together these policies constitute a classic catch 22. and the catch 22 goes like this. if you fit the statutory refugee definition, the rich countries of the global north say we will let you stay if you come here, but we will not let you come here. now some of these policies of remote control are specifically targeting asylum seekers and others are targeting other kinds of migrants. people migrate for many reasons whether it's economics or family reunificati reunification. they're international terrorists. regardless of whether the policies are principally targeting assylum seekers they have disproportional effects on people who have legitimate asylum claims. today i'd like to extend our discussion of the european context and talk about what is happening right here in our backyard with the united states, mexico, and central america and cuba.

and my goals are to shed light on some hidden techniques of remote control and also to talk about the way that buffer states work. and the way that the buffering of particular nationalities varies from very thin buffering of certain nationalities and very thick nationality buffering. of other nationalities. so i'd like to turn your focus to what some people in mention owe call the forgotten border. the mexican border with guatemala and belize. and over the last 20 years or so, privately but now increasingly in public, u.s. authorities are calling this border between mexico and its southern neighbors the u.s.' de facto southern border. it doesn't look like a buffer state border, though, and if you go to that border, you'll see people openly crossing. you'll see open illegal commerce, you'll see people who

are evidently heading to the u.s. about 17% of the people who cross this border according to the mexican government are heading to the u.s. and the mexican government makes no serious attempt to stop them at that border. this is a picture taken within eyesight of the international bridge, a formal crossing point. there are train routes and highway routes leading north with many people, mostly from central america, a number of whom will be asking for asylum in the u.s., openly riding those rails. so mexico doesn't have the kind of border wall that we see if we go to san diego, but what it has, they call a ver caal bordea vertical frontier, if you will, where there's systemic control on transportation routes leading north to the u.s. and the u.s. has been doing many thing the, not just beginning with the so-called crisis of

unaccompanied children from central america, but going back to the 1980s to make it difficult to cross that border. and that includes visa policies to make it difficult for central americans to get visas to get into mexico in the first mace. policies of encampment in southern mexico. and less well known policies to prevent central americans from reaching the u.s. border. keep them corralled in the south, if you will. twinning in the 1990s the u.s. has been financing large scale deportations from mexico. an currently since the initiative since 2007, it's paid for a great deal of capability building of the southern border buildup. a lot has to do with database construction, monitoring of biometrics and linking all of those databases to u.s. systems. now even air passengers who are arriving in mexico without any other destination in the u.s.

are having information shared with u.s. authorities. so behind the scenes, there is a very, very tight level of cooperation between the mexican, canadian and u.s. authorities. but one of the things that the u.s. is trying to do to keep people from ever even reaching mexico is to conduct advertising campaigns in central america to broadcast the dangers that are faced in mexico because thousands of migrants have been killed in this transit through mexico including notorious cases of mass kidnappings and murder. and i don't have time to get into it, but these are a couple of examples of advertisements running in central america that are financed by the department of homeland security, but written as if they were produced by a national government. warning people of these very serious dangers. the scale of deportations in mexico, primarily of central americans is vast and underappreciated in the u.s.

it's also something that's been going on for a very long time. since the rampup in deportations in 1989. you can understand the scale of mexico's buffering if you compare the numbers of the main three central american nationalities, the so-called northern triangle nationalities of guatemala, el salvador and honduras. by comparing the deportations from the u.s. and the deportations from mexico, and you'll sue ee in red the deportations by mexico beginning in the 1990s. menti mexico has been deporting a bulk of central americans who were expelled from north of the guatemalan border. beginning in the mid 2000s, the u.s. began to catch up until 2015 after very strong u.s. diplomatic pressure, mexico is now doing the vast majority of the work of deportations of central americans.

the mexican government estimates that between 1995 and 2010, it was intercepting and deporting more than half of the central americans attempting to reach the u.s. with another 25% to 30% being detained and deported by the u.s. and 15% to 20% successfully being able to cross into the u.s. when it comes to central americans, almost all of those who are detained are deported. which is very different from the way that mexico treats other nationalities who are detained in mexico. very few are asking for asylum in mexico. mexico has an extremely robust asylum law, all kinds of human rights protections. the whole law is framed within the language of human rights protections but in practice, it's extremely difficult to know one is eligible for asylum.

the system i would argue is deliberately broken. now contrast the situation of that very thick buffering of central americans with what happens to 7 cubans. the distance between cuba and florida is the same as the distance between cuba and the yucatan peninsula of mexico and beginning in the early 2000s, large numbers of cubans began using mexico as a bridge to the u.s. under the u.s. wet foot/dry foot policy, if someone is intercepted at sea coming from cuba, they're immediately returned to cuba. if they can come to u.s. land, whether it's the beach in miami or whether it's the mexico/u.s. border, they are quickly paroled into the country under the provisions of the 1965 cuban readjustment act and within a year they will get a green card and be able to stay permanently. the numbers of cubans at the u.s./mexico border seeking admission and almost all of them are admitted has increased quite dramatically in recent years.

more than 30,000 in 2015. and yet, this is barely discussed in the u.s. public sphere. this is not the object of lots of political heat and smoke the way the situation of central america, unaccompanied minors has. but mexico is doing very little to detain people who will definitely be asking for asylum in the u.s. so why is that? well, there's very little serious u.s. pressure to detain this population for self-reasve reasons. one is the legacy of the cold war that gives cuba, alone, cuban nationals, alone, preferences in reaching the u.s. according to this wet foot/dry foot policy i just described. the second is the strength of the anti-castro lobby in the u.s. then the third is the fact that there is not these -- one does not create the optics of disorderly migration, gymnasiums

full of crying babies and so forth around the issue of cubans because they so quiet lly go in the u.s. so even when mexico has detained large numbers of cubans, they very quickly let them out with an exit permit, if you will, which gives the person 30 days to leave mexico and in 30 days that person will have taken the bus to laredo or brownsville. so in conclusion, we can see very thick buffering of central americans. thin buffering. deliberately thin buffering of cubans. i don't have time to talk about it now. i'm glad to discuss in the q & a the way that much more sophisticated buffering policy has been developed around extra hemispheric migration from africa and asia and the middle east often which includes a large asylum seeking component, but i will leave you with that answer to why is it that so many

people have taken these incredible risks to reach a country that will offer them protection? it's because for the vast majority, there is no other choice but doing that illegally. thank you. [ applause ] >> good afternoon. stephan peterman from the general consulate general in los angeles. first let me thank you that me as a mediocre diplomat have been invited to be among those brilliant scientists who have all the figures, all the numbers. brilliant visual distractions. i have none of that. what i have, i look every morning into the news and i find a new situation every morning. that's why i didn't bring a script, because if i had it

prepared yesterday, i wouldn't have known who won the elections in austria, for example. these are my personal opinions, by way, not necessarily opinions of my ministry, but there are certain overlapping sectors. i have two points i would like to talk about with you. the first is since this seminar is under the big title of migration, and not only refugees, i would like to make a few remarks on germany as a migration country. that sounds like many germans to a clear juxtaposition, still now. germany has never seen itself as a country of immigration. it's very strange because we have had immigration all the time. not only in a regulated way but also waves of refugees. we have had them before. it's nothing really new. after the second world war when the eastern parts were occupied

by the russians, it was tens of millions of germans who flooded into the other part of germany occupied by the americans, british and french, and found a new home there and they were refugees. i remember as a kid that in the house where we lived, there were two refugee families and that was in the early '60s that lived in that house still we have seen in the '60s when the economic miracle took place that we were actively looking for people coming to germany. not for immigrants. we were working for working guys. we went down to the southern european countries to turkey and were actually looking for young, strong male workers coming to germany and help our economy.

and they came. maybe some of you who know a little german know we didn't call them immigrants. we called them guestworkers. if you think a second about that, it was quite a clear program that said you come as guests, you work and then you go home again. if you had asked, at that time, most of the turkish or italians who came would have said the same thing. i go to germany which i don't like because it's too cold and the food is not nice, the food is not good. i work here, i make a lot of money and go back to istanbul and buy myself a house and open a shop. that's what most of them would have said. but you know as it goes, then the money's good, you stay another year. you marry, you have kids. they go to school. and all of a sudden you reach a point where your kids speak better german than turkish and your kids would say if you go back to turkey, i won't join

you. i feel much more at home here. so we have had immigration with all those phases of immigration but we did not admit that, we did not have a law regulating that. in our public life, it was not a topic, to be honest. that has changed recently. it changed already in the '90s when we had referee ugees from balkans coming in. not so many as we have now. that there were strong groups in society who asked for having something like an immigration law or better regulation of immigration and giving them, those who came, better rights to become germans, to integrate, to stay and this is on its way now. we still do not have an immigration law as such. we still do not have a good

procedure. so for most people who come, the only little door that legally opens the way into germany is asking for asylum. which leads to a big model as we call it, because many who come out of other reasons, legitimate reasons, of course, but who cannot admit those reasons, would ask for asylum and that is for us a big problem that we have to solve and which is now really a hot topic in the political world and in a society world in germany since we have seen last year's influx of immigrants. you have heard the numbers. 1.1 million came into germany. if you did your math for the u.s. that would mean 4.5

million. so in one year, coming in. and this is a country that has the infrastructure for immigration that is used to that. that is biuilt on immigration. we don't have that yet, so these 1.1 million is quite a big group to deal with. and if you permit me that as a german, what i watched from here was exciting. i think it's the greatest challenge that germany has faced after reunification, so in those 25 years since then. and if you talk to germans, if i talk to my own family now, there's fierce discussions everywhere and the dividing lines go strategy through the lunch tables of families. people are very excited about it. people are very strongly contra or pro. and it's a topic that brings

out, i would say, some of the best and some of the worst of my country. let's start with the worst. you have heard, we've seen aggression, attacks, arson against refugees, against immigrants. the newest figures came in only this year about the first quarter of 2016 and we e have a strong -- the figures went up about right-wing attacks on immigrants in the first three months of 2016. and our authorities do everything to fight against that but i can say we're still up to keeping that under comntrol. the other consequence is that we see the emergence of a strong right-wing populous party. which to me didn't come as a surprise because i did a little political science at university

and among political parties, et cetera. to be honest, i expected it earlier to happen because if you look on the politics of america as the federal chancellor in the last ten years, she being the head of the conservative party of germany, the christian democratic union, moved her fields of activity more and more to the left, you could say. abandoning the draft, military service, homosexual marriage. the exit out of nuclear power. all these were clear aims of the left wing and green parties in the '70s and 8 0s. that's why you see, by the way, our social democratic party, the big left wing party, has lost its influence terribly. they are now 19% of public

support and they used to have 440 pk-plus. by moving to the left, she opened up to the right a void i would say. we have had in germany since the second world war a kind of taboo of right-wing party. whenever one right-wing party emerged somewhere in a federalist state, and some more of them, very early if their diction was a bit too radical, they were branded as neonazis and they would disappear, so they might even appear in parliaments in the states but normally after three, four, five years, they would simply the next elections disappear so we didn't have it as a constant factor in german politics even though all our neighboring countries have those strong right-wing populist parties. now the point is there where we also have one. that is the famous

that emerged recently in three state elections very strongly and very sure they will not be gone fast. we'll have to deal with that. merkel gets for the first time out of her own conservative party strong opinions that her party should move to the right. i'm not sure where it would go from that. my second big topic i would like to comment on a little bit is the european union. when last autumn this big influx of refugees came into germany, i mean, we've heard the details in the presentations before -- before me. to me, it was very clear, this cannot be a german problem. this must be a problem of the european union. and i personally was very shocked to see that the european wr union that i always considered to be also a union of values, it

has been founded as a union of values. obviously, at that point when dealing with refugees, did not show any more common values anymore. the union almost broke up on that line. i mean, you see if you go through the points of view of the different governments of the european union today, it's almost impossible to find a common sense, at least, or, thank you so much, if you go through the history of the european union, whenever there was a big challenge, they hammered out a compromise. sometimes it was a compromise that made everybody unhappy, but still, it was a compromise. and the european union has also developed in that way. hammering out compromise even though it was bad compromise. but in that topic here, we are quite far, still far away of

compromise. and that really for me is the biggest challenge now. it's, if you permit me, it's bigger than the refugee crisis, itself, that the european union might not be able to cope with that, it might break up which would be a catastrophe for europe, a continent, a war-torn continent, let's not forget that, that for the first time with this european union has gone through a very long period of peace. for me, a compromise in the framework of the european union would have at least four elements, core elements, the first being we would need a common immigration policy. that is quite clear. a common immigration policy. it's impossible that every country has its own ideas about that, and then whoever arrives at the european shores would just choose, window shopping, which country offers me most then go there. point number two, even though it's not popular, we will have

to construct a robust border protection. that will be part of the package. so once we have immigration policy with legal doors into europe, we have to protect against anything else. i'm quite sure about that. we will need a coordinated integration effort. we will have to not only as governments and political forces in our member states but also the societies, itself, will have to bring great effort to integrate people from other cultures, people with other religions, people who have a digit mindset from ours. that is a big task for the union. and the fourth, i would say, is a balanced distribution of refugees. if you say 1.1 million for germany, that is a big number of people. if you see that the european union has almost 500 million citizens, then 1.1 million is

not all too much if you distribute them. shouldn't be a problem. we've heard that before. so we will have to have a balanced distribution of refugees. those are my thoughts that i wanted to share with you. my time's almost consumed and if you have questions, i'll be very happy to answer them. [ applause ] >> so he ended two minutes earlier, so that gives us a little additional time for questions. so, again, if anyone is wanting to ask a question, please come up to the mike on the right. again, please ask a short question to the point. >> hello, ladies and gentlemen.

i have a question. i actually have a request. why would greece, portugal, recovering spain, broken france, have to pay for things that they didn't cause? i live in europe half of the time. in poland, specifically. and the pols say, listen, it's not our problem, we didn't benefit by it. why do you want us to pay for it? if saudi arabia, if iran, iraq, the united states, turkey, created this incredible disaster, let them step forward

and pay for it. >> let's hear from the panel. ? [ laughter ] >> i'll go back to some of the points that were made this morning. i'm not here as an expert on humanitarian -- okay. i'm not -- is this on? i guess i would just go back to some of the points that were made in the first presentation which are related to the question of a common humanity and the degree to which there is a sense that we have responsibilities toward each other whether something has been

created by our own, you know, our own governments or not, i don't think that -- i personally wouldn't want to compare the u.s. reaction, if i have to put myself in that -- american citizen, i have to speak from that perspective -- with the reaction of saudi arabia. i mean, i think one wants -- or with qatar or any of these other countries that have played a major role in fostering the disaster that syria has become and refuse to take any serious responsibility for the -- the humanitarian crisis. so i think that -- i mean, this isn't -- i mean, take off my international relations hat and put on my hat as someone who cares an a sense of belonging to, you know, a human race and a sense of responsibility toward other human beings and that that would hopefully be a motivating force. i don't really feel line this

question is directed to me. i mean, i'm trying to -- >> someone else? no? >> yes. i mean, as a diplomatic -- i will not meant comment on other countries, but, sir, it's very cheer there are international obligations that the polish government have subscribed to. they're a member of the united nations and there are very cheer rules of the united nations of international law, how you have to behave when refugees knock at your door. i mean, the government is part of that big game. it has ascribed to that. and treatment of refugees worldwide. and you cannot say at the moment somebody knocks, i didn't do it. i'm very sorry to tell you, but those are international obligations. >> one question per question. perhaps there will be another

chance. >> thanks. >> thank you. >> question for professor about syria. if the refugees are relocated in other countries, what effect would this have eventually on syrian society, having lost so many? the selected group of people. those who are able to leave the country. how will this change the future prospects for syria once the countries are getting peace? >> it's an extremely important question. it's difficult at this point to say because, you know, the outflow has not stopped. so we don't know at what point what will constitute, if you an call it a baseline, once syria would be looking toward rebuilding. we don't know how many more people will leave, how much destruction will take place, we don't know how many more people will be killed. the longer we do know, the

longer people etend to be abroa, the less likely they are to return. there are studies in the process of being conducted now that will help us understand better exactly not sort of regionally how the refugee flows occurred because that i think is fairly ease city to see but to get a better handle on the sort of socioeconomic class of people who have left and how that's changed over time and how that also then interacts with people's employment. so to what extent are we really talking about -- and which parts of this crisis, these primarily agriculturalists who have left and are they people who have tended to leave the country entirely? are they among the, what is it, 5 million, 6 million people we have who are internally displaced? because that's also important. home peop how many people are going to be in syria where they began but not where they started? what are the possibilities of

them going back to their original homes? it's a moving target at this point. it's very, very difficult to imagine what things women look like, if this ends in two years, it will with one set of parameters we're looking at. if it's another five years, ten years, it's something very, very digit. the degree to which syrian children are or aren't being educated. many of them as a result of being unable because of economic circumstances to continue their educations and you're looking at an entire generation of children who are either illiterate or who are -- if they have the good fortune of actually being able to integrate into a surrounding society, maybe -- or be accepted into europe, maybe then they actually get an education in a dig different language, what does

that mean for the possibilities of contributing back home afterwards? they're big questions. some of the kinds of things i think about, what are these major population movements -- syria is the most dramatic one, right? we've also had dramatic ones in iraq. those are not necessarily ending because iraq is not yet, you know, healed by a long shot. outpouring from libya, what's happening in yemen? you know, the destruction and devastation there. humanitarian disaster there as well. so what is this going to mean for these -- to call them failed states doesn't even begin to capture -- what does it mean for whatever structures remain going forward? what does it mean for the possibilities of rebuilding? i don't -- i don't know. >> a question for the -- in the program, you proposed for the management of the migrant crisis in europe, your point number two

was robust border controls. and how does that work in with the shengen agreement where europeans travel freely? how practical would it be? >> that have very easy to answer because the shengen agreement was about traveling freely in between those shengen member states but it never related to the outer borders of the shengen area, so that has nothing to do with each other. >> as a professional engaged in financial forensics, i'm interested in the economics of the corruption that's involved with this. in "the new york times" a couple of weeks ago, there were a description of the $6 billion that had been achieved by the transportation, if you will, of the refugees.

it was reiterated this morning. there's been no comment by any of the presenters about the endemic corruption that exists in all of these countries and i'd be interested of nowing your viewpoint as to what, how this may have affected this whole situation. >> sure. i can speak to the problem of corruption in mexico where, again, there's always a gap between what the law says and how it works in practice. but in the mexican case, the gap is absolutely enormous. and every survey, every bit of anecdotal evidence, no matter what your research method is has shown there's very widespread corruption that the police more than any other group or as much as any other group present a real threat of danger to migrants and that includes many asylum seek who are are passing

through mexico. just one data point, a few years ago, the central authorities conducted polygraph tests on the migration border agents along the southern border. and more than half of them were unable to pass those polygraphs because the level of extortion and various other kinds of shakedowns is so extreme. so it's a very serious problem. >> just a couple of -- yeah, just a couple of things. i was -- i remember when the outflow from turkey really became dramatic and i was wondering -- i mean, understood that no state is capable of completely controlling its borders or its shoreline but it just seemed to me a state with capacity that the turkish state has would be able to do a better job of stopping this outmovement if it, in fact, people in power had control over those things

were actually interested in doing something like that. of course, the proof of that is the dramatic decline since this agreement reached with the eu. but i raised this actually in a session a couple weeks ago where we had people on campus who had done volunteer work and i expressed my surprise that i hadn't really seen any reporting about how the -- beyond knowing what it costs for people who wanted to leave turkey to get to greece. and understanding that, you know, the ships are often rickety and many people die along the way and so on. but what these young men reported to us was that -- i mean, of course, one would imagine that various mafias that are involved and each specialize in different aspects of the process from selling life jackets which apparently in many cases are stuffed with cardboard that lead them to sink as opposed to having any serious flotation device in them, to

shore patrol ships that would spear some of these dinghy-type ships and cause them to sink, and let others go by, presumably because some had paid for their passage out and others had not done so. so the degree to which there is collusion, not just among various sort of traffickers and so on, but also among state authorities in these various population movements i think is important to highlight. so i would say that. the other thing i would say with regard to corruption, when we look at, this isn't specifically about refugees, but if you look at the record of the united states in afghanistan, for example, and the so-called humanitarian assistance that's poured in in the billions of dollars, the same thing, iraq, and stuff that just no one can account for anymore, it's not just a country like syria, it's not just a country like lebanon, or turkey or jordan that has a problem with corruption.

