p.m. eastern here on c-span. until then, we have the were calls and e-mail from this morning's "washington journal." . l street journal." host: we would like to get to your calls. we will begin with chantilly, virginia. mauricio of the republican line.

caller: we need to understand where google and youtube, from -- they were bought last year by the cia. we all a lot of money to china, ok? the deal is it, the government is controlling everything. when you put a video on youtube now days talking about government, it is being removed. it is being removed because they don't want people to know the truth about the things we do around the world. i do not know where this is going to go. but we need to wake up. host: before you go, you asserted that the cia has a majority shareholder interest in google? where did you find that information? caller: besides c-span, i don't

listen to the media because i cannot listen to the media. i get my information through a website network that is growing so fast. they only started last april. he was only in one state and now he is in 11 states. host: you heard about this alleged cia investment in google from there? caller: it is a lot of information about health, government -- i encourage everybody to go to the network. host: "the washington post" today. this is more about other companies that concerned about their security.

host: back to your calls. federal way, washington. sure when on the democrats' line. audicaller: i say, where's the

beef? article points out where we are vulnerable through google and our government agencies and things, but at the same time we are doing the same thing to china. google, that is the nature of the beast. it goes with the territory. google can pull out of china if they want to, but that is not going to stop a cyber war. host: north dakota from the democrats' line calling us from illinois -- eddie from the democrats' line. he is gone. a headline in "the wall street journal" -- what is new front among cold war foes. the next call is from austin,

texas. caller: good morning to you. i was just reading the business section oft ofthe oregonian -- business section of "the orgonian." that other companies would follow their lead. but i thought it was kind of interesting, just a couple of days ago, several chinese authors over there accused google of digitizing some of their books on google books without compensating for getting permission from of these offers. now we are hearing that google will fended -- offended the chinese government', that the hackers are trying to hack their information.

i think googled has been known to steal works and not compensate a lot of authors right here in this country and it has gotten people were right. and i think they tried to do this over in china and china basically said, no way. can i also just real briefly comment -- i heard a guy called earlier about? host: very briefly. caller: you asked,ç why would't the government -- would the government starts swine flu? was in our government behind infecting the blood of the tuskegees with syphilis? host: usec in 2010 you are concerned about the government doing this? caller: i don't put anything past them. in fact, a couple of years ago john hopkins university went to the poor neighborhoods in baltimore, maryland, and east st. louis and deliberately and without informing the poor

people in those areas, the black people, that they were deliberately putting lead in the soil, and that was reported and "the baltimore sun." host: let us move on to ogden, kansas, norman on the republican line. caller: i think any company should be allowed to move out of any country that they want to. yes, there probably is a lot of spying going on. but we people here in the united states should be able to do what we want to. as long as it is legal, that is as long as it is legal, that is what the constit >> we're going live now to capitol hill where president obama is to speak to the democratic caucus, which has been meeting on the economy and jobs. this is being held up the capital visitors' center, live on c-span.

[applause] >> mr. president, on behalf of the chairman, the leadership of this house under the able direction of nancy pelosi, and the courageous work of each and every member of the house democratic caucus, we welcome you here to the congress of the audit states, the people's house. -- the congress of the united states, the people's house. [applause] we can proudly say each and every member of this body has worked to pass the three pillars

of your agenda and we can say that with confidence because we have worked hard under the leadership of one of the ablest leaders of this country has ever seen and certainly the house of representatives has ever had a chance to experience, our speaker, our leader, nancy pelosi. [applause] >> thank you very much. i think the vice chairman for his generous introduction, i thank him for this magnificent issues conference that brings us together here and now, honored by the president of the united states. john is not here. he has been called away on a family member, but he left this in good hands and a fine

foundation for this conference. thank you for your leadership on this as well. mr. president, we have a conference dedicated to securing jobs and securing america. because of the leadership of john larsen, we have been focusing on innovation, recognizing innovation begins in the classroom and changing energy policy essential to it and essential to all that is health policy, all of which, bills have been passed by this house. how appropriate it was to have our issues conference be gone by keynote speech by the ceo and chairman of google to honor us with his present last night. [applause] -- with his presence last night. he gave a very patriotic speech of science, innovation, job creation, and how honored he was he was with us at the same time

he was standing up courageously for freedom of expression in china and throughout the world. [applause] we also this morning -- i think he might be an italian -- wasn't that a wonderful, patriotic speech about jobs? [applause] our friends in labor and a national security workshop on small business, all in keeping with the obama agenda. so here we are this evening, we are so very honored the president is with us. as you know, we have been engaged in conversations about how we reconcile the house and senate legislation. so we have an opportunity to work with president the last few days, over a longer time, but i say the last few days because at

