alternative is an absolutely rapacious were brutal government, then the taliban will find an opening. so our challenge and the government of afghanistan's challenge is to construct legitimate alternatives to a very brutal taliban way of light and governance. >> let me ask you, then, general -- i think i'll ask you to take my question for the record. of the 7000 additional allied troops that had been promised, my understanding is that approximately 2000 are already there to help with the elections. we're only talking about an additional 5000 troops. . ly only talking about an additional 5,000 troops. it has been well documented that restrictions placed by many

countries on their troops in afghanistan will impact their mission there. so i would like to ask you to comment about that. will they be primarily trainers, will they primarily serve in support functions or will they be combat troops? and if a large portion of our allied of the additional 7,000 allied troops are restricted in their military activities, how will that impact their ability to provide assistance to our mission and to ensure victory in this effort. >> first of all, senator, additional 7,000 or so really are additional because the election forces were supposed to go home and if a country commits to extend them or to replace them, obviously that is in addition to their projection. they really are a mix across the board of combat forces, trainers, in some cases prt elements, support, so-called

omelets, the military transition teams and so forth. and certainly some of those will be restricted by caveats. no question. this is not something new to afghanistan. though candidly when i was in bosnia as chief of operations i had a matrix on my desk that had all the countries down the left, list of tasks across the top and an x mark that filled the box as to whether that country could do that task in a certain location. >> same thing. >> same thing in iraq. and, again, we had to, you know, so general mcchrystal's challenge as was the challenge for the commander in iraq is to understand who can do what, employ them to the fullest extent possible and then figure out how to complement what it is that they can contribute with the actions of other forces that can truly do everything everywhere. >> what do you mean by --

>> senator, i have to interrupt. >> if the general could clarify whether some means a majority or -- >> clarify it but it would mean you have three minutes more than anybody else. clarify for the record or -- >> i would be happy to do that sir, thanks. >> we can do another round. there is no problem in that. i want to be fair to everybody here if we can. senator cardin. >> mr. chairman, thank you very much. first, let me thank secretary lew and ambassador eikenberry and general petraeus for your service. you all are providing extraordinary talent to our nation and we thank you very much. general petraeus, i just really want to concur in your assessment of our military, the men and women who are serving under extremely difficult circumstances are the best in the history of america. and i appreciate the leadership. just to give you one example, i had a chance to talk to a maryland serviceman who is in afghanistan and he gave testimony to your assessments.

and it was a -- just wonderful opportunity to see the spirit, see the commitment, and see the difference that our servicemen are making, our service people are making. so during the holiday time, particularly, we can never express our appreciation enough, sacrifices are tough anytime of the year. during the holidays, they're even more remarkable. and so i just really want to express that at this hearing. amazing how many of our senators have talked about the karzai government and corruption. and it has to do with all three of the objectives. if we're going to be able to achieve security in afghanistan, if we're going to be able to have governance in afghanistan, if we deal with the economic progress in afghanistan, it all depends upon having a partner that can work with us. we got to transition the security. we got to have governance of a country that respects the rights of its people, and we have to deal with economic development that if there is monies being

taken through corruption, it is going to cost american taxpayer and international community and the afghan itself more than it should. so secretary lew, i just really want to challenge a statement you made. you said, we're going to hold them -- first you said we're going to have a policy against corruption and we're going to hold the afghan government accountable. how do you hold them accountable? what do you do if you find corruption? do you pull our soldiers out? do you cut off the money? how do you hold them accountable? >> i think secretary clinton testified last week it going to be a long-term challenge to end corruption in afghanistan. and we have to realistic expectations. and i think when we talk about holding them accountable, it means that we have to see where our mind is going and if it is not going to the right place, we move our money and put it through other channels. it means we have to have our auditors come in and not after we're done, but while we're implementing the program, be there side by side, so we can catch things early. it means that when --

>> that may work for particular projects and i think that plan needs to be implemented. but you find corruption at the highest levels that are not being dealt with. how do you hold the government accountable? >> i think that the conversations prior to the inaugural and the statements that were made and the actions taken after president karzai's inaugural reflect the kind of influence -- >> but if there is back tracking, if it doesn't work -- >> we have to maintain the pressure. we clearly have an interest in afghanistan that can't be achieved if we don't -- if progress is not made on this corruption issue. the, you know, we have seen promising signs, though there is more progress to be made. holding them accountable does not mean that a year from now or five years from now there will be zero corruption in afghanistan. >> there is not zero corruption in any country. we know that at the highest levels there is major reason for concern, that is compromising our ability to get our mission done. and i guess what concerns some

that i agree with your statements. i just don't know how you hold president karzai and his top officials accountable if after all the efforts we make, we still find that there is corruption encouraged at the highest levels. >> to the extent there are investigations and ultimately indictments at the highest level it will do a lot to change -- >> but they don't. >> we have to work with them, and we have to make -- hold them accountable means driving it towards having it happen, not having it not happen. >> general petraeus, in response to senator corker talked about the objectives that we're trying to achieve. and i appreciate the way that you listed that. and then you talked about having a matrix as far as other countries' help. do we have a matrix? do we have specific objectives, benchmarks, whatever you want to call them, that we will be using to determine where we are next summer as to whether we're

prepared to withdraw and how many soldiers are able to be redeployed? do we have specific expectations that are at least well known between the afghans and the americans and our allies? >> we don't have specifics, senator, in terms of we want to do this number of troops by this time or something like that. again, the president was quite clear that this is conditi conditions-based. >> i know that. do we have specifics as to what we're trying to achieve and that triggers the ability to -- >> we have -- >> reduce the numbers. >> we have specifics in what we're trying to achieve. we have an operational campaign plan to give you. one measure will be the increase of security, something we'll track by district, not just by province. and there is an operational campaign plan and we can track that and you should ask certainly general mcchrystal in

the closed session today i think would be a great opportunity to get a layout of what it is, how he's thinking through the operational piece of that. >> i'll tell general mcchrystal that you told us it was okay for him to give us -- >> tell him -- he's a couple of years behind me, i buddied him. he -- then also of course we will have specific goals for the afghan national security force growth over time. that is yet another met ri metr. these will be somewhat similar to the kinds of analysis that we did in iraq where you look at a host of different factors in a district's area including local governance, including the economic situation, political situation in addition to the security situation because they are all, of course, related.

as you know, you're either spiraling upward or spiraling downward. and the spiral is not just all security factors. it is also local markets coming back to life. it might be the traditional less extreme tribal leader returns and is more solidified and that kind of thing. >> thank you. thank you. >> i make this comment, any one of the three of you can comment on it, but i've been rather hoping after the president thought about this for some time that we would have a clearer picture than what we have. and i, with all due respect, i'm just not getting a clear picture. i listen to the president very carefully and he told us we would start leaving in july of 2011. then i asked gates about it the next day and he said it was a target. i don't know where we are. are we in? or are we out? they talk about reviewing at this time or another time. the thing that really bothered me was i listened to karzai

yesterday stand alongside gates and he starts talking about 15 years. i don't know whether he wasn't listening to the president or what. the president said we're not going to give an open-ended commitment there. well, probably to karzai 15 years isn't an open-ended commitment. i got to tell you, to the people of the united states, 15 years is an open-ended commitment. i don't know whose job it is to sit down with them and look him in the eye and say, look, you're dreaming this is not going to happen. we need a lot more clarity than what we're getting. i don't -- i have every confidence that our united states military have given a mission, they will go in, will accomplish that mission, but unfortunately it seems like always the military mission gets mixed with what our overall goals are there. and i'm just not happy about what's come out of the last -- about what's come out of the last week. i was sincerely hoping we would get there. so have at it, whoever wants to comment on it.

>> why don't i start, senator, and just to talk about the difference between, you know, july 2011 and the nature of our long-term commitment to afghanistan. the president did not say july 2011 our relationship with afghanistan would end. it would be the beginning of afghanistan taking over areas that would give the military -- our military the ability to begin to draw down. i think that all of us see a long-term relationship with afghanistan, particularly on the civilian side that is going to have to go on for many years. the questions that have been raised about the magnitude of the commitment, those are serious questions, we take them very seriously. we're not in this alone. it is an international effort. we have to work with international partners to take this responsibility, not just on the united states. i think that the signal that we're sending is very clear that the buildup of troops is headed towards a crescendo and will start to come down. there will be other parts.

if you look at iraq, we're building up certain civilian capacities in iraq right now as our military withdraws. so we're taking over certain responsibilities. i think we have to look at the different parts of it separately and it shouldn't be a source of confusion. it is progress when the military is able to leave and civilian programs can step in and have a more normal relationship. >> i couldn't agree with you more. the difficulty is i really question whether you're going to have the same security situation in afghanistan that you have in iraq right now looking forward to july of 2011. i hope i'm wrong. but in addition to that, the financial commitment to stand up their army and police, particularly over the period of time that karzai is talk about it, i don't think the american people are going to accept that. >> senator, if i could, just talk about what secretary lew had said, our goal is -- we'll agree, is on as rapidly as possible have an afghan government that can provide for the security of their own people

and provide sanctuary for al qaeda. the july 2011 date is very important in one regard. the afghan people, they're very insecure people given their history, given the neighborhood they live in. at the same time, 80 years after arrival, there is a growing sense that they want to take charge, want to take control of their sovereignty. there is a desire among the afghans to lead with this is a good forcing function for the for us. if you'd accelerate the police of their ready to transition. longer-term, we do not know how long and what type of security assistance program we will need

in a afghanistan. we know it will have to be a long-term program. we do not know the bill. -- the level. we also know that for every one u.s. army soldier or marine that is deployed to afghanistan right now, the cost ratio of that vs afghan police and army on the ground must be on the order of 20,000 or 40 to one. it is a good investment. >> the president talked about july 2011. they are talking about for years before they take it over. who will take over before july 2011 and the four years the president karzai is talking about? >> he has comprehensive control of the securities for th. >> what is envisioned is the

beginning of transition. this is and then that is much more comprehensive. i hope you will be able to attend the session amid general mcchrystal. we know it the campaign plane is. ld also just say, senator, again, i hope you'll be able to attend the session with general mcchrystal this afternoon. i think you'll get ougt of that some clarity. we know what the campaign is and we know what the plan is to work with our civilian partners from ambassador iceikenberry's embas. >> thank you for your extraordinary service and sacrifice and i know you must be a proud father as well. your son's commission, we know about that. and secretary lew, we appreciate your service and your

availability. i know we tend to call off from over here. we're grateful for that. ambassador eikenberry, want to thank you for your service and also wait you make time for us when we travel to afghanistan. you work pretty hard over there. and i want people to know that. i was going to ask a series of questions about president karzai and governance because we try to think about this challenge in three ways. security, governance and development. that's helpful to help us keep our focus on three major challenges to get this strategy implemented correctly. but i'll leave that for another day. we'll submit questions about concerns i have about the way he's conducted himself and we talked about this when i was in afghanistan in august. but i wanted to focus on two areas. one is the police and the

buildup of the afghan police, and also the militia, the local tribal militias. in particular with regard to the police, and i know this may -- this may be a question for one of your -- all three of you. in washington, numbers get attached to issues. and we keep hearing over and over again, and now i doubt the accuracy of this number, that's why i bring it up, 92,000 afghan police and general mcchrystal hopes we can get that to 160,000. hearing a lot lately about the 92,000 being way, way off in terms of police that are -- will need to -- that are trained now. by one estimate, only 24,000 have completed formal training and the attrition rate is 25%. if either of those statements are true, it creates all kinds of challenges and big problems.

i guess, general, i would ask you, ambassador eikenberry, i would ask you what can you tell us about the accuracy of those numbers, number one. number two, law enforcement in iraq that can be applied here or not, maybe it is a different challenge. >> yeah, just as senator, two points and then i'll turn to general petraeus, i know general mcchrystal will have clarity on those numbers when he talks to you this afternoon, but attrition is a problem with the police. there are problems of discipline with the police. we don't want to understate the challenges that we have ahead of us right now. against that, though, general mcchrystal does have a very aggressive program for partnering with the police. one of the keys we have seen with the police as we have seen with the army wherever you provide good mentors or partner on the ground, good things start

to happen. but they have to sustain that presence. it doesn't happen over a 24-hour period. i have a lot of confidence in the plan that he's laid out where he's going to wherever possible expand out the number of partners we have with the police forces, we'll certainly welcome a lot of help from our nato allies to expand that kind of capability. >> senator, i agree with everything that the ambassador said. beyond that, we're actually conducting a 100% personnel asset inventory and getting biometric data so we can tell ourself, tell our afghan partners what ground truth really is. beyond that, central command also at general mcchrystal's request hired a team from ran to look at, in fact, the overall effort of afghan security forces and hire some individuals that have had some very good experience in this.

speaking of that, a couple of lessons from iraq, one is and i don't want to, you know, sound sort of flippant here, but it is a lot easier when you're winning than when you're losing. the fact is in iraq, during that escalation of sectarian violence that took place in 2006, particularly after the bombing of the shrine in in sa mara, there were whole units that were hijacked by myrrhi imilitias bee situation got so bad, and in fact the police are the most vulnerable. we have to be very careful. another lesson is you have to get the organizational construct right. you cannot train police and put them into an area that an active area with the insurgency and expect them to survive. because -- not only are they vulnerable, but their families are vulnerable, they live in the neighborhood, the kids have to go to school, get kidnapped and

all the rest of that. we have to get that construct right intellectually. and then beyond that, the partnering piece is hugely important. if you can get the construct right, get the right forces in, that may mean that you end up using more in afghanistan, they're called the civil order police which are actually units, they're really a paramilitary force rather than just a local police force. but that's a much more appropriate construct for real conflict zones than are local police. at some point you have to bring in the army. in iraq we had areas where there were no security forces left at all and we literally had to bring in our forces and then iraqi army forces then to get back to the point that you could get to local police going again. >> i'll ask in the next round or submit for the next record for the local tribal militias. thank you. >> it is an important element of this. making sure the warlords don't come out, we don't need more

warlords, but do enable and empower local security forces in what is called the community defense initiative. we won't have something akin to the anbar awakening of all, you know, tribal linking as this reaches critical mass and takes off and rejecting in this case the taliban. but what we can do is help -- it is a village by village, valley by valley effort and we're using some of our best special forces teams right now really to experiment with this, but we think it is something that has good potential. >> thank you. >> senator shaheen. >> thank you, mr. chairman and thank you to each of you for your commitment and being here today. thank you, ambassador eikenberry for your hospitality when i visited afghanistan with a number of other senators. you were very new there. we appreciate it very much your hospitality and your direction. a lot of the discussion this

morning has focused on what is happening on the governance and development side as well as what is happening with security. there has been discussion about a civilian coordinator for afghanistan, a civilian counterpart to general mcchrystal. can you give us your assessment of how important you think that position and person might be and then why we are in the attempt to find someone to fill that position? >> well, coordination, senator, at the international coordination that the united nations level, that's essential to our success. and as well within nato isaf, within that command, the civil military coordination aspects are also fundamental in terms of just trying to rationalize our developmental assistance and ensure we're making the most of our resources. some ideas have been -- have been now to develop both for

trying to improve the efficiency there and within nato isaf itself and those are being looked at. >> given the urgency of that position, do you have any sense of what the timeline will be for having somebody in that role? >> i know that secretary clinton, at the recent foreign ministers meeting at nato headquarters in brussels, she discussed this with the -- her fellow foreign ministers and i think it is going to be on their agenda for the month of january. >> mr. lew, can you give us any more insight on that? >> i would just make two points. first, there is some natural turnover at unama and it is part of the discussion there as well in terms of choosing a new head of the u.n. mission. and a point that secretary clinton made last week which is important to remember is that while isaf is a very useful, critical coordinating mechanism at the military level, at the civilian level we have many nonnato countries making significant contributions and we

