financial products whether suitable in the like and making sure there's proper disclosure. we've had a lot of instances we've seen. a lot of instances of complex products not clear what their purpose exactly was. it's clear that the number of people did not understand them. those were at the heart of the problem. we have very common standards relating to how to apply fair value we are working jointly to try to revamp, overhaul,

improve our standards for accounting for the financial instance. we are working on a time frame to try to get the expose your out in the next few months. how can assets be directly market to market if there is no market. a situation of total market analysis. >> there is at the core of some of the issues that has arisen over the past year.(sñ there are transactions going on for most things. there may be very inactive. it is not clear what the parties are and what their motivations are and the stress sellers and the like. the standards put out a few years ago which did not

increase the fair value. the idea of marking as ets down in bad times has been around for centuries. but, the problems are that we have now got all these structured securities until people understand what is backing them up level 3 was

meant for exotic derriff tiffs and things not liquid markets. there are more techniques for that. the issue has been making those portable.

>> are there any accounting standards that cannot be circumvented by corporate crooks? don't reporting rules put a

burden on honest businesses? >> good reporting requires not only good standards but it does require faithful implementation, good auditing, good review and enforcement by regulatory agencies. i think things are getting better in terms of those other elements. i hope the accounting standards are also getting better. there is no absolute guarantee that corporate frauds will not continue to exist. i think we are getting better at it. we have not seen the last fraud. >> what is your reaction to the resent charges of the fact that

faby has lost their independence. >> the investor technical accounting committee, an advisory group, we have many groups that are standing groups. we have project groups. they wrote a letter expressing concerns over actions we took in april and the process there

in. i think we believe pretty strongly that we responded to genuine issues in the system in a highly responsibly manner. i think it is important to distinguish between a corllation and causation of those particular events. the particular issues in question and guidance we delivered, without going to a long story. the s.e.c. did a good study mandated by congress that they delivered at the end of the year on market to market and fair market accounting. we put those items on our to look at.

the staff started work. there was a hearing in march and the response to questions there, i laid out our proposed time table which had those issues in guidance of the second quarter. let's say that a number of folks on the committee urged either us or the s.e.c. to kind of expedite the guidance. we had already done some of the work. i went back and consulted with my fellow support members as to whether and how we could scompi expedite that guidance. it was insurance tensive, extensive. we got over 700 comment letters and had many, many meetings and

lengthy discussions with investors and financial institutions. really, it was a rich process. all of that impacted the final guidance that we issued. really due to the investors, we talked to significantly expanded disclosures on a quarterly basis to better assess the problems on some of these assets. >> congress has a lot on its plate, do you think requiring the regulation of these markets will get done? >> my track record on guessing how congress will behave hasn't been great but i think this will get done. the cut they are talking about between standardized contracts and customized ones remains to

be seen. i made the point about the need for infrastructure information systems transparency around these kind of market.  i think there's a lot of other people that believe that needs to be done. >> how do you counter act the too big to fail system if you have vested interest in the private sector? >> other people are better equipped -- i think what's in the president's plan. i'm not sure it addresses the too big to fail to begin with, but it does kind of say that if we do have a very big institution, we can't be held hostage. there has to be mechanisms to get us out without either the

taxpayer footing the bill or causing havoc to the financial system. getting from the place we are now,7y a very large financial institutions to a place where we had a group of smaller financial institutions that requires a lot more study. >> one area to be looked at is back at financial sheets. >> the one that's belong on balance sheets should be on them. the once that don't, won't be on there. there will be enhanced

disclosures we issued last week, two weeks ago. we finalized two new standards around this force. beginning of next year, we worked closely with bank regulators on that. those new rules are reflected in the stress tests. >> reliable financial statements are critical for investors to make good decisions. what reforms make sense to restore credibility of credit rating? >> this is just as an observer of the scene. i know the various credit agencies have taken a good look

