reports that employees didn't own up to their mistakes when investigators came knocking. what is the irs doing to ensure that its employees in the future keep e-mails and records safe? >> again, it's several things. first of all, we discovered it was a mistake that shouldn't have happened and it obviously did not help our response to the investigation. what we need to do is when we have a document and a protection and retention request, you can't

rely on sending it up from the top and assume that will automatically be transmitted accurately through the bottom. those retention requests will go individually through the chain of command. secondly, we are training our employees as to what it means to retain all media within a particular area. but the broader issue is that we're dealing with is we should not be depending on individual hard drives and disaster recovery backup tapes as a system. we should have a standard, not something fancy, a standard e-mail system that retains the records automatically that's easily searchable. we shouldn't have to spend $20 million in a year responding to legitimate congressional inqu y inquiries for information.

whenever there's a document retention request, it goes throughout the organization and it goes to the front line managers and they understand what it means. we'll provide training for the i.t. people, exactly the media that should be retained. the people on the front lines, the two employees involved, nobody purposely did this. b, this was viewed as junk. it was found in a closet. when we retain media, it's all media wherever you find it, however hold it is, however disusable it is. the better solution in the long run is not to rely on backup disaster recovery tapes and not to rely on individual hard drives but to have a readily searchable backup system of all the e-mails at the agency.

>> thank you. commissioner, thank you for joining us today. i'd like to shift the focus to something this committee had an opportunity to address last month but chose not to because of partisan infighting and the influence of interest groups in this town. it's the irs' ability to regulate taxpayers -- in order to protect our constituents from identity theft, we must ensure that paid taxpayers perform due diligence. especially important and crucial for credits that assist low-income families. as you mentioned in previous testimonies, 57% of itc returns come from paid preparers, 3/5 who received no oversight from the irs.

it leaves and enormous hole within our taxpayer information. claimant return to these paid preparers to help file their returns because of the complex eligibility requirements placed within the tax code. paid prepares who don't enroll with the irs have a 40% higher chance submitting an improper return. not fraud, but an improper return. the agency tried in 2010 to bring these preparers in line with minimum qualification standards. it is actually our responsibility to provide your agency with the authority to do this. last month when attempting to correct this problem, some of my colleagues balked at the idea of granting your agency the authority. walk us through, if you would,

why it's so important for congress to take action and to help improve tax enforcement for this group of taxpayers. and i know since 2010 you've made steps to increase compliance and reduce error rates, so if you could walk us through -- integrate into your comments what you've done since 2010 and the steps you've taken. >> well, as i advised the chairman, what we're talking about is minimum qualifications of preparers. it's simply that people ought to demonstrate a minimum capacity do understand the tax code. it is particularly important in low-income and immigrant areas where a lot of times people are hanging out shingles where people are saying come with me, i'll get you a bigger refund.

we handle over 10,000 return preparers, came and spent several days with us updating themselves. what we're proposing is what we started to do and ran for almost a year is require continuing education, minimum qualifications for tax preparers in areas like the itc. the majority of the itc returns come from preparers. they've had no education about how the program and how various credits work, so we think it would be a significant step forward, provide greater protection to taxpayers, especially in low-income areas to have some level of confidence that when they pay the preparer to do their tax code, it's not somebody with a shingle.

some of them are unethical. some of them say, come with me, i'll get you a big refund. some of them are collecting the refunds themselves. we're not going to get crooks out of the world, but if people go through the time to become educated to some extent about what the tax law is about, it is a better indication that they're serious about doing it well. the volume of improper payments is the single most problem we deal with. but we need more tools. i appreciate the committee's support for getting w-2s earlier so we could in fact match the w-2s with the returns we're getting. we need access to the new higher database which this committee would provide us with. it's a complicated problem. it goes to the complexity of the

eligibility requirements in the statute and while the statutory framework is not my domain, if it were simpler, that would also help. >> one real quick comment. senator portman in my state has played a major role in staffing and running vita sites. one last really brief question. if we were to take some of these actions that you ask for, i assume you could say with some certainty that improper payments -- some would call it proud, itbut it's not fraud -- improper payments would be reduced. >> i want everyone in this agency who knows about this problem and working with it to sit down and say why isn't it we haven't made more progress. what we came out with what --

we'd need w-2s earlier. the final piece, which i asked the committee to consider, is we need limited correctable error authority. when somebody has claimed erroneously a child, we have to audit those people. there's a limit to our ability to do that. we can do math error corrections. if you went to a university not on the list, if we see that, we either have to hold the return and deny you the credit and audit it, or we have to let it go through. and we don't have enough resources ever to audit or way of this problem alone. that's what package i was told a year ago. we appreciate the support from the committee on all those areas. if we had those, we think we would make a significant dent in