have to make sure that in getting civilian coordination we don't coordinate out some major partners. so just a little bit more complicated and that's the kind of conversation going on right now. >> certainly recognizing the sensitivity of that person and who might fill it, i would urge, given what everyone has testified to about the importance of the civilian efforts that we move as fast as possible in that direction. general petraeus, i want to follow up a little bit on senator casey's questions about what is happening with the local militia and efforts at reconciliation with some of the taliban. i think i understood you to say that some of those discussions have begun. and or negotiations, i guess, is a better way to put it. i think that's first time i've heard that from anyone and so i just wanted to clarify that that

is what you said and how do you envision that going forward? who is going to do those negotiations? what, if you could explain that a little more. >> i was actually talking more about the community defense initiative, which is, again, a local, but i'd be happy to talk about -- >> please. >> it is used -- the term is reintegration of reconcilables in afghanistan as general mcchrystal and others remind me all the time. but recognizing that, again, you can't kill or capture every bad guy out there, you need to take as many of them as you can as we did in iraq and take them from either actively or tacitly supporting the insurgency, and, in our view right now, at low and midlevel, try to break them away. and that involves, again, isolating them, securing them from the irreconcilables,

separating the irreconcilables who make no mistake about it, do have to be killed, captured or run out. and then helping to re-establish local structures, many of them tribally based, the tribal elders, local emoms and so forth. there is an element that has now been formed. it -- one of the individuals helping general mcchrystal to do this is an individual that general mcchrystal and i knew very, very well from iraq. he helped us to the reconciliation piece there, the first deputy i had, sir graham lam. he is a special adviser to general mcchrystal. they have now established an organization called the force reintegration cell. it has a two-star british officer. there is some diplomatic component to it now as we had in

iraq. we still haven't flushed it out as fully as we need to. that is ongoing as is the development of the kind of robust intelligence element that we learned in iraq you have to have dedicated on nothing but figuring out, again, is this -- this is a pretty big question. is this individual reconcilable or not? and if not, again, they have to be killed, captured or run off. but if they can be, then, of course, you can make them part of this solution instead of part of the problem. and then there have to be it is tied into this as wolpell. just one quick note. a great official is literally the equivalent of the division commander of the 82nd airborne division. their partners. we tried to establish what is the necessarily a chain of command. what would you call it?

a unity of civilian effort. >> that helps achieve overall effort. separate from that is this community defense initiative. we going to the village in help enable individuals to defend themselves in the bank to a subdistrict reaction force. >> thank you very much. >> i want to echo everyone else's comment for thanking you for your service. i've been to iraq and afghanistan to rise this year. -- twice this year. i wish everybody in america would have an opportunity to drop in randomly anywhere in iraq and afghanistan. you be so proud of our forces.

i think you can fill the shoes. can you talk about what has happened, how the 18 month deadline has come motivate the effing government both on the -- the afghan government vote on the side? oth on the area of training troops and also in dealing with corruption? >> yeah, let me speak on the first one, senator. we know that after the announcement that president obama made about the importance of july 2011 that the ministry of the interior, the ministry of defense, with us together, sat down and rolled up their sleeves and said what does this mean, how can we get behind this? so i think it will have a very good galvanizing effect, but that will be in full partnership and with support of us. and i know that secretary gates

had very positive talks with president karzai just yesterday in kabul. this was one of the items of discussion. president karzai is showing his commitment as he has publicly for this date and getting behind his role as commander in chief which will be important. his support for this being, of course, important in the development of the army and the police forces. our efforts that we have against trying to improve government accountability, these are long going efforts. senator, as we talked about when you visited me in kabul, president karzai's inaugural address, as i said earlier, we found helpful, we found encouraging, we do have programs that have been under way for several years. i'll give you one example of the progress that we're making in this area. we have something called a major crimes task force in afghanistan. announced several months ago but

a lot of preliminary work has been put into it. this will be hopefully the afghan fbi. we have ten fbi agents on the ground right now, dea agents on the ground, military partners with us, the british working with this element. i could go on. we have a lot of different initiatives that are out there. they aren't seen right now. they're not visible. we tend to spend all of our time talking about one individual or one particular case. but at the end of the day, it is the spade work going on out there steadily, training of civil servants, training of law enforcement agencies, things as simple as trying to improve procedures. minister of finance recently told secretary clinton at dinner, very proudly, that he had overseen an effort in kabul to reduce the steps required to get a license for a car from 54 steps in one month to three steps in a couple of hours. that's not a headline story in "the new york times" but that probably has more to give us

bigger results in a fight against corruption than one middle level criminal put behind bars. so just steady work. >> general petraeus, just help me through this, we talked in the past and secretary gates was here talking about how the taliban reconstituted themselves in ungoverned areas. the strategy we're talking about, we're going to be mainly the populous areas leave large swaths of afghanistan without any real involvement. we have a -- >> but the difference is, of course, in afghanistan we can go into those areas. >> i understand. >> in fact, the taliban really reconstituted as much in remote areas of pakistan as they did actually in afghanistan. there is a great article, by the way, in "newsweek" a month ago, cover story talked about how the taliban came back and i commend that to you if your folks haven't shown it to you. >> the idea wore concentrate on the populated areas but having

force available to go into the less populated area to dismantle and -- >> that's correct, sir. in fact, we actually will be increasing our counterterrorist component of the overall strategy as well and general mcchrystal may want to talk to you a little bit about that during the closed session as well. no question, you got to kill or capture those bad guys that are not reconcilable. and we are intending to do that. and we will have additional national mission force elements to do that when the spring rolls around. >> have you thought about a strategic forces agreement with afghanistan? >> we have an agreement which covers the status of our forces, not formally called the status of forces agreement. and at this time, senator, we're comfortable with the arrangements that we have. >> secretary lew, 388 civilians

outside of kabul by the end of the year. i know you talk about a 10 to 1 ratio. is that enough considering the number of forces, military forces we have to really implement a coin strategy. >> the civilians that are there being deployed, on a map there are two dots on each spot, a military assignment and civilian assignment. the numbers are very different. you put one agricultural specialist in a town surrounded by the appropriate afghan, you know, support, that's a program. you don't need a battalion of u.s. agricultural experts in a town. i think that with the increased coverage that we will get with the additional troops, there will likely be an increase in the number of civilians that we need. that's why we're referring to the numbers likely to go up in the order of 20% to 30%. the goal is to fully resource the civilian requirements so that as we go through the plan

we have the right number of civilians. >> senator, if i could add to that, just quickly, to give you orders of magnitude, right now in the part of southern afghanistan, we have five u.s. agricultural experts. they in turn are creating a network some of 500 afghans who are in turn administering a program that over time will reach out to tens of thousands of farmers. it is not necessarily how many, it is how are they employed what effects are they getting. as secretary lew said, i'm certain that over the next several months as we work with general mcchrystal, and better analyze the implications of his campaign that we will have to come back with a request for additional u.s. civilians to be deployed. >> thank you. >> thank you, mr. chairman. >> thank you. we'll leave the record open for just until the end of the week in case there are additional questions. senator wicker did have that last bit of question. do you want to put that on the

record now so we can honor his question and -- do you recall it? i saw you writing notes at the time. >> the question on militias? >> yeah. >> i'm sure if it was a national caveat for militias, actually. >> i thought he had one question -- >> we're fine. we're fine. and senator kaufman asked the last question, i wanted to ask you, secretary lew, obviously -- needless to say we scratch the surface of a lot of these questions and a lot remain outstanding. we look forward to meeting with general mcchrystal and follow up on the military side. so i appreciate that. and i know that secretary lew you're always available to us. we appreciate it. yes, ambassador. >> chairman, i wonder if i could also say one -- make one other point here, if we're getting ready to close out. >> please, yes. >> earlier in the hearings there

was concerns raised about bureaucracy within the embassy. i'd be the first to say that we operate in an environment right now with our challenges on the ground, with the government of afghanistan, our allies, the friction of bureaucracy that goes with working with our own headquarters, we have a surface of bureaucracy. i wouldn't say in the embassy we don't create additional impediments out there in terms of bureaucracy. i would highlight over the last 12 months our embassy strength has increased threefold, sixfold out in the field, during the months of august and september, we had a 100% turnover of our embassy personnel. we as general petraeus said, we reorganized not only ourselves out in the field, but we had a significant reorganization within the embassy, which brings the other agency teams together efficiently and works with our partners in the military in a very comprehensive and indeed

unprecedented way. i want to emphasize, chairman, the leadership that we have got in the united states embassy starting with the -- starting with my deputy. it is an absolutely superb leadership, the very best in the world. it goes down to sections, down to the last staff person. so if there are concerns about bureaucracy, i would welcome the opportunity, of course, offline to talk to anybody that has those concerns. >> well, that's fair. and i'm sure -- i think there are some concerns but i think it is important thing to work through. the key here needless to say is going to be the ability of the folk out in the hinterland to do their jobs and that will depend on the local security, local leadership, politically, partnering so to speak. it is a tall task, which, again, i repeat, will be so positively impacted by getting something going in the western part of pakistan. that will make the job so much easier. so that said, we are very, very

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>> congress continues its look at president obama's afghanistan strategy tomorrow. you hear from the top military commander, general mcchrystal. we will bring the that live starting at 9:30 a.m. eastern on c-span3. next on c-span, president obama on the economy. then the house debate peninsula -- financial and assure regulation. then general petraeus's capitol hill testimony on the war in

afghanistan. on tomorrows "washington journal" a look ahead white house strategists. vali nasar is this policies in afghanistan and pakistan. we will talk to scott garrett about financial regulations but a also come in the headed the congressional tarp oversight panel, elizabeth warren. "washington journal" is live beginning 7:00 a.m. eastern europe c-span. >> american icon, three original documentaries from c- span are now available on dvd, a unique journey to the icon and homes of the three branches of american government. cdc is a detail of the supreme court through the eyes of the justices. -- see the detail of the supreme court through the eyes of the

justices. explore the history, art, and architecture of the capital, one of america's most symbolic structures. it is a 3 does the dvd said. it is $24.95 plus shipping and handling. >> president obama said he hopes members of congress of both parties will support his newest proposal for stimulating job creation. the president spoke briefly after a bipartisan meeting at the white house. >> i've just ended a discussion about job creation. we spoke about the challenges facing our families, businesses,

and countries as a whole, and while we can do to overcome it. it builds on some of the ideas that i offered in the economic speech acadia's today and on some of the is it discussed -- and on some of the ideas we discussed last week of the. our economy is in a different place than it was when i took office last year. our economy at that time is at the break of collapse. the credit and housing markets were in deep trouble. we are losing 7000 jobs a month. economists were concerned we are slipping into a second depression. that is not what happened. there were necessary steps to help our automobile industry recover in civilize our bank. we pulled our economy back from the abyss. our economy is now growing for the first time in over a year.

we just receive the best doctor poured in over two years. -- we just received the best job report in over two years. it is still shows a loss of 11,000 jobs. i'm not one to rest until every american who is looking for work can find a job, until we put americans back to work. it is no secret that there has been less than full bipartisan support for the recovery act and some of the steps that have broken the free-fall of our economy. my hope is that as the move forward, we can use it together, recognizing we have a shared responsibility to meet our economic responsibilities on the behalf of all americans, those who elected us to make sure that we are doing the people's business. small businesses are the engines that drive much of the hiring and our economy. we should be able to forge a consensus around a series of

steps to help small businesses grow, and hire new employees. that includes the elimination of capital gains tax. i haven't heard leaders decreed an incentive to encourage small businesses to add and keep workers. i proposed making an initial investment in the nation's infrastructure. projects will actually double what was done over the previous six months. this is not only going to put more americans back to work, but this is work that americans need done. i have called on progress.

congress to revive incentives for consumers to buy materials in the four homes with greater energy efficiency. it will promote energy conservation and tell americans put more money in their pockets. i have proposed a week extend proven initiatives that promote energy efficiency and clean energy jobs. i have called for an extension of emergency relief to state, seniors, and assistance needed miss. to support these efforts, we will wind down the troubled assets relief fund. it was created to stabilize the baking system. it has served its original purpose. the cost has been lower than we expected, giving as a chance to pay down the deficit faster than with the -- than we thought at

the time. more will need to be done to put our nation on a form -- firm fiscal good thing. i'm looking for it to working with leaders for how we can structure a plausible scenario to get to medium and long-term deficit reduction. it is appropriate and the leaders of both parties. it is burned hiring and economic growth -- hiring and economic growth are not democratic or republican issues. they are america's issues. i am committed to working with anybody who is willing to do the job and to make sure that we can rebuild our economy and make sure that americans all across the country, regardless of political persuasion, are seeing the kind of opportunities that we expect here in the united states of america.

i'm confident we can do so. i am confident we can put our economic troubles behind this. it will require a sense of purpose here in washington. i hope the leaders of i just met with will feel the same way. thank you very much. >> congressional leaders also talk to reporters about the meeting with the president. you hear from republicans john boehner and eric kanter. here is nancy pelosi and senate majority leader harry reid. this is 15 minutes. >> good afternoon. we just had a very productive bipartisan meeting with the president of the united states

produce the center focus of the jobless job creation -- united states. the center focus of the meeting was job creation. we all know that job creation is central to the president's budget and to its economy. the recovery package saved our country from a free fall at the beginning of the year. it created many new jobs. it passed in the spring. it was to grow our economy. lower taxes. reduce our deficit. energy, education, and healthcare are the three points of the bill. [unintelligible]

there are a wide range of subjects to discuss, how we can invest not in the developing infrastructure of our country, including water projects. we talked about assisting state and localities to they can meet their budget needs. we have a heavy focus on small business. i think it is possible for us to provide some, but partisan ground. the president was receptive to that. states and localities is very important this would prevent a firing of schoolteachers, police officers, firefighters, and health care workers but o.

it is a very encouraging meeting. it is one i think will produce some results in the short term. all of it is committed to deficit reduction. i will yield. >> the president listened to every one of us speak of things we thought would help the economy. he said we would address the short-term economy, which we have to do. we have to create a situation where people are confident. one of the things he told my republican friends here is stuck trying to frighten the american people. things are a lot better. he had a charge he showed us about how things have improved

dramatically. we have a short-term problem that we talked about. we will address that. we are doing them right now. we talked about the long term process we need to address. he also mentioned that there things we are doing dramatically right now that will help in the short term and long term. healthcare is one of them. healthcare helps create hundreds of thousands of jobs and reduces the deficit. we all agree there have to be sending an infrastructure. i am pleased the president. i congratulate him. i look forward to the speeches. >> [inaudible] >> i do not think he was upset at anything.

he and knowledge that there is war -- he acknowledged that there is work. it would help the people were talking more positive about what was going on. >> [inaudible] >> we are confident that we are going to be able to do the health care bill before we leave here. we had a great team that took place last night. the package is not completed. we should get that in the house on thursday. there are some good things happening. we also have a good conversation with the speaker and others last night. it is on my bipartisan basis. a lot of that we talked in here. we have legislative initiative that we will look to preve.