>> i have a question for both -- you mentioned about rise of the right wing especially in germany, but i can, you know, for my perspective, i think there's a, you know, big rise of -- sharp rise of right-wing parties and right-wing supporters all throughout the world, like including even here in u.s. this is very interesting because, we all talked about -- especially in europe. the nation states will disappear and it will be all us. not me and you. but what -- politics is very important. especially in accepting refugees. public attitude toward refugees. what do you think about this rise of right-wing -- how will

it happen in the future? how will it -- european union in accepting refugees and this rise of right-wing, how will it be seen from middle east? because it will also, you know, get a response from middle east because the politics is all about anti-christianism, anti-islam, that kind of, you know, issues. >> yep. thank you. >> well, this morning, by very short, we could have had the news that we have the first popular right-wing president in an eu member state by 49.7% to 53%. so this is a very concrete phenomenon. or look to france, how strong it has become recently. and we will see what will happen in the next elections.

you cannot ignore it. and on the lefteist part of public opinion in my country, i find people have a problem accepting that democracy brings things like that, that a democracy you have to respect if people vote for those parties. i can speak only for my country. we have, of course, clear rules. we have our constitution and our red lines that you cannot cross, but within those red lines of the constitution, people have, of course, the right to vote the party that they think represents their political beliefs. i might not share their beliefs but if you call yourself a democracy, you have to deal with that. it's a competition. i think the other peatther part to offer something to the electorate and gain back some ground for themselves. i think we have, we have reached

the point where they understood that. they have to be much more in contact with their electorate and share a little more of their concerns and maybe get back more of that ground. >> i'm not sure how much difference i think it means in a case for middle easterners. the difference in the way that the u.s. has conducted policy under democratic and republican administrations, you know, in some cases maybe, you know, it's been more violent in one part of the region than in another depending on which administration we're talking about. the record of the last several decades is not one that is -- you know, is one that seems to illustrate the values that the united states proclaims to be bringing to the world. i mean, this idea of sort of promoting democracy and so on.

people living in a place like iraq which was under the most brutal sanctions regime in history for over a decade. repeated invasions. drone warfare now. so the idea -- you know, right -- i mean, if this is what one gets with, you know, a democratic administration, i'm not sure that the rise of, you know, a donald trump phenomenon really for people in the middle east who've lived with these realities for decades is something -- i'm not sure that there's -- that that makes a whole lot of difference. i mean, people -- on the one hand, they might be shocked by sort of the brutality or the -- of the rhetoric, but they've had to live with brutality of the policy so i'm not sure that it makes much difference. >> thank you. my question is for mr. biedermann. i was struck by your remark about how the follow-on effect of the immigration and refugee

crises in europe might even be worse than the current existing crisis because of the stresses and divisions it's creating. might you please -- i'm interested, if you would not mind speculating, on the worst case. how troubling, how bad could that get? in terms of the divisions within the union. thank you. politically and so on. thank you. >> of course, i'm not a prophet. no. i'm an optimist. i think that the project of the european union is so big. after having a europe in 1945 that was completely destroyed mentally and physically, to create a political party that might be able to abandon war, i mean, i'm the first generation in europe forever that has never seen a war and this is thank you to the european union. that is a project that is so big and so important, not only for us europeans because if it goes

well, it might offer a kind of organization to other parts of the world, too, where people still think that wars or fighting might go on forever. we managed now for 70 years to hammer out compromise and to solve our problems without bloodshed. that is a big endeavor. it's a utopia we are trying to realize there. i can't imagine we give it up just for one particular topic that should be solvable. as i said, it's -- europe is big. europe is strong. economy's running not so -- i mean, it's a rich part of the world. let's not be so shy about that. we could absorb, of course, refugees and we should do so, but i pray every morning that this project survives because it's so important. it's not typical for a diplomat to pray every morning, i know that.

>> so i want to get the panel's thoughts on the question that professor asked, our keynote speaker. i thought it was a very important question. i'm going to phrase it somewhat differently but i think it amounts to the same thing. each of you have offered a diagnosis of at least part, maybe all of the situation and each of you have implied certain solutions. mr. biedermann, i think you're the one with the four points and perhaps proposed -- proposed and approached most concretely. here's the question at least the way i would phrase it. one could look at your diagnosis and solutions as ones that will work only if we hold to a relatively narrow expansion or no expansion of the 1951 refugee convention, definition of refugee. or one could look at your solutions as really underscoring that that regime really needs to be dissolved or completely

rethought and really ask the question, who is a jerefugee in the first place? i'm curious what you think about that. are your solutions a challenge to the refugee migrant distinction or do they require that we maintain that distinction? >> i think the distinction still is a good thing even though in reality, it poses, i mean, enormous problems as we all see. but there is a difference between somebody who flees a country where his or her life is threatened, compared to somebody who is looking for an economic better life. it's not the same thing. and we should keep the red line here, i think, but as you know, in reality, it's so difficult to find -- you know, it's really difficult, but just consider if we opened those doors and considered everybody who considers themselves or herself

a refugee as such, the numbers would go up and i'm not sure about political stability then in our countries. >> i think it's important not to let the perfect be the enemy of the good. i think that the biggest problems with the u.n. refugee convention are not the provisions of the convention, but things that might be added on to it, but i think if the convention were to be opened up from scratch at this particular moment that the result would be much worse for people in desperate conditions than what we have right now. personally, i would like to see many more legal mechanisms for people to apply for protection regardless of where they are. and speaking now as a citizen of the world, rather than as an analyst, i would be willing to trade more punitive enforcement measures, detentions, things like that in return for a serious, wide, legal mechanism. [ inaudible question ]

>> that is. if someone from syria is in turkey or some part of syria that's not under the control of a persecuting group, that that person be able to apply for asylum in the u.s. or canada or qatar or wherever and then traffic directly to that place of refuge. >> what's being -- [ inaudible question ] >> for example, in the doors are left completely open, that means when asylum seekers come to a place like europe and have their refugee status determination and at the end of that are found not to fit the refugee criteria, then what happens? well, typically people are not deported. and in general i'm not in fave of mass deportations but i'd rather have a system that makes it possible for people to come to europe or another place of ref refuge, have a serious refugee status determination than the

current system which has a very, very deliberately high cost in human lives because of the impossible transit. >> this is a question for professor. so about the united states. leaving aside the political -- accepting refugees, just considering economic issues and cultural issues, how many refugees per year, coming years, do you think the u.s. could accept, accept from the middle east? what's the cost, individual upfront cost that you estimate. how do you think it could be financed? >> good question. you know, for most of the 2000s, the u.s. has been accepting about a million legal permanent

residents per year and right now we're just taking something like, what is it, 30,000, 50,000 refugees. very, very small number. clearly the united states has a massive capacity to take more c refugees. if you fly from los angeles is new york, it's a big country and there's a lot more room for refugees. i think we need to be honest about the fact that up front there are costs, resettlement does incur costs in the first few months and maybe few years and that depend on the human capital of the person who comes. if those investments are made early on, they will reap returns in the future. but i think we need to be serious about the fact that, yes, we need more congressional appropriations for resettlement. >> would you mention some figures? i would be interested in some ballpark estimates of the costs

and if this makes sense to you. >> i don't have specific estimates to give you but what i can say is this is something that would require congressional action because it's not something the president can do to appropriate more money towards refugee resettlement, that would require congressional action and clearly there's no political will to do that now. >> well, it has been said that the refugee crisis that started in 2011, immediately after the arab spring, is not quite a crisis anymore since it has become quite a constant phenomenon. medical practitioners in the receiving countries say that the real crisis is the fact that they can not afford to pro vid juf car enough care, especially mental care, they're suffering from ptsd, the sexualization of

torture and they say this as the real crisis. some of these clinic, and they are called ethnoclinics, have their locations or their names classified because some of these victims testified to clear human rights abuse and my question is has there been a movement towards documenting the stories of these victims who testified to these abuses to their carers, to their caregivers to build an oral history and oral archive of the human rights abuses like in bod nia, because whatever happened in bosnia happens in terms of torture with middle eastern refugees and has there been -- at least in germany, a movement towards collecting these witness testimonies so adds to persecute perpetrators of human rights abuse?

>> i don't know that. sorry. >> i know there's a lot of work being done documenting refugee stories but whether it's specifically -- there are particular groups that are interested or focusing on human rights abuses that i simply don't know. >> well, there's definitely an effort to collect evidence for prosecution but it's not focused on. [ inaudible ] it's focused on collecting documents and photographs and accounts of what have been happen i happening. [ inaudible ] >> i heard a story on npr this

morning that doctors are collecting. [ inaudible ] >> so if there are no further questions i'd like to thank our panelists. [ applause [ applause ] and thanks to all of you for attending this event. >> i should have sat in the audience because your presentation was very interesting, i could have learned a lot. all the figures you had were really quite revealing. [ indistinct conversation ] officials from the homeland

security department testify on the u.s. visa program and the potential risks of not being able to track those who remain in the country after their visa expires. you can watch that house hearing tomorrow at 10:00 a.m. eastern on c-span 3. it was announced earlier today that all senators will have the chance to be briefed on the investigation into this weekend's mass shooting that left at least 49 people dead at that orlando, florida, nightclub. fbi director james comey and homeland security director jeh johnson are expected to attend that meeting which is set for wednesday. we heard director comey talk about the ongoing investigation today at a news conference. here's a portion of what he had to say. >> what i want to do is give you a sense of what we know so far and then tell you as much as i can about our past contact with the killer. we are going through the killer's life, as i said,

especially his electronics, to understand as much as we can about his path and whether there was anyone else involved either in directing him or assisting him. so far we see no indication this was a plot directed from outside the united states and we see no indication he was part of any kind of network. it's also not entirely clear at this point just what terrorist is group he aspired to support although he made clear his affinity at the time of the attack for isil and generally leading up to the attack for radical islamist groups. he made 911 calls from the club during the attack at about 2:30 in the morning sunday morning and there were three different calls. he called an hung up, he called again and spoke briefly with the dispatcher and then he hung up and then the dispatcher called him back again and they spoke briefly so there were three total calls. during the calls, he said he was doing this for the leader of

isil who he named and pledged loyalty to. but he also appeared to claim solidarity with the perpetrators of the boston marathon bombing and solidarity with a florida man who died as a suicide bomber in syria for al nusra front, a group in conflict with the so-called islamic state. the bombers at the boston marathon and the suicide bomber from florida were not inspired by isil which adds a little bit to the confusion about his motives and, of course, we're working to understand what role anti-gay bigotry may have played in motivating this attack that occurred during the very month when we recognize and celebrate our lgbt brothers and stirs. it's early, we're working hard to understand the killer and his motives and sources of inspiration but we are highly confident that this killer was radicalized and at least in some part through the internet.

c-span's washington journal live everyday with news and policy issues that impact you. coming up tuesday morning, three members of congress will join us to discuss the mass shootings in orlando over the weekend. democratic california sweptive the eric swalwell, ranking member of the intelligence superintendent committee on the cia talks about the role of u.s. intelligence today and in the future. then the chair of the homeland security subcommittee on oversight and management efficiency, pennsylvania representative scott perry, on homeland security and domestic terrorism issues and senator tom carper of delaware, member of the homeland security and government affairs committee discussing threats to u.s. security. be sure to watch c-span's "washington journal" beginning live at 7:00 a.m. eastern. join the discussion. >> we are going public.

we'll be watched by our friends and people across the country and i would hope, as i said before, that the senate may change, not as an institution but may become a more efficient body because of televised proceedings. >> the proceedings of the united states senate are being broadcast to the nation on television for the first time. not that we have operated in secret until now. millions of americans have sat in the galleries and observed senate debates during their visits to washington, but today they can witness the proceedings in their own homes. >> and in effect the senate floor has been a kind of a stage, the senators have been acting on that stage, the audience is in the galleries and

by our action today we haven't really fundamentally altered that situation, we've sumly enlarged the galleries. we have pushed out the walls to include all of the american people who wish to watch. commemorating 30 years of the u.s. senate on c-span 2. now a conversation on urbanization around the world and what it means for geopolitics, the global economy, climate change, and other issues. among those we'll hear from, chicago mayor rahm emanuel, former treasury secretary ankh paulson and the governor of bangkok. [ applause ] thank you very much, indeed for that lovely welcome and on behalf of the "financial times," as the u.s. managing editor, i should say we are absolutely

delighted to be partnering with the chicago global council on this very, very important event. that's not just because we love chicago here at the ft, although swernly do, particularly when the weather is like this. and it's not just because we love smart conversation with intelligent people. and looking around at you at the audience, i know there are a lot of people who have a lot of ideas to offer on the future of cities and i look forward to hearing what you all have to say. but we're particularly pleased to be partnering on this event because we know cities matter. we are in the business of stories, news stories, and cities are at the center of almost every single story that the "financial times" writes today. good stories about amazing economic dynamism, cultural collisions, technological change, exciting political

participation. but also very bad stories about terrorism, about pollution, about rising income inequality, about many problems with corporate and political governance. but either way, these stories affect most of our two million strong readers around the world and i should mention that 30% of those are actually in america. america is our biggest market. and they're very important stories. so important that in fact we have a special report coming out tomorrow looking at the future of cities and we've also made the ft.com web site accessible freely to all of you here during the next couple of days. soy look forward to some fantastic conversations in the next couple of days. we have several leading ft journalist swlos come in from around the world to moderate these conversations, i look forward to hearing what this amazing array of delegates have

to say about these very, very important issues. and finding ways to turn bad stories about cities into good stories in the future. but most importantly i would like to first of all say a very big welcome to a man who's probably best placed to start off the whole event, mayor rahm emanuel who will say a few words of welcome to kick us off. thank you. [ applause ] >> thanks, jillian. i want to thank all of you for being here, especially the guests. as a mayor of the city of chicago you'd make me happy if you'd just go out and spend some money and buy some things. we've got a budget you we need to meet so you would be very helpful. this is our second year of having a forum because one of the most dynamic and and

exciting things happening around the world is the renaissance of our cities, as the intellectual, cultural and economic center of either a metro area or global area and the good news for the city of chicago in the last three years, there have been three distinct studies of 100 cities. ibm, "economist magazine" carney. in each of the magazines, each of the studies of 100 global cities, chicago was ranked in the top ten cities, either ninth, eighth, or seventh as most economically competitive. as a mayor i agree with the one that said we were the seventh most competitive in the world. [ applause ] a fellow chicagoan competitive middle child right there. [ laughter [ laughter ] it fell in line with something we did in my first year of my first term. i had asked brookings institute and mckinzie to do a study to

look at chicago, what are our strengths, challenges, opportunities and to lay out a business plan for the next ten years. all three of the former studies in the brookings institute and mckinzie study came back with the same conclusion about the city of chicago and we have an economic plan that focuses on talent, transportation and technology and by investing in those three things and continuing to invest in those three things and continuing to keep chicago at the competitive edge that it has as it competes around the globe, in the first three studies, what is also interesting for city, while we were in the top-ten ranking, we were the only city on that top-ten ranking that was not either the representative country's financial or political capital. new york was on the list, berlin, london, tokyo, all of them are near political or financial capitals of the country. chicago, thank god, is neither the political or financial

capital but we are the heartland of the united states. i happen to think of the city as the most american of american cities. and so the conference we're having today and i have had some meetings with my colleagues from around the globe, all of us face the same challenges, how to find the resources to invest in the future and make sure our city continues to be a high-quality living experience for people of diverse backgrounds to continue to call that home. and we approach this and i learn aloss from my colleagues from around the globe who are looking for answers. the decisions we make in the next four years will determine what chicago will look like in the next 30 or 40 years, the other thing that is more important to have this meeting, to have a shared set of ideas and i welcome you to the city and thank those who have helped make this possible. it's a continue well effort for us to keep a dialogue going and learn from each other as we make the decisions about investing in the future.

thank you. [ applause ] >> ladies and gentlemen, please welcome to the stage, ambassador hang chi chen, secretary henry paulson, dame tessa jao, and our panel moderator jillian tet. [ applause ] . well, good evening, everybody, and welcome once again. welcome to the opening panel of this conversation looking at the future of the powers and limitations of global cities in many ways this picks up where mayor emanuel just left off because as he says, chicago recently has been doing an audit of what its strengths and weaknesses are and what it can do to invest to make a more vibrant and successful city in the future. what we're going to be doing in

this panel is taking that a step further and saying well, if you look at global cities around the world as a whole what doesn't audit look like today? are cities working or not working? which cities would we hold up as being top of the class, what would we put as the most effective global city, which ones are the disaster zone this is which ones are going to be worthy of praise? which ones are the problems? and we have as you just heard a fantastically diverse collection of people to talk about this. i won't present them all again now but we have essentially at one end ambassador chan who is representing the city state of singapore, arguably one of the most successful cities in the world. we have secretary henry paulson who has been working with chicago in looking at the issue of urban innovation p particularly in relation to the

u.s. and china for many years. we have dame tessa jao who has been working as a british member of parliament for many years but has been involved in the role of london on the global stage and we have the governor of the city of bangkok and thailand, a former academic political scientist who spent years analyzing problems and has been trying to fix them as governor of thailand recently. i would like to start by asking ambassador chan. you spent many years as ambassador to washington, 14 years as singapore's ambassador to washington looking at sing more to a global contest. many europeans would look at singapore today and say not only are you perhaps one of the most potent city states in the world but in some ways you are a success story as a city, what do

you think are the key lessons for why singapore works today? >> how much time do sniff. [ laughter ] >> three minutes. >> well, jill iian i would say looking at singapore, it has two advantages, it's a global city and city state. we can be small and nimble but we can also have the authority, the sovereignty and the financial resources to do things and that has helped us enormously. singapore has taken advantage first of what is original role has been which is as a maritime and trading center. then we piled on other functions seeking to be relevant and that's very important for global cities. are you relevant? can you remain relevant? and from a maritime and trading sender we are become a petrochemical center. we're the third largest

petrochemical refining center in the world and we're an aviation hub and i think there's a power law about cities. the more you do, the more you will have. and more will come. people will come, talent will come, investments will come, et cetera. so i think we've capitalized on that. but the second point about singapore is that we were fortunate to start off with an excellent leadership, a leadership which knowing we have no resources, absolutely no resources, no oil, not even water chose to be strategic and to develop the human resource, people. and by being strategic, i think my -- the founding father and his ministers really found a role and constantly tried to define a role for singapore.

and to build an excellent bureaucracy. an honest bureaucracy, a disciplined bureaucracy and we work adds a whole of government. every agency is coordinated, when you are small, city state size, you can have rapid policy response so it comes together, i say all this but there are times when we are not so well coordinated. >> remind us how many people live in singapore today? >> 5.5 million. >> 5.5 million. that makes you a tta tiddler compared to india. how many in bangkok? >> 5.7 registered but i think at least 10 to 12 million. >> when you as governor of bangkok look at singapore and see the extraordinary success, what strikes me most about sing mortar is not just that you are

flexible and many some ways homogenous, you're very wholistic. when you look at a story like singapore. can you be singapore? or is that just to difficult given the history? >> we are always very jealous of singapore. [ laughter ] >> well, you win prizes for honesty straight up. >> there's a unity of national and local governance and this makes ones task much easier, while in thailand things are much, much more complex, different legal, political, social and financial settings. >> and yet bangkok does have this amazing sense of cultural history. no one is going to stand up and sing "one night in singapore" are they? >> i'm not sure whether that's a compliment. [ laughter ] >> well i think we can take it as a compliment.

are you going to tell me people are going to sing "one night in singapore". >> but jillian can i add this point? i pointed out what is good about singapore and all the reasons why singapore is successful but our position is not unassailable. a city state, a global city, can lose its position. think. when connectivity changes, you change. and technology. so for singapore i think it has become our task and role to always define a new relevant and that is what we are obsessed with. to constantly reinvent ourselves. >> right. >> so far i think we've done okay. >> i want to go back to the question about being creative and cool and certainly bangkok in many people's eyes is seen as creative and cool, whether that makes it harder to be organized, too, whether you need to have the messy collisions to be cool or not. when you're talking about

innovation. that's a key issue. but on the issue of venice, i'd like to bring in dame jowell and ask you. we add the ft ran a series of advertisements about our brexit coverage which for those of you who haven't read it, it's super. you should read it. but we have a picture of venice and london and asking essentially "is london destined to become the new venice if brexit happens?" i'm not necessarily going to ask you to talk about brexit though i'm sure everyone here would love to know whether you think it will happen but how do you look at london as a quasi city state? >> i don't think that london is a city state and i don't think it would be a good thing for london to become a city state. london is the foremost city in the united kingdom. contributes to the economy and the strength of the economy in the united kingdom but is

clearly distinctive and i think that when i was in the plane flying over here today i was thinking about this illusive definition of what is a global city and a global city is not a world city, it's not just a city. it sort of describes a special kind of personality, of self-confers which london certainly has, connectedness to the rest of the world which london certainly has woven in to the rest of the world. immigration over generations has created that for london. and london is as defined during and after the olympics a creative and cool city but the ambassador is right about this. there are threats to london's position, as we would say, as

londoners, the greatest city in the world. you can be creative and cool but there's a limit to your creativity and coolness if there are problems with visas and you restrict talent coming in, if you don't have universal broadband coverage and if young creative people can't afford to live in the city, can't afford to send their children to school there. so the threats facing london are actually rather prosaic. it's the lack of affordable housing, it's the level of congestion, if creaking structure. desperately in need of updating with plans to do so. the skill mismatch. the fact that the constraint on instruct at the pace that london needs is the shortage of skilled labor and so on.