the improper payment rate, a significant dent in the volume of improper payments that are made not only in itc, but the educational tax credit and the additional child tax credits. >> i hope, mr. chairman, we can work together on that as we negotiate tax issues in the months ahead. thank you so much. >> senator grassley. >> thank you very much for holding this very important hearing. it's evident from the report that at the very least a dysfunctional culture and poor management led to the mistreatment of groups with conservative philosophy applying for tax exempt status. political biases and poor management went hand in hand with politically motivated behavior continuing unchecked. the targeting scandal coupled with poor customer service and general mismanagement has shaken what confidence taxpayers had in the irs. to move beyond this congress and the irs are going to have to

work together to make the necessary changes to ensure similar abuses can never happen again. so i think the time is right to once again revisit the issue of taxpayers' rights and irs structural reforms. the bipartisan report has a number of good recommendations, and in addition i want to remind my colleagues that senator thune and i introduced the taxpayers' bill of rights enhancement act to further beef it up. i have three short questions. mr. commissioner, for taxpayers to move beyond the targeting scandal, they need to know that those who allowed it to occur have been held accountable. my understanding is few, if any, disciplinary actions were taken against mid-level managers who were involved in the targeting. one such manager who was not only never disciplined but received a bonus and has been

promoted. so my question. how can taxpayers applying for tax exempt status feel confident they will be treated fairly when individuals who oversaw the targeting remain in place, were never disciplined, and in some instances even promoted? >> i would note a couple of things. first, the chain of command, starting with the commissioner down five levels, has been changed. they interviewed 100 employees and found no evidence that any employee acted with political bias or designation. nonetheless as i have stated from the start, it's a situation that shouldn't have happened. people shouldn't wait two years. in terms of discipline, the chain of command all the way

down has changed. there are new people that have gone through, and we have pursued appropriate disciplinary review as needed. but i would note and i think it is important for the public to note, the justice department talked to 100 individuals, some of whom identified as conservatives or republicans. none of them did anything based on political bias. >> follow up to something senator wyden discussed with you about the cell site simulators. the follow up would be in the past two months both justice department and the department of homeland security have publicly issued policies that require greater fourth amendment protections and greater transparencies when these devices are used. so my question is whether or not you can commitment to such a policy statement with a date certain. >> our criminal investigators follow the justice department policies and if they're updated, we follow those.

i'm happy to commit we will follow that justice policy. >> my last question. this bipartisan report that we've referred to was significantly hampered by poor electronic record retention. my understanding is that the irs has been working with national archives and records administration to implement a record management approach known as capstone and come into compliance with an executive directive mandating e-mails be managed in an accessible electronic format at least by december 31st, 2016. two questions. does the irs expect to be in full compliance with the executive director and capstone procedures by december 31st next year? if not, why not? and what procedures does the irs have in place presently to ensure what happened with lois

lerner's e-mails does not happen in the meantime? >> we're almost there. as i noted, our goal is to in fact not depend upon hard drives and individual computers. not to depend on disaster recover tapes as a backup system, but to upgrade it to what everybody else is using so that we not only have a backup system separate from the e-mail systems, but one that is easily searchable and readily searchable. as noted, we've got a plan that we've worked with nara. by the end of next year, we hope not only to beat the capstone issues, but to be moving with limited resources to updating our e-mail systems. >> senator scott is next. >> thank you, ranking member. good morning. >> good morning.

>> earlier, senator wyden asked you a question about the most consequential changes you made at the irs. i think your answer is your employees can now e-mail you in a new special e-mail box that was just created. that was the most consequential thing you've done based on the report? >> i think what i said the most consequential thing i've done is try to get every employee to view themselves as a risk manager. if they see any problem about any issue in question, they should immediately report to their manager. they should report it directly to our risk management office or directly to me. we've done a whole range of things. i do think that ultimately for us to avoid these kind of problems we need to have a situation where no problem gets hidden. >> got you. i'm going to move on to my

questions, but i do believe as i listen carefully to your answer the answer that you gave, though your testimony is filled with recommendations and suggestions based on ability to move forward without legislative action is that there's a new e-mail system in place where your employees can directly e-mail you. why are we here? it's important to remember why we're having this hearing. it is because in the irs an agency in the federal government with amazing power of intimidation, there was, has been and hopefully no longer is a culture of discrimination. and if this culture of discrimination that focused and targeted conservative organizations, tea party and other conservative groups, 300-plus, and in addition to that also audited individuals

who were making conservative contributions. so we're here today not to have a conversation about simple structural change. we're actually here today because there was a culture of discrimination in the agency that has the power of intimidation in a way that no other agency in the federal government has. and it used that power of intimidation against conservative organizations. and then there was a coverup of that intimidation. that's why we're having this hearing today. if you think about the fact that those conservative organizations cumulatively waited nearly 600 years, 600 years to receive an irs determination, we should seriously consider what actions are necessary for us to make sure that culture never again exists. you were brought in as a turn