>> which ones to suffer do when specifically, in january, february? -- but when specifically come in january, february? >> we are working on that right now. >> [inaudible] >> i do not know your question means fo. >> the american people are asking, where are the jobs? the president invited us to have a conversation about how we get our economy going again and get the people back to work. we may clear the employers are

concerned about some of the policies coming out of this it fenestration and this congress that will make it harder -- out of this administration and this congress that will make it harder. the health care proposal will raise the cost of employment and make it more difficult for employers to bring it back to work. if we are serious about expanding employment in america, we ought to do some the about expanding trade. experts are a big boon to our economy. it should be a bigger boom. we also presented a letter to the president outlining some of our tax proposals that will help encourage employers to bring people back to work. with that, we turn it over to erick kanter. >> good afternoon. we cannot keep spending money we do not have. the american people understand that. they are concerned about the consequences of the amount of

spending going on in washington. we suggested a no cost the job plan that recommends several steps we can take together that do not cost anything. it can help give americans back to work. the discussions were cordial. there were more in depth than usual. the presence of the look of some of our proposals. we specifically talked about the difficulties lenders are facing with regulators. it may be overreacted in terms of true value. the senator said he would continue. -- secretary said he would continue. there is a contrast between what the president is proposing and are no cost jobs plan. he said he challenged us to bring in economists to make the case that we ought not be spending right now. we think we have spent enough. we think it brings uncertainty

and small and large businesses have reacted to that. they have a lot of hesitancy about job creation. >> but was a good discussion this morning. we heard about the uncertainty facing small businesses and what they see coming. there is regulation that we are seeing. everything we xl may be a toxic substance. -- exhale may be a toxic substance. no new regulations unless there directly related to safety and the tax increases until the unemployment rate becomes lower. they are specific ideas. we have options. it was a thoughtful discussion. public, some of the ideas will be taken up. -- hopefully, some of the ideas

will be taken up. >> we had the operation deducing down with the president and discuss how we can get this economy -- we have the opportunity to sit down with the present and discuss how we can get this economy back on track.

the chair recognizes the gentleman from california, mr. waxman. mr. waxman: mr. chairman, i rise in strong support of h.r. 4173, the wall street reform and consumer protection act of 2009. as long -- i have long advocated for comprehensive regulatory and financial reform. last year as chairman of the oversight committee we held many hearings examining the causes of the financial crisis. those hearings showed government regulators were asleep at the switch while wall street banks drove our economy off a cliff. change is necessary and i believe this legislation will strengthen the federal government's ability to prevent and respond to future crises. consumer protection is a central element of the energy and commerce committee's jurisdiction and i support the reforms in the bill.

the legislation provides four essential improvements to the operations of the federal trade commission. these improvements allow f.t.c. to seek civil penalties and enforcement actions against violations of the f.t.c. act, not just violations of rules and orders, as the f.t.c. act currently allows. enforce against those who provide substantial assistance to entities that commit fraud, promulgate rules using the standard procedures act processes used by virtually all other agencies and litigate its own cases without delay when it seeks civil penalties against fraudulent actors. each of these four provisions will strengthen f.t.c.'s consume prior text abilities and enable it to be a powerful partner with the consumer protection agency in protecting consumers from financial fraud.

the energy and commerce committee shares jurisdiction over the new consumer financial protection agency with the financial services committee and i am pleased that chairman frank and i were able to find a compromise in this area. under the agreement we have reached, the agency will start off with a single director who can take early leadership in establishing the agency and getting it off the ground. after a period of two year the agency will continue operations with the leadership from a bipartisan commission. i've also been concerned about the provisions of this legislation relating to the regulation of financial instruments associated with the energy sector. i'm pleased it to report that the agriculture committee and the energy and commerce committee reached an agreement to address potential regulatory conflicts where the jurisdiction of the commodity future trading commission as enhanced by the

proposed bill could overlap with the jurisdiction of the federal energy regulatory commission. i want to thank chairman frank and his staff for leading this important legislation through congress. i also want to thank commerce trade and consumer protection subcommittee chairman bobby rush for taking an early lead in examining the proposal in his subcommittee and chairman dingell for ensuring that we enhance f.t.c.'s role. ranking member barton worked closely with us on our proposal to create a commission to lead the cfpa and i finally want to thank chairman peterson for working with us to resolve the energy regulatory issues. i urge all my colleagues to support this legislation and i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from texas is recognized.

>> thank you, mr. speaker. i yield myself four minutes. the chair: the gentleman is recognized for four minutes. mr. barton: i ask unanimous consent to revise and extend my remarks. the chair: without objection. mr. barton: thank you, mr. speaker. first let me say that i rise in strong opposition to this bill. i did support marking it up at the energy and commerce committee to maintain jurisdiction over this agency and other agencies in our committee's jurisdiction. i did work with chairman waxman to make some perfecting changes to the bill that's before us. but having said that i think that it is a bad bill, it's an unnecessary bill and it's a bill that will have unintended quentses -- consequences of a negative fashion if enacted in its current form. i'm glad that some of the federal trade commission's jurisdiction that was originally stripped from the bill and given to the new agency has been retained and put back with the

f.t.c. i also think, though, that a new agency cobbled together by congress from existing regulatory structure will not eliminate one of the world's oldest sins. hurricanesters and scam artists will not hold up their hands and turn honest because there's a new federal regulator on the block. they'll simply find new ways to cheat the government as it tries to get on its wobbly new feet. bureaucracies, particularly new ones, don't move at the speed of businesses, especially shady illegal businesses and they certainly don't move at the speed of fraudsters. i want to commend chairman frank for his hard work on a tough issue. having said that the outcome of his hard work is an enormous bill and an enormous bureaucracy that in my opinion just won't do the job. having said that the obama administration apparently wants this new so we're going to get it. at least we're going to attempt

to get it through the house on the floor this evening or tomorrow, whenever the vote may occur. i wish that a super regulator could find and repair the underlying problems with the housing and mortgage markets but i don't think that it can. empowering a new agency with nearly limitless power to deem almost any product or service of financial activity is questionable at best and tir ancal at worst. this legislation even fails to create a national standard for the super regulator to enforce. instead it adds another layer of federal regulation on top of existing state laws. finally the legislation gives broad new authority to the f.t.c. that really has nothing to do with the proposed agency and covers everything beyond consumer financial products. mr. speaker, i rise in opposition to the bill and i would hope that we would defeat it. with that i want to yield the balance of my time that i control to the distinguished

chairman of the financial services, the distinguished ranking member of the financial services committee, congressman bachus of alabama. the chair: the chair cannot entertain that request in the committee of the whole. mr. barton: all right. i reserve the balance of my time. the chair: the gentleman reserves. the gentleman from massachusetts is recognized. mr. frank: mr. chairman, i begin by yielding four minutes to one of the members of the house who has a very significant imprint in this bill, all to the protection of investors and the integrity of our markets. the chairman of the capital markets subcommittee, the gentleman from pennsylvania, mr. kanjorski, four minutes. the chair: the gentleman from pennsylvania is recognized for four minutes. mr. cannon: mr. chairman, i -- mr. kanjorski: mr. chairman, i

want to thank the chairman of the full committee recognizing me and to assert for the record in the full house that a@@@@@ @

first and foremost we discovered that there were greating regulators in transparency and accountability in the rating agencies as they acted to evaluate various sets of securities in the world markets. and when we examined the rating agency in great detail and through hearings and examination we found that these entities were poorly -- not really regulated at all, but certainly poorly accounting for their own responsibilities in the system. we found that they were enticing investors throughout the world to buy securities that rated a.a.a. when in fact some of those securities weren't even of b-class quality. as a result millions of people around the world and billions of dollars came in to the purchase of these securityized -- or

these securities and as a result when the market failed, they failed and there was an impression around the world created that the american government, the united states of america, stood behind these rating agencies when in fact we didn't. and that there was a great compromise, some of these rating agencies, because of the internal conflicts within the agencies, were taking great liberty in evaluating and analyzing the values of certain securities to the extent that because they were paid by the individuals that were issuing the agency, there was an internal conflict. whether that conflict caused to a large extent scandal or caused failure in the system, one will probably never know. but certainly the aspects of the operations of the rating agencies have been called into question, were called into question at the time, and certainly have been since our

examination. so what have we done? we have developed a set of principles and rules to account for accountability and transparency in the rating agencies in the united states. will that cure the problem? no. we're going to have to watch very closely, monitor very closely, that these rating agencies do not stray from the straight path. if they do we'll have to come backage impose greater restrictions on them and take extraordinary actions in the future if necessary. but we will have rating agencies now that can be sued when they could never be sued before. we will have rating agencies that will have the responsibility to provide disclosure, who will have the responsibility of showing their methodologies and explanation to the buying public of the securities they rate and analyze. to that extent we hope the public will be protected. next we looked at who is accounted for in our system and

we found, as we've all known, that some 10, 12 years ago hedge funds were denied the examination of the securities and exchange commission. we have now formed what is known as the private fund investment advisors registration act which is title 5 of this act, part a, and that provides that all advisors that want to play in the capital markets must register and must disclose certain information so that knowledge of what capital is doing, where it is and what amounts will be known by our regulators. that's the first time in the history of the united states that that will prevail. it should go a long way of having inside information in the role of the regulator of the united states as to what is at risk. then finally we created an investors protection act. the ininvestors protection act has done so -- investors

protection act has done so many things. but the s.e.c. gave recommendations which were incorporate rated in the bill, things they saw -- incorporated in the bill. things that they saw -- the chair: the gentleman's time has expired. mr. kanjorski: with that conclusion, i think -- the chair: the gentleman is recognized for one extra minute. mr. kanjorski: then finally we have something new, we created the federal insurance office that for the first time will encompass information encompassing the insurance industry of the united states. finally, i'm proud to say i had a major part in putting together an amendment to the act in the first provision, act 1, that allows for too big to fail protection in the united states. for the first time the regulators of the united states will have the opportunity to analyze the structure of corporations in the financial service industry, that item may

be too large, interconnected or too large in scope or too unexperienced in management or some other condition, that may in the future cause them to be of systemic risk to the economic system of the united states and we've empowered the regulators to move in and require changes, controls and regulations to prevent that occurrence so that never again, we hope, economies will be too large to fail but in fact will be too large in fact not to fail. so with that i recommend to all my colleagues on both the democratic side and the republican side to stop for a moment to think what we've done here and may i call the attention of the republican side, three of the eight bills we passed through our committee went through with significant -- the chair: the gentleman's time has expired. mr. kanjorski: thank you, mr. chairman. mr. barton: may i inquire how much time i still control? the chair: the gentleman has two

minutes remaining. mr. barton: i yield two minutes to the gentleman from california, mr. royce. the chair: the gentleman is recognized for two minutes. mr. royce: thank you. the gentleman from california referred to the wild west earlier. no two institutions better fit that description than the government-sponsored enterprises fannie mae and freddie mac. over the years, some of us pleaded for additional regulations. you may recall in 2005 we tried to pass strong legislation to fix this problem and bring reforms to the government-sponsored enterprises. i brought an amendment to this floor to give their regulator the ability to rein in their mortgage portfolios that were spiraling out of control. the federal reserve came to us and said, these institutions at the heart of the u.s. mortgage market pose a systemic threat to our economy. that is why i offered my amendment which was defeated, as were others, that would have provided stronger regulation. that is why senator chuck hagel

offered similar legislation which passed the senate banking committee on a party line vote but was blocked by the senate democrats from coming to the floor. we understood the risk posed by those government-backed companies, especially when it came to the affordable housing goals the democratic-controlled congress mandated in 1992. those affordable housing goals led the g.s.e.'s into the subprime market and they ultimately led to their collapse. former president bill clinton understands this epic blunder. last september the former president said in an interview, i think the responsibility that the democrats have may rest more in resisting any efforts by republicans in the congress or by me, when i was president, to put some standards and tighten up a little on fannie mae and freddie mac. this is one of the main reasons why our economy is where it is today and this is why we must reform the g.s.e.'s which this

bill does not do. instead this bill creates a perpetual bailout fund and ensures the too bill to fail doctrine is with us indefinitely. for the first time in its history, washington will officially become the center of our financial system. regulators will be able to rescue certain companies -- i'd ask for an additional minute. . the chair: the gentleman is recognized for an additional minute. mr. royce: they will be able to pay off some creditors and counterparties and not others and keep failing companies operating in the market for years and they will be able to dismantle a healthy institution that they believe may pose a

risk. if there is any doubt that this type of authority will be abused, look at how the administration handled the chrysler bankruptcy earlier this year. it was their desire to do away with the clearly defined rules of the road found in the bankruptcy code in order to reward their political allies. those rules of the road that that were so easily dismissed have acted as the bedrock of our capital markets for decades. they differentiate us and attract capital from all the corners of the globe. this bill froze that model and replaces objectivity with subjectivity. what is the likely outcome of all of this? the largely politically institutions will have the edge of over their competitors. the speaker pro tempore: the gentleman's time has expired. the gentleman from minnesota is

recognized. mr. petri: i yield myself such time as -- mr. peterson: i yield myself such time as i may consume. i rise in support of this bill which will be considered at a later time. i want to thank chairman frank and his staff working with us and our staff over the last few months on the amendment and on the provisions in the underlying bill that affect both of our committees. passing this bill is necessary to improve the financial regulatory structure in america. and the house agricultural committee has played a significant role in contributing to this legislation and while it may not -- while i may not agree with every provision, i support the goals of increased oversight, more transparency and an end to taxpayer bailouts of large financial institutions. our committee has spent over two years examining various elements of derivative markets

and we have focused specifically on their contribution to the financial meltdown. most notably the prevalence of heavily traded bilateral swaps used by large financial institutions that have either collapsed or received large taxpayer bailouts. now derivatives in and of themselves were not the cause of the financial meltdown in the second half the last year but did play a role. had the provisions of the peterson-frank amendment been in place last year, financial institutions like a.i.g. would have never gotten themselves into a position to keep them selves solvent. the resolution provided for in the underlying bill will mean large financial institutions and not the taxpayers will be financially responsible for their own undoing. i thank chairman frank for the

work he did on ensuring that this legislation does not have unintended consequences for the farm system. the chairman, farm credit had nothing to do with the financial crisis and in fact, the strong underwriting capital security appraisal and repayment statutory standards that we mr. putnam: in place after farm country went through its consequence had a more financial network. the treasury department agreed when they said it was not their intention to bring farm credit into the regulatory discussion and i thank chairman frank for recognizing this. with that, i still have some concerns with some parts of the underlying bill, particularly the establishment of a systemic risk regulator and empowerment of the federal reserve to take a leading role. the real power resides in the

federal reserve instead of the oversight council established by this bill, particularly the ability to impose whatever prudential standards it sees fit. and there doesn't seem to be any mechanism for the council to check the power of the federal reserve if it believes that the fed is going too far. while i think the systemic lanching needs much more refinement i will not let these concerns deter my support for the underlying bill and the much needed amendment that will shed light on the previous dark markets for the overthe counter derivatives and never threaten the stability of our financial system. i urge my colleagues to support the bill and i reserve my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from oklahoma is recognized. mr. lucas: i yield myself such time as i might consume. the speaker pro tempore: the

gentleman is recognized. mr. lucas: i rise in opposition to h.r. 4173, regulatory reform of our financial system is @@@r some would call slush fund for some too big to fail companies funded by $150 billion tax on financial institutions. this tax will reduce available capital for lending and will be passed on to consumers in the form of higher fees. as the ranking member of the agriculture committee, i rise