so i think that you can see this and the ambitious poetic part of the identity, which is a creative city but also the risks if it becomes disconnected from the means by which that creativity. that leadership is actually sustained. >> but when you, as someone who has looked at the governance of london in some detail, actually ran to be mayor. when you were considering your mayoral bid, did you feel jealous when you looked at singapore and said if only i had a small cohesive bureaucracy that i could actually control, get to do things, that would be the answer? >> i think there are -- i think there are two things. one is if you are the mayor of a great city you've transcending traditional tribal politics. that's the first thing.

second, you have to be able to plan for the long term. i mean, if i look -- you know, the transformation of singapore has been over, what? 20 years? 30 years? >> 50 years. >> 50 years. there you are. and actually meeting the challenges of modernization that london requires will take 20 years. so i think that that is -- you know, i think it's a mistake to look at other cities and envy because london is a city of and for londoners, distinct and therefore the way in which london is run and projected to the world has to be true to that and there are aspects of, you know, the city state of singapore that would never work in london. i mean, london is kind of irreverent, self-confident,

rather arsearsey as one might s >> not sure how you translate arsey into american. >> that's right, young city, a city with fragility. and looking at that means you can begin to understand the challenges facing london over the next ten years. >> secretary paulson, i'd like to bring you in because you've never actually run a city but you have run goldman sachs which probably is as wealthy as your average city and you've also run the u.s. treasury. i'm curious. from your experience having traveled all over the world, which cities do you think are most successful today? >> wow. so i happen to -- first of all, i love my city. i've lived in new york, i've lived in washington, i came back to live in chicago so i'm a big fan of chicago. number one. number two, i would say that

the -- that i agree with the comments that have been made here how important management is to a city. and we've all watched, i've watched chicago go up and down based upon the mayors here you can have -- it's harder to screw up a national government than a city so it takes -- it really is management intensive. i'm going to look at it from a -- start of an unusual perspective because i think basically cities don't work unless there's a strong economic base. if you don't have -- and governments don't create jobs but they create the conditions for business to create jobs. and it's very competitive because business and capital are ultimately going to go where it's most attractive to invest and so, again, i look at it through that focus.

and i think singapore has done a magnificent job. i think london has done a magnificent job. to me they both really stand out. i have, though -- my focus, as you say i can comment having traveled around those places but because my focus is u.s./china relation, and on u.s./china relations my focus is on economic sustainability and the environment i look at urbanization through that route and so one of the biggest things on my mind, huge, is i look at what's going to happen, what was said at the beginning, this population explosion, the fwhoex to three billion people, where are they going? they're going the cities. so ithe reason i think london ad

singapore and bangkok are so important is because we're going to need models. most of those, their growth, is going to be in the developing world. and i'll tell you, there there are huge issues. and so as china figures out what the urbanization model is going to look with the next 300 million people going to the city and as they look to models elsewhere and help create models to the developing world, it will be very important. and we're talking about all the -- you know the arts and what makes difference cities special, i think in the developing world it's going to be management capacity. the plans, if you don't get the plan right, you're really in problems and then finance. because many parts of the world

don't have municipal finance and when you look at what needs to be done to bring clean technologies -- i'm focused on the environment and i'll tell you, we can argue about what roles city plays and where the national government plays a bigger role and the city plays a bigger role but when you look at dealing with waste material management, you look at dealing with transportation, you look at dealing with buildings, that's at the city and i'll tell you. if you are as concerned as i am about climate change and the economic risks from that it's going to be all about what happened in the cities and so therefore that's why i think new york is so important and i will somewhere u.s. tell you, i've got to say a few words about new york. i think new york compares very favorably with london, very favorably with most major --

>> with anything? >> well, just in terms of overall in terms of the energy, in terms of the dynamism, in terms of the environment for business i just look at singapore in a different way. when the ambassador talked about management, i love -- i heard someone the other day ask me and i didn't -- they said listen, in 1960 there were two island nations that started off each run by a 30-year-old lawyer and they described one of which was singapore as this is a swamp and nothing there and the other, of course, was cuba which has this vibrant economy and of course castro 30 years old and i will kwan you. look what happened to one and look what happened to the other. and a lot of that is through really good management. >> right, right. well i know the environmental issues are crucial. i mean one of the things that secretary paulson is involved with is trying to bring green

technologies to china and one of the facts that leapt out at me from our resent conversations is an astoningnishingly high proportion comes from creation of places like china. i'll turn to the governor in a minute but do you want to jump in here for a second? >> i just wanted to throw into the ring this thought. peter schwartz, in scenario builder, says by 2065, 80% of the world will be urban and professor michael bati, this well-known british geography said by the end of the century the hold world will be urban. now the rural countryside will be urban and you have second-tier city, third-tier cities, fourth-tier cities. you are bringing urban functions to the rural areas, does that

help or does it not help in green house gas, etc. >> whether it helps or hurt, it's a fact and so -- and a big part of this is going to be having cities be livable, cities that are livable for people, made for people and not just cars but my own view is that we're just taking china as an example and building on what jillian said, that roughly 40% of carbon emission come from buildings over the last five years, perhaps half of all new buildings going up have gone up in china so you say where will the big benefits from? they'll come from, a lot of them, from energy efficiency. i think if it's done right and you're talking about transportation, you're talking about energy efficient buildings, you're talking about

industrial processes, there's -- that's where a lot of the low-hanging fruit is. but so much of this is about rolling out new clean technologies in scale on a cost-effective bases any the developing world and where is the money going to come from? it's not going to come from government, government has to create the conditions to bring that private capital there so there's a lot to be learned from what we see, experiments and things going noncities all around the world and for instance in china the reason -- my institute is a think and do tank and we're focused right now, i'm focused on two things in particular, one of which is this region, beijing, tan general and aby a which is the political center of china. it's huge in terms of the

populati population so it's a big population center, big, big industrialization very dirty air but yet china is focusing on this as to the pilot for rolling out their transformation to a lower carbon economy and to a new economy and so the work that they're doing there, part of it is energy efficiency, part of it is transportation. part of it is getting renewables on the grid and then another thing i'm working on, we're working on is green finance because that -- china is president of the g20 this year and they're working on models for green finance. and the reason i think it's so important is those models might be not only very, very important in china but could be used throughout the developing world. >> so we need innovative technology and innovative

finance as well. but i'm curious -- okay. >> but what i think we're at risk of forgetting here is the dynamic that drives this because we certainly -- we all agree that strong and directed management is fundamental to change but that certainly in the uk, most of europe, most of the u.s. is cut across by the messy business of politics which so often means that decisions on big infrastructure projects are crying out to be taken but they've become paralyzed by the inability to broker a political agreement. a political consensus. so i think we can be highly prescriptive about what cities need but don't let's forget that you're having to broker two

things, drive the management process to secure change but also look after the politics at the same time. >> so how do we cope with democracy in a city? >> oh, well, there you are. >> it's an issue chicago is grappling with. i'd like to bring in the governor right now. new many ways emblematic of the problem in the emerging markets in that you say you officially have five million people, probably nearer to 10 million, that reflects a boom in urbanization which is quite d w dramat dramatic. two-thirds of the world's population will live in cities by 2050 and you end up with everyone living in cities soon. how on earth do you in bangkok cope with this sudden expansion? do you have the ability to execute decisions quickly or are you upended by messy politics

to? could you dl what secretary paulson is talking about with green technology. >> for a long, long time bangkok flourished despite itself. for a long time we expanded, our economy expanded without proper city planning with very little legal power given to the city but 30 years ago, exactly 30 years ago a new law was passed and i think we began to put things right and yes, in many ways we have been able to address many of the challenges that have arisen over the last 30 years and the challenges which we inherited from the period before that. we perhaps have benefitted from relative continuity in the 30 years since that law was passed

there have been only six governors while there have been over 20 changes of government so. >> so you've had 20 national leaders -- 14 different -- but -- >> they've changed 20 times and you've only changed seven times? >> yes. >> well, you're certainly more stable. that makes italian politics look positively stable. [ laughter ] >> still we need to amend the law because the world has changed. we need more capacity, legal capacity to deal with more problems and introducing green technology is difficult if we require great investment but that we're trying our best but budgetary constraint is a big skon strant. bangkok pays 70% of the nation's

taxes but we get from the government less than .7 of the national budget. >> .7? >> .7. >> that sounds like a very, very bad deal. >> in the last 20 years, the national budget has gone up probably four times, nearly four times while in absolute terms the money we get from the government remains exactly the same. >> so my question is imagine tomorrow you said okay, i'm governor of bangkok, i want to deal with the environmental problem. could you in theory talk to secretary paulson or other people and just develop a scheme to get green finance and implement it? do you have that power or are messy local politics getting in your way? is democracy the problem or is it a problem that the national government is impeding what you want to do?

>> we are allowed to talk to different people. we are allowed to engage in agreeme agreements. i don't engage in tribal politics as was mentioned. i have had to work with three different governments in the last seven years and i think on the whole there have been pretty reasonable over the years so, yes, we can go our own way in these sort of things. indeed, we were more progressive than the government because we introduced the first carbon emission reduction plan by a government agency. we -- the first plan started in kevin and now we are starting the second plan which is a 20-year plan so we can go ahead. >> that's probably a model in london as well. >> and you see some of these

policies will have their -- will be initiated and have their origin at a very local level. you know a sort of community level. some will be determined by the national government and the city government then becomes the mediator and the implementer. it seems to me that the important thing is to be pretty focused on the small number of policies that can be transformational and that you as a city government have the power to deliver. >> i would just echo what has just been said in that i think the issues everywhere i look are political and it's not just in

democracie democracies. the u.s. -- -- i'll make two comments. first of all, your comment about infrastructure in the u.s. we all know we need massive investment in infrastructure and again it's not -- the government i don't think has got the noun do everything that needs to be done and how do you attract private capital? and the issues we have are all the multiple regulations and delays and political risk that makes it an unattractive investment so it's very hard, you talk about building high speed rail, you talk about building the kind of power grid we should have in the united states and you look at the right of ways and environmental laws. now i'm going go to china because some people say well, they're an authoritarian government, they will say to me i -- i call it ask the emperor syndrome. and people will say the president, xi jinping, ask him,

you can get something done. and you look at the diffuse decision making in china and you look at the power that has been devolved to cities on the one hand but on the other cities don't really have a sustainable system of money finance in china and mayors don't have real budget authority. they have to take one's land and use it to finance investment in infrastructure and that's not sustainable and they need massive tax reform. major tax reform. and that's very difficult to get done politically in china so there are all sorts of issues that they don't have the national government bureaucracy they need. so the president is trying to modernize the government and grow that. they don't a legal system to enforce the environmental laws so they need to start using

environmental measures to assess mayors in terms of their job performance. so there's -- everywhere i look i think these issues are issues of management capacity but also political issues and unfortunately a lot of the things that are -- need to be drone politically unpopular. >> except, of course, in singapore which has its very holistic model where essentially it is small enough to be run as a single bureaucracy. >> and there's something to be said for continuity of government. i would like to pick up the point also about everything being political and mayors don't have enough resourcings, they may not have the power. and i'm not sure the answer is to give mayors that much more power.

it's a problem there are ten cities doing very well and you -- enhance the power of every may mayor you're going to have ten more lords before you know it. so i can see the center jealously guarding some of that power but i have to say that mayors have demonstrated. they learn from each other and the c-40 mayors have done a good job of learning from each other, inspiring each other. >> and mayors in the u.s. have a lot of power. >> yes. >> and they get things done. and you can -- it's really i think one of the strongest parts about the u.s. system with the exception the way some of the fiscal fears have been run in some of our cities which is a big other than. [ laughter ] >> as someone who's been around the country quite a bit i can say spinding time in washington usually leaves me feeling like i

want to jump off the nearest small building. spending time in what's happening in local areas is wildly inspiring because you have these petri dish experiments all over america showing different ways of having governance. i'm going to turn the audience for questions in just a minute but before i do. the question that rises in my mind from hearing you talk and the fact that mayors can get things done sometimes more national governments or more stable than national governments is should we be asking cities to play a bigger role on the global stage? should cities be involved in setting foreign policy or trying to circumvent national governments to create connections? in london right through there are a lot of people to succeed, if there was brexit and create their own city state. is it time to be talking about cities as an agent of foreign policy. >> i say make one view as

someone not carrying water on one side or the other. they're different systems and some -- there's different forms of federalism, there's different political systems and to me the point that is overwhelming is cities are where the action is going to take place so whether -- so there's a huge role whether mayors like it or not there's a huge role just in managing cities. and in almost every city i can think of there's a huge role in terms of the environment and there's no doubt that they do that. there's a huge role in terms of making the city competitive and open for business. so we could argue about whether we should give cities more power or not. i'm really much more focused on how do you create the models

because that's where so much of the action is going to take place and even if the policies are set at the national level they'll be implemented in many cases at the city and that's the coal face. whether you're dealing with crime, preventing terrorism, whether you're dealing with education which is just almost -- you know, education, the training, businesses working with cities to train. so i just see this as being huge and come back to cities needing to create models. >> right. i think this question about should cities be free to develop a foreign policy really -- it kind of forgets the order which is that there are certain furngss that a national government has to discharge and

i think that the -- you know, i'm sure london, the city i know best in the world, you could certainly argue the case and describe london's foreign policy which is by and large pro-european, outward looking, pro immigration. and in favor of utilizing the links with countries like india, like parts of south america, china, the city having a large diaspora, apart from anything else. so i think that's fine but i think it's very important not to forget that the electorate -- and mayors are elected, the electorate will judge the success of the mayor by his or her ability to do what they need for their city so you can have very grandiose foreign policy and lose an election.

if you haven't built the homes that people need and improve the quality of the infrastructure. so, again, you come back to this. it's a slightly mar lly mario c isn't it, in you campaign in poetry and you govern in prose. and there has to be that underpinning of practical and very clearly managed change. >> on that note, do you think somebody like saddiq kahn, the new mayor of london, was correct to say we should stay in the european union? is that the role of the mayor of london? >> absolutely. it's in london's interest to remain as part of the european union and look at the businesses in london who speak with virtually one voice on the importance of european investment in london. and he was absolutely right. to share a platform with the prime minister in doing that ch. this is a national concern not

one of narrower party politics. >> would you go out and be an ambassador for thailand not just bangkok? >> there's a strong trend of them becoming national leaders or heads of government but while they remain city state, there is very little time to engage in international diplomacy most mayors or governors find it difficult to travel. as i'm sitting here in chicago, if there's a heavy downpour in bangkok people will start asking where's the governor, why isn't he here trying to drain water from some streets. [ laughter ] >> so we're watching the weather forecast very closely in bangkok. >> that doesn't mean we don't engage in any diplomacy at all but we have built good

relationships with cities but it's a different thing to engage on purpose international diplomacy on a sustained basis. >> right. i fully agree with everything that has been said but mayors do conduct some kind of diplomacy. they do it for trade missions and when bill clinton was governor i know he met with mayors to taiwan. jacques chirac when he was mayor of paris went to japan quite a few times. so i think they tried to get investments. to some extent it's foreign policy but not foreign policy the way it touches on security

and strategy but as an ambassador in washington i was quite intrigued to find tacoma park impose sanctions on myanmar way above what the united states was imposing and i think boston as well and i -- >> so national cities like boston were imposing more sanctions on myanmar than the government? >> and tacoma park in maryland. >> i'm not sure how the tacoma park -- how big it is. >> and myanmar is in asean so i was interested, i was intrigued how could this be but there you are. >> that's part of the federal spirit of america and diversity. >> i'll tell you one thing. not only are you right but it's becoming much, much more intense with globalization and with capital being as noble as it is.

it's amazing how competitive where businesses are looking that they're going to build. mayors and governors are -- that's a big part of their job and it's becoming i think more intense and more difficult. and so you'll find mayors fighting and promoting to bring business being big protectionists trying to protect dying industries. >> on that note i have to ask you tessa jowell before i turn the audience for questions. if the uk does vote for brexit, does london lose its global perch? >> well, let's hope that doesn't happen, jillian. [ laughter ] >> what's your betting -- >> i think brexit would be damaging to london's economy. >> and what probability do you give brexit right now? what probability do you give to

brexit right now? >> i think we'll vote to remain but the important something that we vote to remain conclusively so the issue is settled. certainly forcertainly, for the next generation. >> i think -- had a vote, i think we know which way he would be voting. >> business, london is a center for global business. it is a global financial center: to me a no vote would be devastating and i don't think it will happen. >> i hope you are right. i hope you are right. but many political predictions have been up ended this year. >> mine is worth absolutely nothing. i'm just an optimist. >> let's have some questions from the audience. it will be courteous and not compulsory to not identify yourself before you ask your question.

it would be courteous to keep your question very, very short. i believe we have micro phones roving in the audience. if you wish to direct it to an individual person do let me know. if not, i will direct it myself. so any questions for our panel? do you have a question back there? >> i'm from the international institute for strategic studies. i've heard very interesting things about global north, you know developed world cities. i'd lying to where do global cities from developing countries especially those cities that are facing profound violence and dysfunction such as rio de janiero -- i come from rio and i live in london and it's very different. they aspire to be global cities, and they are certainly seen as global cities as the introductory video showed. can they be global cities even though they are facing high level violence, criminal violence, and several deep

problems that don't affect cities like chicago and new york? >> you don't see violence in chicago? >> i was going to say. yeah, i think tragically, given what's happened so far this year, that's not -- mr. paulson, would you like to comment on the issue of how do you combat the violence and can you be a true global city if you are? >> i'm not -- i think -- my comment aside, i think people -- the violence in chicago which is -- which is, you know, very sad, it's not in the areas where business is operating, and it hasn't really affected yet the competitiveness here. but it's a huge problem. now, i -- do i think global -- you know, in developing worlds that there will be true global cities there? and the answer is you betcha.

when you look -- so step back a minute. and those of us who have been raised in the developing world, the world is changing in the sense when you look at where the economic growth is coming from and you look at the oecd countries and the percentage of the global economy they had ten or 20 years ago and what they have got now and what they are going to have in the future, it is -- the economic weight is going to be shifting to asia and to other parts of the developing world. and so the idea that people think that shanghai or the jing jeije region -- aren't going to be right along with hong kong outstanding global cities i

think don't understand what's happening. so i think they have got a real, if they get it right, they have got -- they will be important economic drivers. but for them to get it right, china is going to need a new economic model. >> right. >> and they are going to need -- they are not dealing with crime there. they are dealing with, you know, terrible pollution issues. and they are dealing with other really serious issues in terms of dealing with their own form of immigration in terms of the immigration from people from the countryside without something access to education and health care. but yes, i think that what -- and i think your question, though, when you look at latin america and you look at different places in africa, and you look at what's going to happen throughout the developing

world, and cities springing up and becoming three, four, five million population cities overnight. this is something we all have to be very cognizant of. because if they don't deal with these issues it's going to impact not only them, but all of us in terms of what it does to our global ecosystem and what it does to our global economy. >> right. right. tessa? >> i think this is such a good and important question. i think my reaction is on three levels. first of all, cities don't become global cities simply by asserting that they are global cities. i think the second is that the fear of crime, neighborhoods where crime is a fact of everyday life and i've represented in my years as a member of parliament some such

neighborhoods, makes this self-confidence outward looking self-confidence that comes with being a global city almost impossible, which is why mayors that make tackling crime, bringing down crime their number one priority are likely to be successful in transforming their cities. i think the third thing i'd say with the rio olympics what in 35 days is that, you know, i greatly respected the ambition of the international olympic committee -- i know we are going to be talking about big events over the -- mega events over the course of the conference and the part that they have to play. and i'm sure that the rio olympics will be a huge success. but obviously, they haven't come

without a price in disruption, unrest, and so forth by the local community who are living with this uncertainty, crime, disruption, to lives day-by-day. so i think that you have absolutely, if you like, sort of registered a question at the heart of what we mean by global cities. and what we have to do, what leadership is required in order to create a global city. >> yes. we have a very different question from the electronic connection. there is a tweet. what role does naturalization of immigrants play in singapore? that's a question which of course has implications in many

cities around the world. mayor chen would you like to comment on what role the naturalization of immigrants plays in singapore? >> singapore is a very open society. in fact we were so open about, you know, increasing our population through immigration, and our immigration is not rural country. it's not migration from the rural country to the city. we actually give visas so you can control your immigration. and we've been very good about opening our doors because singaporeans are not repousing themselves. 1.2. that's our birth rate. so we -- in fact, in singapore today, one out of every four that you meet on the street is not a singaporean, is a foreigner. in fact, it would be 1.3-something. now you can be naturalized to be a citizen. but like most cities elsewhere,

we are also receiving some political backlash from too many immigrants. so whilst we remain open, we are staggering that openness. in other words we are controlling itful but it's hugely important. immigrants play a very productive role in our society. it helps bring -- helps singapore prosper. they play really constructive roles. >> it helps maintain the population, as you say n a world where many singaporans are not having babies. problem of much of western europe. en any more questions from the audience? we have a question down there in front. just got a few for minutes. >> steve clemens of the atlantic. thank you very much. my question is, none of you from the various cities you basically represent are talking about the transforming aal power that we are seeing in things like data, sensors. rahm emanuel is one of the most

famous data mayors in the world and while i know there is a panel that comes up on this later it just seems to me so core to talking about enframing the power and limit of future cities that i'm interested in how you think about data and how that is changing what's possible in the cities that you are representing. >> i think everyone here, steve, will stay that -- that's steve clemens from the atlantic. everyone on this panel will say that data of course plays a very major role. and how we use data in urban informatics to help in city management is going to be crucial in actually managing the problems of the city. but clearly not every city is at that level. but at the very least, i would say n fact, when i think of connectivity and global cities, global cities thrive on connectivity because of the connectivity, you know, a city

is a global city. and that connectivity must now move to sort of a digital connectivity. the digital footprint of influence is extremely important. i'm sorry we didn't mention it. >> i ask govern or paribatra, hw do you use data in bangkok? is that something you use? >> we are developing a database will which will assist us in tax collection and also assist us in other areas like provision of public health services and looking after the elderly. but it is very much still work in progress. but the importance of data is recognized. >> i think the use of data also

allows an open conversation between the leadership of the city and the people of the city, which is why it is important that the data is trusted. the second thing is that transformational change doesn't come without inconvenience and asking people to behave differently. you know, to take their car less often, to take the bus more, the walk more, all these kinds of things. and i think that data can be a very powerful mediator in providing the evidence base on which that behavior change is carried. >> right. >> i tell, it's -- i tell you what's been a huge eye opener for me. the institute sponsors a u.s./china ceo council on

sustainable urbanization. so there we have really big companies like tim cook from apple, doug mcmillan from walmart. jenny rammetty from ibm. mary barra from general motors. and then on the chinese side, state grid, alley baba and so on. and the project's big data, like for instance, it has just blown me away in terms of looking at for instance what ibm is doing in china, helping them track and be able to predict the pollution and source where it's coming from and or what can be done in terms of transportation management. or the -- and all of these companies, it's -- the technology they bring. if you are -- and the technology i see in china, and just in terms of even managing the power on the grid. so this is bringing all kinds of

capabilities. and so i think that is a huge tool for mayors. but, still, i do think no matter how much of a tool that is, so much of the constraints come down to political constraints, getting support from the voters to do the things and to do really really difficult thing. but you are right on. but i think probably the reason we didn't address it is none of us -- i can look at it with awe, but in terms of getting me -- i am at a data experts. >> as paulson says, there is always the problem of those pesky politics, or those pesky politicians. it's been a terrific debate. thank you very much indeed. as steve just said over the next couple of days we'll be picking up many of these themes and discussing them in a lot more detail, whether it's to do with data management, whether it's to do with the issue of the olympics or other big events and how they impact on economies. we have a session on violence,

which is a very big issue, tragically, even in chicago. we have an issue on income inequality, on urban design, an event on income inequality and we've also got events looking at questions of culture. a whole range of these specific themes will be discussed. to me perhaps one of the most potent comments of this session which i think framed it all was from secretary paulson saying it's harder to screw up national government than to screw up a city, to which i would add it's probably easier to make your mark quickly and do something really dynamic for the future in a city than government, too. >> amen. >> and that is what we're all here to discuss. so thank you very much, indeed. >> thank you. [ applause ] next up, we're all going to have a drink. [ laughter ]