the same time we saw this great president address the issue of haiti -- [applause] as a person extending comfort to those he could reach with any connection to haiti. as the commander-in-chief, deploying our troops and resources to come to the aid of the people in haiti. and as the president of the united states, speaking to leaders from around the world, one at time about how they could work and help in this effort. we saw leadership, we saw compassion, we saw american values, we saw president barack obama. [applause] how beautifully, he said in his remarks to the people of haiti, you will not be forsaken, you

will not be forgotten. you speak for all of us in that regard. thank you, mr. president. [applause] so here we are at this issues conference, i see the market is over 10,700 today, an increase of 4000 points since the president became president of the united states. [applause] word is the gdp will be at 4%, which was down -6% one year ago, a 10% difference since the president became president of the ad states. in the course of the day and our visit to detroit earlier at the invitation of chairman dingell, we heard over and over again, thank you for the recovery package. it has helped us invest in new technologies, the innovative, hire people, take our country

into the future, and as eric said last night, under the boughs of our fathers as president kennedy said. if we are to honor the vows of our nation, we must be first and we intend to be first. in that spirit, mr. president, i tell you how proud i am of my members all the time. since last we came together, you talk about health care, they have passed the health-care bill. since then, they have passed reform for wall street and jobs for main street. i'm very, very proud of them. [applause] now let us show our president how very, very proud we are of him as we welcome the president of the ad states, barack obama. -- the president of the united states, barack obama. [applause]

>> thank you. thank you, house of representatives. thank you. thank you very much. thank you. everybody, have a seat. thank you, madam speaker, thank you, outstanding work, to all the leadership, thank you for inviting me here today. thank you. [applause] the house of representatives has been an incredible partners throughout this year, but i hope you don't mind me singling out one of the best partners any president ever have, that is unbelievable speaker of the house, nancy pelosi. i was in california doing a dnc

event and nancy introduced me. i said she is smart, articulate, she knows her issues, but what people don't understand is she is tough. [laughter] she is tough. she is tough for members, for this caucus, and she is tough for the american people. [applause] her extraordinary leadership is one of the reasons the house of representatives has consistently set the bar on a whole host of issues and legislative accomplishment that we have seen this year and that we will see this year coming up. before i begin, i want to give all of you a quick update on our urgent efforts to save lives and support the recovery in haiti.

our thoughts and prayers go out to all people of haiti. haitian americans to have family members, one of my top advisers is an asian american and has cousins and aunts and uncles who are still missing. -- is a haitian american. his family priest that baptized him, he is suspected dead. those stories ripple throughout the community, but obviously a ripple throughout all humanity, what we see that kind of tragedy we are seeing. i wondered here to understand i have directed my administration to take swift and coordinated and aggressive action. i have made it clear to my national security team that this has to be a top priority, across agencies, departments of defense, a part of state, usaid, all of the agencies

involved -- called lan security, fema, they're all involved making sure we can get in there as quickly as possible, engage in search and rescue, provide medical attention and long-term help with the recovery. [applause] our highest priority is the safety of american citizens. we are currently airlifting injured americans out of haiti. i know many of you have constituents desperate for news of their loved ones and you should direct them to the state department website for a phone number and e-mail address and let them know we will not rest until we have accounted for every single of our fellow americans in harm's way. the first wave of our rescue and relief workers arrived on the ground yesterday. search and rescue teams are working around the clock to save lives. more waves of major assets are going to be arriving. this morning, i announced at

immediate investment of $100 million to support our relief efforts in the early days of this crisis. [applause] most of this is for the basics -- life saving equipment, food, water, medicine. this investment will grow over the year as we help our neighbors embark on what is going to be a long-term recovery. i want everybody in the house of representatives to understand that this is a moment for american leadership. this is a time when the world looks to us and they say, given our capacity, given our unique capacity to project power around the world, we have to project that not just for our own interests, but the interests of the world as a whole. my national security team understands i will not put up with any excuses for us not doing the very best in this time of tragedy. [applause]

it is good to be here with all of you. i want to make a guarantee that 2010 will not be a boring year. [laughter] let me say this -- 2010 will mark a year of remarkable progress for the american people. much of the reason for that is because of actions that were taken by the house of representatives. i want every to go back because sometimes in this town, memories are short. when this congress convened one year ago, after eight years of failed policies and decades of broken politics, we faced down the worst economic crisis since the great depression. we knew that we're going to confront an unprecedented battery of challenges, not to mention long-simmering problems that had been put off for decades.