in opposition to title 3, the o.t.c. derivatives title that is currently in h.r. 4173. this same title was adopted by the financial services committee. i opposed this title in the committee where i'm also a member, because it makes it too costly for end users to manage risk and unnecessarily ties up capital that could other wise be used to create jobs and grow businesses. however, chairman peterson and chairman frank will bring an amendment to the floor that will strike and replace this derivative title. this amendment is the product of negotiations between our two committees. i prefer, i must admit, the version reported by the agriculture committee. but this compromise is significantly better than the current title in the bill and i will support its inclusion. but i support its inclusion

only if the other secondary amendment that may be offered by my friends on the other side of the aisle are defeated, save one. i would be remiss if i didn't thank chairman mr. petri: ter son with the agriculture committee republicans when our committee reported out h.r. 977. chairman peterson worked in good faith to work with our members and we learned together the concerns of all our participants in over the counter derivative markets. many still concerns are still unresolved. we were able to improve areas that were important to end users, manufacturers and food producers that manage price risk so they can provide low cost products. they should not be major financial houses residing on

wall street. they did not cause the financial collapse and should not be regulated like they did. i would have preferred language that would have made clear that only those entities that can have a significant adverse impact on the u.s. financial system be regulated as major swap participants. similarly, i don't understand why market makers that only deal in clear products need to have additional capital and margin requirements imposed upon them by the federal government. fible finally, we should not forget that new opportunities, innovative products and services and ultimately economic growth are borne from people willing and able to take risk and invest. we should not attempt to regulate risk out of existence. as it stands now, the peterson-frank amendment allows the appropriate financial regulator to closely market

trends and market participants who may generate too much risk for a healthy robust financial system. this amendment gives the regulator the appropriate tools to reduce risk before it can negatively affect our economy. the peterson-frank amendment isn't perfect, but it is a marked improvement over other legislative efforts either proposed or considered. mr. chairman, i reserve the balance of my time. the chair: the gentleman reserves. the gentleman from massachusetts is recognized. mr. frank: i yield myself such time as i may consume. the chair: the gentleman is recognized. mr. frank: my republican colleagues are in the throes in regret that things they would have liked are not in this bill. there will be a certain amount of fantasy on the floor of the house as they lament the existence of things that aren't

here. one of the major bailout instruments, section 1303 of the federal reserve act was used during the bush years to bail out not the institution, but the creditors of bear stearns, but then it was used by a unilateral by the federal reserve with no congressional input in september during the bush years of 2008, to provide substantial amounts of money to a.i.g. the bill before us today wipes that power out. there will be no more use of section 1303 to provide funds to any existing institution. as the republican bill also says, the ability to fund an instrument to which companies can apply if they are solvent in the midst of a national liquidity crisis, but nothing like a.i.g. there is a fund in here for the

fdic to use and if a financial institution has to be put out of existence because it had become too indebted and unable to meet its debts and it was big enough that its failure would cause the systemic negative kind of consequences. last year, lay man brothers went under and the bush administration felt they couldn't pay anybody. and the bush administration said then, we have to pay everybody because we can't pick and choose. we end that dilemma and we say and this is absolutely crystal clear in the bill, it says, if an institution gets to the point where it cannot pay its debts and it is of such size that those debts threatens systemic negative consequences going throughout the economy, it dies. there's no bailout. there's no continuation of that

entity. it is a dissolution fund and it is put into receivership. there is a fund raised by the assessments on the financial institutions. i don't want to strain their compensation and they don't want to contribute to expenses that may be incurred by their own responsibility. that is the difference between us. we say that if the federal agency that is putting this out of business and takes it over and yeah, there is a takeover of failing institutions who threaten by the size and complexity of their indebbedness to threaten the strength of the country, the share holders are wiped out -- these are all absolute conditions that have to be met. and it may be in winding them down, some money has to be spent. you don't walk in and say, ok, the door's closed. that is irresponsible. we say it may take some money

to wind them down. we assess the community that caused these problems for that. if there is a need and a shortfall if this happens before the fund is built up, money will be borrowed from the treasury with an absolute requirmente of repayment in this fund. there are no taxpayer dollars that will be used. it will be lent in some cases as has been lent in other cases, but they must be repaid and must be a repayment schedule. the assessments will continue until they are repaid. i apologize to my colleagues that the bill is too big. i don't know if that means it was too much to read or too heavy to carry or short ones can't see over it when they are sitting down. i don't know what the problem is. this notion that the value of a piece of legislation is inversusly related to its size is rather odd, but let me tell you how they manage to slim

down, which i would like to do now, but i have to start my diet next week. how do they slim it down? they don't do anything in their bill about executive compensation. we say that the kind of bonuses and large payments to take risks and not be penalized if they fail, we have language in there to stop that, they don't. we say let's ban the kind of subprime loans. we have a lot of language to ban subprime loans. they don't. save some more pages. we do regulation in other ways that they don't do. they don't have registration of hedge funds. they don't have requirements of private advisers. so it is true if you avoid subjects, you shrink the size of the bill. by the way, as to the size of the bill, this didn't -- sometimes it's not what is nt there is relevant and i

appreciate that about the process. we began marking up the elements of this bill before the summer recess. we have had a large number of hearings and have spent over 50 hours in actual markup debate on this bill. there have been hundreds of amendments offered and some have been accepted from the republican and democratic side. it was vetted. it was made public and available. i'm sorry they had to read a lot of pages. they don't like to be reminded of compensation abuses or hear about subprime. but we do. we want to stop it. there is no bailout fund. the bailouts of a.i.g. and bear stearns, not possible, illegal under this bill. if a company fails, it will be put to death. we have death panels, but they have the death panels in the wrong bill. they are in this bill and we will spend the money to get rid of them in ways that will minimize damage, money that

will come from the financial community. . we heard it's going to have a restriction on credit. it's true, many were opposed to the credit card bill. many voted for it. they say there's a credit czar. that one is too odd to put any meaning behind. i'd like them to point to the sections that do it, maybe if it's too much to read all at once they can divide it up. there's 177, if they each read eight pages i think they could get the whole bill done. maybe then they could find the credit czar in there. i can't. we do say that if you're identified by the systemic risk council as overleveraged and you're big we will step in and tell you as the gentleman from pennsylvania's amendment said, you're too big, raise your tap tal. maybe that's a credit czar. maybe when someone would have told a.i.g. a couple of years ago, stop selling those credit default swaps that you can't

back up, because mortgages that you are ensuring against loss can lose money, maybe they think that's a credit czar if you tell a.i.g. don't do it. because nothing in that bill, zero in that bill would have interfered with a.i.g.'s recklessness. not a word in here that would have done that in terms of the overleveraging of a.i.g. nor of the subprime loans that were there. so, yeah, the lack of regulation over many years allowed big problems to grow up and it takes a fairly comprehensive bill to do it. we have been working on this bill for literally months. we have had days and days and days of hearings, we have voted on it, we have amended it, it's been available. so i would hope that that would stop complaining about the size. i would hope that would deal with the substance but the real subject of this bill, not a bailout that does not exist and wait for someone to read me the sections that show that there's taxpayer money that can go to keep a failing institution going, there absolutely is not. aye like them to tell me, do they think we should do anything about subprime loans, anything

about executive compensation, anything about hedge funds? so, yeah, here is the situation. years of an absence of regulation, both an absence of the world of regulate, mostly under republican rule, lead to the largest crisis in recent memory, since the depression, they talk about job loss. as i said before, what a terrible day january 21 was. apparently there was a wonderful economy up until january 20. barack obama took power and millions of jobs disappeared retroactively. a deficit strung up that had not been there. bailouts were retroactively pushed back to september. the major factor in job loss was this terrible crisis. what we do for jobs is to say, you will not be allowed once again the financial irresponsibility of some in that community to get us into trouble and the republican proposal is very clear. do not interfere with the

ability of an a.i.g. or a lehman brothers or a city corps or countrywide or any of those other financial entities, do not prevent them from doing again what they did before. if and when they have done such a bad job that they're collapsing, then let them go bankrupt and don't do anything to deal with the consequences. let's have another lehman brothers. we say no. let's try to stop them from getting there. if they do get there, yes, we will put them out of business. but in a more orderly way. i reserve the balance of my time. the chair: the gentleman reserves. the gentleman from alabama is recognized. mr. bachus: mr. chairman, i yield myself such time as i may consume. the chair: the gentleman is recognized. mr. bachus: i ask unanimous consent to address the house from the floor. the chair: the gentleman is recognized. mr. bachus: mr. chairman, this is a great country.

and i think we're all proud of our country. it is no small@@@@@@@ @ @ @ @ @r is so wrong and not the size.

individuals in this country ought to have the right to choose. they ought to have the right to choose their health care provider, their doctor. they ought to be able to make choices, health care choices, treatment choices between themselves, their doctor, their family, not the government. we see with health care that this idea of the individual, this idea of choice, this idea of freedom to make those choices is under attack. we found that with energy that not the individual but the government determined that we weren't going to utilize coal, our most abundant resource. we weren't going to use oil,

that we were going to tax, that we were going to tax energy, we were going to discourage that, we're taxing health care and the health care bill and in this bill we levee taxes. we have sanctions. people may still be able to make choices but they'll be discouraged or they'll be taxed when they make those choices. you know, the decision about seeking the doctor of your choice or the decision about borrowing money or the choice about lending money or the choice about the terms of that loan, those ought to be choices between individuals, those should not be managed by the government. now the chairman has rocked this legislation before and it is his

legislation -- brought this legislation before and it is his legislation. his image and his imprint is clear on each and every page of this legislation. i'm not really seeing -- i've not really seen such an individual drive such legislation since perhaps the first lady, hillary clinton, brought her government-managed health care to the floor in the early 1990's. and this is just simply another way of an attempt on the part of really -- and i think the chairman really has faith in the government and the government's ability to manage and the government's ability to make decisions, that he actually has sincere faith. in fact, members of this committee, members of this committee on tv this morning, democratic members, actually made references to europe, the

way they do things in europe. the fact that the government is making these decisions in europe. we are the greatest, as i said, the greatest country on the face of the earth and we didn't get there through government management. we didn't get there through government management of health care wesh won't get there by government -- care, we won't get there by government manage of credit or lending or other financial services. it won't happen. we're the largest economy in the world, it's not the british economy, it's not the french economy, it's not the chinese economy, it's not the japanese economy. it's the american economy. how did we get to be the largest economy in the world, three times larger than the next largest economy, the japanese economy? bigger than the chinese economy, the japanese economy, the british economy and the french economy put together. we got there with faith in the

individual, not in the government. and that is what's wrong with this bill. and you can clearly look and no more is it more evident in this bill that not only do we not have faith in the individual and the individual responsibility and in individual's right sometimes to take risk, but we also give individuals the right in this country to succeed. but when you do that, unlike in other countries, you've given them the right to fail and this bill clearly establishes a bailout fund and it says, when the largest companies in this country, when the largest companies in in this country, when they fail we're going to establish a $150 billion fund, a permanent fund, a permanent tarp

. the democratic gentleman from california, mr. brad sherman, said tarp on steroids and where do you get this money from? well, actually it's $200 billion. $150 billion you get not from the companies that are failing but from their competitors who are succeeding and you transfer that money to those companies that have taken risks they shouldn't have taken. you take it from those companies that didn't take those risks. that's not competition. that's socialism. now you can call it what you want to, but it's socialism, it's government-managed, it's not what america's about. and let me reserve the balance of my time but before i do let me say this, this is not about what -- a crisis that occurred last september. this is not about the continuing bailouts that started with the

federal reserve, an independent body, but continues and have grown in intensity under the obama administration. but there is enough fault to go around but cannot we agree on one thing, that it is time that we allow people in this country to succeed and we allow them to fail? isn't it time in this country that we decide that there's no more too big to fail? because if you make that determination, you make the determination, as we have over the past year, that there are thousands of small businesses and medium-sized businesses and companies that were too small to save. and that's not fair. that's not what america is about. it is not about taking from people who pay their mortgage and no matter what the circumstances of those who

failed to pay their mortgage, it's not about transferring money from one to the other. that's not about america. it might be about charity, it might be about neighbor helping neighbor, but that is not what this country was established about. so, let's -- let's not use the crisis that we have experienced in this past year to create the calamity of a government-managed country where the individual, where freedom, where choice is a thing of the past. i reserve the balance of my time. the chair: the gentleman reserves. .

the chair: the gentleman from ohio is recognized. >> thank you, mr. speaker. in this season of yule tiding, gift giving, silver and gold, what are my republicans attempting to give americans with their opposition to this bill. my colleagues would rather give gold to the corporate goldman sachs rather than put silver and gold under the christmas tree of ordinary americans, bah humbug. they would stand with corporate executives and thousand dollar suits than those in the unemployment lines. they would rather bail out the big banks rather than americans keep their homes on main street. bah humbug.

they would like to protect the pensions of bill corporate executives and stand with hedge fund managers who are betting on the price of oil going up and price of food going up and americans failing to pay their mortgages rather than helping those families that are sfang in lines at food banks this holiday season, bah humburg. this bill will help and will protect small businesses and from the unnecessary risk by wall street risks and speculators and brings transparency and accountability to a financial system that has run amuck. this bill is about instituting commonsense reforms, holding

wall street and big banks accountable. now republican leaders would rather vote to rescue big banks on wall street than find it in their hearts to help struggling americans on main street. don't be a scrooge. help our people or surely you will be visited by the ghost of christmas past. i yield back my time. the chair: the gentleman yields back the balance of his time.. the gentleman from oklahoma. mr. lucas: i yield to mr. moran 2 1/2 minutes. mr. moran: i rise this evening as one might expect in my opposition to h.r. 4173 certainly as written. this massive as the gentleman from massachusetts has said, massive general regulation bill. we have 1,200-plus pages, so-called reform bill that

would dramatically increase government involvement in our economy. if this congress is serious about economic recovery, we should be reducing burdensome regulations, not increasing them. i have heard from many about their inability to access credit from their local lending institutions. small businesses and farmers rely to make payroll and expand and make their ends meet. local lending institutions would love to make these loans but the overly broad regulations and ininconsistency together with higher fdic insurance premiums has restricted family and small business access to capital. this house should be more focused on the credit crunch and helping institutions cut through the bureaucracy and lend money, not creating more layers of regulation. among the provisions i oppose within this regulation is to create a permanent tarp bailout

authority. this will shield firms from their mistakes and pass their costs onto the american taxpayer. the regulation takes an approach disrupting markets that have performed well and placing regulatory burdens in the places where they are not needed. one of the changes that this legislation would make is not the overthe counter derivatives markets. in the wake of last year's collapse, these markets performed relatively well under the regulatory regime. they allowed regulators to adapt their regulatory approach. rather than recognize the success, this legislation replaces those core regimes with a rules-based structure that has failed. this legislation also redefines the definition of a hedging

transition and contract market so narrowly that it will be difficult to properly hedge their risk. these changes will hurt, not help and introduce less, not more volatility. and i yield back mu my time. the chair: the gentleman yields back the balance of his time. the gentleman from massachusetts. mr. frank: with all these assertions that it's going to hurt credit and small banks, the independent community bankers association, a great representative of small banks support this bill. now they will be upset if we do bankruptcy. as far as the bill is concerned, the independent community bankers association support this bill and they believe the opposite about credit. and i yield four minutes to the the gentleman from california, mr. sherman. the chair: the gentleman is recognized.