>> announcer: cspan's washington journal live every day with news and policy issues that impact you. coming up tuesday morning, three members of congress will join us to discuss the mass shootings in orlando over the weekend. democratic california representative eric squallwell ranking member of the intelligence subcommittee on the cia talks about the role of u.s. intelligence today and in the future. then the chair of the homeland security subcommittee on oversight and efficiency commissioner scott perry on homeland security and domestic terrorism issues. and senator tom carper of delaware, members of the homeland security and government affairs committee discusses threats to u.s. security. be sure to watch cspan's washington journal beginning live at 7:00 a.m. eastern tuesday morning.

join in the discussion. >> tuesday morning here on cspan 3, a hearing on people who stay in the u.s. longer than allowed by their visas and what that means for national security. that house homeland security subcommittee gavels in at 10:00 a.m. eastern live on cspan 3. industry leaders testified about proposed energy efficiency rules for household appliances at a house energy and commerce subcommittee hearing. they talked about the possible effect of regulations on consumer prices and efficiency of large appliances including dishwashers, refrigerators, and washing machines. this is two hours, ten minutes. >> i'd like the call the hearing to order this morning and i want to thank our panel of witnesses for being with us. i'm going to introduce you right before we -- right before you give your opening statements so

i'll just introduce you individually at that time. i would like to recognize myself for five minutes for an opening statement. today's hearing is entitled home appliance energy efficiency standards. since 1987, we've had energy efficiency standards for certain appliances. came about because back in 1975, there was a federal energy policy act that established that format. the reagan administration was sued because it was not being implemented. and as a result of that lawsuit, we now found ourselves in about the fifth or sixth gyration of these energy efficiency standards which apply to almost anything that plugs into the wall in your home, whether it is an air conditioner, refrigerator, wash e dryer,

furnace, oftenen, washer, dryer, lighting, whatever it might be. and the argument was initially that you would save energy bills over time because of the efficiency you would use less electricity in the small amount of additional cost, you would ends up saving money. now some people today are questioning that because we're as i said we're about the fifth sixth or seventh round of these efficiency standards, and some people say that you reach a point of diminishing returns. and some people say that the additional cost now is at such a rate that you really don't have any savings over the long term because the energy efficiencies are simply not that great. now, other people say that's not the case. and of course additionally now, everybody is talking about global warming. and so there is additional emphasis being placed on this

because of that. one of the problems that we have is in america we feel like we're doing more than any other country in the world on these types of issues. i was reading an article the other day that said there are 3 billion people in the world who use open flames to cook today. and in the developing world by 2040, they expect that 65% of energy consumption will come from the developing world. we also hear a lot today about people being concerned about the cost of living. and we know that in california and new york they are trying to raise the minimum wage. and many people are urging that we raise the minimum wage. some people agree with that. and some people don't. but it's interesting that those strong advocates for raising the

minimum wage, they don't want to consider the additional cost caused by regulations. it's one thing to say okay we need to raise the minimum wage. but to low income, middle class family, if these appliances are going to cost additional money, what does that mean to their pocketbook? and then, we're even hearing now from some of the appliance makers that some of these new appliances really don't work as well as the old ones. and so it's a situation where i think no one really expected that the department of energy in this administration would be as aggressive as they have been on so many different fronts. now, the good news was that in 1975, when they were considering these efficiency standards they were supposed to consider that the technology was really feasible and that there was an

economic justification for it. but today that's beginning to be blurred and we know, certainly, at epa when they consider it, they certainly don't consider whether it's technologically feasible or economically justified. so if we wanted to have a more balanced approach what we're trying to do is hear from people who are involved in this on a daily basis because the american public when they go to the appliance store to buy an appliance, they don't understand all about this efficiency. they just know what the price is, and then some people are telling them well you are going to save money even though it's a lot more, because of the electricity that will go down. and other people make the other argument. so one of our objectives today is to just try to get a better understanding of what is the reality of this. and that's why we're hyhere we'. so i want to thank all of you for joining us. and at this time i'd like to introduce the distinguished

gentleman from illinois mr. rush for his opening statement. >> i want to thank you, mr. chairman, for holding today's hearing on the home appliance north efficiency standards under the department of energy stake holder's perspect i. i want to welcome, mr. chairman, all of our witnesses before the subcommittee here today. mr. chairman, since there are deo standards that we are addressing here today i think that it would definitely benefit the members of the subcommittee to also hear from the agency directly. and i hope that we can invite them to testify on this issue at a near date in the near future. mr. chairman, historically, energy efficiency has proven to

me the low hanging fruit that has brought more parties together legislatively while also making our country safer, more secure, and more attentive to the impacts of climate change. indeed, the story of energy efficiency, mr. chairman s one that is filled with success stories that are really helpful to pay our country forward by making us more independent and more secure while also reducing the cost of energy both in our pocket books and its impact to our environment. in fact, mr. chairman, by doe's own estimation, american

families saved close to $63 billion as a result of their energy bills going down. and this is the result of the -- these appliance standards that we are considering just in the year 2015 alone. the agency also forecasts, mr. chairman, that standards issued since 2009 would save the american consumer over $53 billion in utility costs and decreased common emissions by 2.3 billion metric tons by the year 2030. mr. chairman, in addition to the

huge energy savings and the benefits to the environment, appliance and equipment standards also lead to additional investments in the work force and and ultimate creation of jobs. a 2011 report by the american council for an energy efficient economy entitled, and i quote "appliance and equipment efficiency standards, a money maker and a job creator", end of quote found that in the efficiency standards led to net job creation in every single state. the study also found that by 2020, appliance and equipment standards will contribute up to

387,000 annual jobs to the u.s. economy. mr. chairman, while almost every effort by doe to establish or revise energy efficiency standards has been met with some type of opposition, traditionally, this issue has been pursued and i would commend both sides of this subcommittee they have been presumed in a bipartisan matter with contributions to the party put forward by our presidents and by past congressmen even though those congressmen and the white house have been under the control of both republicans and

democrats. it is my hope, mr. chairman, that following today's hearing we will ultimately get back to that type of collaboration and that type of cooperation on this issue. mr. chairman, it is critically important that the federal government maintains its leadership role of promoting, encouraging, and enticing interested stakeholders to continue with the progress that has already been made in efficiency technologies so that we can continue to keep moving the nation's energy policy forward. mr. chairman, i want to end my saying i look forward to today's hearing. i'm looking forward to expert witnesses on the successes and

the challenges that are facing this nation as it relates to energy efficiency appliance. with that i yield back. >> the gentleman yields back. at this time i recognize the gentleman from illinois, mr. shimkus. >> it's important to hear from stakeholders because the stories that we we have been here may not always reflect the real world and we are hoping that you will give us what's going on on the ground. and so i want to we have been a little story to put this all in perspective, too. congressman bosnia boston and i met with a small manufacturer about two months ago. and there subject to a d.o.e. enforcement case. and of course because of the enforcement case, they have been told to stop selling a piece of equipment. this company spent several months trying to find out why a -- they and a third party lab

that tested the product -- why they met the standard, and why why when d.o.e. got their hands on it they didn't meet the standard. so d.o.e. tested the product seven months later. and not only -- and i'll we have been the story of why d.o.e. came to a different conclusion. but it is also under a new regulation than when the product was originally produced. so here's this fraudian, catch 22 world in which you all have to try to live in to try to catch up after a product has been manufactured to a new regulation, and then face the heavy hand of the federal government. so the company was not aware of section 2.11 because it was not included in the proposed rule making. it was two lines in a large rule previously represented as not materially altering efficiency

measures. this piece of equipment did not pass the automatic test. but it did pass the manual test. so this is a piece of equipment that you operate manually or you can hook up a thermostat and it will operate automatically. it did meet the standards for the manual test. it didn't meet the test for the automatic. d.o.e. would never tell them why they failed the test until months later. even when they asked for transparency, show us your work, tell us what you are doing. so this is a crazy world in which we live in. the federal government's there to help, not punish. federal government is there to if they want to have efficiency and they want to encourage movement forward they should be insenting. they should not -- this small company -- it's a small

company -- has a proposed $241,000 penalty because d.o.e. is now saying that they knowingly, knowingly kind of jimmied the efficiency standards where the equipment met the manual standard, didn't meet the automatic standard. of course when you fall into this regime you can't sell your product. it's banned from being sold until this conflict gets resolved. small companies just can't survive this type of work. it would be best, as we hear, i'm sure, similar stories about the struggles of maintaining it. businesses go as they have to raise capital, assume risk, hoping to get a return. and while they are doing that, they create jobs. if the government -- we just

want the government to be fair players in this system. if we're going to create these new standards, give industry a chance to meet them. and don't play games of delay by not working with the industry and telling them why they failed to meet the standard. or changing the rules for automatic or manual type systems. so i'm really looking forward to the hearing. i think it's very, very important. and i've got questions when we come to it on -- to address the jobs debate, which i think people will find pretty problematic that these are now causing the loss of jobs in our country. and i yield back my time. >> thia yields back. this time recognize gentleman from new jersey, mr. pallone, for five minutes. >> thank you mr. chairman. the appliance and equipment

efficiency standards program at the department of energy has been successful in reducing energy consumption and lower consumers energy bills. the program also has been beneficial to manufacturers making energy saving products more ubiquitous and leaving -- leveling i should say the playing field nationally. in fact, efficiency standards for consumer appliances and other products likely constitute the single most effective evident to reduce energy consumption in the united statesle according to the energy department, americans saved $63 billion on their utility bills last year because of these standards. and this is also resulted in avoiding 2.6 billion tons of carbon dioxide emissions which would equal the annual level of emissions from 543 million vehicles. these figures are staggering and highlight the benefits this program. consumers save money and our environment is spared billions of tons of pollution every year. all of this began with enactment

of the energy and conservation act which was signed into law by republican president gerald ford, a highlight republican. this started a trend because with an exception to the amendment to the statute under the carter administration, every major expansion of the appliance efficiency standards program has been signed into law by a republican president. while some of our witnesses and my colleagues on the other side of the aisle may lament the long list of appliance standards proposed by the obama administration, they should remember that depending on your point of view much of the credit or blame for the obama standards can be traced back to two laws signed by president george w. bush. the energy policy act of 2005 and the energy independence and security act of 2007. and while the 2007 act was passed by a democratic congress, the energy policy act of 2005 was born out of a fully

republican congress and authored by the former republican chairman of this committee. i don't know why -- i have to keep saying fully republican congress. that's obviously not what i like. but the fact of the matter is that that most of this legislation was done by republican congress and presidents. this underscores an important fact. for the past 40 years energy efficiency has been a by part san issue where republicans and democrats have come together to reduce energy consumption and save consumers money. times have changed. certainly there are few republicans who still understand the importance of energy efficiency. mr. mckinley has worked with mr. welch to demonstrate trait the bipartisanship in this area is still alive to some degree. regrettablebly that seems to be the only republican support for major efficiency legislation in this congress. consider the recent house vote to go to congress on an energy package that would actually increase consumption by rolling

back efficiency. again, how times have changed. could the fsht standard setting process use improvement? of course it could. because there is always room for improvement. despite a revisionist view that disputes efficiency standards over new development the fact is that the standard setting process has always yielded some controversy from one industry participant or another. but these controversies were generally worked out and the results were better products, more efficiency, and often useful changes to the standard setting process. my concern is that improvements simply may not be possible in this current koung. last year when we were working to forge a bipartisan compromise on furnace standards certain stake holds made me question the sincerity of the so-called reform efforts. perhaps it's a matter of perspective. what some stakeholders view as minor tweaks look an awful lot to me like a thorough getting of the standards program. ultimately i believe a serious

successful energy efficiency policy for our nation must address demand as well as supply. that's why efficiency has traditionally been a concept that brought parties together. mr. chairman i hope one day we'll see that again. it doesn't seem like today is the day. thank you. i yield back. >> gentleman yields back. and that concludes the opening statements on our side. so at this time our first witness will be ms. sofie miller who is a senior policy analyst at the george washington university regulatory study center. ms. miller, thanks for being with us. and you will be given five minutes. just make sure the microphone is on and it's up close to you so we can hear every single word that you say. and you are recognized for five minutes. >> well thank you, chairman whitfield. and rank member rush and member of the subcommittee for inviting me to share my expertise today. i appreciate the subcommittee's

interest in the department of energy's energy conservation program as well as opportunities for congress to improve it. i am the senior policy analyst at the george washington university regulatory study center where i analyze the effects of regulation on public welfare, including effect of do. e dough's energy efficiency standards on consumers specifically. through my research i have identified ways in which these standards can harm consumers rather than benefiting them by limiting the products available and removing from the mark appliances that might best suit their needs. doe's efficiency standards regulate most appliances in households. and as a result they affect almost all u.s. consumers. these standards increase the prices of common appliances in exchange for reducing consumers energy and water bills in the future. while doe does estimate consumers receive large net

benefits from this trade off it doesn't take into account the diversity of americans or that u.s. households have different needs and prirchss when it comes to household appliances. as a result, one size fits all energy if thesy standards can deprive consumers of the act to make purchases that best suit their circumstances and constraints. in such cases these regulations are a cost to consumers rather than a benefit. for example, efficient dishwashers or clothes dryers save money in the long term the more frequently they are used and tend not to benefit households with lower frequency of use which includes couples or single residents such as the elderly. doe calculated large benefits by estimating that a household operates its clothes washer 392 times per year or more than once a day on average. while this might be realistic for large families or households with small children, it does not

represent every household. in fact, even after accounting to their lower energy bills, the standards ended up costing the nearly 70% of american households that use clothes washers less frequently than six times per week. to illustrate from personal experience, a very efficient dishwasher made sense for my mother, who has nine children and used to run the dishwasher as must have as four times per day, if you can imagine that. but my current household of two, we run the dishwasher twice a week. in our case it's not likely that a more efish and more expensive appliance is going to be worth the investment. in addition, efficiency standards are particularly costly for low income households. wealthier americans can afford to wait years or even decades to recoup the higher cost of an efficient appliance while poor americans with less certain streams of income have higher opportunity costs.

doe calculates high benefits by using a relatively low time value of money which field studies find represents wealthier households. changing doe's mole to reflect the actual time value of money to low and median income households shows that they encourage large net cost as a result of efficiency standards. when a paycheck has to cover rent, food, and other necessiti necessities, a very efficient appliance may not be affordable even if it does reduce electric bills in the fucht many families cannot borrow at the 3% rates that doe assumes. but energy cost savings are not the only justification for these standards as more efficient appliances can also reduce environmental emissions but these environmental ben pits are quite small relative to the cost of the standards. the fact the cost outweighs the benefits by a factor of 3 to 1. by looking at the environmental

standards alone. doe wouldn't be able to -- in sum, the payoff will vary depending on a household's income, size, and other characteristics such as geographic location. it is perfectly rational for individual households to prefer to purchase different appliances including those that do not meet doe standards. by taking away those choices, and preventing households from buying the appliance that best suits their individual needs, doe is imposing a cost on consumers and not a benefit. this is particularly true for low and median income americans and the elderly who bear the highest costs of appliance efficiency standards. thank you all for your tight. i look forward your questions. >> thank you ms. miller, very much, for your opening statement. and our next witness this morning is mr. joseph mcguire, who is the president and ceo of the association of home appliance manufacturers.

thanks for being with us. and you are recognized for five minutes. >> chairman whitfield -- >> and turn your microphone on and get it close. >> mr. chairman and ranking member rush and members of the subcommittee, thank you for the opportunity to testify this morning. membership includes more than 150 companies throughout the world. it employs tens of thousands of people in the united states. our members produce more than 95% of the household appliances ship for sale in this country. i don't think there is any disagreement at this table that the appliance standards and energy star programs have been successful. energy efficiency gains across core major appliance categories are dramatic and undeniable. for example the most commonly purchased modern refrigerator uses the same amount of electricity as a 50 watt light bulb. a new clothes washer uses 73% less energy than it did in 1990 and half the water. i also want to make clear that

our industry has been a support of these programs and had been be involved in rule makes and legislation programs to strengthen and improve the programs. i personally led the 200 plus organizations that initiated and supported the national appliance energy conservation act. we strongly support federal standards and state reelse. while these programs are both successful they are both in need of modernization to recognize the success achieve and establish a framework for policies and programs focused on meaningful additional efficiency gains. yes, there should still be federal standards that guarantee savings nationwide but absent technological breakthroughs a process geared towards continually ramp rachting up standards does not make sense for the environment, the consumer or the economy. but this will not happen under the current stts standards

construct. reform legislation is needed. hr 8 is a practical step along that path offering modest sensible changes to epca that will require doe to follow procedures it agreed to with the organizations that advocated for reform in 1987. but more is needed. today ahem is calling on congress to take further steps to modernize our national energy fishsy law by ending mandatory sear serial rule making and mandating standards only when justified by qualified metrics. -- requiring doe to meaningfully consider cumulative regulatory burden on product manufacturers. mandating procedures regarding transparency and public engagement. no more black box analyses.