at what they do. both of the processes and do deal with the potential interest. there are some who would say the way they are paid is not great. it creates a conflict of issues. it's the same issue that has arisen over time with the auditing profession. mechanisms get built to deal with that. the alternative business model is maybe not a viable one. should all o.t.c. deriff tiffs go through clearing houses? >> yes. is accounting a part of dynamic

envisioning? >> people use this term for cookie cutter reserves and the like. i'm probably a wind mill tilter but i think that we;at need to continue the need to zrib the earnings management gain and focus on quarterly earnings and estimates and like that to me, reporting is something you do, you do it faithfully and honestly. i'd like to be 6 hi and have a full head of hair, but it doesn't happen. did you say you would report a greater coupling of gas

standards for capitol requirement? if so, please elaborate. >> yes, i would. if you think about it also, how you report on a particular transaction, event or economic phenomenon depends on the audience you are engineering it at. tax reporting isn't something, when you have a dint objective in mind and as i said in my speech, you say this is how it ought to be reflected. the idea of enough capitol at

the time, that point in time financial decision can be different points of view. i think the important thing is because we have both got the common interest and continue to work together. i believe that the bank regulators should have a little more flexibility -- not unbounded flexibility but more to take the gap numbers and make adjustments. >> with the obama administrations recommendations that we move to a set of financial reform, do you thit s.e.c. will follow the road map? >> they have gotten 200 plus

comments. the ball is really now in their court to decide what to do to go forward. we continue to work closely with the international accounting standards board and other national standards -- i told you about china -- to try to get to this goal of high quality standards that would support quality reporting ñ we'll pursue that. the determination of timing and that who could use these things, that rests with the s.e.c. >> we are just about out of time. before i ask the last question, let me remind our members of future speakers. on july 1, discussing the star

history. july 11, discussing resent development in u.s. national security. and july 10, bounder and chief trial founder will be with us. and let me give you the traditional mug. >> i earned it. we have one more here. some saw the perils before the financial collapse. what do you foresee as the next problem in your world? >> i think the next issue that i see is dealing with loans and loan accounting. that's going to be part of our

financial instruments project. right now loans are what are called an incurred loss model. that's been clear that that's the -- the provisions there have lagged. the downward spiral. i think trying to think of a better model there. that might also have a side product of reinforcing sounder lending as well. if a few more years, we need to think about inflation, that has accounting problems as well. thank you for coming. i'd like to thank national press club staff members for organizing today's lunch. thank you to the n.p.c. library for its research.

our events are available for free down load on i tunes as well as on our website. non-members may pump transcripts by calling 202-662-7598. or emailing us. for more information, go to our website at www .press .org. thank you very much. we are adjourned. [applause]

>> up next, a portion of yesterday's house floor debate on the energy and climate change bills. and live at 7:00 a.m., your calls and comments on " washington journal." >> this week saw the release of thousands of minutes of the nixon tapes. more from the newly released tapes this afternoon on c-span radio. >> some house floor debate on legislation for global climate change.

the final vote was 219-212. here's a portion of that debate. s co the speaker pro tempore: the gentleman is recognized. mr. waxman: we're taking a decisive action to support america's security and create millions of clean energy jobs to drive our economic growth. this bill, when enacted into law will break our dependence on foreign oiling make our nation the world leader in clean energy jobs and technology and cut global warming pollution. as a result of these new policy settings, we will create millions of clean energy jobs for america and restore our technological leadership in clean energy. we are also protecting consumers. the bill tackles big problems that have been ignored for far

too long, and it proposes solutions that will transform our economic and clean air environment. there is a remarkable coalition behind this bill. electric utilities support the bill, manufacturers support the bill, farmers support the bill, and so do the nation's leading environmental organizations, labor unions and faith-based groups. there are many members responsible for this remarkable coalition. on the energy and commerce committee, john dingell helped force compromises with the auto industry. rick boucher developed ideas that will provide a future for coal. mike doyle addressed the concerns of the steel industry and other trade vulnerable industries. the chairman of the ways and means committee worked with us to make sure that the interests of low-income families are fully protected. and the chairman of the agriculture committee made sure the legislation addresses the concerns of farmers and makes

them part of our energy future. the need to act is clear and urgent. there is a national security imperative to act. this legislation at long last begins to break our addiction to imported foreign oil and put us on a path to true energy security. there is a scientific imperative to act. the evidence on global warming, on the consequences of carbon emission is overwhelming, and we have based our bill on the science. and there is a moral imperative to act. we have obligations to protect and preserve the environment for our children and the generations that follow. and there is an economic imperative to act. this legislation is an enormous jobs bill for america. it will promote investment and growth for decades ahead, creating jobs for the new energy economy of the 21st century.