we new solutions will not be quick and they would not be easy and they would not always be popular. but we made a decision that we're going to govern. there were easier path to take. because we knew when i was sworn in we had already lost 650,000 jobs and we're going to lose another 700,000 jobs of the number -- the month i was sworn in. we knew. we knew that the recovery coming out of this extraordinary recession is going to be long and hard. the easiest thing to do what had been to not take tough decisions and point fingers. there is a long and hallowed tradition in washington of doing that. but that is not what you did. think about what has happened as a consequence. in one of america's darkest

hours, you answered the call. time and again, you stood up and led. thanks to which you did, we can say now what we could not say when year ago -- america is moving forward again. [applause] the economy is growing, job losses have slowed to a trickle, job losses over the last quarter of 2009 were still unacceptable, but they were one-tenth of what we endured in the first quarter. so you have a lot to be proud of, but, let's be honest with each other. this is still a tough environment for a huge number of americans. this is a tough time for this country. i know which have seen in your district, the same thing i have

seen in towns across this country, the same thing i read about in letters each and every day. pain and anxiety and sometimes anger felt by our friends and constituents and our fellow americans. there are 7 million americans out there who have lost their jobs over the past two years and they still need our help. what they can expect from this administration and i know what they can expect from you did is that we're going to have a sustained and relentless focus over the next several months on accelerating the pace of job creation. that is priority number one. [applause] last month, i outlined the next steps i believe we have to take to spur job creation and the house has already acted on many of these. first, tax breaks and loans to help facilitate the business, additional investment in putting people to work, and modernizing our national of the structure, third, incentives for consumers to make homes more energy

efficient, which does not just create jobs but saved consumers money and put this on the path of energy independence. i want to thank all of you for stepping up to pass a jobs bill along these lines. [applause] if these were ordinary times, the legislative victories of this congress, the ones we have already accomplished, would be historic by any measure. think about the enormous challenges we face, that explains why some of the things we already did have not got as much attention as they deserve. what is so amazing is out of the major initiatives we were talking about before we took office, you have either completed or set the stage for almost all of them. because of what you did, we cut taxes for small businesses in 95% of working americans, just as we said we would. because of what you did, women are not getting equal pay for

equal work. [applause] because of what she did, 4 million children now have health insurance that did not have before. our veterans know they will be taken care of in a way that had been neglected for too long. [applause] because of what you did, there will be new rules preventing credit-card companies from ripping off americans and tobacco companies from targeting our children and there are new laws in place to protect from reject part -- to protect consumers from predatory lending. [applause] because of what you get, young people and old people like have new pathways to serve this country to our national service legislation. because of what you did, we strengthen protections against hate crimes based solely on the war, what you look like, or who you love. we made historic investments, we have an extraordinarily it with

us today in our corporate community and in our technology communities. he knows what we have done in science and technology and the clean energy economy. historic investments. the largest that have ever been made. we made historic investment in education, so that we are fully prepared to win the race for the 21st century. we reformed our defense spending to cut out waste and save taxpayers billions of dollars while keeping us safe. the " the washington times" not known as a big promoter of the obama agenda point out we succeeded where his previous administrations have failed because of the work done in this congress to finally get serious on some of these spending cuts that had been talked about for years. [applause] this house passed common sense financial regulatory reform to help prevent a crisis like this from ever happening again.

each achievement represents promises kept. we are not stopping. today, we are on the doorstep of accomplishing something washington has been talking about since teddy roosevelt was president. that is reforming health care and health insurance here in america. [applause] believe me, i know how big of a lift this has been. i see the polls. i get 40,000 letters every day and i read a stack of them each night. i catch the occasional blog post or cable clip that breathlessly declares what something means for a political party without talking much about what it means for a country. i know that the virtues of this legislation for americans with insurance and americans without it have been entirely obscured by fear and distraction.

but i also know what happens once we get this done, once we sign this law -- sign this bill into law. the american people will suddenly learn that this bill does things they like and doesn't do things people have been trying to say it does. the worst fears will prove groundless and the american people's hope for a fair shake on their insurance company for quality, affordable health care they need will finally be realized. this year alone, this reform will bend some of the worst practices of the insurance industry forever. they will no longer be able to refuse coverage for pre-existing conditions for children or drop coverage when people get sick and need it most. they will no longer be allowed to impose restrictive annual limits on the amount of coverage you receive, lifetime limits on the amount of benefits received. they will be required to offer free preventive care like checkups and routine tests and