applying the procedure act to the energy star program. there have been 30 standards and amendments that apply to the amount of m. products under the program and test revisions accompanying the standards. the reality is that for many product categories the relentless march of rule makings is not justified. because energy savings beyond those already achieved are severelily diminished are products are nearing max numb efficiency under technology. further regulations are likely to make a cost beyond an acceptable level and likely result in degraded performance and functionality. we saw this in the flawed proposed dishwasher deal last year whose pay back outlasted the progt's live. doe, to its credit, retracted the proposal. but it shouldn't take a national uproar for this to happen. the rule never should have been

proposed. as for energy star, the program has drifted from its original of energy -- this drift must be considered in concert with the reality that the success of the program has essentially made it mandatory in the marketplace. congress needs to bring this program under the much more traditional procedures and specific criteria of the administrative procedures act which applies to virtually every other program epa administers. it is also important that congress make clear that energy star is about energy efficiency only, not about epa's ideas regarding quality, functionality, sustainability, other non-energy factors. our ultimate objective is to improve the u.s. regulatory environment in measurable ways that foster a fair, more predictable, more open and more efficient regulatory landscape. as an industry, we will continue to live up to our responsibility to provide consumers with life enhancing products that deliver superior performance in energy

and voorlal benefits. our industry is very competitive, which drives not only innovation, but also reduces product costs through hundreds of millions of dollars in productivity improvements. that's why home appliance prices don't keep up with the cpi. not because of appliance standards. productivity investments hide the fact that changing product design and materials to meet energy standards adds costs. implying that the huge efforts in type and capital investments to achieve productivity somehow make energy efficiency free is a great misunderstanding. mr. chairman and members of the subcommittee, in summary we call on kong to modernize epka so it addresses current circumstances by recognizing the diminishing energy savings opportunities for many products, evaluating cumulative regulatory burdenen and the actual impact of past rules and sbrofg transparency in stake holder engagement. thank you for the opportunity to

testify. >> thank you mr. mcguire. our next witness is ms. elizabeth noll who is the lengths latiive director for energy and transportation at the national council. you are recognized for five minutes. >> g. mr. chairman, member of the subcommittee. thank you for the opportunity to testify. this program sets dependable minimum levels of energy efficiency that all americans can count on to reduce their utility bills, the carbon pollution that harms human health while promoting innovation and new job. my name is elizabeth noll and i'm the director at nrdc. nrdc has long supported energy efficiency standards and we are far from alone. we have successfully worked alongside many groups, including nema, ahri and a hem here today. and support was reiterated in a

recent op ed we authored with the national association of manufacturers. let's not forget, the initial law was signed by ronald reagan, then expandsed and approved with broad bipartisan support. why is that sponge support for efficiency standards? this program is wildly successful. dplifring tremendous consumer and national benefits. it has broad and bipartisan support founded on a long history of collaboration and consensus building. and by all accounts, there is still huge potential for even more energy and financial savings now and in the future. to my first point, by every single measure, the program provides huge benefits n. fact, national appliance standards are the second biggest energy saving policy in u.s. history. second only to vehicle fuel economy standards. appliance standards are saving the typical u.s. household about $500 per year on their utility bills. last year alone, american

consumers saved $63 billion. and thanks to standards already on the books today, consumers and benefits will save almost $2 trillion on their energy bill due to improved appliance and equipment sold through 2035. because these standards are cutting american energy consumption, it also reduces the need to burn polluting fossil fuels to run those appliances and equipment. last year alone helped u.s. avoid emissions of 300 million tons of carbon dioxide. that's equivalent to the july pollution from billion 63 million cars. as i noted earlier, three republican presidents have signed laws supporting energy efficiency standards. and for the first time since the early naents, the department of energy is up to date with its legal deadlines that congress enacted. in the spirit of consensus building and collaboration the agency has done more than every to to open up avenues to

increase stake holder participation and collaboration of the 42 standards finalized since 2009, almost a quarter stemmed from consense success agreements negotiated with industry support. and those that aren't negotiated go through a normal rule making process which includes multiple opportunities for input from industry. as a result, the vast majority of american energy efficiency standards go into effect without controversy. as noted in other testimony today, manufacturers much prefer a single national standard over a state by state patchwork of requirements. consumer groups, state governments, business groups, utilities all have engaged correctively and support the program. one might ask, are there more energy consumer and environmental savings to be achieved? emphatically, yes. one example involves the biggest energy and pollution saver from a single standard in the agency's history which was completed in january for

commercial roof top air conditioners, heat pumps and warm air furnaces. and it represents the third revision to this standard. this standard is expected to save 15 call drill onbtus of energy over a 30-year period, which is nearly equivalent to the amount of energy in all of the colbourned to generate electricity in the united states in one year. a fourth coming report by the appliance standards awareness project and the mourn council for an energy efficiency economy find that the savings potential for federal stads that will be eligible for update in the next eight years exceeds what has been accomplished over the last eight. it's likely to open up new students for savings we cannot even contemplate today. without standards, cost-effective energy efficient opportunities will be lost leading to unnecessarily high energy bills, increased energy consumption, more harmful pollution, and uncertainty for manufacturers. there is no doubt that this

program works and will continue to deliver huge consumer and environmental value now and into the future. thank you for the tune to share my views. and i look forward to your questions. >> thank you ms. noll for your statement. at this thailand time i'd like to introduce mr. kevin cosgriff who is the president and ceo of the national electrical manufacturers association and thanks for being with us. and you are recognized for five minutes. >> thank you mr. chairman. ranking member rush and members of the subcommittee for having us today. i am a he the president and ceo of the national electrical manufacturers association some nearly 400 members that provide virtually everything in the electrical world. i appreciate this tune to talk about epka with the subcommittee. we have a central position in this dialogue given that 27 of the 63 covered product are made by nema members and an

additional 30 products products contain components made by nema members. i have three main points i would like to make today. first, there are diminishing energy savings returns to multiple rule makings on the same product. that's not saying that we don't believe in energy savings. we're just saying there is diminishing returns on multiple rule makings that ought to be considered. future energy efficiency opportunities should include looking at energy use systems, not simply components or individual products. and lastly, serial regulation does over time limit consumer choice. first on diminishing returns. epka was written 40 years ago and many of the covered products have since achieved then unimagined levels of efficiency. several products have been through two or more different rule makings. and the epka statute requires

the doe to determine whether standards are warranted on every single product every six years. this applies even to products that have reached the stage of regulatory maturity, as it were, that is the say the products for which cost efficiency energy improvements have reached their limtsds. cost-effective energy improvements have reached their limits. we should retire several of the mature covered products. by that i mean retire at the current level of efficiency. not back slide. and that stakeholders including government should be given sufficient time to analyze the impact of a previous regulation before a new rule making cycle kicks off. rarely has a product entered the market before the next rule process kicks off. there has not been enough time to really analyze the information in the real world to see if it works.

my second point is that energy efficiency opportunities should begin looking at energy use systems. epka was crafted for individual products. the challenge ahead i think is to build on this past industry's success with a new more holistic approach to savings opportunities. individual products are increasingly interconnected and operated as a system rather than singularly. we suggest congress consider this to an when discussing energy savings. think energy savings from a building versus energy savings from a lamp. demands -- my third point is serial regulation impacts consumer choice. demands from global competition, government regulation and consumer previous residence require manufacturers to print to remain relate.

they must repeatedly clear hurdles to remain viable. they are the definition of having skin in the game. one tendency of epka however is over time it will trend towards eliminating certain products from the market. under this type of regulatory scheme, there will be fewer and fewer choices offered to consumers. we assert that markets should drive and in fact are driving the energy efficient economy. one choice that markets can do without, however, is availability of products entering the united states that do not comply with u.s. law and policy. this deprives consumers of energy efficient benefits and disadvantages law-abiding manufacturers. this is an area where the federal government especially can be helpful with policing up these imports. in conclusion, electrical manufacturers contribution to the energy efficiency economy has been diligent and i believe

commendable. throughout this effort, nema has made constructive proposeas to congress, to doe, and working with other stakeholders to advance energy efficiency where he believed it was justified and where the savings we've resisted regulation for the sake of simply doing something more when the benefits were insignificant or the costs were just too high. the 40-year-old model of regulating energy use and single products has in many cases done its duty. but its diminishing returns are exacting an increasing cost for our industry and higher price for our consumers. the legislative overhaul that builds on the success of the last 40 years but allows us to all keep the energy efficiency economy moving forward is what we wish to support. we urge congress to seize this unique opportunity. thank you. i look forward to your questions. >> thank you, mr. cosgrove. at this time our next witness is mr. thomas eckman, who is the

director of the power division of the northwest power and conservation council. thanks for being with us. you're recognized for five minutes. >> thank you, mr. chairman. my name is tom eckman. i am the director of power planning for the northwest power conservation council. i'll start way very quick thumbnail of who we are since there are in northwest delegates here. i thought it might be important to figure out why i'm here representing the northwest. the northwest power and conservation council was established under a congressional authorization of the northwest power conservation act of 1980, public law 96501. we are an interstate compact authorized by you folks here in congress to do power planning for the northwest. so we for the states of oregon, washington, idaho, and western montana we produce a 20-year power forecast of needs and a resource plan to meet those needs for electricity. and our statutory requirement is

we're to treat energy efficiency as one of the resources we can rely on to meet those needs. over the past three decades, 3 1/2, 35 years, we've produced seven different power plans. we're to update those plans every five years. we started back in 1982 with the first plan and called for cost-effective energy efficiency to be a major component of that planning process as directed by congress. over that past 35 years energy efficiency has been a very significant contributor to the northwest economy and to meeting our needs. in summary since 1980 the northwest region has saved enough electricity through codes and standards, utility programs to be equivalent of roughly six seattles in electricity -- annual electricity consumption, or more than 1 1/4 times the actual consumption of the state of oregon.

so it's a significant trigger. it roughly represents our second largest resource in the region. it's met 55% of low growth since 1980. we really believe in energy efficiency that is cost effective. the reason i'm here is to talk to you about the role that federal standards have played in making that happen and what they look like going forward. over the past 35 years federal standards have basically produced 1/5 of the total savings we've been able to achieve. energy codes about 20% and the remaining through rate payer funded utility programs. 1/5 of the savings turns out to be worth about $1 billion in annual savings out of the -- on an annual basis and saves about 5 million metric tons of carbon off of our system. and we have a very clean system because half of our power comes from hydroelectricity. that's a significant component. it's about 12% of our total emissions on an annual basis.

on a going forward basis we looked at the federal standards that had been adopted between 2009 and 2014. those standards alone will reduce our forecast low growth from 1.1% to .8%, about 30% reduction in low growth. again saving significant consumer cost for a nur generation and saving consumer pain and agony from carbon emissions. we are here to support those standards because not only have they been of huge benefit to us but we have been involved in the negotiations that led to not only the federal standards but many of the standards that have been adopted since 1987. i am a member of the appliance standard rule making advisory committee that was appointed by d.o.e. to facilitate better communication between manufacturers and advocates for energy efficiency to begin to develop more transparent and open processes to engage in rule-making. and since the advent of that

committee, which was basically formed at the behest of the department itself because it understood that it could do a better job of rule maketiing th in a standard noticing and comment process. it can't always do a better job but in some instances, elizabeth noted that appliance rule making for air-conditioners and package rooftop systems, those consensus agreements between manufactures and advocates have produced better standards, more regulatory certainty on behalf of the manufactures and greater compromise for facilities to implement standards on behalf 69 manufacturers. so i think those -- that particular improvement was not envisioned in the original statute but it's a regulatory process that doe implemented on a voluntary basis and has improved immeasurably the transparency of the standards development process on a going forward basis. and i think that we can talk more about that in the time that you have questions for me. i'll stop there. thank you.

>> thanks, mr. eckman. and our next witness and last witness is mr. steven euric, the president and ceo of the air conditioning heating and refrigeration institute. so thanks for being with us and you're recognized for five minutes. >> thank you, chairman whitfield, ranking member rush and members of the subcommittee for inviting me to testify on this important topic. i'm steve yurek and i'm president and ceo of the air-conditioning heating and refrigeration institute. we have 315 member companies that manufacture more than 90% of the residential commercial and industrial air conditioning, space heating water heating and commercial refrigeration equipment sold installed in north america. our members employ over 100,000 people in manufacturing and more than 1 million american jobs when you include those involved in distribution, installation and maintenance of our equipment.

i want to make it clear that our industry has a long record of leadership when it comes to innovation, energy efficiency and environmental stewardship. in fact, the equipment our members produce is 50% more efficient than it was just 20 years ago. but even as we innovate and develop the next generation of highly efficient equipment we always have in mind the needs of our customers who are after all the people who buy and use our equipment. we have three main concerns with the current statute that i'd like to discuss today. first, the authority congress set forth through setting efficiency standards, the energy policy conservation act is 40 years old. and it has not been updated to reflect new technologies and economic realities. two, in addition to the impact in our industries, consumers are paying a heavy price both in real monetary costs and in comfort and safety. when new equipment costs more than consumers can afford, they find alternatives.

some of which compromise their comfort and safety while saving less energy and in some cases actually using more energy. finally, american jobs are being lost in part because of the promulgation of ever more stringent efficiency regulations. and the worst thing is d.o.e. admits that these regulations cost jobs. while the clinton administration issued six major efficiency rules during his eight years in office, the current administration issued eight major efficiency rules in 2014 alone. there are real consequences from this rush to regulate. yes, complying with these rules cost my member companies millions and millions of dollars, but what is far more important, it should be far more worried to congress is that american jobs are being lost and consumers who are already feeling financially squeezed are being forced to pay more for products they rely on in their everyday lives from comfort cooling and heating to

refrigeration to hot water. epka requires that all efficiency standards meet the twin tests of technically feasible and economically justified and yet d.o.e. has issued rules that use unrealistic assumptions in its analyses to justify higher efficiency levels. i'll give you a couple of examples. for commercial boilers d.o.e. estimates the new standard would save just .8% more energy than the existing standard but would cost manufacturers up to $24 million to comply. for residential boilers and commercial refrigeration equipment, d.o.e. justified the economic impact of the higher efficiency levels by using the assumption that no matter how much the product increases in price, demand for that product would never decrease. every time d.o.e. issues a new rule, it issues a press release estimating the rules' benefits and cost savings to consumers and energy savings for the nation based on theoretical models.

d.o.e. has never looked back to see what the energy saves actually were or if consumers actually ever benefitted from spending more money. and the current law does not even require such a review. finally, d.o.e. projects future job losses in several of its rule makings for our products. for example, in two separate rule makings for different types of commercial air conditioning units, d.o.e. noted small business manufacturers would need to re-design their entire product offering or leave the market. d.o.e. acknowledged in a potential scenario in which a rule making for commercial refrigeration equipment could cause all existing production to be moved outside of the united states resulting in a loss of over 3,500 jobs. changes to epca should be implemented in phases with the collaboration of all stakeholders.

i urge all members of the upcoming conference committee to ensure the technical corrections in hr-8 remain part of the final energy bill. broader epca reform should stress flexibility, enhanced technical and economic justifications and the process should be overhauled to maximize transparency and stakeholder engagement. congress should require d.o.e. to convene stakeholders to discuss a new regulatory framework. we're ready to work with congress, d.o.e. and other regulatory stake holders on ways we can together fix and update this 40-year-old law to create a new, more open process, conserve energy, help manufacturers remain competitive in the global marketplace, and benefit all consumers. i appreciate the chance to appear today and i look forward to answering any questions you might have and working with you as we move forward on this important issue.

>> thank you, mr. yurek. and thank all of you very much for your testimony. we appreciate it. i'll recognize myself for five minutes of questions. ms. miller, the george washington university regulatory study center, how old is this center? >> it began in 2009. >> 2009. >> that's right. >> and you how long you have been there? >> since 2012. >> 2012. >> mm-hmm. >> so if you were running for public office or you were going to some rotary club speaking somewhere around the country, could you categorically say that these efficiency regulations are saving consumers money because the reduction of electricity costs exceeds the additional cost of the new appliance? >> i would say that these

standards have very different affects on different households based on some of the characteristics i mentioned and shs also some i that state as well in my written testimony. for instance, if you live in texas, maybe it's more beneficial for you to have an efficient air conditioner but do uf care how efficient your furnace is? how often are you going to use it? in that case you may not save any money by getting an efficient furnace. so i would say that different situations -- >> so geographical area would have an impact on it. >> absolutely. >> and then you indicated the use of the product obviously would have an impact on it and you mentioned i think that some elderly people who maybe use it less would have less benefit from it as well, is that correct? >> that is correct. and the department notes that in its analysis. >> so all of us make comments about, oh, this is going to save money and so forth, but it certainly is possible in many instances, i would assume, that

low-income people and elderly are harmed more by these regulations perhaps than they are benefitted. would you agree with that? >> that seems to be the case. and the department also does acknowledge that there are negative impacts on those groups in its own analyses. it's not a view that's outside the mainstream. >> originally, this started because of the arab oil embargo. the reason that this all started was because of trying to conserve the use of energy and certainly that has changed today because we have an abundance of energy in america. but today it's become more of a climate change issue. that's what people talk about, well, we've got to be more efficient. less co2 and so forth. mr. mcgwire, you and mr. cosgriff and mr. yurek all touched on this, the need for reform.

mr. mcgwire, you and mr. koss grieve and mr. yurek all touched on this, the need for reform. and you all made some pretty strong statements. you said that sometimes the product is not going to be as effective, it's going to cost more to consumers. it's going to you reduce consumer choice. and one comment i would also make on hr-8, which is our energy bill, one of the most controversial aspects of it related to the process that the d.o.e. goes through in adopting these new standards. for example, they really are not transparent on this. the data analysis is not really available until they get ready to notice it. and so all we were saying in this one provision which was like we were turning the world upside down was we want d.o.e. to sit down with the manufacturers, the people who make these goods, and have a more open and transparent discussion with them. i mean, you would agree with that, right? >> we would agree with that, mr. chairman. and actually, that process that you're describing used to be

used by the department of energy where manufacturers would have an opportunity to test a product under a new standard or to even employ a new test procedure before you could determine whether a standard was appropriate. but what we've seen in the last several years is because so many rule makings are going on at the same time that d.o.e. has not been able to go through this very thorough process of let's do a test procedure and make sure that works. the test can be repeatable and reproducible before we set a standard so the companies can see if you can test a product. it's very -- manufacturers spend an enormous amount of resources on compliance to these standards. the testing is very complicated. >> right. >> these products are more sophisticated than they used to be. so you want to get that right. you don't want to mess that up. >> right. >> and what's happened is the

process has become conflated an it's very difficult to understand what's happening sometimes. >> mr. cosgriff, would you agree with that basically? >> i would agree with that. maybe think as mr. mcgwire was answering your question, the product cycle of some of the products entering the market in our area, l.e.d. lamps as an example, is in many cases less than a year. so if you miss one of these hurdles i've referred to, you've missed a product cycle. that's a very big deal. and for a small or medium-sized company of which there's many making l.e.d.s, that could be fatal. >> well, i have a lot of other questions but my time has already expired. mr. rush, you're recognized for five minutes. >> i want to thank again the panelists for your interesting testimony so far.

there's a question that i have, and there is an argument that while the efficiency standards have been very valuable at reducing energy costs and consumption, many of these standards have already reached their maximum efficacy, and we cannot squeeze any more juice from the grapes in a certain manner of speaking. do you agree with the statement that many of these appliances are as efficient as they can reasonably become? or is there no -- and there's no room to move forward with these new standards or do you believe there's some more cost-effective

standards and measures and pathways that we can implement in order to greater have more efficiency and cost savings? >> thank you, congressman rush. yes, i do think that there are more cost-effective pathways to achieve greater energy savings that have yet to come. and i'd begin by just as i say today in my opening remarks the rule that was finalized just last year for commercial rooftop units represented the largest energy saving -- single standard in agency history. and that was the third time that that standard had been revised. and while this is going to deliver huge consumer and environmental value, it was nowhere near the most energy-efficient technology that's commercially available. so it just suggests that there is still room to improve, and i

would also note that as i mentioned in my opening remarks that the forthcoming report from aceee in the -- looks at the rules that will be up for revision in the next eight years and has shown that the energy savings opportunity from those rules will exceed that of which -- of those that were finalized in the last eight years. again, just further suggesting that -- and some of those standards will be ones that will be products that have already had standards and have gone through revisions in the past. and i would finally would just say that standards increase innovation and that innovation, that technological innovation creates new product features, new design opportunities. our refrigerators today have more features than ever before. and that also could unlock opportunities for increased energy savings. and that could form the baseline for future revisions to standards in the future.