mr. sherman: tarp on steroids that was the original bill that was submitted to us by the secretary of td4@k))$rr that effect without noting the

major change this bill now makes in the section 1303 of the federal reserve act. that is the most dangerous provision in the u.s. code and this bill is a major step toward limiting that section. code section 1303 now allows the federal reserve to lend at times of systemic risk that they declare to be in existence unlimited amounts to just about anyone on whatever terms the fed thinks is adequately secured, unlimited amounts. they have already done about $3 trillion and under current statute, they could do $30 trillion. and the republican alternative does nothing to limit section 1303. it leads the giant freeway of bailouts open forever. in contrast, this bill continues three important

limitations. the first was drafted by the chairman and it says that 1303 can only be used to put money in the economy in general, not to bail out one or two firms. and i thank the chairman accepting two of my amendments. and it does not adjust that amount to inflation so the power of the fed will decline with inflation over time, which is only fair, since it's the fed that is supposed to be in charge of eliminating inflation. second amendment was the idea of acquiring the highest possible security for amounts of credit extended under 1303. this bill is a step towards limiting the power of the executive branch to put money, taxpayer money at risk. it does contain section 1109 and 1604, both of whichr

pursuant to an amendment accepted in committee, which i authored, sunseated in 2013. section 1109 replaces 1823 under current statute, so it doesn't expand bailout authority. in fact, it contrasts it because it is limited to $500 billion while 1823 which is suspended, is unlimited amount. 1109, as will appear in the manager's amendment requires an advanced fee so the taxpayers are compensated for any money put at risk and any losses to be collected from those companies which participate in the section 1109 loan guarantee program. section 1604 does provide funds to resolve insolvent institutions. but as the chairman points out, it's a death panel, not a bailout. it's only for institutions that are going to be lick which dated and limited to $150 $--

the chair: the gentleman is recognized for one minute. mr. sherman: section 1604 is sunseated in the year 2013. taken as a whole, this is anti-bailout legislation and contrasts with the republican alternative that does nothing to limit section 13-3 which has been used cheefl under the bush administration to put over $3 trillion of taxpayer money at risk. it does provide for section 1109 and 1604. they are limited in amount and temporary in time. and most importantly, it limits section 13-3, threeways, as to dollar amount, the purpose that money is put at risk and the

degree of risk which the fed is able to take. what i said about this bill when it was originally was proposed may well have been true. the bill now is a step away from the tarp approach and step away from bailouts. the chair: the gentleman's time has expired. the gentleman from alabama is recognized. mr. bachus: i yield four minutes to the ranking member of the subcommittee on oversight and investigations, ms. big erts, four minutes. the chair: the the gentlewoman from illinois is recognized. mrs. biggert: thank you, mr. chairman and thank you for giving me the time. i appreciate it. there's no question and no disagreement among members from both sides of the i'll that we need -- aisle that we need financial reform for the industry and for the economy.

but this bill isn't the answer. you can find some good bipartisan provisions in this bill. mr. kanjorski and i worked out insurance language to bridge the gap and communication among regulators and address problems with businesses like a.i.g. mr. hinojosa bolstered housing counseling efforts and credit agency reform. unfortunately, the good does not outweigh the bad. small businesses are struggling to keep their doors open and record number of americans are jobless. a report issued yesterday, the number of homeless and hungry families is still on the rise. we need a bill to unfreeze the credit markets so financing is available to allow u.s. businesses to grow and create jobs. we need a bill to improve regulation. we need a bill to help americans get back to work so

they can provide for their families and put food on their table. mr. frank's bill sets us back and imposes a tax on financial institutions and diverts away from lending and creates a permanent bailout fund tarp two. taxpayers will pay in advance for the failings for those that are reckless. and taxpayers are on the hook once again, if there isn't enough money. does that sound familiar? of course. it is more of the same. this double downs the instrution of the government. increases fees. instead of strengthening consumer protection, it creates a giant federal bureaucracy. it will tell groups across america, anyone involved in financial activities, including churches that provide payment plans for funerals, what products and services they can offer. the churches cause the financial meltdown?

no. why not address the disconnect among existing federal agencies before layering on another one. are we creating a new agency. we need straightforward derivative reform and don't need regulation that charges regulators with creating a one size fits all approach to regulate compliance and justify mandates and kill jobs. this crackdown on illegal and deceptive activity, regulate gaps and strengthen enforcement agencies. we should have transparency and accountability on wall street that will discourage and never say that those too big to fail. that's what our republican alternative aims to do. my republican colleagues on the financial services committee and i have offered every step

of the way solutions for stronger financial regulations and yet the bill, mr. frank's bill steamrolls ahead and threatens to weaken the competitiveness of our markets and tie the hands of businesses, limit consumer choice and this bill is an overreach and overreaction and should be thrown overboard. we need bipartisan reform to get our financial system and our country back on track. americans, consumers, taxpayers, job seekers, the homeless, hungry and main street businesses deserve real financial reform. this bill is not it. i urge my colleagues to oppose the bill and support the republican alternative. i yield back. . the chair: the gentleman from minnesota is recognized. mr. peterson: thank you, mr. chairman. what i'd like to do is engage

chairman frank in a short colloquy and then give the rest of our time on our side to mr. murphy who is our last speaker. so if mr. frank would be willing, i would yield myself as much time as it will consume and would like to enter into a colloquy with my good friend. the chairman of the financial services committee. title 1 of this legislation creates a systemic risk oversight regulatory structure that enables regulators to raise capital requirements and impose heightened proinvention standards on firms that could pose a threat to financial stability. the legislation also empowers the federal reserve board to pose a host of additional requirements on constitutional activities deemed systemically important. it appears that this new structure is not intended to replace or duplicate regulation of securities or derivative exchanges that are already subject to regulations by the s.e.c. or the cftc. in looking at the statutory criteria for determining whether financial companies should be

subjected to stricter standards, it is hard to visualize the application of these criteria to derivatives and securities exchanges. changes are not the players who have performed the trading but the administrators of the marketplace where such trading occurs. do you agree that while derivatives and security exchanges would certainly qualify for definition of financial company in title 1, the intent of the legislation is targeted more at the players in the marketplace as opposed to the administration of the marketplace? mr. frank: if the gentleman would yield, the answer is yes, i agree completely they've operated as they are going to operate, as they are intended to function, as marketplaces rather than themselves the operators, it is inconceive to be me that they could be designated in that way. mr. peterson: i thank the chairman for the clarification of the intent and i recognize the gentleman from new york, mr. murphy, a new member of our committee who has actually got some real world experience in

this area and has been a great member in helping us put this together, for the balance of our time. the chair: the gentleman from new york is recognized. mr. murphy: thank you, mr. chairman. and also thank you to ranking member lucas. the work we did on the ag committee is the kind of commonsense solution that the americans are looking for. we worked together to come up with regulatory reform in the ag committee with respect to the driventives legislation -- legislation and we saw overwhelming support from not just democrats but republicans because people in that committee know what the american people knows. for the last 10 years washington has failed to regulate our financial markets. and as a result some of those on wall street and at the big financial firms have taken that opportunity to gamble with our money. they've put our future at risk and they've put the very american dream that so many americans spend their time hoping and praying for at risk. and it is time for us to respond to that. they per siptated the failures in washington and the failures

on wall street precipitated the worst financial crisis since the great depression and it's our job here and now to come up with solutions to that. wall street melted down and main street paid the price. this cannot happen again. so what do we need to do? we need to regulate what wasn't regulated. so many people now recognize that no one was looking at systemic risk, no one was looking at the a.i.g.'s of the world and seeing what they were up to. there were whole sections of the drisktive marketplace that no one was regulate -- derivative marketplace that no one was regulating, in fact, by law that was passed here in washington, no one was responsible for looking at it. that cannot continue. there were whole parts of the consumer world that were not regulated, mortgage brokers, payday lenders. this cannot continue. we must regulate what was unregulated to bring everything into the system. we need to protect our consumers. we talked about payday loans and mortgage brokers and the kind of liar loans that were put out

there in the past. no one was responsible strictly foring at protecting our consumers. this legislation will do that. with the consumer financial protection agency there will be a focus on protecting our consumers. that's something that's common sense, that's something that all americans want us to do here in washington. and the last thing that everybody in my district wants, and i think americans all over this country want, is they want protection from taxpayers having to fund any future bailouts. nobody thinks that main street should be bailing out wall street. shouldn't have happened in the past and it sure should not happen again in the future. it's critically important that we fix that. the bill that we have in front of us does set up disillusion authority. it's funded by the large financial institution to help shut down those that fail. that's what needed to happen in the past, that's what needs to happen in the future, that's the kind of commonsense reform that we all need to come behind. we need to regulate what wasn't regulated, we need to protect

our consumers and we need to make sure that taxpayers never again have to fund a bailout. @r minnesota for the work that they've done on the credit default swaps and the regulation that is there. i do think it's an improvement and i'm certainly going to support that amendment. but i think it's important for us as members of this congress to bring a perspective to this

and in the words of mr. bachus from alabama oakow in my ears, mr. speaker, and that is that it isn't so much about this stack in the bill that mr. frank says might be too heavy for to us carry, it's about the culture of the bill that might be too heavy for the american people to carry. it's about the difference between believing the federal government can regulate more aspects of our society, more aspects of our economy, and the difference in believing whether people can become and entities can become too big to be allowed to fail or whether small businesses might be too small to be allowed to succeed. and it's about the difference between the free enterprise economy and a managed and controlled economy. it's about the difference between liberty and the difference between a socialized economy. and i've watched this economy -- as this economy has spiraled downward over the last 15 or so months and we've been involved in this. we've been engaged in it

intensively. and it comes down to two divergent philosophies. one of those philosophies is echoed in some advice that we got from one of our top economic advisors who i'm going to remain name ms who said to us 2 1/2 years ago at the beginning of the subprime mortgage discussion, said, what's going on is these large financial institutions are doing what everybody else does. they're doing that because the other people are making money and they're making money. and their psychology is, if things fall apart and melt down, there's likely to be a bailout. if they do what everybody else does they'll get bailed out like everybody else. that's at the root of this. whether you can be allowed to fail so that we have a free enterprise system. there's a stack of immigration cards produced by the u.s. citizenship immigration services, glossy flash cards and you look through those flash cards and it asks, who's the founder of our country? george washington. turn another one, what's the basis of our economy in the

united states, flip the other side, free enterprise capitalism. it is a principal tenant of the american way of life that you must answer that question accurately if you want to become a zpwen of the united states and yet -- citizen of the united states and yet here we're debating to have a free market. and, mr. speaker, i'm going to submit that we've got to be able to take a chance to succeed and fail. ok, i'm -- mr. lucas: i yield the gentleman an additional 30 seconds. mr. king: i thank the gentleman for yielding. we had a chance and we should continue forward to repeal the investment act, we should regulate fannie mae and freddie mac, we should require them to meet the same standards of every other financial institution in the united states, we should let people fail, though, and so that others can succeed and a.i.g. should be split up. this is the seventh federal agency when we have already too many. we need to have free enterprise succeed and that, mr. speaker, i appreciate it and i yield back

the balance of my time. the chair: time has expired. for what purpose does the gentleman from massachusetts rise? mr. frank: i'd like to yield myself 15 seconds to invite members to show me the part of the bill where there's a bailout that goes to failed institutions and keeps them going? i will read the parts that make it clear that's not the case but maybe there's something i didn't read. so anybody who tells me there's a bailout that goes to continue business institutions -- the chair: the gentleman's time has expired. mr. frank: i yield 15 more seconds. yes, i yield to the gentleman. i yield myself two more minutes and yield to the gentleman. >> i appreciate the gentleman yielding. mr. frank: two minutes. mr. sherman: the language of the bill says that -- mr. frank: what page? mr. sherman: i'm sorry? mr. frank: page. mr. sherman: i'm looking right now. the one section -- one second -- mr. frank: give me a page or we can't have a serious discussion, obviously. mr. sherman: the language of the bill gives the authority to set

up a -- mr. frank: i want to take back my time. if the gentleman will point to the page -- the gentleman rose voluntarily, i would assume he had the language. i yield to him again. mr. garrett: page three of the judiciary committee, self-executing amendment. mr. frank: says what? mr. garrett: it says on page 291 after line 4, insert the following subsection, conversion to bankruptcy, conversion, the corporation may at any time with the approval of the secretary, when meeting the treasure secretary, and after meeting with the council, consult the proceeding under chapter 7 or chapter 11 of title 11 united states code by filing a petition against the covered financial company under section 303-n of such title. it goes on page 4. the corporation will -- the corporation may serve as a trustee. basically what you have established here is a political decision by the treasury secretary to take an institution that they decide that they are going to put into receivership

which you said before would be the end game and allow them to convert back into a 7 or 11 bankruptcy. your statement before and this goes back to my opening comment which you respondsed to, why are we concerned with such a large bill? the reason we're concerned with such a large bill is because obviously the chair and members of your side of the aisle have not read the entire bill. the reason we presented a much smaller bill was because obviously you have not read our bill either. i note your opening comment -- i still have the time. mr. frank: it's my time and i take back -- mr. garrett: you yielded it to me. i'm responding. mr. frank: i a want to respond to the response -- i want to respond to the response. i said i took -- i took two minutes for myself and yield time -- mr. garrett: i'm sorry. i thought you wanted a response. i'm sorry. the chair: both minutes have expired. mr. frank: i yield myself 30 seconds to explain to the gentleman who misunderstands the rules. i yielded myself two minutes so

we could have the conversation. he then used up both minutes. it was not within my power to continue it. i will get back to it now, i don't want to keep my friend, i yield four minutes to the gentleman from illinois. mr. garrett: hopefully i answered your question. mr. frank: i yield to the gentleman from illinois. the chair: the gentleman from illinois is recognized for four minutes. >> thank you, mr. chairman, i rise in strong support -- mr. frank: the gentleman -- temporarily i move the committee do now rise. the chair: for what purpose does the gentleman from massachusetts -- mr. frank: i move the committee do now rise. the chair: the question is on the motion that the committee rise. those in favor say aye. those opposed, no. the ace have it. the motion is say -- the ayes have. it the motion is adopted. accordingly, the committee rises.

the speaker pro tempore: mr. chairman. the chair: mr. speaker, the

the hearing will come to order. wee delighted to welcome today under secretary jack loo, ambassador karl eikenberry and lieutenant general petraeus from afghanistan. we're very, very pleased you could take time to be with us today. we all know eight days ago the president announced his decision regarding a new phase in our afghan mission including the important decision to send an additional 30,000 troops. and for all of the answers that the president offered and there were many, certainly explanations of his strategy and reasons for his decision, a lot of questions still have remained and our appropriately being asked by various committees on the hill, and we appreciate, obviously, the administration's

cooperation in making themselves available so those questions can be answered. it is important. needless to say, for the american people to understand the strategy, and the stakes. the details of our civilian strategy particularly how afghan governance at all levels will improve and above all, how we will strengthen our partnership with pakistan. as i've said a number of times, i believe that there are just some common sense conditions based on the judgments that we have been hearing from commanders in the field and from our ambassadors that ought to narrow and guide the deployment, the sort of mission tasking, if you will, of our additional troops, and i think those are, are there reliable afghan partners? are there reliable afghan forces to partner with?