people in industry have told us that as soon as this legislation becomes law we will find billions of dollars invested in infrastructure over the next five years. we can see an incredible lost opportunity if we don't act now. these are amazing, developing new technological centers around the u.s., and we can see those jobs going overseas. and that technological superiority going overseas as well. and this bill is affordable. contrary to what we are going to hear from our friends on the republican side of the aisle, the congressional budget office found that this legislation would cost households an average of only $175 in 2020, less than 50 cents a day. the e.p.a. put the cost at 22 cents to 32 cents a day, less than the cost of a postage stamps and lowering utility

bills by 7%. this bill is a tremendous opportunity creating millions of new jobs and driving economic growth. it will end our dependence on foreign oil and keep us more secure. this bill will drive to a new area of sustainable growth and innovation, and i urge all members to support it. and, madam speaker, i reserve the balance of my time. the speaker pro tempore: the gentleman from california reserves his time. the gentleman from texas is recognized. mr. barton: thank you, madam speaker. i ask unanimous consent that the ranking member of the agriculture committee, mr. lucas of oklahoma, control the first 15 minutes of the debate on the minority side. the speaker pro tempore: without objection, so ordered. the gentleman from oklahoma is recognized. mr. lucas: thank you, madam speaker. i thank the gentleman from texas. thank you, madam speaker. and i thank the gentleman and i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. lucas: thank you, madam

speaker. the waxman-markey bill promises to destroy our standard of living and quality of life with higher energy costs, higher food prices and loss of jobs. the bill is the single largest economic threat to our farmers and ranchers in decades. we have more than 115 agricultural and food groups who have publicly opposed this bill as of today. madam speaker, i'd ask that the list be entered into the record at the appropriate place. the speaker pro tempore: without objection, so ordered. mr. lucas: do you know why? the greatest threat to agricultural producers is ignored. under h.r. 2452 input costs will escalate as a direct result of the energy tax. markets will shrink because foreign competitors whose government will not place burdens on their farmers, they will be able to undersell us. but what about the billions of dollars that farmers are supposed to garner due to offset credits? many farmers will not be able to participate.

if the producers started soil tillage practices before 2001, they'll be ineligible to participate. the amendment does not exempt agriculture from performance standards in the bill which means the e.p.a. can tell our producers how to manage their farms. this bill will tax you. this bill will destroy the livelihoods of those who live and work in rural america. those who work every day to consistently provide our nation and the world with a safe, affordable, abundant food supply and fiber supply. agriculture sets squarely in the crosshairs of this bill because it's energy intensive. whether it's the fuel for the tractor, the fertilizer for the crops or the delivery of food to the grocery store, agriculture uses a great deal of energy throughout production and processing. although usda hasn't devoted any time or resource to complete economic analysis of how this bill will impact

farmers, the heritage foundation has. a recent study from the heritage foundation revealed that by the year 2035 the average net income for farms will be decreased by 57%. and also by 2035 gasoline and diesel costs are expected to be 58% higher and electric rates 90% higher. for example, residents in oklahoma can expect their electric rates to increase by nearly $300 million. so why are we doing this bill? so the u.s. can lead on climate change in the world? we can lead when china and india have refused to participate? we can lead when europe is willing to do half what this bill calls for? we can lead when the rest of the developing world is unable to do anything at all about climate change? some of my idealistic colleagues have to say we have to set a standard for the rest of the world. but i say, i will not make my