>> yes, ma'am. i want to shift my focus. my office has had many conversations regarding energy efficiency standards for appliances and their impacts on low income families. one of the arguments that we hear quite often is that the cost of complying with new energy efficiency standards will have a disproportionate impact on low-income consumers. how do you respond to this charge, and secondly, are there any benefits to lower income households if industry is forced to comply with the most current energy efficiency appliance standards? >> thank you. i guess i would -- i'd begin by saying i know the impacts on low income customers is a priority of yoursor, as it is for nrdc.

and minimum efficiency standards set a dependable level of energy efficiency that every american can count on. our analysis suggests that appliance standards will save the average american household including low income households $500 a year compared to before standards were set. so that is significant. and i agree that low income households pay a disproportionately higher portion of their income goes energy costs. in a recent report by nrdc and ac triple e shows that energy efficiency is a key strategy for reducing the energy burden that low income households face. i would say that is why groups like the national consumers law center and texas rose and other consumer advocacy groups engage and are highly active in the standards setting process because of the important

benefits that it serves for the low income populations that they support. >> thank you, mr. chairman. i yield back. >> gentleman yields back. the chair will recognize at this point the gentleman from illinois, mr. shimkus. >> thank you, mr. chairman. this is actually a very good panel. you know, there really is more that unites us than divides us on this whole debate. and i think that's true across the board. and first of all for mr. mcgwire, mr. cosgriff and mr. yurek, you're saying there's a need for some reform, but you're not claiming that there's a desire to jettison energy efficiency standards, are you? >> no, not at all. we're supporters of the program. >> let me -- i'm going to go quickly. mr. cosgriff in >> absolutely not. >> mr. yurek? >> no. >> so this is an example where we really can work together to get some sensible changes to affect folks like the narrative

that i provided earlier today. there is that trap that people do fall into from big federal agencies and the rolling out of regs and, as the fluorescent light bulb case, mr. cosgrove, they get caught in a trap and you don't want to miss a cycle of putting a product on the shelves because for a small company, that could be deadly. and ms. noll, you did mention in the discussion with my colleague mr. rush that we should -- the confusing thing is we're not talking from a baseline of families. what is a family? what is a cost? i think ms. miller mentioned it. her cost and a two-family household is different than a family -- i'm one of seven kids. nine in the family. grew up a lot different costs. a lot different projected savings. don't you think that if we're going to have this debate that

the department of energy ought to help us define what is a family, what is a savings, and to have part of that transparency, miss noll? >> thank you. i would say the department of energy does take into account many perspectives. >> but don't you think they should help define this so we could have a better, accurate discussion of what the savings are and who they're saving? this amorphous savings is being disputed by economists based upon real data and real numbers. >> as many of the colleagues that i work with, we strive to find -- get better data -- >> the question is, shouldn't the department of energy help us define their savings? the answer is they don't. mr. yurek, following up on this question, don't you think they should do a better job, department of energy should help us define savings and costs? >> yes, i think the process -- the d.o.e. is in a bind in some ways by the statutory language

of this 40-year-old act and how they're required to do the analysis. they're in a bind by the time frame in which they need to do all these rules. they don't have the time anymore because of all the rules that they're involved in to do the deep analysis that they used to be able to do and confer with everybody. and they also have a court order saying they need to meet these deadlines. >> let's go quickly to job losses. you highlighted it in part of your written testimony. talk about the job losses. shouldn't the d.o.e. talk about that there is a loss of jobs? especially as you get to this point of -- again, my colleague mr. russia says how much juice are you squeezing from the grape? you identified that just in your testimony. >> yes. i think that's one of the economic analysis that needs to be be done. i think they forget the purpose of this act is not to go to the maximum tech and maximum efficiency. it's to slowly raise the bottom

so everybody can purchase that equipment and have those savings. there's other programs such as mr. mcguire mentioned related to energy star that are the pull to get the higher efficient and get people to buy that equipment. what we're seeing now is that this program is being used to go to the max tech versus going to the minimal level where people get savings and benefits but don't have the cost -- >> aren't you asking for a return to a collaborative approach with the department of energy, mr. mcguire? >> yes, we are. >> mr. cosgriff? >> more collaborative. >> mr. yurek. >> yes. >> so i do have to applaud the doe. we have actually been pressuring them years and also the epa to say, tell us how this affects jobs so in this most recent proposal rule march 12, 2015, this is what it says, some large manufacturers have already begun moving production to lower cost countries. short term, u.s. job loss. this is the department of energy saying that. an amended standard that necessitates large increases in

labor content or that requires large expenditures to retool facilities should cause other manufacturers to reevaluate production siting options. what that means is that if we squeeze too much -- my colleague mr. rush, if we go too much, we lose jobs to overseas manufacturers, and that would be unfortunate. thank you, i yield back my time. >> gentleman's time has expired. the chair recognizes the ranking member of the full committee from new jersey for five minutes. >> thank you, mr. chairman. ms. noll, from listening to some of the people silting next to you on the panel and some of my colleagues on the other side, you'd think that the standards process has suddenly become far more contentious than it used to be. in my opening statement i talked about the fact that the standard setting process has always yielded some controversy from one industry to another and that's not to say that complaints or controversies weren't always important or even

valid. but i just see some contention as inevitable part of any meaningful standard setting process no matter how well it functions. so while not every standard can be negotiated my sense is that there has been more consensus than ever before and that every industry trade represented here today has been involved and likely benefited from that consensus. so my question is, do you agree with me that there actually seems to have been more consensus in the standards setting process over the past eight years and of the rules finalized in the last eight years what percentage of those rules has been established through consensus negotiations, if you could. >> good morning. yeah, it's interesting because i think about the number of rules and the number of negotiations that have taken place over the years, and there's so many to choose from. i mean, the last two revisions to home air conditioning standards went through a consensus process and landed a negotiated consensus outcome. and that's fantastic for

consumers and the value of that is going to deliver to them and for the environment as well. so i think from my perspective i would say that the controversy is the exception and not the rule. you know, that we can demonstrate i think of the -- as i said in my opening remarks, of the 42 standards that have been finalized since 2009, almost a quarter of those stemmed from joint consensus negotiations. and that's not to say that every rule needs to or can come from a consensus or a negotiation. and those that didn't went through the normal rule making process. and with the exception of maybe a few standards have been without controversy and supported by stakeholders through the process and input. so, yeah, i would just encourage us not to characterize action as controversy at this point. >> i'm a strong supporter of energy efficiency programs and

again i'm confused by some of the claims being made by members of today's panel. i find it difficult to believe there are no more significant energy efficiency gains to consumer products unless you assume we can't improve on current technology or develop entirely new technologies that are more energy efficient. for example, tv went from tubes to liquid crystal displays to plasma to l.e.d. in a little over a decade. so are we truly done with refrigerators, dishwashers, air conditioners, furnaces, whatever? >> our experience has been no. i mean, i think in the latest refrigerator standard revision this was the sixth time including the state standards that that standard had been revised. it represented about 20% to 30% improvement over the previous standard, and that's on par with other revisions, fully supported by manufacturers and stakeholders. and i think we've seen, you

know, that that trajectory has held true. refrigerators are now 75% more efficient. they have more product features, are 20% larger, and it costs half as much. i think the lighting revolution that we've seen take place is another example of -- i don't think in 2000 we could have predicted the number of choices and the efficiency that we would get from l.e.d.s today. so those are just a few examples of where this could be headed. >> right. several witnesses have referred to mandatory serial rule makings. my understanding of the law is that it mandates the review of a standard every six years. however, to my knowledge, the law doesn't require that the standard be updated every six years. so just to clarify, would you just answer yes or no to the following questions, okay? does the law require a standard be reviewed every six years, yes

or no? >> once it's gone through its statutory requirements, then yes it's required to be reviewed every six years. >> does the law mandate that a standard be updated every six years regardless of any other fact pattern? >> no. >> does the d.o.e. have to determine whether rule making is likely to result in significant savings before requiring a standard be updated? >> yes. >> and does d.o.e. have to determine whether rule making is likely to be technological feasible and cost-effective before updating a standard? >> yes. >> okay. thanks a lot. thank you, mr. chairman. >> the gentleman's time has expires. the chair uses the privilege of the vice chairman to recognize himself for five minutes. a hearty texas welcome to mrs. miller, mr. mcguire, miss noll, mr. cosgriff, mr. eckman, and mr. yurek. in the initial time i have one question about air conditioning. southeast texas, my home, exists in a climate we call 95/95.

from early april to late september it's 95 degrees fahrenheit with 95% humidity. until 1902, the only job in that region was picking cotton and guarding prisoners in big state prisons. that provided very, very slow, low growth. and then this carrier invented the air conditioner in 1902. that single invention combined with oil being discovered at spittletop and beaumont and the 51-mile houston ship channel being built has put houston on track to be the nation's third largest city sometime this decade. federal actions affecting air conditioning gets the attention of all texans. especially if two federal agents are in conflict. we've seen that situation right now with air-conditioners. d.o.e. as to higher efficiency standards for air-conditioners. while epa is banning foam

blowing agents from being used in air-conditioners. so my only question is for you, mr. mcguire and you mr. yurek. mr. yurek first. can companies comply with these conflicting standards? can they comply with these? what are the challenges? >> first off, yes, they can comply with it. but how they comply with it is it costs a considerable lot of money in the conflict between the two statutes going into effect in and the needs to spend money on research and development and then once that -- the research and development is completed, they need to then retool their plants. yes, they can do it. it's going to cost the big manufacturers that have the funds will have the ability to do it. there will be several of the small manufacturers that don't have the funds available that will go out of business either being acquired by the bigger

ones or just leaving the area. >> big guys pay, the small guys go away. mr. mcguire your thoughts. can they survive? can they work with these conflicting regulations from different departments? >> the industry can comply, but the problem is it takes a certain amount of time to do that. and the epa decisions, proposals on refrigerants is not being coordinated with d.o.e. on the efficiency standards. with the vast majority of greenhouse gas emission avoidance benefits come from the appliance standards, not reducing the -- changing the refrigerants. we have to deal with the fact that the safety standards in the u.s. do not allow the type of refrigerants we have to go to yet and the amounts necessary. that requires a safety risk assessment tests that companies are going. it takes a lot of time, sequence and investment for this to happen and it would be prudent for the two agencies to talk about this and reach a decision

that makes sense for the environment and for the people that are making these products. >> final question, sir. do you believe the obama administration is meeting their own goals set with their executive orders to minimize the cumulative impact of these regulations? they said, let's make that lower. does this achieve that, or is this in violation of that? >> we do not believe the d.o.e. is in a proper analysis to the cumulative regulatory burden on manufacturers when they're doing their appliance efficiency standards because they're not taking into account the cost and investments that have been made for previous versions that haven't been recouped as well as the investments that have to be made in alternative refrigerants. >> mr. yurek, your thoughts sir? >> i agree with mr. mcguire in that that proper analysis has not been done and the burden on manufacturers is not being considered and actually has been ignored when raised in some of the rule makings related to commercial refrigeration

equipment where we did raise epa changing the refrigerants that could be used at the same time efficiency regulations went into effect. doe said they haven't changed it yet so we're using the current refrigerant. they issued the rule, six months later epa banned those refrigerants. there's two different implementation dates, one is 2016 for the refrigerants and 2017 for the energy efficiency standards. you have to redesign twice in two different periods of time. >> thank you. my time is expired. one word of warning. don't mess with texas air conditioners. chair recognizes the gentleman from california for five minutes. >> i thank the assistant chair. mr. cosgriff, i believe that you stated that many of the imported products are not held to the same standards as american-made products. is that right? >> i didn't say many. i said that we should be on guard to make sure that nonqualified products enter the stream of commerce inside the united states. >> so that must be happening then. is that happening? are products entering --

>> we receive information from our manufacturers routinely that they find products in the stream that don't by objective standards meet the standards of the united states of america. >> so u.s. consumers are buying products made overseas that are potentially less efficient and cost american jobs at the same time. >> they might be, yes, sir. >> how can we remedy that situation? >> neiman in the past has worked with congress in the past in the area for instance, customs and border security to make it available to their agents so they can know what they're looking for, to be able to identify what constitutes a valid third party certification mark, what might be a counterfeit and other tells that you might see in --

>> so this is an enforcement issue, not a trade rules issue. >> mostly enforcement, yes, sir. >> okay, very good. mr. eckman, please elaborate a little bit if you would on how the rule making process could be improved, the transparency of the rule making process could be improved. >> i'll go through a little bit of history so that the context is there. in mid-2000s, d.o.e. staff directed their consulting staff to sit down with advocates and manufacturers to help negotiate whitegood standard with aham folks so the technical staff that was supporting d.o.e.'s rule making was appraised and involved in those negotiations that were informal at the time. they weren't authorized by doe. we were handling those on the side. and that led to another process on electal transformers where both doe staff and their consultants got involved an

finally doe established under the federal administrative procedures act a negotiated rule making group called a. rac, appliance standards rule advisory committee. which now oversees a series of requests that might come in from parties that want to enter into negotiations and through a regulatory process as opposed to a rule making through a standard comment process. and that has opened i think the doors to more consensus agreement. the agreement on major refrigeration products, the hvac equipment, pumps, and electrical transformers all came from those kinds of negotiations where there's a great deal more transparency interaction with the manufacturers, with advocates and d.o.e. staff and its consultants because they can get down and talk face to face, roll the sleeves up in a meeting not in a very formal hearings type process. i think that has improved both the outcomes and the feelings that come out of those outcomes about we agree we can't get

everything we need, but the compromise works for all of us. and that process to me is really central to in advancing the rule making process. >> thank you. mr. cosgriff again, you mentioned that the -- or i'm going to ask this question. do you believe that the current standards have room to drive more innovation? >> do i believe the current standards have -- >> can drive more innovation. >> can drive more innovation. i think the manufacturers are driving innovation. i think competition is driving innovation and i think standards have a part in that. but i wouldn't overstate what their part is. so if a product is at the low end of efficiency, then the standards are a welcome boost. if a product like a transformer is approaching 99% efficiency,

i'm not sure what they're accomplishing. >> thank you. ms. noll, could you give some examples of efficiency improvements that are still possible? >> yes, i'd be happy to. you know, i think that as we look at some of the products that are still -- that will be revised in the next eight years, there's standards for equipment and household appliances that have seen standards before. water heaters is the likely potential opportunity for increased savings. as mr. cosgrove just mentioned, distribution transformers, they ed may be reaching a high level of efficiency but all of the electricity that is produced in america goes through transformers so even half of a percent improvement there is going to be a significant national benefit. so i do think that there is opportunities that still exist to improve through the standards process. >> thank you, mr. chairman. >> the chair recognizes the gentleman from ohio for five minutes. >> thanks, mr. chairman. and i also would like to echo that i think this is a great

panel today and i really appreciate you all being here. i'm kind of an expert. my wife and i in the last six weeks just bought a washer and dryer and the refrigerator's next. but in northwest ohio we do make hvac. we make dishwashers. we make dryers. we make washing machines. we also make waffle irons. we make large mixers. and we also have a large freezer plant right in west central ohio. so we have a lot of things going on. it's very important to our economy, but mr. mcguire, if i could start with you, you've been particularly critical of the proposed new standard for dishwashers. can you explain what is wrong with the standard both in terms of the substance of the proposed rule as well as the process by which it has come about? >> well, the proposed dish washerer standard from last year, first of all, it required

a 20-year payback to the consumer for a product whose useful life is 13 years. it reduced the amount of water that a dishwasher uses in a cycle from 5 gallons to 3. and the proposed rule did not go through any type of performance or consumer testing before it was issued. we did not get a chance to do that. we normally do in these rule makings. >> let me interrupt. why didn't you get to be part of that? >> d.o.e. just didn't do that part of the process. they just went right to the rule without that type of testing. so once it was proposed, we did the testing and we demonstrated to d.o.e. and others that dishes were not cleaned and multiple product manufacturers products it did not clean the dishes. so the utility of the product was affected. the consumer payback was not there. and the energy savings was minimum. less than a quad. 7% of one quad. now, the current dishwasher standard that's in place today, that has a payback to the consumer of 12 years so that was already at the limit in terms of economic sense.

there was no need for this fifth dishwasher standard. so it didn't -- it messed up the product. and it did not make sense for the consumer to buy such a product. so our view is that there's something wrong when the process spits something out like that. that has to be a product or a category where you don't do another rule making unless some quantifiable measure can show there's going to be a real significant savings in energy that won't harm the consumer. but under the current process, it's very difficult to get doe's assumptions and other things that go into their analyses done by their contractors of the national labs so that's part of the process change we'd like to see. >> just out of curiosity, when you were doing this testing when you were going from five gallons to three gallons, how much did that cost the industry? and what did that cost the consumer in the end? >> well, how much did it cost the consumer?

>> when you are doing the testing, going from five gallons to the three gallons you said, i was just curious, is there a cost to the industry that you had to do? >> oh, sure. >> and overall, i assume that would go back to the consumer. >> well, these tests that we did on this proposed rule were -- the standard didn't go into effect so those costs were absorbed by the companies. thousands dollars to do these tests. but once the standard is in effect, in order to prove your compliance with the standard, you have to test your product before it's submitted to the marketplace and then a regular routine testing market surveillance that our industry actually does some of that testing to police ourselves and to provide some information to the government. those tests are very expensive, and the cost of compliance -- the tolerances are very, very tight. so manufacturers invest a lot to make sure their products meet the standards and the tests are sophisticated so it's a costly part of being an appliance manufacturer.

and those costs are going to the product like any other cost and are passed on to the consumer. >> thank you. mr. yurek, i'm concerned about the economic effects that the administration's aggressive regulatory agenda has. it's my understanding that doe is implementing rules that set new standards for individual components in your members' residential and consumer products such as the new standard for the efficiency of furnace stands. how does regulating a specific component on a large heating or cooling system add to the cost of a furnace or air conditioning system? >> we have a lot of concern and i think looking at this 40-year-old law that it's dealing with products and in some instances it's going into the components in those products and pieces of equipment. which is the wrong direction. really what we should be looking

at is how these products are put into the house or into the building and looking at an overall systems approach to efficiency to really look at the gains because if you start dictating and regulating the components, be it the compressor, now they're looking at regulating the fans that go into the air conditioning and furnaces and others. you're dictating how these products are designed. once they're put into the product, they might have -- we've shown in a case in a proposal out with the california energy commission when they were doing this with air handlers, what they were proposing and the efficiency level for fans actually used more energy when applied in the air handler than being abe to design the overall product and the energy use of that air handler. and so we just want to make sure that this is done rationally and the current law doesn't give doe that kind of authority to look at the broader picture. i think we just need to step back and say, it's 40 years old. let's look at it and make some changz and make it better so we can actually get some energy

savings out in the field and have consumers be able to afford the equipment. >> thank you very much. mr. chairman, i yield back. >> the gentleman's time has expired. the chair recognizes the gentleman from vermont, mr. welch, for five minutes. >> thank you very much. this is a great panel. appreciate it. couple of things. we don't have a bill yet, right? so this is kind of an abstract discussion? and i thought mr. shimkus kind of laid out the potential for cooperation here. i do like the notion of collaboration in the process because you've got folks at doe who are doing their best to implement efficiency standards. you've got real world folks that are the manufacturers that have to contend with the very practical issues of implementation. i mean, ms. noll, you're okay with that, right? >> yes. >> i mean, i think standards are incredibly important. i don't think they're everything. mr. cosgriff, you mentioned that

the standard in some cases does spur innovation but if you've got something that's highly efficient then it's not going to accomplish all that much. i mean, a lot of what you're saying sounds very reasonable to me. the jobs issue i think it really is all -- it's not so much the jobs issue. i mean, air conditionings by the way is one of the most outrageous loss of jobs is with carrier leaving indiana to go down to three buck an hour wages in mexico, which i think is pretty appalling but has nothing to do with standards particularly since whatever it is that's mafr manufactured at 3 bucks an hour has to meet the standards before it can come back into this country, right? so you've got a level playing field as long as the standards apply to everywhere. but i do, as a strong, strong supporter of efficiency standards with mr. mckenly, who's got a lot of experience in this, i feel that those of us

who believe standards can work have to be extremely diligent in tryinging to address practical concerns as they come up. that makes sense to me. so i've heard the industry folks saying that you're not for unraveling them. you want them to be more practical. yeah. i'm not asking a lot of questions because i don't think there's that much disagree the and we don't have a bill. but i think one thing that would be helpful as part of this process would be to get the d.o.e. folks in here and ask them what are some of perhaps the congressionally imposed burdens we're imposing on them, where you're saying they've got so many rules they've got to deal with they don't have the time and space. the bottom line here, collaboration i think is really good. i think standards are absolutely essential. i mean, the energy efficiency savings that we've had have been tremendous in -- if they're done right, it can save consumers money. it's not without impact. i mean, we all understand that.

but there was a cost associated with requiring the automobile manufacturers install seat belts. that cost more money when you bought a car. but most of us think it's about time. mileage standards have been tremendous. that is a cost, but it's really had an impact on the average mileage in our fleet. so really what i'm asking for is to take up mr. shimkus on his observation that this is an area where there's some opportunity for us to cooperate, but that means not letting it get adversarial. if there's acknowledgment even from the people who are affected by this in ways that they think are a little too aggressive, to have some interaction with d.o.e. and us to try to figure out what are the process improvements we can make in order to get the benefits of regulation. i'm just ask the industry people. mr. mcguire and mr. yurek, is

that a problem for you, the approach i'm talking about? >> it's not a problem. we've used consensus many times in the past. but we think consensus ought to be to change the law so that the process requires these improvements and they're not discretionary. >> well, that's got to be a discussion -- there's no specifics here. so you're making -- we don't have a bill in front of us. >> there are some process improvements in the energy bill in conference, but the ones we're talking about the major reforms aren't, you're right -- >> i'll tell you what would be helpful for me. if each of you did like a one-page bullet point assessment of convict katrina things that you think in the process would improve it. then we can assess it, have a discussion, talk to d.o.e., how does that work? would it improve it or not? what's the down side of it? we're just having this real abstract discussion here.