because the object of this exercise is to transfer the responsibility to them. second, are there local afghan leaders to work with on the ground, because we want them to be invested, and to come in quickly underneath the clear and hole and third is the civilian capacity in place to make the military gains sustainable? i was very pleased to hear general mcchrystal say yesterday that as we plan new operations we're going to take great care to ensure that the civilian elements are in place to immediately follow our troops. i think that is critical and it is very reassuring to hear that that judgment will be made. ultimately, our success depends on having a robust civilian effort to build in oun military gains and general petraeus has consistently argued as did when

he was general eikenberry now ambassador eikenberry consistently argued that there is no military solution allmyly. so that needs to remain front and center. importantly, each of the challenges i've mentioned demand not only that america improve our past performance, but also our partners, all of them, must improve theirs. and this challenge is especially crucial when it comes to pakistan. i am convinced that what happens in pakistan, particularly near the afghan border, will do more to determine the outcome in afghanistan than any increase in troops or shift in strategy. pakistan is in many ways the core of our challenge. from the hakani network to other, the interconnected extremist groups that we face don't stop at the afghan border. and so our strategy cannot stop there either. it must extend to pakistan.

al qaeda's leaders are there, most likely including osama bin laden. home-grown militants@@@@@@ commanders

deserve great credit. they have sacrificed. now we're looking for them to take on the afghan network, and al qaeda strongholds. this will be crucial to our success in afghanistan. today we are prepared to provide pakistan with additional equipment, and other military assistance to help its people, and its government, to prevail against these extremists. but we have to know that we are building a new and a lasting partnership. many pakistanis believe that america will once again abandon the region as we did after the fall of the soviet union. one reason why pakistan has often hedged its bets and used the taliban for strategic depth. so let me be clear, and i think i speak for -- for the committee in this, and for the congress, because it would be a mistake for anyone in pakistan or

elsewhere to believe that the president's words about drawing down troops from afghanistan somehow mean an end to our involvement or engagement in the region. it does not. our challenge today is to persuade pakistan that it cannot and does not need to hedge its bets. our troop deployments will eventually decrease, but the conditions that will permit them to decrease will be beneficial to pakistan. and america remains committed to the people of the region for the long haul as our 7.5 billion dollar civilian commitment demonstrates. this also reflects our recognition that pakistan's civilian, military and intelligence leaders face serious challenges. all of us are engaged in a difficult balancing act between the tougher measures we believe must be taken and the anti-american blowback that such measures can bring to pakistan's

fragile democratic institutions. it should help our efforts that no country has suffered more than pakistan at the hands of al qaeda. the taliban, and affiliated terrorist groups. some 2,600 people have been killed in terrorist attacks in pakistan in the last 2 1/2 year, yet with so many pakistanis view the united states as a problem, we have to admit that we have simply not fought for our reputation enough. we must do more to make sure to make the case that fundamentally america and pakistan are fighting for the same things. we need to make clear to the people of pakistan we will be full partners in their fight against extremist element it's which is why in 2009 alone, the united states has given about 300 million conflict-affected populations in pakistan.

as we know, all nations are threatened by extremism, whether it takes place in new york city or in mumbai or other areas, we must work together in stopping people, throwing bombs and killing innocent people. that is the world's challenge, and it means that afghanistan, pakistan and india must cooperate to reduce the violence and eliminate the tensions. our troops are defending the right of afghanistan to develop its own government. they're risking their lives to chase down international criminals who threaten not just the united states but afghanistan, pakistan and beyond. there will come an inevitable moment in this fight where our partners in pakistan must take up the fight with an equal vigor so we don't have to take matters into our own hands. i believe we can build a significantly stronger

relationship with pakistan and i also believe in the long run pakistan will strengthen its own democracy, institutions and security by engaging in an unfetterrd fight against the extremists with its own borders. here in washington our domestic debate focused a great deal of energy on the question how many troops we will send to afghanistan. i believe other strategic question, civilian capacity, improved governance, standing up afghan security forces and especially greater cooperation with pakistan, greater partnership, if you will, that those are the crucial derman nants of success, not the numbers of troops. at sentcom commander and the state department official responsible for the management, the members of this panel are all of them well equipped to talk the details of these vital efforts today and i look forward to their testimony. senator lugar? >> mr. chairman, i join you in

welcoming secretary loo, ambassador eikenberry and general petraeus. we appreciate that you've come to the foreign relations committee today. this builds on the hearing left week with secretary clinton and admiral mullen and explored not only the prospects for success of the military campaign in afghanistan but also how the president's plan fits into our broader strategic objectives of preventing terrorist attacks and stabilizes the middle east and south asia. much of the debate in congress has focused on the president's stated intention to begin withdrawing some u.s. troops by july 2011. some members have voiced concerns that such a date undercuts impressions of the u.s. resolve, gives the taliban and al qaeda a target beyond which they can wait us out. other members with a very different view of the war worry

that july 2011 date is so flexible it offers no assurance that troops will be withdrawn. this is a legitimate item for debate, but i am doubtful the success or failure hinges on this point nearly as much as it does on the counterinsurgency strategy employed by allied troops, the viability of afghan security forces and most importantly, how the united states engages with pakistan. i have confidence that the addition of tens of thousands of u.s. and allied troops under the direction of general petraeus and mcchrystal will improve the security situation on the ground and in afghanistan. more uncertain is whether the training mission will succeed sufficiently to allow u.s. forces to disengage from combat duties in a reasonable time period. the most serious question, however, is whether improvements on the ground and in afghanistan will mean much if taliban and al

qaeda sanctuaries in pakistan remain or if instability with pakistan intensifies. as hearings in our committee have underscored, potential global impact of instability and a nuclear armed pakistan dwarfs anything that is likely to happen in afghanistan. the future direction of governance in pakistan will have consequences for nonproliferation efforts, for global economic security, for our relationships with india and china, and security in both the middle east and south asia regions among other major issues. last week secretaries clinton, gates and admiral mullen acknowledged the importance of pakistan's apened president's calculation and underscored that the administration is executing a regional strategy. i'm incurringed by press reports that have described 9 intense diplomatic efforts with the pakistani government aimed at securing much greater

cooperation, but we should remain cognizant that the focus of policy tends to follow resources, and by that measure, afghanistan will still be at the core of our regional efforts. the president and his team has justified their plan not only on the basis how it will affect afghanistan but also on how it will impact our efforts to promote a much stronger alliance with pakistan than embracing the objectives. the president has said the united states did not choose this war and he's correct, but with these troop deployments to afghanistan we are choosing the battlefield. what we will concentrate most of our available military resources. the afghanistan battlefield has been inherent, has inherent disadvantage of sitting astride a border with pakistan that is a portis line for the militants but a strategic obstacle for coalition forces. as long as this border provides the enemy with an avenue of

retreat for resupply and sanctuary, our prospects for destroying or incapacitating the insurgency op innegligible. it is strategically less important afghanistan while taliban and al qaeda leaders become increasingly secure in pakistan. if they are able to sit safely across the border directing a hit-and-run war against us in afghanistan, touting catastrophic terrorist attacks abroad and working to destabilize pakistan from with, our strategic goals in the region will be threatened, despite progress on the ground in afghanistan. some reports indicate that taliban leaders are aware of the threat from u.s.-operated predator drones are moving out of remote areas in the crowded cities, are moving rather out to the remote areas from the

crowded cities, including a karachi, for example. if such reports are true, the united states will have even fewer options to pursuing taliban and al qaeda leaders in pakistan absent the active help of pakistani authorities. specifically, will pakistan work with us to eliminate the leadership of osama bin laden and other major al qaeda officials? in addition to improving the cooperation of pakistani authorities, the united states and our allies will have to become more creative is now he engage with the afghan and pakistani peoples. we should understand as a matter of survival, people in dangerous areas on both sides of the border will tend to side with whoever is seen as having the best chance of winning. we should also recognize that tribal loyalties most notely pashtun loyalties are at odds with the strong central government and with that

acquiescence to external military pow. the rand corporation observed recently i quote, the objectives should be to do what afghanistan says most effective historical governments have done. help the pashtun tribe, subtribes and plans providing security and justice in the areas. and help to manage the process. end of quote. meaningful progress in afghanistan is likely to require tolerance or even encouragement. of tribal administration in many years, as well as convincing tribal leaders that opposing the taliban is in their interests. and these circumstances we should explore, for example, how a cell phone and other communication technologies can be used more effectively. both as an avenue for public diplomacy for the afghan people and as a means for gathering information from them.

already 7 million cell phones are in afghanistan. one for every 4 inhabitants, more or less. the taliban is bent on destroying communication towers, understanding the threats posed by these technologies. for example, cell phones could be used by sympathetic afghans to produce realtime intelligence, including photographs of ieds being prepared, or calls alerting coalition troops to movement of the taliban. phones eliminate the need for informants to take the risks of visiting a police station and of conversing openly with u.s. troops. similarly, expanding the use of credit card transactions could prove revolutionary in problems that lacks an effective banking system. they can provide a way to reduce corruption, improve accounting with the afghan government and security forces, and relieve

soldiers from going a.w.o.l. and deliver pay safely to their families. i appreciate the innovation and dead dhags our witnesses displayed in the past, and their willingness to take an extremely difficult mission. i noted last week that the president deserves credit for accepting the responsibility for this difficult problem as we go forward, and that is equally true for our distinguished panel. i look forward to their discussions and i appreciate their service. thank you, mr. chairman. >> thank you very much. we're going to start with the testimony from secretary loo and we're bratful with you taking on the civilian side of this. thank you. general petraeus will follow and general, about as interesting a set of challenges as any commanding general could have in succession, and we're pleased and delighted to have you here and very respectful of your leadership in all of this.

finally, ambassador, eikenberry, let me just thank you. i had occasion to spend about i had occasion to spend about fi@@@@@@@ @ @ security pip today i'd like to

discuss some of the key civilian components of that strategy. which is the president and secretary clinton emphasized are essential to the success of that mission. our troop increase must be matched by strong civilian deployment and the foreign assistance that reaches the regions and functions targeted by the civilian military plan. we're working with o & b to ensure the programs are fully resourced and look forward to wokking with congress on the funding levels that meet these. the usda and other civilian agencies are working with afghan partners to bolster institutions to national and subnational levels to be ready to ramp up their own responsibility when our combat troops begin to depart. the president's time frame gives the afghan government and president karzai a sense of urgency to make the reforms needed for better governance and stronger institutions. this effort will continue long after our combat troops begin to drawn do you and their key to our enduring commitment to

afghanistan, pakistan and the reefen. it's critical that of a phans take increasing responsibility for their own long-term welfare and security when our combat troops begin to debate. on my visit to afghanistan and pakistan i've seen working in the fields and construction teams in afghanistan and their consulate pish shour. making extraordinary sacrifices on behalf of or security. as secretary clinton said last week and ambassador eikenberry will elaborate, we really do have the best people in these jobs. this is an effort to be hopeful despite the serious situation in afghanistan. civilian experts helping to build the afghan government capacity in the national ministries and provisional and district levels, providing development assistance in the field and working on scores of other roles. as i will discusses in a few minutes our civilians in pakistan are making similar contributions.

their vice strategy will focus resources partnering with local officials and afghan citizens to deliver high impact systems. expanding programs that bolster afghan's alonging a sector, the traditional core of the afghan economy, the agricultural sec r sector. create jobs, reduce the flow of funding for the taliban from poppy cultivation draw insurgents off the battlefield. training capable police we are concentrating on rule of law programs to help the afghan government and local communities develop responsive mechanisms as an alternative to brutal taliban justice and launching comprehensive communications efforts to empower afghans to challenge threatening narrative that extremists use to assert control. we will support an afghan-led effort to open the door to former taliban who abandon violence and want to reintegrate into society. we understand some who fight with the insurgency do not do so

out of conviction but because of economic pressure which is a powerful form of coercion. our efforts will help afghans secure a better future if they do so peacefully, respecting fellow citizens and renounce al qaeda. it is also critically important the afghan government make progress on control and corruption. it is in his inaugural speech last month, president karzai pledged to combat corruption improve government. and the afghan people, and the united states and international community will hold the afghan government accountable for knting to make good on these commitments. we have seen some promising first steps. the t.j. stvpattorney general'ss investigating leaving reasons names not disclosed until there's a conviction. a major crimes tasks force is expected to be fully operational by the first of the year and the afghan government announced it will establish a national anti-corruption court, even today the afghan high office of oversight is scheduled to hold a press conference to combat

corruption and share more details of action underway. i'd like to say a few words on our staffing and training. we're on track to triple the number of civilians in afghanistan by early next year and anticipate we further increase civilian staffing in 2010 by another 20% to 30% concentrating on positions in the field that deliver vital services to the afghan people. it's important to remember the multiplier effect that civilian personnel provide. on average, ten partners ranging from locally employed afghan staff to experts who work with u.s. funded mgms. since it is estoeshl recruit civilians with the right skills we've enhanced both recruiting and training to make sure we get the right people to the right place at the right time. for example, we conducted a week-long civilian military training xwersz at a camp in indiana for civilians who are about to deploy to field positions from state usaid and other civilian agencies. i visit a few weeks ago and saw

firsthand how the training immerses civilians and military in real-life exercises training side-by-side with afghan american whose played role of interlock coutures, plan projects, hold meetings and practice safety and security with military partners. those who recently returned from the prts are contributing to training as subject matter experts and share their real-life experiences to civilians about to go abroad to take their place so they can be safe, more prepared and do their jobs more safely. i want to assure this committee we will do everything we can to make sure that our men and women are well prepared and well supported, both from kabul and washington so they can succeed in their efforts and make our nation more secure. we're building a core of afghan and pakistan experts who continue to contribute to the mission even after they return. foreign service officers with pakistan and afghanistan experience key positions at the desks here in washington, at the foreign service institute on training, and ambassador holbrooke's office at nato and

other posts. secretary clinton when they was in kabul in november she heard from a u.s. army colonel, woo he is thousands of outstanding service, none had 40 years of agriculture law or govern of expertise. but the usda, usaid and state department experts serving alongside his battalion. he told her he was happy to supply whatever support these valuable civilians need and he said we need more of them. the president's strategy with congressional support will make that possible. now, i'd like to take a few moments to address how the recently completed strategic review impacts u.s./pakistan relations. as the president made clear in his speech last week our partnership is linked to our efforts in afghanistan. we're committed to a partnership with pakistan that is is built on a foundation mutual interest, mutual respect and mutual trust. we're not only strengthening pakistan the capacity to target the groups that threaten our countries but providing substantial resources to support democracy and development in pakistan. the president said going forward

the pakistani people must know america will remain a strock supporter of pakistan prosperity and security long after the guns have fallen silent. so the great potential of its people can be unleashed. the united states is xmited to security assistance programs that strengthen pakistan's capacity to target violent extremists that threaten both of our countries fop that end the state department is working closely with our mellie tear partners managing two praems, foreign military financing and the counterinsurgency capability fund. fmf assists pakistan in sustainable development of pakistan's military services building a long-term security relationship and reinforcing the u.s. commitment to a partnership. pccf provides the military training and equipment necessary to pakistan to wage the immediate battle against insurgence in its border regions. we're deepening our relationship to responsibleary civilian-led government. such a government can be a partner in regional stability and support the u.s. efforts in

afghanistan. this committee under the leadership of chairman kerry and senator lugar has taken the lead in passing legislation to dramatically increase help to pakistan authorizing a $7.5 billion over five years of assistance. these funds make it footbapossi support pakistan and education, water, agriculture and governance. we're developing a civilian assistance strategy to reduce poverty and vulnerability to terrorist recruitment that poverty breetsds. a and significant projects. we hear repeatedly from pakistanis who want to be involved and under the leadership of paterson, we're working closely to develop a program that reflects their needs and work through pakistani institutions develop programs wherever possible with a goal of abling nongovernmental