mammograms at no cost. patients will have rights. they will get what they pay for. that's just the beginning. all told, it is reform of finally offers americans and security of knowing they will have quality, affordable health care whether they lose their job or change their job or get sick. [applause] by the way, it is reform that begins to bring down costs for families and businesses and governments and for those of you who are concerned about the deficit, we have the congressional budget office that says in the second 10 years, this brings down the deficit by a trillion dollars, in the first 10 years, it brings it down by over $100 billion, you have nothing to apologize for what it comes to talking about deficit reduction. the responsible thing would have

been to do nothing in that is not what you decided to do. this represents the big step towards deficit reduction in years. [applause] so, i know everybody in the media is in a tizzy about what this is going to mean politically. if republicans want to campaign against what we have done by standing up for the status quo and for insurance companies over american families and businesses, that's a fight i want to have. [applause] if their best idea is to return to the bad policies and bad ideas of yesterday, they're going to lose that are given. what are they going to say? the old system worked well, let's go back to the way it was? that is not going to appeal to seniors who are now seeing the possibility of fed doughnut hole finally closing so they can finally gets discounts on prescriptions. that will not appeal to small businesses to find out all the tax credits they get for doing

right by their employees, something they have wanted to do but may not have been able to afford. it's not going to be appealing to americans who for the first time will find out they can provide coverage to their children, their dependents. all the way at the age of 26 or 27. that is why i will be out there waging a great campaign from one end of the country to the other, telling americans with insurance or without insurance what they stand to gain, about the arsenal of consumer protections. [applause] about the long-awaited stability they will begin to experience. i will tell them i am proud we are putting the future of america before the politics of the moment. the next generation before the next election. that come after all, is what we were sent appear to do. standing up for the american people against the special

interests. solve problems we have been talking about for decades, make their lives a little bit better, make tough choices sometimes when they are unpopular. that is something everyone of you who supports this bill can be proud to campaign on in november. i know some of the fights we have been going through have been tough. i know that some of you have gotten beaten up at home. some of the fights we will go through this year are going to be tough as well. but just remember why each of us got into public service in the first place. we found something that was worth fighting for. there was something that we thought was important enough that we were willing to stand up in the public square, risk loss, risk embarrassment, because we knew in our hearts that something was not right. we work in some measure living up to the american ideal.

we thought if we got involved and engaged in the democratic process, somehow we could make it a little bit better. we have asked the american people for the chance to lead at this defining moment and they have entrusted that extraordinary privilege to us. if we live up to that responsibility, if we are fighting for the american people the same sense of urgency they feel in their own lives, that i am absolutely confident we will be able to look back at the end of this year and say things are getting better, that we have reignited confidence, in our economy, in america, and in each other. that we have restored a sense of responsibility here in washington and above all, we have begun to renew the american dream and keep alive, not just for this time, but for all time. that is what you did last year, that is what i want you to join me in doing this year and all the years to come.

thank you very much, everybody. thank you. [applause] [applause] [applause] >> ladies and gentlemen, we're going to take questions and allow the press to go ahead and retire. we have microphones here on each side. >> in the texas governor's race, the leading candidates for the republican -- debate tonight preconceived the three candidates tonight at 8:00 eastern on our companion network, c-span2. this weekend on "prime minister's questions" we will

see gordon brown pledging u.k. aid to haiti and the liberal democratic leader asking why mr. brown has not yet appeared before the iraq war inquiry panel. sunday night at 9:00 here on c- span. >> said this weekend on "book tv" military leadership and

winning counterinsurgency wars. also, a children's book author and illustrator on growing up in communist czechoslovakia. it's part of a weekend filled with non-fiction books on c- span2. >> did you know the number one freed news application for your iphone or iphone touch is c-span radio? you can get quick and easy access to streaming audio channels, c-span radio, and c- span and c-span2. there are links to all our podcasts, and it is all free, available from our application store. >> earlier today, the financial inquiry commission held day to the hearings looking into why last year's financial crisis occurred. we will hear opening statements now from witnesses that included attorney general eric holder, and the sec chairman, mary schapiro. the congressional appointed

commission made up of six democrats and four republicans is scheduled to deliver a final report by december 15th of this year. this portion runs half an hour. capitol hill. >> good morning. the meeting, the public hearing of the financial crisis inquiry commission will come to order. there is a quorum present. welcome to our second day of public hearings. on the causes of the financial and economic crisis that are gripping this country. as i said, and as the vice chairman also indicated yesterday, we are a panel that is going to do our level best on behalf of the american people, to try to discern the facts and

the causes of the current crisis. which has affected so many million americans. yesterday, we heard from a range of experts, and folks from the private sector. today, we have a number of people with us who are at the federal, state and local level, who have been involved. in grappling with the consequences of this crisis. and i'm looking forward to today's testimony. i want to thank all the commissioners for all their hard work yesterday, and what we'll do today and i want to thank the folks in the audience add the people watching this hearing, as well as all the witnesses who will provide testimony to us. mr. thomas, do you want to make any opening comments this morning? >> no thank you, mr. chairman, other than to say, thank you very much for appearing before us, and we look forward to continued cooperation. thank you.