and regulations i think are really important and can be really beneficial, but they also if they're not done right can have a lot of downside to them with no upside. ms. noll, how about you? >> i would be happy to do that. i just would also encourage us to look at some of these -- where the process is working and i think dishwashers is an example of that where d.o.e. heard from industry and congress granted them the authority to look at consumer utility and performance as one of the criteria. >> that would be helpful. >> for economic justification. >> just as an scam. how it's working and serving to protect consumers and also ensuring a balance both the impacts on manufacturers as well as the impacts on consumers and the environment and reducing our energy consumption. >> what about you -- >> gentleman's time's expired. i'm sorry, sir. got to move on. i recognize the gentleman from west virginia mr. mckinley for five minutes. >> thank you, mr. chairman. let me just build a little bit on some of the remarks that were made earlier about some of the credentials. peter welch and i have had a wonderful working relationship. we both -- we chair the

efficiency caucus. we put language into the current energy bill that we're waiting to see what's going to happen in the senate. we've been to the white house for signatures on energy efficiency bills. so this is something i think he and i really grasp fairly well this. back when i was in private practice in engineering, we designed some of the first lead certified schools in office will buildings in west virginia. working with tonka over at energy efficiency with the turbines to create energy. energy efficiency is one of the prime areas i like to play with and get involved in here. but i get to a point, there's a vast difference -- i want to play back a little bit on what my colleague and good friend bobby rush from illinois was talking about, the disparity of income when people are facing this. if you look at this, it poses a challenge for all of us. it really does for us.

if you look at mississippi, my colleague here from harper, mississippi, their medium family income is $36,000 a year. in mississippi. $36,000 a year. but in maryland it's over $70,000 per family income. so in those affluent states or neighborhoods, they make choices. they have choices. you'll probably if we went through the motor vehicle licensing we probably find they have more bmws and lexus cars there than we have in some other areas of the country or in neighborhoods. we have -- so cars are going to be different because people have choices. we have housing, different pricing for housing because people have choices for that. we have health care.

when you go to the shangs under obamacare, there are different exchanges you get so people have choices. but when it comes to their major consumer appliance, they don't. for your air conditioning, your refrigerator, your range, your dishwasher, your furnace, all of these now have been mandated that this is the only one that they have available to them. i'm troubled with that because of the diversity of income, their capability of doing it. don't tell me it's going to save me $500 a year because we understand the whole pay-back is so much longer on all these. so i'm wondering, is there a suggestion you all could make that might make it more palatable for people to be able to have a choice? so that they're not confronted with this hard decision. i know of families that are trying to fix anything they can -- their equipment as much -- make it last as long as possible because they know that they can't afford the cost of the new one. so they're spending a lot of

money in repairs because they don't have a choice. they know what the cost is. that air conditioning costs the same in connecticut as it does in mississippi. or that dish washer. so what would you suggest that we in congress could do to maybe ameliorate some of these differences so that the poor conditions or states that have trouble, how can they afford to have this cost? >> congressman, i think this is a really important issue. i think it's bring back the balance that was originally put out in the 40-year-old law where it says technically feasible and economically justified. right now the folk you us is too much on the technical feasible in saying, hey, my manufacturers manufacture products everywhere from the federal minimum to very high efficiency. yes, we could go to the high efficiency but we need to look at the cost. and i think it's bringing that balance back to that economic justification in saying, this law is intended to raise that floor slowly.

people that have the incomes in maryland and other places are going to purchase the things with all the different bells and whistles on their refrigerators, their dishwashers, their air condition conditioner, and everything else, but there's a lot of people in this country, when you look at the cost now of the minimum efficient air conditioner, you're looking at $6,000 to $10,000 at a minimum that is done in an unplanned time because most of the time these units go out when the hottest day of the year or the furnace when it is the coldest day of the year. and the federal reserve just had a study last week that said over 47% of the american people have less than $400 in emergency cash available to them. so what are they going to do? they need that comfort. in the wintertime, they need the heat a lot of times for medical reasons. they need the cooling in the summer. and so it's bring back that

balance. you know, probably putting more of an emphasis on the economic justification versus the -- >> my time is expired. could each the six of you, would you mind putting a little paper to me tor something that you would suggest that might be a solution to help out for families in depressed areas? thank you very much. i yield back. >> gentleman's time has expired. the chair recognizes the gentleman from new york for five minutes. >> thank you, mr. chair and thank you to our witnesses. certainly we're citing a 40-year history here. again to repeat what my colleague from vermont indicated, we have to look at some of the trade situations too where offshoring of jobs might have helped some families retain those jobs and be able to afford these items and this job loss thing i think is much more complex than just suggesting standards caused it. our energy efficiency standards have improved products that benefit all of our constituents, many of these are not luxury goods but necessities found in nearly every home. we've heard support for national efficiency standards from

manufacturers and consumers, and we've heard from industries, from states, from environmental groups that there is consiste y consistency, that this program has been a success. i'm certainly open to improving the program but improvements cannot undermine the purpose of this program. and while we look for those improvements we should not lose sight of the fact that this program is incredibly successful while there have been a few contentious rules, it is my understanding that of the final rules issued since 2009 almost one-quarter were the result of negotiated consensus agreements and only five have been subject to litigation. so to our witnesses, do you agree that many of these rules have been consensus driven? >> yes. >> yes, most of them -- as ms. noll said, 25% of the rules in this administration have been through the consensus process. that means 75% of those 40 others have not. and i think we all support and

would encourage that negotiation consensus process because there's more of that give and take that mr. eckman talked about versus the notice in comment where you only have the adversarial is much more adversarial versus the negotiation. i think that's something we should look at. >> okay. and i think it's worth noting that doe has a history of working to improve the program, especially around increasing stakeholder engagement dating back to the 1990s. a few years ago doe established as i understand the appliance standards regulatory advisory committee which formalized the process for negotiated consensus rulemaking for the first time. and a number of our witnesses participate on these committees, which includes again our manufacturers, our trade associations, states, and

consumer groups. can anyone comment on this committee's work and what -- you know, what it is as a positive -- what it might be as a positive step to formalize this process? mr. eckman? >> yeah, i think it has improved the process a lot, particularly where there's a likelihood that both the manufacturers and the efficiency advocates and the doe agency personnel and consultants can come to a more flexible conclusion than would otherwise be provided. and i think that's -- it's allowed for lots of horse trading that wouldn't occur as mr. yurek said under the standard process that was rulemaking hearings process and file your report. so i think that's -- it's been a huge advantage. i've been a member since the committee was established. we've had multiple work groups, seven different work groups, so far negotiating standards. they worked the best when both the parties that want to participate in that come before the committee and say, we think we can work this out. give us a chance. if that's not possible or there's not really an issue everybody thinks we can do this through rule and comment, that's a much more expedient process.

it takes a lot of time and energy to do the negotiations, as you're aware, but that turn out to be better rules as a consequence for everyone involved. i think supporting that on a continuing basis in process, that has a really -- has improved the process a lot. >> does anyone else -- >> i would just want to note that on the 75% that weren't consensus or joint negotiations does not mean that they weren't going through the normal rule making process to deliver a superior outcome and only five of those rules have been litigated. i think that is still a very small number on the grand scheme of things. >> thank you. mr. cosgrove? >> and to mr. yurek's point following up a little bit, when you're sitting around a table talking about technical things you better have the technical chops to have that conversation.

so in this highly quantified algorithm that asrac and d.o.e. consultants are using i'd like to see inside that. we have mathematicians. we can figure it out. i don't understand why we can't see what the key assumptions are and how those assumptions play inside the model they built and run through the computer. one of the things we've learned over the last 40 years i think is that this incoming tide has raised all the boats. this is a good news story. now let's perfect it but let's do it in as scientific a way as possible and as transparent as possible. >> anyone else? mr. mcgwire? >> mr. tonko -- >> the gentleman's time has expired. make it quick. i recognize the gentleman from missouri mr. long for five minutes. >> thank you, mr. chairman. mr. mcgwire, could you recommend to me what type of hair dryer would be the best purchase for my dishwasher so i can dry my dishes whenever the cycle is through? >> i'll provide that for the record. >> my dishes are not feeling the burn as they once did.

mr. cosgrove, in some of the testimony given today the issue the department of energy coordinating better with another agency was mentioned as an area of improvement. particularly in the area of making sure that imported products containing regulated components are held to the same standard as domestically manufactured products are on their own. what are your thoughts on how we can ensure a level playing field for u.s.-made components? >> there will be a number of things. i think clearly it may not be d.o.e.'s responsibility but it would be their responsibility to make sure their fellow travelers, principally customs and similar policing functions, are aware of what the standards are, what to be looking for -- >> can you pull your mike a little closer? >> i think industry has a role in that too. we should step up and offer our technical expertise. there's other distributors would have a role in that.

systems manufacturers will have a role in that. so it's not going to be one easy solution, but we don't want those products in the stream or in the system. >> the energy conservation standards program requires department of energy to start a new rule-making procedure on a product as part of a six-year review cycle. could you tell me generally how long it takes to fully comply with energy conservation standards for a product factoring in all of the cumulative rules including test procedures? >> three years sticks in my mind. i think it would be different for different products. i mentioned lighting happens a little faster. if we're doing a motor, meeting a motor efficiency standard, that's a bit more complex. machines. so i think it's different. assuming it's -- we have three years to get into compliance, and then that gives you three years of run time before the

next rulemaking kicks off and d.o.e. tends to, as you'd expect and as they should, start that rulemaking early. so they're able to comply with the law when they get to six years. i'd also point out in the covered products for nema we know of only two times where the department has chosen for the cost-benefit analysis to forego the rule. >> what are some of the challenges in complying with both the energy conservation standards and additional test procedures? >> go ahead. >> congressman, that's one of the interesting things that was -- the change when we made the serial rule part of i think it was 2005 amendments to epca, you have to review the standards every six years. the requirement is you review the test procedures every seven. and what we're starting to see in a lot of our products, the test procedures aren't complete for the products that they're setting standards for. so as a matter of fairness we

don't even know what the test procedure's going to be and how our products are going to be measured. the information isn't there. and they're setting efficiency standards at minimum levels. and so i think the interrelationship is very important. we need to know what the rules are, be able to evaluate what those rules are through testing our products and provide that information to d.o.e. before they start setting the next standard. the same thing is the previous question mr. cosgrove, our products it's a five-year implementation time from the standard being set and when it becomes effective. and it takes the entire time to do it. what we're seeing is even before in some cases the standards are put into effect we're seeing the next round. and we saw that with residential air conditioners. the standard went into effect in january of 2015. the fall of 2014 they already started discussing the next round of efficiency. so you're looking at increasing the efficiency standards on this

equipment even before the prior standard went into effect. >> welcome to washington, d.c. mr. cosgrove, do you care to comment on that as far as what the challenges are? >> they're pretty much as mr. urich said, it's going to take us some additional time depending on the product. >> okay. thank you. mr. chairman, i yield back. >> the chair recognizes the gentleman from north carolina mr. hudson for five minutes. >> thank you, mr. chairman and thank the panel for being here today. very informative discussion. mr. mcgwire, which of your appliances have been regulated multiple times? do you believe we're reaching a point of diminishing returns with this serial rulemaking? >> virtually all of our products have been regulated multiple times. the current refrigerator standard that's been in effect since last year is the fourth version of that standard. same for dishwashers. the rule i mentioned that was proposed last year was the fifth

revision. we believe we hit the point of diminishing returns in the last tranche of standards negotiated through the consensus process. we think standards going forward for most of our products are not justified on the economics or the energy savings. >> appreciate that. mr. long asked one of the other panelists about the issue of having the d.o.e. propose new standards for some products while the underlying test procedures are also changing. would you like to elaborate on how this is a problem for you? >> it's a major issue because a manufacturer cannot tell whether they -- what they have to do to comply with a new standard until they know how to test to it. that's why the law as to the test procedures come first. but that process is a little out of whack right now. so we in the case of portable air-conditioners, we've had to comment on a proposed standard before we knew what the final test procedure was. that's really impossible to do. but that's what we're forced to do under the current process that's being employed.

>> that seems like it's not serving the best interests of the people either. if we aren't getting the true assessment of the results of these tests. obviously i see why that's a mistake. many of your manufacturers make several regulated products and face multiple rules. what's the challenge? maybe you can elaborate a little more for your member companies in terms of complying with all these different requirements simultaneously just in addition to sort of the testing thing we talked about. but just elaborate on that. >> the initial investment to gear up for a new standard as mr. urich and cosgrove said is quite an investment to understand the test procedure and get your products qualified. but ongoing a manufacturer has to test and identify those products to the department of energy if you want your products to be energy star qualified, that requires a further up-front test as well as ongoing testing of a certain percentage of your

products. so that's a pretty significant testing burden for the manufactur manufacturese manufacturese manufacturesers. and when the test procedures are under revision, it has to be very precise in order for you to design a product. what we've experienced is energy star sometimes will want a different test procedure than d.o.e. requires for the standard. one of the benefits we found of negotiating the consensus is we would peg the energy standard requirement to the standard requirement with the single test procedure so manufacturers can plan that out. that hasn't always been the case. these are processes that used to be employed but haven't been across the board in recent years. >> thank you. industry groups have repeatedly asked d.o.e. to establish separate product categories for condensing and non-condensing covered products only to have the d.o.e. provide a response

that condensing and non-condensing equipment provide the same utility to consumers, so there's no justification for establishing separate product categories. is this another area that warrants an objective third-party review? >> congressman, what you're talking about is the famous furnace rule. and there again it's related to technology. this equipment is at a point where you have condensing and non-condensing and there's cost differences that are considerable between the two technologies. right now we are at the highest level of non-condensing efficiency. and the rulemaking is looking at moving to a condensing requirement. i think the groups -- this would have been a rule that would have been great for negotiation because what we've seen over the years is that every rule that's come out has ended up in litigation. and to see if the groups could

come together and reach a solution, i think would have been a better solution. here right now in the midst of a notice and comment. d.o.e. has just issued their proposed rule to o.m.b. for review. so we'll see what happens there. but having two separate product classes for condensing and non-condensing does not look like it will be something that's put forward. >> looks like my time's about expired. so i'll yield back. >> the chair recognizes the gentleman from ohio mr. johnson for five minutes. >> thank you, mr. chairman. and i want to thank the panel. i know you've been here a while already. for mr. mcgwire, mr. cosgrove and mr. urich, how important is early stakeholder input for the rule-making process? what are the additional challenges that you face when d.o.e. issues a notice of proposed rulemaking without

having consulted with you beforehand? mr. mcgwire, let's start with you. >> i think it's very important from an effectiveness point of view. if the manufacturer hasn't had the ability to be in a dialogue with the government about the proposal and how they expect the efficiency requirements to be achieved and do some testing, then you're really dealing in a vacuum. this is what happened with the proposed dishwasher rule. it's very important. these are technical matters. it's very important that not only manufacturers are engaged, but also all stakeholders. this asrac process does do that. but the asrac process is useful once a decision has been made that will be a new standard. what we're talking about is a change in the process for determining whether there should be a new standard. if there is going to be one, consensus is always the best. we feel we will do better as the advocates feel given a give and take, putting on the table, and

not wondering where the data came from. >> before we go any further i really want you guys to get the dishwasher rule right. i'm the dishwasher at my house and if the dishwashers don't clean, i've got a real problem. it's going to be double work for me. mr. cosgrove, go ahead. >> i certainly agree with what my colleague says. i think what i've heard is listening to this conversation is at least by the manufacturers, this is not an assault on the standards. we want the energy-efficient economy to thrive. it's good for business, as noll pointed out. that said, it can be more transparent. the department of energy has some true experts in their fields, but so do we. and it should be as was stated. let's put the numbers on the table, and then let's bring in the business people and say, okay, the cost of efficiency improvement goes like that, but

then the efficiency curve is almost flat. at some point we've got to call enough. >> got you. thank you. mr. urich? >> i think it's very important because industry has the information that this rule's going to be based on. it has information on what technology's available. it has information on the cost. it has information on the products that are being sold today, both on the different efficiency levels. so if that conversation doesn't occur, what is the regulator looking at to make its decision on is there significant energy savings, can there be energy savings, and should we move forward with the rule? it's very necessary for that dialogue, and i think d.o.e. would like to have that dialogue, but again they are tied by what u.s. congress has put in the act in the serial rulemaking where you're mandating these rules every six

years, and they just don't have the time to do a lot of times everything they need to do or like to do to get these rules out and also meet the court order from the 2nd circuit to make sure they meet all their deadlines. >> let's continue with you, mr. urich. the d.o.e. has proposed new standards for some of your products while the underlying test procedure is also changing. why is this a problem for you? >> it's a huge problem in that i stated earlier, yes, we need to know what the rules are, how our products can be measured. and again, it's getting d.o.e. the right information. if the test procedures aren't set, how do they know how products are performing out in the field? >> is it safe to say it's pretty

dadgum hard to innovate when you don't know how you're going to be measured at the end of this? >> you don't know what the target is. you don't know what you're going to be measured on. >> if you don't know where you're going, any road will get you there. okay. mr. chairman, i'm going to yield back 45 seconds. >> we thank the gentleman from ohio. the chair will recognize the gentleman from oklahoma mr. mullin for five minutes. >> thank you, sir. thank you for having this meeting. i'll be honest, there's a few meetings we have in here that i had to study hard on because i'm not familiar with it. this is as i would say in my wheelhouse. i understand this situation extremely well. ms. noll, i'm going to talk to you for probably the remainder of the time. because a couple of things you said, and i just want to set the record straight. one, you said huge savings that these energy savings standards the d.o.e. has put out has put huge savings. that was your words, right? based on what? >> based on analysis. >> what analysis? >> analysis that aceee and the appliance awareness project that's done as well as energy zone analysis. >> are you really looking at bills and prices? because you said huge savings and then you said up to $500 a year on energy cost. is that correct? >> correct.

>> in oklahoma the average household today their total energy bill a year is $1,296. so you're saying that because of your savings, you know, that bill would have been $1,796? is that right? >> absent the standards. >> but yet if i go back and i look at 2008, the midline whirlpool dishwasher, the average use was about $29 a year is what that unit cost to run. at the same time, the cost of the unit was $375. today the same unit is $399 and it costs $32 a month to -- or a year to run. >> the standards program's been in effect since 1987. >> i'm just talking about -- you said huge savings. >> mm-hmm. >> so i'm trying to figure out where the huge savings are from.

because right now we're just talking about -- we're just talking about dishwashers. dishwashers we can see in the years have went up. they cost more. so that's not a savings. and they cost more to run per year. so just give me an opportunity again. where is huge? huge would be massive. i mean, i'm thinking like big time. that's huge, is your word. $500, i guess you could say that's huge. but i don't see it. that's the dishwasher. so i'll give you the mike and let you go ahead and try to explain that for me. >> in my opinion i think $2 trillion in savings to consumers is a lot of -- >> you say 2 trillion. i'm trying to figure out what the $2 trillion are. d.o.e. comes in here and makes all these outlandish claims all the time. how much they're saving the mid-level households and all this stuff and how much energy

is down when energy cost is actually up. and then you're in here making claims that the household is saving money and i'm just not seeing it. if anybody on the panel can help me, let me know because i don't want to make a claim that's not true and right now i'm seeing a claim that's not true. go ahead. miss miller. >> i think it's a valid question to say what is this analysis based on. and i think to reiterate some of the other remarks made by other members of this panel it's difficult to see where those claims come from in d.o.e.'s analysis. >> right. >> and if you're looking at dishwashers specifically, if you look at the standards that were finalized in 2012, they assumed as you mentioned before, mr. mcgwire, that the payback period would be about 12 years, which is only as long as your dishwasher is going to last. and i think they assumed that households would save on net $3. >> let me read you a manual for a startup for a new dishwasher now. on top of it costing more to run, quote, this is out of the

manual, says "run hot water at sink nearest your dishwasher until water is hot. turn off water for best dishwasher results. water should be 120 degrees before it enters the dishwasher." this is the new standards that we have to have out. so not only does it cost more to run, ms. noll, now we're having -- we're wasting water, which this is a big issue nowadays. we always talk about water savings. especially let's go to california. let's talk about california for a second. they're supposed to run, waste hot water, and let it run 1/4. this is the manual that comes for dishwashers now that says that. refrigerators. let me use refrigerators real quick. refrigerators in 2008, average whirlpool refrigerator cost $999. that same unit comparable today is $1,299. energy cost, also up. now, these are two major appliances. we're talking about refrigerator. we're talking about a dishwasher. where's the huge savings?

d.o.e. and the argument on all these energy-efficient appliances are always out there talking about huge savings. and the american people think it's huge. and yet i gave you two examples of -- >> hold on, mr. chairman. >> gentleman's time has expired. thank you. seeing no further witnesses seeking time the chair asks unanimous consent to enter for the record a multitude of statements on the subject matter from a number of agencies and concerned citizens. without objection, so ordered. in closing, the chair wants to thank all the witnesses for your time, your expertise, and your insights as to use hair blow-dryers to dry dishes in the dishwasher. the chair reminds members you have five legislative days to submit questions for the record and executive eors, statements for the record. without objection this hearing is adjourned.