organizations. jus as we need strong local partners for assistance programs to succeed, we need international partners to support pakistan the development and democracy helping pakistan build on its success. we're working closely with pakistan and the international community to meet the needs of the division and military operations early in the year were effective but left considerable need for reconstruction. we're supporting the u.n. special envoy for assistance to pakistan's efforts to coordinate assistance in vulnerable areas and encouraging other countries to follow through ounlder tokyo donor conference plemps. as we strengthen our partnership, we're forging strength and cooperation on a. >> guest: basis that emphasizes institutions not individuals. in addition to the president prime minister and other ruling party officials, we're reaching out to provincial and local officials and developing strong working relationships with parties and civil society leaders across the spectrum. building on the october trip by

secretary of state clinton, diplomacy efforts redefines the u.s. relationship goes beyond security efforts. this expands to people to people contacts and provides alternative to the narrative of fear and hate extreme s rely on and pursuing high-level policy dialogues to encourage the government of pakistan to undertake policy reforms leading to long-term economic growth and development. sustained diplomacy on energy iri issues, for example, and proving the lives of the pakistani people has reinforced pakistan's resolve to implement critical lech trissy pricing reform. they're essential to meet the demand necessary to support economic growth. our discussions with the president and prime minister finance minister and many others in the pakistani government stressed the importance of moving forward with reforms that will put pakistan on a path to prosperity. creating new opportunities in

pakistan and afghanistan is a core component of combating violent extremism. that's why we're continuing to work in congress to create economic opportunities in the region including initiatives such as proposed reconstructive zones a program essential to our national security objectives in the region. providing duty-free treatment to certain goods produced in all afghanistan and parts of pakistan to create much needed employment opportunities. also we're supporting pakistani and afghan negotiations to findize a transit plate agreement allowing you to move quickly between markets through pakistan's ports or across afghanistan's road to central asia. efforts to build a more stable pakistan are in our national interest and in the interests of pakistan. the most recent series of violent attacks killing hundreds including women and children underscores the importance of counterering the insurgency. there will be ongoing humanitarian needs in pakistan as the government continues to take military action against

extremist groups. we're proud of our successful contributions to this humanitarian effort. the responsibilities and interests i've described are shared by governments around the world. our nato allies and other international community partners already made significant contributions of in their own in afghanistan and pakistan. most recently the nato min stairal in brussels, allies pledged to contribute approximately 7,000 difficult troops for fging if and in all 25 countries plemped to do more in terms of troops trainers and trust fund monies. the task we face is as complex as any national security challenge in our lifetime. we will not succeed if this effort is viewed as the responsibility of a single party, agency or country. we owe it to our troops and civilian whose face these dangers to come together at americans and with allies and parter ins to help them accomplish this critical mission. i thank you for the opportunity to testify today. thank you. >> mr. chairman, senator lugar, members the committee, thank you

for the opportunity to discuss this situation in afghanistan together with deputy secretary le wuchlt and eikenberry. i provide my assessment of the situation in iraq as commander of the multi-national force in iraq and i appreciate this opportunity to discuss the way ahead in afghanistan. let me state up front thapt i fully support the policy presiden >> success in afghanistan is necessary and obtainable but the challenges are great. the united states and afghan partners can disrupt and defeat al qaeda to prevent re-establish meant of the sanctuaries prior to 9/11. we can create the capability office other extreme elements while building afghan forces that can increasely lead the fight against the taliban allowing international forces to

re-deploy overtime. none of this will be easy. improving capacity of the afghan government will also be difficult. i can observe during the deliberations of the president's security team. nonetheless while certainly different and in some ways tougher than iraq, afghanistan is no more hopeless than iraq was when i took command there in february of 2007. in deed the level of violence and civilian death where is vastly higher than we have seen in afghanistan but achieving progress in afghanistan will be hard and the progress there likely u)s& be slower than developing than was the progress achieved in iraq. as president obama has observed. success in afghanistan is vital for america's security. qaeda.ssential to defeat al

the all right. ban we're fighting in afghanistan today the same that sheltered osama bin laden and al qaeda as they planned the 9/11 attacks. al qaeda as they planned the 9/11 attacks. the relationship between these groups remains strong. as sent gates observed last week, the taliban and al qaeda have become symbiotic, siege benefited from the success and mythology of the other. the afghan taliban are to the sure distinct from the pakistani taliban and their partner groups which also have close relationships with al qaeda. the pakistani pal btaliban are part of a sindt gated group. carrying out many other groups. that threatens the stability of pakistan and afghanistan and indeed the entire subcontinent. although most taliban fighters

confronting our forces are local afghans motivated by local circumstances, the afghan taliban leadership is organized, ideologically motivated and a beacon and symbol for other dangerous extremist elements. as secretary gates noted, defeating al qaeda and enhancing afghan security are mutually reinforcing missions. they cannot be untethered from one another as much as we might wish that to be the case. achieving our objectives in afghanistan thus will not be easy. the taliban has in recent years been gaining strength and expanding the extent of its control of parts of afghanistan. it is important to remember nevertheless that the taliban commands significantly less support among posh kinns than other sunni or extremist groups in iraq had in their communities in 2007, and commands virtually

no support among afghanistan other ethnic groups. beyond the insurgent challenge, corruption with the afghan government particularly the serious abuse of power by some individual leaders and their associates, has eroded the government's legitimacy. flaws in the recent presidential election further undermine confidence's in the government and, of course, taliban sanctuaries in the afghan/pakistan border area remain a major challenge to security in afghanistan, although we have been making progress in addressing this issue. meanwhile, iran has played a mixed role in afghanistan. helping with the country's development, but also providing some lethal support to the insurgence, albeit on a more limited scale than it provided to militants in iraq. our armed forces and civilians and those of our nato allies and isep partners will therefore

physical tremendous challenges in the months ahead. as in iraq, our troopers and their partners in afghanistan will have to fight their way into enemy strongholds and clear enemy-controlled population centers. as in iraq, the situation is likely to get harder before it gets easy per. violence likely will increase initially, particularly in the spring as the weather improves. moreover, as the afghan government with international encouragement and assistance moves to combat corruption and abuses of power, the result1c

first-ever three-star command freeing up general mcchrystal to focus on strategic and coalition aspects of the war. the critically important training command has moved from in "t it's new commander bill caldwell is setting conditions for the critically important expansion and improvement of afghan support forces. u.s. combat forces will assist in afp' forces by training and partnering with afghan units at all levels. a concept effective in iraq only recently developed in afghanistan. furthermore we're working not just to support it but to mobilize and enable local citizens. we're now working not just to secure the afghan population, but also to mobilize and enable local citizens.

engaging them in community defense initiatives so they can help defend themselves against extremist elements trying to establish control in various areas. we have also worked to improve coordination between the military and all other agencies of government. wearing his u.s. hat, general mcchrystal worked with ambassador eikenberry in the u.s. embassy in developing a u.s. civil military campaign plan. further, we have established a joint task. detain the operations and afghan threat finance sale, an information on task force, and a coordination cell to oversee remmen silliation and reintegration efforts and each will partner with embassy, usaid and other inner agency officials as did similar elements in iraq. u.s. forces have also established partnerships between battle space owners and senior civilian representatives that several echelons and regional commands east and south and

launched other initiatives to improve unity of effort in north an west as well. general mcchrystal is also transforming the way our forces operate. he has develop add coherent and focused campaign plan for the entire theater. assisted by general rodriguez and his two-star french deputy. general mcchrystal was issued new counterinsurgency guidance to ensure focus on the critical task of securing the population in order to help facilitate afghan-led reintegration of reconcilables. a core objective of any insurgency aefrt and updated the tactical directive and taken a number of other steps to reduce civilian casualties without kpra mizing the ability of our services to operate. as we focus on the u.s. civil military effort we also recognize we are not fighting this war alone. in addition to our afghan partners, u.s. forces are part of an international coalition that includes elements from 43

countries. our isep partners recent lit committed some 7,000 additional soldiers and more likely to be pledged in the international conference plan for january in london. allied forces have been fighting skillfully and bravely and taking casualties from iraq to kabul and ma czarry sharif conc some partners have declared end dates for their combat participation, there is hope they will be able to continue to contribute in other roles. one of the most important developments over the past year has been the impressive determination of pakistan's efforts against extremists that threaten the stability of a pakistani state, and the chairman noted this earlier. pakistani operations have significantly degrated pakistani taliban groups. these are the largest and most

successful operations pakistan has conducted against internal extremists. we should acknowledge the losses of pakistani military, frontier corps and police have sustained in the course of these operations. to be sure these operations have not directly engaged the sanction wares of afghan taliban groups and pakistan or those of some of the extremists i described earlier. however, the determination of pakistan's extremist leaders an important step forward and does facilitate our efforts to degrade the groups in the border region and to defeat al qaeda. in short, success in afghanistan is again of enormous importance, and it is attainable, but achieving our objectives will not be easy. to paraphrase what the great ambassador crocker used to say

about everything, everything in afghanistan and it's hard all too time i believe we can make important progress in zefrg tasks. to reverse the taliban momentum, to improve the security of the afghan people. to help improve afghan governing. and to help combat forces in a way that does not jeopardize that the progress that has been achieved. the american military has been at with war or had forces deployed continuously since saddam hussein invaded kuwait in august of 1990. for the past eight years we have fought terrorists and insurgents in afghanistan and iraq. the forces have been tested

during this period as never before. but it has also performed as never before. it is without question the finest fighting force and in particular the fighting counter insurgency force our nation has ever fielded. the determination, skill, initiative and courage of our soldiers, sailers, airmen, marine and coast guardsmen are awe inspiring. so are the sack faces they and their families make every day. it continues to be the greatest of privileges to serve with them and with our civilian and coalition partners in such important important missions we are taking. i want to thank you and your colleagued for the continuous support you provide for our men and women in uniform and their civilian partners. >> thank you very much, general. >> thank you for the opportunity to present my views on

afghanistan today. i would like to ask that my full statement be submitted to the record. >> without objection it will be. >> last week in a speak president obama presented the administration's strategy for afghanistan and pakistan. his decision came after a full review. i'm honored to have been a part of the process. i believe the course the president outlined offers the best path to stabilize afghanistan and to ensure al qaeda cannot regain a foothold to plan new attacks gns us. i can say that i fully support this approach. i consider myself privileged to serve as ambassador to afghanistan. working with civilian expert who is form the most capable embassy

anywhere in the world today. i'm extraordinarily proud of them. i'm also honored to testify against jack lou as well as my old friend, general david petraeus. yes, i also had the honor of testifying with general stan mcchrystal. my professional colleague and friend of many years. general mcchrystal and are united in a joint effort where civilian and military personnel work together every day side-by-side with our afghan partners and allies. we would to the accomplish our objectives without in cooperation. as you know, mr. chairman, the united states is at a critical juncture in our involvement in afghanistan. on december 1st the president more troops. hastening and improving the

training of the afghan national securityorce >> on the civilian side we aim to increase employment and provide essential services in areas of greatest security while improving critical ministries in the economy at the national level. these steps taken together we believe will help remove in surf gets from the battlefield and build support for the afghan government. as the president said we'll be clear about what we expect from those that receive our assistance. after a difficult election the afghan government shows signs of the need to deliver better service, governing and security. we await urgent concrete steps though in a number of areas. we'd like to briefly discuss the three main pillars of our effort in afghanistan. security governing and development in his testimony

yesterday general mcchrystal talks about building national forces. i've made a special point of getting outside of kabel to see conditions first hand. i fully concur that the security issue remains serious. conditions firsthand. i con cure with general mcchrystal's assessment that the security is critical. it's critical to regaining the initiative. i'm confident as these troops arrive the situation will stabilize and will turn in our favor. we can work with the afghan army and police to take a larger role in providing for the security of our people.

moving on from security, the second pillar of our comp rehence i havive strategy focuses on governance, or overall goal is to improve to afghans see the benefit of supporting the international government and the insurgency loses support. as general mcchrystal has pointed out. the afghan's government's lack of credibility with its own people. our approach at the national level is on improving key ministries, by increasing the number of civilian technical advisers and providing more development assistance directly through the ministries budgets. by focusing on money ministries that deliver official services and security we can celebrate the building of the afghan

government to so social security accountable. we're working jointly with the military. through district development working groups and district support teams which help build afghan capacity, particularlies in the areas of greatest insecurity in southern and eastern afghanistan. underpinning all efforts is the need to combat corruption and promote the rule of law. with our assistance the afghan government is steadily building law enforcement institutions to fight corruption, organized crime e and drug trafficking. in his inaugural address president karzai encouraged us by his statements. the station of poppy and trafficking of opium also continue o have a very da

debilitating effect. effortsly law enforcement agencies and the military to detain traffickers and drug shipments and support for agricultural development. the narcs problem, of course, will never have a solution without economic development. in recent months we've adjusted our approach to focus on building key elements of afghanistan's private economy. increasing the emphasis on agricultural. enhancing collection and improving the coordination of assistance within the united states government and international community. these steps were taken to improve the lives of ordinary afghans and contribute directly to government and lessen support for tp insurgency. rebuilding the farm sector in particular is essential for the

afghan government to reduce the pool of unemployed men who form the recruiting base for extremists groups. we estimate some 80% of the afghan population gets their income directly or indirectly from agriculture. mr. chairman, i want to emphasize, we're concentrating on what is essential and obtainable. the president's strategy is based upon a pragmatic assessment of the security interest of the united states of america. we do need a viable afghan government so our forces can draw down and the investment of the united states taxpayer dollars can be reduced. in closing i would like to mention two important risks we take in carrying out of strategy. in spite of everything we do

afghanistan might take over on a timely basis. the second is our partnership withing pakistan. the effort we're taking in afghanistan likely to fall short of our strategic goals unless there's more progress in eliminating sanction wares used by the afghan, taliban and their associates inside of pakistan. if our afghan partners and their allies do their part, i'm confident we can achieve our objectives. i say this with conviction. for the first time in my three tours of duty in afghanistan. all support for the president and increasingly of our allies. achieving our goals in afghanistan will not be easy, but i'm optimistic we can succeed tw the support of congress. our mission is now one of the government's highest priorities.

we will soon have increased our civilian presence in kabul threefold and in the field six fold just over this past year. we will need more. u.s. assistance ask a fraction of the total spent in afghanistan over the past eight years. mr. chairman, success is not guaranteed, but it is possible. with the additional troops and the other resources provided by the president and with the help of the united states congress we will work tireless to ensure al qaeda never finds refuge again

in afghanistan. >> thank you very much, mr. ambassador. let me just say to my kpleegs and the committee, there's there's a balance as everybody knows. i've always tried to give everybody a longer period of time to question because then you can develop sort of a train of thought. but we have a lot of members. everybody wants a chance. we have limited time. i hope everybody is agreeable with that and we'll go with a six-minute round under the circumstances. general, let me thank you for your comments about the troops. every one of us here every time we go over there we are struck by how extraordinary they are and the contributions they're making. our thoughts are very much with them we're grateful to you and all of the leadership and to all

oaf them. it seems for the moment the question of hedging the bet is very much on the table with respect to afghanistan's leadership. i wonder if you could, general, share with us the recent pakistani military offenses, we have yet to see their operations directed after the afghan, taliban or al qaeda strongholds. the military has continued to work with rival taliban factions, including those led by bahadur, believed to be involved in the afghan surgeonsy and lin.