around man to turn this around. and as senator grassley asked, who has been fired? what are the disciplinary measures that you've taken? do you have the power to fire the employees who were involved? because we know we have the power to promote some of the employees because obviously some have been promoted as senator roberts clearly stated earlier. i'm concerned, as a taxpayer with the breaches that we've had, that the new culture is a culture that is still as inconsistent with the right direction as the old culture. and my concern is for the 8,000 south carolinians who have had their information exposed because of the breach is just on top of the concern that i have for this culture that seems to target individuals based on this

notion that america is a nation of free speech. and if they don't like it, there's somebody in the irs that can tamper it down. that's a problem we should pay close attention to. mr. kos ka then, you mentioned yo in your opening statement that there are limited resources. my question is if there are limited resources, as the turn around guy, should you ask for the ability to take the employees, the 200-plus employees who were working full time on union activities, should you take the 600,000 hours, the 600,000 hours invested yearly on only union activities, should you redirect, if you had the power, the $27 million of taxpayer resources in a different direction so as to meet the obligation of the irs

as it relates to actually dealing with taxpayers. and if you don't have that authority, which i'm sure that you don't have all of the authority, should a part of your response be asking for the authority? because perhaps we need the legislation that will empower you to complete the job as turn around guru that i'm sure you could be. if you need that legislative action, tell us what it is so we can work with you in making sure that the irs is the premier agency within the federal government that 'em boldens people to have great confidence in the outcome and in the process. i would love to partner with you in that journey. >> if i could respond. >> briefly, mr. commissioner. senator roberts is next. >> could i respond?

>> yes, of course. >> first i appreciate the offer of support. it is important to ensure that the public has confidence. you mentioned as a fact the culture of discrimination. there's no evidence that supports that there was any culture of discrimination. the department of justice interviewed 100 different employees of the irs, some who identified themselves as conservatives, some as republicans within none of them said that political bias entered any decision. anyone who is claimed to have targeted, the inspector general has looked at over 100 of those cases and found not one where anyone was quote targeted because of their political activities. we need to deal with the problem but we need to characterize it appropriately. the committee in a bipartisan way listed a set of recommendations they thought would deal with this problem. we've committed to implementing all of the recommendations within our control. we remain committed to making sure that the problem does not

happen again. groups should not have to wait 250, 500 days to get notification. you can set up a c-4 organization without the approval of the irs. anyone who wants to set up it on their own without our approval. part of the reason they need or seek our approval is because the rules are complicated in terms of what the facts and circumstances are and they want to be able to have us review that in terms of facts and circumstances. which is why i think if we could clarify, it would be much easier for those interested in becoming c4 organizations to set up and operate with the set of confidence that the rules are clear and that nobody is going to second-guess them. >> thank you, commissioner. >> mr. chairman, i do need to respond to what he said. give me 30 seconds. i appreciate it very much. >> very briefly. >> learner compares the approach that led to getting al capone to

using awe dits to intimidate tax exempt organizations. learner's process is described in the republican reviews, examples include how learner may have directed audits of the group. thank you, mr. ranking member. >> thank you, mr. chairman. i want to thank you and senator hatch for holding this very important hearing. it's been two and a half years almost since the finance committee opened its bipartisan investigation into the ishs's targeting of social welfare groups based on their political view. the question we have to ask is what have we learned. certainly that the irs was guilty of gross mismanagement or in the words of our ranking member, vast bureaucratic dysfunction. but i think we do the american people a disservice if we say

it's simply incompetence. the fact that the culture at the irs allowed employees to believe that they could let their personal political views guide how they treated taxpayers and that there would be no repercussions for doing so. simply put, we need a culture change at the irs. american taxpayers should expect at the very least a culture of accountability, of fairness, impashialty. no taxpayer ever again should fear that that would be discriminated against based on their political beliefs. while i appreciate the changes that the irs is attempting to implement, i believe that more needs to be done. earlier this year senator grassley and i introduced the enhancement act of 2015 which is a series of measure to hold the irs kpat h accountable. the irs has lost the trust of the american people and doesn't have the ability to make the

necessary reforms on its own. congress needs to act to make sure that the taxpayer's rights are protected. i hope this e which can count on the support of you and other high officials at the treasury. and with that what i would like to do is get you views on a few of what i think are the common sense proposals that senator grassley and i have in our legislation to make the irs accountable to the american taxpayers. i'm going to read through these and ask you to hold off on commenting. but i want to get the questions in. the first one is that last year the irs proposed its own taxpayer bill of rights. if question is would you support legislation to codify the rights and make it the duty of the commissioner to ensure that irs employees are familiar with the rights. second is the ten deadly sins created by the irs restructuring commission in 198 9 8 requires

mandatory termination of an employee who threatens to audit a taxpayer for monetary gain. would you support this? number three, in your recent letter to the committee you state that the irs failure to preserve electronic record is clearly unacceptable. do you support legislation that would ban irs employees from conducting official business over personal e-mail, a measure that passed the house by a voice vote earlier this year and do you support legislation that would codify the deadlines by what this national archives required the irs to put the document retention policies in place. finally, keeping in mind that some conservative groups were stuck in limbo up to five years on their application, would you support granting 501 c