>> thank you. >> thank you. tuesday morning here on c-span 3, a hearing on people who stay in the u.s. longer than allowed by their visas and what that means for national security. that house homeland security committee gavels at 10:00 a.m. eastern here on c-span 3.

madame secretary, we proudly give 72 of our delegate votes to the next president of the united states. ♪ ♪ now, a hearing on synthetic drugs, manmade chemicals with names like k-2, spice, and bath salts. federal, state, and local officials testified about the manufacture and sale of the drugs, some of which is legal.

senator chuck grassley of iowa chairs the senate judiciary committee. >> start until there's members of the other political party here, but they happen to be stuck in traffic, which shouldn't surprise anybody. they said i could go ahead. wherever we are in the testimony, when they arrive, i will let them give their opening statement right away. in many areas across this committee's jurisdiction, we hear time and again that technology is outpacing the law, but in no other area is a result of this gap as deadly and tragic as it is with a recent rise in the production, marketing, and sale of synthetic drugs to young

people. traffickers created these drugs in laboratories so that they produce the same or greater effects on a user as controlled substances. but when the government acts to ban the new drug, traffickers simply tweak the chemical formula ever so slightly to evade the law. dealers give these substances exciting names like vanilla sky, spice, and crazy clown. and sell them in legitimate convenience stores all to market them to young people as legal and therefore presumably safe, a safe way to get a high. but of course this is all a lie. these drugs are anything but safe. almost six years ago to the day, a young man from iowa, dave rozga, became one of the first

young people to die from the effects of smoking synthetic marijuana or k-2. david's parents have since become outspoken advocates for education, awareness, and action against the menace of synthetic drugs. i'm honored to have them and david's brother here today and david's father will share his family's story. synthetic marijuana or cannabis are substances that have little to do with the marijuana plant. the substance is typically composed of plant matter sprayed with chemicals designed to mimic the effect of the thc, the active marijuana ingredient, with far more potency. synthetics often marketed as

bath salts or glass cleaner are another type of synthetic drug. these are stimulants that imitate the effects of cocaine and methamphetamines. a third category of synthetic drugs has emerged as a concern, synthetic opioids in the form of fentanyl. this committee needs no introduction to the opioid crisis of course. fentanyl and its derivatives and opioids are five times more powerful than morphine. quote, they are deadly convergents of the synthetic drug threat and current national opioid epidemic, end quote. just last week it was widely reported that the overdose of fentanyl was responsible for the death of the musician prince. according to dea, synthetic

drugs are largely developed outside the united states, mostly in china and smuggled into the country through the mail or across the border with mexico. reports have indicated that the profits are often traceable back to the middle east, so we need to take a hard look at whether law enforcement has tools needed to protect the public from these synthetics. while this committee acted a few years ago to clear the trafficker since then, it's clear traffickers are continuing to outpace us. in 2012 after rozga testified before the senate, this committee acted by passing my bill the david mitchell rozga act. the bill placed a series of

synthetic can baa noids and other analogs on schedule one. it extended the time for which a substance can be scheduled by the dea to protect the public. the bill had broad bipartisan support on the committee. the next year my bill became law as part of the synthetic drug abuse prevention act. this was an important step to help protect our young people. sure enough calls to poison control centers began to level off or decline for a time. and since march 2012, the dea has used its temporary scheduling authority to place 35 synthetic drugs on schedule i. but clearly the threat posed by these drugs has not abated. calls to poison centers for synthetic marijuana have once again begun to spike, rising from 2,600 in 2013 to 3,600 in

2014 and almost 8,000 in 2015. news stories continue to depict the awful effects of ingesting these substances on our youth and the effects on our health care and criminal justice systems. and law enforcement continues to encounter these substances in record numbers. so i thank all of our witnesses for being here today to help us learn more about this crisis. many of us on the committee have supported legislation that we think we can help. but given the complex way in which drug traffickers can evade the law, this is a difficult problem and doesn't have an easy answer. i'm going to now turn to senator feinstein and instead of what i gave orally, because i shortened my statement, i want my printed statement put in the record without objection.

senator? >> thanks very much, mr. chairman. i want to welcome our witnesses. and as i look out at the audience here today, it appears to be a knowing and intelligent audience, so i'm really very pleased to see this. well, that may have been -- [ laughter ] he's a humorist, so i have a humorist comment. i'm not a humorist, so i wouldn't deliver it well. so i'm going to cease and desist. we're here today to discuss synthetic drugs and the challenges in bringing the manufacturers and traffickers of these substances to justice. i think this audience knows that unregulated substances mimic the effects of controlled substances such as marijuana, pcp, and lsd. and that's bad news. in 2015, there were 7,789 poison

center exposures nationwide to synthetic canaboids, also known as synthetic marijuana. this is the most since the drug appeared in the united states. there were 3,960 exposures in the states just represented by this committee, mr. chairman. that's almost half of the exposures nationwide. the challenge for law enforcement is that manufacturers, mostly in china and india, change one or two molecules in a drug's composition and they produce a controlled substance analog. the new drug, even though it has a similar effect on the body to a controlled substance, may no longer be illegal under federal law and enforcement efforts

become difficult. these drugs are then shipped to our country where they are marketed as legal alternatives to illegal drugs and appeal to youth because they're easily accessible. often sold at gas stations, convenience stores, or online. we're now beginning to see a decrease in synthetic c cannaboidics exposures, but synthetics continue to bring about havoc. in sacramento, there were 52 fentanyl related overdoses in one month, resulting in at least 12 deaths. nationally from 2014 to 2013 to 2014, there was an 80% increase

in overdoses involving synthetic opioids, including fentanyl. i've never seen that before. an 80% increase in a year. and while alarmingly high, these statistics may also be inaccurate because fentanyl caused deaths are often misclassified as prescription opioid or heroin related. like other synthetic drugs, illicit fentanyl and its analogs are clandestinely produced and primary enter the united states in one of three ways. one, chinese chemists produce and ship it to the united states via international mail. two, mexican drug traffickers produce it with precourser chemicals from china and smuggle it across the southwest border. or three, chinese chemists

produce it and ship it to canada where it is smuggled across the northern border. the point of this is regardless of the type synthetic drugs pose a deadly and quickly evolving public health threat. mr. chairman, you and i have held two drug caucus hearings on this topic dating back to 2011. since then, though, congress has only scheduled 26 substances and another 35 have been administratively controlled through temporary scheduling, only 11 of which have been permanently controlled. simply put, our current legislative and administrative framework prevents the swift action that's needed to address this constantly evolving problem. that's why with others in 2015 i

reintroduced the protecting our youth from dangerous synthetic drugs act. this is a bipartisan bill cosponsored by many members of this committee. and this bill would prevent manufacturers from skirting federal law by establishing an interagency committee that would convene on an add-needed basis to quickly designate and prohibit new synthetic drugs encountered by law enforcement. i think importantly since controlled substance analogs are not subject to schedule i research restrictions, legitimate scientific and medical research would be safeguarded. controlling new synthetic drugs more quickly will better enable us to protect our nation's youth and ensure successful prosecutions against those who manufacture and traffic these

drugs. so if people here have comments on this bill, i would very much like to hear them. and i think one thing is clear, mr. chairman. we really have to move with alacrity. we really have to do something to stop this. i've never seen this in my lifetime before in this country, and so i am hopeful that under your leadership we'll be able to come forward with some important legislation. and i thank you very much. >> i associate myself with her remarks about acting quickly on this. michael botticelli is director of national drug control policy. he leads the administration's drug policy efforts and is responsible for creating a manual of national drug control strategy. previously he served as director of substance abuse services at

massachusetts department public health. an undergraduate degree at sienna college and a masters of education. we invite you back and we're glad you're back here. richard hartunian is a u.s. attorney, northern district new york. prior to his confirmation, he served as assistant u.s. attorney for 12 years. he is a graduate of georgetown university, albany law school of union university. chuck rosenberg has served as acting administrator for the dea since 2015. began his career of public service as an assistant u.s. attorney eastern district virginia from 94 to the year 2000. after a few years in the private sector, he served in a series of

senior positions in law enforcement, including consul to then fbi director muller, consul to then attorney general ashcro ashcroft, and chief of staff to then general comey. in 2006, he was confirmed by the senate as u.s. attorney eastern district virginia, a position you have held since 2008. he also has an undergraduate degree from tufts, law degree from the university of virginia, and master's degree from harvard. he joined the fda in 97 after working as basic science researcher and academic physician, medical college of georgia and veterans administration hospital augusta, georgia. he earned his ph.d. from the

university of nebraska medical school. completed his residency case western reserve and his fellowship at yale university. would you start out, mr. botticelli, please? >> thank you for inviting me back to discuss issues related to synthetic drugs. although all synthetics drugs, met amphetamine, fentanyl, and opioids are of great concern to the administration, i'll focus on -- they are designed to mimic the effects of controlled substances. in december 2015, the united nations estimated that there were over 600 identified nps on the global market. the vast majority of these not controlled under u.n. drug treaties or domestic drug

control authorities. they are often mixed with material to form a dangerous final package and final product in alluring packaging. the potency and composition can vary from batch to batch. many pose a serious threat to public health, including addiction and life-threatening medical consequences. i appreciate that mr. mike rozga is here today from iowa to talk about his son david's tragic death associated with the use of a synthetic. there are also many young people that are a testament to the deadly impact that nps is having on our families and communities. although the u.n., the federal government, and all 50 states and the district of columbia have developed responses to nps, there are still ways it can be manufacturing that make it challenging. all nps are manufactured in

china. given the fatal and nonfatal effects of these substances, this clearly needs to change. the united states is leading discussions with international partners on how the global response to nps can be improved. in april at the special session of the u.n. general assembly we joined other countries to encourage the world health organization to engage more proactively in the review of services for international control. and while international control of drugs and chemical precursers are important, the existing international scheduling framework is underutilized and is unable to control the overwhelming number of nps that exist or could be developed in the future. as a result, the united states and other countries are working to press china to take control within their borders.

most importantly, china streamlined their scheduled process for nps and determined that the impact of a substance both domestically and internationally should factor into the review for substances for control. our federal agencies will continue to work directly with china to reduce the manufacture of nps. federal agencies are also working with law enforcement to support investigations domestically and abroad. with the science and research community to better understand the pharmacology of nps and to form better treatment strategies and to inform communities about the danger of synthetic drugs. despite these efforts, we're kerned about the availability of traditional responses to successfully reduce availability of nps. the data collection needed to

support of scheduling actions for the existing, let alone potential nps, is a huge task. under the analog statute, prosecutors must start each case anew, even if the same substance is involved, which is a time-consuming and resource intensive process. technical experts at dea and the fda have been meeting and working together on the data collection required to place new drugs under control and how that plays into permanent scheduling processes. we believe that a coordinated response to scheduling, which aims to protect public health and public safety and takes into research interests is necessary to get and stay ahead of the supply of nps. congress can help by legislatively controlling a significant number of nps that are structurally related to scheduling compounds. it helps prevent further harms

to the public. in the long term, more significant reforms to the domestic scheduling framework are needed to stay ahead of the realities of the illicit drug market. in recent months, the united kingdom and australia have taken bold steps aimed at getting ahead and staying ahead of this drug threat. we'll continue to work with our international partners, federal government agencies, and our partners at the state, local, and tribal levels to prevent the threat to our communities that these dangerous substances pose. thank you very much. >> now go ahead mr. hartunian. >> yes, chairman grassley. on behalf of attorney general lynch and my partners, i thank you for the opportunity to

testify here today about synthetic drugs. synthetics drugs continue to flourish are horrible human costs, including hallucinations, violence, hospitalizations, and worse. there is no quality control. and there's significant variations in toxicity. as a result, police officers encounter users that irrational and combative. in 2012 involved a 54-year-old utica man who was seen naked in the street waving a tree branch. when the man told police they have to kill him to stop him, the officers deployed a taser gun, but the man pulled the probes out of his chest and continued walking until two officers subdued him.

in march of 2016, syracuse police took a 25-year-old man to the hospital after his mother reported that he had set his mattress on fire after ingesting synthetic drugs. syracuse has seen so many overdoses of synthetics locally known as spike that it's been called spike nation. now under the analog act criminal liability depends on a finding in each case that the substance is an analog intended for human consumption and that the defendant either knew the substance was one regulated under federal law or knew the identity of the substance. even if a substance is widely regarded as a controlled substance analog under the statute, each criminal prosecution must establish that fact anew, which requires extensive use of expert witnesses to prove that the analog is substantially similar to a controlled substance in structure and effect. in light of the common practice

of marketing and selling synthetics with names like bath salts is set up a lack of knowledge defense. neither the challenges nor the evasive actions of the synthetic drug manufacturers and distributors have deterred our efforts to protect the american public. in the northern district of new york, we first used the analog act in a case that began in 2009 to convict 20 defendants in a ring importing molly from china and distributing it in the syracuse area. multi-kilo quantities were shipped, some falsely labeled as metal corrosion inhibiter. in 2012, we successfully prosecuted the owner of nine head shops in central new york which sold synthetic drugs.

we seized nearly 12 kilograms of spice and k-2 and thousands of packages of amped, clear, and legal funk. he went to jail for 87 months. from coast to coast and in the heartland, my fellow u.s. attorneys have achieved similar successes. in north dakota after two teena teenagers died in the grand fork area, there was a business confirmed that was importing analogs from several countries and distributing them across the united states. carlton and 14 other defendants were convicted and sentenced. in the eastern district of california, victor pled guilty to causing at least 24 tons of misbranded synthetic drugs to be introduced into interstate commerce marketed with names like bizarre, orgasmo.

in april 2016 in the middle district of florida, a chinese national was sentenced to 50 months in prison for his involvement in supplying hundreds of grams to the u.s. zang was a chemical engineer. he altered his inventory accordingly. in the northern district of iowa, two men were convicted in late 2015 of conspiracy to distribute analogs and conspiracy to launder drug money. they were wholesaler distributors of ones like nice guy and mr. happy. while our prosecutions punish offenders and deter others from engaging in such conduct and raise public awareness of the dangers of synthetic drugs, we understand that education,

prevention, and rehabilitation are essential components to a comprehensive solution. we partner with educators and medical providers in town hall events. we invest substantial resources in youth education programs like our leadership project reaching fifth grade students in new york's capital region. and the northern district's intensive reentry court which helps high risk offenders to deal with their addictions and successfully reintegrate into society. the tools congress has given us allows to take significant action. our resolve remains unwavering. thank you. i look forward to answering any questions you may have. >> thank you. now mr. rosenberg. >> thank you, mr. chairman. it's a pleasure to be here. i appreciate you holding this

hearing on this topic, sir. sometimes in our lexicon, we use words perhaps without thinking about it. unprecedented, historic, unique. but i think that what we're seeing is unprecedented and historic. we have an epidemic, another word that sometimes is often overused but is apt here. it fits. this is an epidemic. i want to talk about this a little bit thematically. i'll be brief. i think there are three other words that help me think about this problem. one is vile. one is volatile. and one is lethal. let me explain. the reason this is so vile -- and you touched on it, mr. chairman, is because a lot of these poison pedalers are marketing to children. they take substances, put them

in shiny foil packets, give it a fun-sounding name, put it in a grocery store and sell it to kids. by any definition, i think that's vile. volatile. let me explain that as well. as you touched on, mr. chairman and senator feinstein mentioned, we are trying to keep up with a picture that changes almost every day. we've identified something like 400 new nps, psychoactive substances over the last four or five years. we were seeing one a week. now we're seeing two or three in a month. i almost feel each time i sign an administrative control regulation that i'm simply telling the bad guys not this one anymore. move over here. and that's what they do. it's volatile. for every one substance we have controlled legislatively or administratively, there are 11

more out there that are uncontrolled and it is changing all the time. so vile and volatile. let me briefly address lethal. folks will talk today eloquently perhaps on this panel, certainly on the next one, about the effect that this has had on our kids and the folks we have lost. i want to talk about it from a slightly different perspective, from a law enforcement perspective. fentanyl is so dangerous that we have had to instruct our agents if that they touch it or inhale it accidentally, they can die. if they're a canine officer and their dog sniffs it perhaps because it is laced in heroin, that dog can die. we have trained our agents, not because they're first responders because typically they're not, but because they could encounter fentanyl to administer to narcan

to one another. we have to protect our own people because this stuff is so lethal. it's really a remarkable substance. we're putting out a roll call video through the international association of police to warn a million police officers across the country that you can't field test this stuff. you can't transport it the way you normally transport other drugs. you have to be so careful because just being exposed to it not even purposely ingesting it or touching it, can kill you. vile, volatile, and lethal. i'm very happy that you're doing this. we've got a lot of work to do. we're playing catch up, and we need your help. thanks for the opportunity. >> you're very plain spoken. thank you very much. now mr. -- dr. throckmorton. >> chairman grassley, ranking

member feinstein, members of the committee. thank you for the opportunity to appear before you today to discuss the important role that fda has in supporting efficient and scientific assessment of new drugs whether illicit or -- i agree with all of the comments that the three panelists have made as far as the seriousness of this issue. new illicit inthetic drugs are flooding the u.s. market. they pose significant health risks. we appreciate the efforts the committee is doing and fda is committed to doing our part. while we are the lead federal agency for regulating controlled substances and enforcing csa, hhs has a number of responsibilities, many of which are performed by fda in this

area. my testimony today will focus on the role we have in the drug scheduling process, including the emergency control of new and dangerous street drugs. as a part of our work, fda conducts a scientific and medical evaluation, which forms the basis for the hhs recommendation to the dea about the appropriate level of control for a substance that has the potential to be abused. the eight factors are spelled out in my written testimony. that evaluation involves a careful analysis on synthesis, structure, receptor binding, and clinical studies to help us understand a drug's abuse potential. once complete, our analysis is shared and then sent to hhs who transmits a recommendation to the dea for final decision making. under the csa, controlled

substances are listed in one of five schedules. for today, schedule i is the highest level of control reserved for drugs that have a high potential for abuse. no currently accepted medical use and lack of accepted safety for use under medical supervision. in addition to this work, fda has a role in the energy or nontemporary scheduling of illicit drugs that you have referred to. dea can place a substance into schedule i more quickly. in this process, fda provides information about whether a given substance is an ingredient in an approved drug product or the subject of an investigational drug study. we participate in the final scheduling action following the emergency action. the scientific process to determine the appropriate level of control for a substance balances the important need to protect the public from the dangers posed by drugs and substances of abuse while at the same time seeking to provide access to these drugs for

researchers for potential drug development. finally, in addition to its role in scheduling drugs, fda works with the department of justice, including dea, and other state and federal agencies to support criminal investigations involving the illegal sale, use, and diversion of controlled substances. with this background, i want to turn to the emerging public health threat of nps. we have engaged with fda to test the abusiveness of these substances. we completed a memorandum of understanding that is facilitating the sharing of information so we can work more closely together. most of them were emergency scheduled and then permanently controlled under the csa later. we are working with the dea to do even better by improving the process of drug scheduling with

the enactment of the synthetic drug abuse prevent act in 2012 as a part of the fda scheduling drugs act. using this approach, fda has been able to evaluate 16 substances to make recommendations for permanent scheduling by dea. extending this approach, we've also been able to apply a similar way to look at new bath salts. these are highly dangerous stimulant and hallucinogenic substances that can cause toxic effects including convulsions and death. chemists can rapidly alter the chemical structures to stay ahead of regulators. placing these substances into

schedule i can help protect the public health. however the same chemical structures found in the n prk s overlap with drugs that have potential therapeutic use. the requirements placed on the conduct of research using schedule i may act as a disincentive for research in those therapies. we believe by performing efficient scientific review we can balance the important health risks propowith appropriate and scientific understanding. fda is committed on working with other partners on science in this area to understand and enhance the timely and appropriate assessment of these substances in advancement of public health. we hope you'll continue to give the relevant federal agencies an opportunity to share perspectives on proposed

responses, including scientific-based solutions. thank you for the opportunity to appear before you today. i'm happy to answer any questions i can. >> i would ask my colleagues who will take five minutes. we won't have a second round because we have five witnesses on the second panel. i want to make sure that they have their opportunity to testify before the committee as well. i'm going to start with mr. hartunian. it appears from your written testimony that you and some of your colleagues have had quite a bit of success prosecuting cases pursuant to the controlled substance analog enforcement act despite the challenges posed by proceeding under that statute. so you're to be commended for that. so my question, with that in mind, despite complaints about the scheduling process being too

slow and cumbersome, do you have an opinion on continuing to schedule dangerous synthetic substances or should we just rely on prosecuting these substances as analogs? >> thank you, chairman grassley for that question. i think it's clear that the more chemical substances that we schedule, the easier it is for us to do our jobs. your act in 2012 was helpful adding chemicals and substances to the schedule list under the controlled substances act. that clearly makes it easier for prosecutors to in a more straightforward way to present cases in court, establish that the chemical compound is something that is on a controlled substance schedule and then proceed without questions about its chemical composition and its effect. when we run across synthetics that are unscheduled, we have to deal with the challenges of the

controlled substance analog act. they're well familiar to you chairman and senators through your great work with the drug caucus. you've heard about that. we have to prove these elements beyond a reasonable doubt that can be challenging. they're subject to expert testimony battles. frequently the defendants will call experts to call into question testimony about the effect of a substance when in fact there is a plethora of testing that's been done. that can confuse jurors and make it difficult to prove. to answer your question, sir, the quicker, the faster, we can get these drugs scheduled, the better. >> mr. botticelli, we keep hearing that our current scheduling approach for synthetics just isn't as agile

enough to deal with it. at the same time, we also hear concerns that if we move to schedule substances too quickly, it could hurt legitimate research. as we look to find a better approach to address this threat, what can you tell us and the congress about how other countries are addressing it?