ku could you share with us how to convince them we have a long term commitment to the region, we're not about to leave that, and we need them to focus on these other networks and groups. >> mr. chairman, first of all as we were discussing the development of the last ten months are really quite significant. the pakistani leadership, the civilian populous, the clerics and the military have all united in recognizing the internal extremists are the most pressing threat to their country. more pressing than the traditional threat to the east. they've taken action in response to that recognition as you

noted. did not just clear and leave they're already looking forward to ultimate transition. and as you noted gone after the group held by the late. that operation is now drawing to a close. they have moved furd north to go after some of those who got away. in these operations they are encountering and conducting some fighting against those that are part of that extremist syndicate

that i described that does do fighting in eastern afghanistan. certainly not the afghan taliban. with respect to how do they eventually take those on, i think frankly that the effort to demonstrate a sustained substantial commitment to pakistan. pakistani counter insurgency fund also very important given the history we have with the country and having left it a couple times before. this is process of building trust. building mutual confidence and building a relationship in which the mutual threats we face are

addressed by those on the ground. as i mentioned and as you mentioned we have to recognize the enormous sacrifices that the pakistani military frontier corps and police have made recently. and also the losses their civilians have sustained. but it's about building a partnership that can tran send the issues we have before where we have left after supporting one operation or the other. >> as you answer, could you also tie into it the question of the political reforms? because as you know in order to sustain stability you have to have reform. fundamentally the pakistani military has been adverse to changing that. they've always historically used the region to promote the perceived interest in afghanistan. and those relate to the

perceived interest of india. if you could perhaps share with us about how we establish a long-term relationship there are some linkages to other issues. >> just to pick up where general petraeus ended the relationship between the multiyear commitment, the relationship between maintaining long-term security assistance through the program while we wrap up counter insurgency training is critical. the action the pakistan military is taking. the question is are we there for the long term relationship? it speaks to the long term in a way that counter insurgency does not. it's critical that we may tanina

balance there. it's not just what they do in the military maneuvers that are important. are we there in the post military to help them with the reconstruction? with the rebuilding? that gets to the question you're p),v @ @ @ b@ @ @ @ @ @ @ @ @'v address.

as you know in recent months there have been unprecedented months to extend certain political rights and other rights to the those that live in the sort of tribal areas. rights they've never had before and i think that's an important step forward as well. >> i appreciate you saying that. i agree with that. those areas, rights they've never had before. zb . >> i appreciate you saying that. i agree. >> ambassador, i just have a couple of comments and the time when i'm permitted to respond to this point. as your organizing of the embas embassy, staff has observed their debty ambassadors working

in afghanistan they face considerable bureaucratic obstacles. maybe from ourselves. i'm hopeful that you're cognizant of the way they work. like wise they need to be with the regional military commanders. our impression of these staff is there are some problem there is. they're not beyond working out. but these are our praks. we've had all sorts of estimates of how much members of the army of afghanistan, how many members of the police force are going to be trained. i ask this because press accounts of the army have gone

all the way from 200,000 to 400,000, which is quite a difference. now secondly and general petraeus can maybe give us some insight on this. if you could give us a figure of what our goal is and let's say this is obtainable. there are press accounts from president karzai's visit with gates this morning that president karzai said we're going to need a financial support in afghanistan until 2024. i'm not sure how the president arrives at that time, which is 15 years away. but i am interested in the amount of money. in other words, we pro mote the army for year to year.

maybe part of the response is the police force may not always be under the central government. somehow there has to be resources in afghanistan, either at the central or regional levels to pay for this. or sat some point regardless to whether or not our troops begin to leave, somebody will need to be there. namely the afghans that we have trained. so this is an area i haven't seen out really. will you help us with the numbers and longevity of that? >> senators, i think in previous testimony in the past week or so what has been identified is we have established goals by years

for now for the afghan army and the afghan national police. to give you a sense of the that the a&a right now is roughly 96,000 or so. the goal by october of next year is 134,000. the anp is 94,000. goal by the end of next year is 109,000. along with that you have heard theses s s s aspirational goal. others stated we could envision afghan's security forces numbering as many as 400,000, an army of 240,000 and a police includes border police and a variety of other elements beyond just local police right now we want to reach our annual goals.

there have to be programs that run beyond that without yes. but we want to first confirm that we can in fact meet those goals. to do that, by the way, we have to make significant improvements. not just in recruiting but also in retention. >> the pay to these people. >> the pay had just been increased. there is essentially a benefits package to work out how tow, in fact, recruit and to attain more afghans for those security forces. beyond that a shift in momentum will be the best recruiting tool of all. you want to be the good guy. when you have doubts about that you will lose your bets. there's no question as president

karzai was highlighting that afghanistan will require substantial funding for years to come in a whole host of areas, not the least of which is their security forces. i would submit it's easier to maintain a certain number of afghan forces than it is to maintain the number of u.s. coalition forces required to compensate for their actions. if you get up to the 400,000 range, and again no guarantee that's where we're going. if we end up there that's over $10 billion range per year. that highlights the importance of helping afghanistan gop and exploit the mineral wealth. there is enormous potential in afghanistan to dramatically

increase the national revenue but if and only if it can get the security and the the infrastructure that enables them to extract that mineral wealth and get it out to the market. >> thank you very much, senator chairman. let me welcome all three of you here this morning. i know you've been busy testifying and meeting with members of congress. let me underscore the comment made by chairman kerry, again, general. when you mentioned 1990, it's been that long in time that we've been asking our men and women in uniform to be on 24-hour watch, so to speak, in that part of the world. it's a long time. all of us are deeply grateful to them. whatever the differences about policy questions, the unfounded respect we have for the men and women in uniform that represent our country all over the world every day needs to be conveyed as possible as we often can.

please continue to do that for us all. as i think jack lou pointed out, this is of utmost importance. how we secure the nuclear arsenals in pakistan. maybe i should have mention that had first in terms of priorities. and obviously dealing with violent extremism. all of us here have a lot of questions about this. i respect on one hand the desire to have some sort end date strategy here. almost there's an inherent problem as you look at this massive difficulty. i'll ask chairman for a full statement of my opening comments for the record. let me, if i can, and i'll raise this with all three of you and you decide which of the three of you is best able to respond to this.

again, the pakistan part of this equation is most troubling to me in the short term. obviouslily if we don't secure the nuclear arsenals all of these efforts, of course, would seem to pale by comparison. president has been under increasing pressures from both the members of the military in his own country as well as those opposed to his close relationship with us. give us some sense if you will what you think the current political intentions of pakistan. whether or not they imperil civilian rule in the country. how serious are those threats? >> if i could let me turn to it to the ambassador of

afghanistan. i'm probably not the best to talk about the situation inside of pakistan. >> let me answer briefly and then on the core security question turn to general petraeus. the difficulties are not new. we've been working with the current government to try to help build the institutions, not just the people, so there's the ability to rely on ongoing relationships regardless of the leadership. without addressing the kind of day-to-day risks that they deal with. there's still a lot of progress that needs to be made. the tension, contentistant tens between the military concerns and public concerns is debated.

the support that we've shown over the last year. in terms of mapping out a five-year strategy of supports for civilian leadership is really central to what we've been trying to do. shore up the idea of the need to invest in lasting civilian institutions. >> let me ask the question. i think you've answered this already with some of this. my understanding is the success of this program depends on a willing partner in afghanistan. >> i think we do agree with that. because the actions being taken are carried out by the military, it might be helpful to have general petraeus comment on the relationships we've had over the last year as well. >> as one who has been in

pakistan four or five times in the last six months, i've had a lot of conversations with military leaders and civilian leadership. i don't think the current challenges imperil civilian rule. again, i don't see the prospect or desire for anyone to change civilian rule. we've worked very hard to establish relationships of trust and confidence with the pakistani military and especially the pakistani army. again -- we're making up for the lost generation. but i think we have have build those relationships patiently and stronger. chairman mullen has done a great

deal of that as well with substantially augmenting the number of individuals in the office of defense representative pakistan pakistan. he was promoted to three stars. what we're trying to do is to build these relationships to where they become a partnership in confronting what clearly are >> thank you gentleman. thank you mr. chairman. mr. chairman, thank you and certainly thank each of you for your service and i very much appreciate you coming and being with us today. i know this is somewhat painful and we appreciate it. general a tray us when you talk about the surge in iraq, those have a sense of a really strong commitment that - really

encompassed the whole country. i know in march there was announcement of what we were doing in afghanistan. while it was spoken that it was narrowed it was actually pretty expanded from the standpoint of what we'll do in afghanistan. looking at the matrix, of general generals it was an all out effort. secretary gates realized this was a full out nation building effort for lack of a better description and now thats in the rowed some so we hear sort of a partial effort taking place as it relates to the country itself and sort of our leaving a country that's little different than the type of country we're trying leave in iraq. i guess what would be good for me - clarification wise - would be to understand what you see, afghanistan being when we begin

to draw down troops, whenever that is. and it's ability to actually maintain itself successfully. i know we're talking about pulling back away from rural areas into population centers. what i see is a country that's candidly, not unlike what we're discussing in pakistan where you have a lot of areas out there that are not administered and not really governed if you will. there that are not administered, not really governed, if you will. so if you could describe fully what you see us having there, what the role it would have there when we begin withdrawing, i think this will be helpful. i think it's confusing as to what we're actually doing there. >> thanks senator. and thanks as always for looking after the great 100 first airborne division. >> yes, sir. >> sir, i think it would be

worst reviewing. it's a result of the deliberations that took place with president obama and the national security team. they're pretty straight forward. they are to reverse the taliban momentum, to deny the taliban access to and control of population centers and lines of communication. security forces, increase the size and capability of the security forces and other local security forces to begin transitioning security responsibility to the government within 18 months and selectively build capacity to the afghan government particular any in key ministries.

that's tying it to a central government to be seen as serving the government, rather than preying on them. as those conditions appear in other areas, we can then thin out our forces. i want to be very clear that afghanistan is not iraq. it's also, by the way, not vietnam, it's not a lot of other places. it's afghanistan. it has plenty of its own challenges, but we have to look at that. but the fact is the way we thinned out in iraq as we were able to get iraqi security forces and iraqi officials capable of taking over local responsibilities is somewhat similar to what it is that we want to do in afghanistan. and you keep certain capables there longer than others, again,

as in iraq. what we're doing in iraq right now, for example, is working to enable the forces. so they can keep the heat on al qaeda and reduce the frequency of the kind of horrific attacks that we yesterday. the month of november, for example, saw the lowest level of security incidents and the lowest number of violent deaths in iraq since we got good data post liberation. so that would be the concept. i think that's sort of the vision of how this would go. >> i know we have a briefing later today in a security setting. i know we'll talk through a lot of that at that time. and i know our time is very short today. none of us like being where we are. i know this is all complex.

we're glad that we have people of your caliber doing what you're doing. as we look at this whole issue right now and consistents of a brand of type of activity occurring around the world when people are unhappy with what's happening in the country. that's a concern that you've expressed. i know that's been expressed at the state department. i think the difficulty that we have is envisioning that in each of the countries is have these issues we end up with an all out building of a country. because it's easy to pay somebody to take up weaponry against the government. looking into the future efforts always developing different type of strategy that don't end up being nation billing. >> i think it would be accurate

to say we are developing strategies that are appropriate. amounts of nation building depending on the problems that afflict those countries. i think you've raised an important point. that is trying to figure out how we can without, again, conducting complete all-out nation building levels of assistance, keep countries from becoming failed states. central command has a couple of candidates for that. as you know, within the area of responsible. >> thank you, mr. chairman. thank you. thank you for all being here today. and for your selfless service to

our nation. there is a danger in sending additional troops to afghanistan could push militants into pakistan and further destabilize that nuclear armed nation. do you agree that there's a risk that sending more troops could just push militants over the border? >> there is indeed a risk that our operations could lead some of these elements to seek sanctuary. that is why we're working very hard to coordinate our operations more effectively with our pakistani partners so they

know what our cam plain plan is and can anticipate and be there with a catcher's mitt or an anvil, what are the it may be, to create these individuals. we have actually conducted some operations of medium scale in the regional command east where that kind of coordination was conducted. and before we launched the operations, the marines, we also briefed our pakistani partners. we have in fact gun just recently, literally in the last several weeks an effort to lay out in real detail our operational campaign plan and then to coordinate that with the actions of the pakistani elements. >> i appreciate your description of what we're doing and what we're laying out to the pakistanis. isn't it the case that they're going to have to move against all the militants in that area if this is really going to work? >> well, they're going to have to move against enough of them so that obviously their

capabilities sufficiently degraded. i don't see any of these kinds of efforts as unconditional surrender, planting the flag on the hill top and going home to a victory parade. we need to beat them down to a level where they don't threaten. that was the point of degrading the taliban to levels manageable by the afghan security forces. i understand that. they do move gns the different pockets that exist. >> over time, no question. they have to again deal with these. they present an internal extremist threat. now because we are going to be pushing now. so they need to be able to do this now. >> as they -- as we conduct operations, senator again we

have to coordinate what we're going to do with them. i should note we need to also be realistic that there's a limit. they'll say you can only stick so many short sticks into so many hornets nests at one time. they have a very impressive military. but there are limits on their capacity. that's why the insurgency capability fund that you provided for us and the foreign military financing has been so important to help them with that. >> there's a myth the pakistanis fear we will abandon them. however, the pakistanis do not support military escalation as expressed concern that it will further destabilize the situation on both sides of the border. if we were to reduce our troop levels in afghanistan, by

maintaining an ability to counter terrorism operations in the region while providing the pakistan niece robust financial support, wouldn't that communicate our commitment to pakistan and be more responsive to their concerns about the instability caused by our massive military presence in afghanistan? >> senator, i'm not the ambassador, but i will comment on this. with the reduction of u.s. military support at this juncture, inside afghanistan, the security situation in afghanistan would decline. i think it would decline over time with a lack of u.s. commitment dramatically in the security in afghanistan will breed insecurity within pakistan. >> general, there's no doubt that al qaeda has found safe haven among militants in the region. is it fair to say there are continuing differences between the afghan taliban and al qaeda over their strategic goals that provoke tensions between the two

groups? >> there are indeed periodic tensions. then there are tin deed periodic reconciliations, if you will. again as secretary gates explained quite effectively in his testimony, there is a relationship between really all of these groups sometimes the taliban are up and al qaeda is not quite as much in the forefront. other times it's reversed. >> i understand that. but the description is surprising to me. general mcchrystal in his nomination process told the senate armed services committee that continuing differences over strategic goals could persist and promote tensions between the two groups. it strikes me that it may not really be at a level of symbiosis, but i thank you all.

>> thank you mr. chairman. best of holiday season to you. we hope to enjoy it with the families. i'll let you do that, mr. chairman. we'll get there. ambassador, with a twinkle in your eye, acknowledge that we were encouraged by president karzai's statement about improving the government, reducing corruption, et cetera. but you also said in your nonprinted remarks i think that you were very impressed all elements of the national power was deployed you followed that with a statement we should work to improve the ministries and confidence of the afghan people. are we impressed but not yet certain that his words of

corruption, reduction and things like that were a statement and he >> senator, we work in partnership with the government of pakistan and president karzai is the duly elected president of the country and he's our partner. we have four areas we need to concentrate on in the partnership with afghanistan. first, is in the area of law enforcement. we're making progress in that area. secondly, he's going to be essential that we improve the finance all right. accountability working with competent ministries. we have a good program that's been under way now for over a year now. taking essential ministries of afghanistan and working with them to improve their procedures in which they reach a level then of competency and we put funds in directly through them. we have a more expansive program this year planned. working with the international