>> on the first panel, and we have before us, the attorney general of the united states, mr. holder. we have before us, mr. lannie brewer, in charge of the criminal division of the department of justice. we have sheila bar, chair of the fdic and mary shapiro, chair of the s.e.c. we're going to start as we are with all witnesses, as will be -- as has been and will be our custom at this commission, we will swear all witnesses, so i'd like to ask all the witnesses to please stand and be sworn before us. do you solemnly swear or affirm under the penalty of perjury, that the testimony you're about to provide the commission will be the truth, the whole truth and nothing but the truth to the best of your knowledge. >> yes. >> thank you very very much. we will now commence, i will ask that each witness provide an opening statement. we do have written testimony

from the witness les. les -- witnesses and i'd like to ask if each witness would provide up to 10 minutes of oral testimony. it's my understanding that mr. holder will provide the testimony for the department of justice, and i will also note that mr. holder rearranged his schedule to be here, and will be with us for the opening statement and a couple of brief questions, and i know his schedule dictates that he has to depart, but let's start with mr. holder. and then go to ms. bear and ms. shapiro. >> thank you, mr. chairman. chairman angelides, vice chairman thomas, thank you for inviting me to address you and you the other distinguished members of this commission. these inaugural hearings, i believe, mark a critical step forward in better understanding the root causes of the financial crisis that has held our economy in its grip over the last two years. i appreciate the opportunity to participate in the commission's work, panned to assist in your

inquiry. this morning, i am joined by lannie, the assistant attorney general for the justice department's criminal division. lannie spearheads many of our key he was in investigating, prosecuting and punishing financial crimes. he has submitted written testimony, which provides a comprehensive overview of the department's work in these areas. and he will be available to answer any additional questions that you might have. we must be vigilant in our efforts to safeguard and strengthen the american economy. our efforts to fight economic crime are a vital component of our broader strategy. a strategy that seeks to foster confidence in hour financial system, integrity, in our markets, and prosperity for the american people. now, in carrying out the strategy of the justice department, has long focused its efforts on combating financial fraud. across numerous administrations, democratic and republican alike, the department has worked hard

to combat fraud and to recover ill gotten gains for the benefit of fraud victims. now, despite these efforts, however, we know that financial fraud persists. in fact, the "wall street journal" reported earlier this month, about that "crisis" and fraud in the securities and investment banking industries are at their highest level since records began. unquote. the current economic crisis has brought these challenges to the forefront. now, let me state at the outset, what role the department plays, and does not play in addressing these challenges. put simply, the department of justice investigates and prosecutes federal crimes. as i sit here today, prosecutors in washington and in 94 u.s. attorneys offices around the country are hard at work investigating a wide array of financial fraud cases from mortgage fraud to medicare, and health care fraud to securities fraud, to corporate malfeasance. i'm proud that we have put in

place a law enforcement response to the financial crisis, that is and will continue to be aggressive, comprehensive, and well coordinated. while the reach of our investigative and prosecutorial function is broad, we do not purport to have all the answers. as a general matter, we do not have the expertise, nor is it part of our mission to opine on the systemic causes of the financial crisis. rather, the justice department's resources are focused on investigating, and prosecuting crime. it is within this context that i am pleased to offer my testimony and contribute to your vital review. the department has a long history of prosecuting financial fraud, an we will continue to do so. working in concert with our federal, state, local, tribal and territorial partners, the justice department is using every tool at our disposal, including new resources, advanced technologies, and communications capabilities, and the very best talent that we

have to prevent, to prosecute, and to punish these crimes. and by taking dramatic action, our goal is not just to hold accountable those who conduct -- whose conduct may have contributed to the last meltdown, but to deter such future could be duct as well. the corner stone of our work in this area is a new interagency financial fraud enforcement task force, which will establish in november by executive order of the president, and is led by the department of justice. at the core of the task force's mission, is a more robust and strategic law enforcement effort focused on combating four types of financial crime. number one, mortgage fraud. from another closure rescue and loan modification frauds to systemic lending fraud, in the nationwide housing market. number two, securities fraud. from traditional insider trading to ponzi schemes to accounting fraud to misrepresentations to investors. third, recovery act and rescue

fraud, including the theft of federal stimulus funds and the illegal use of taxpayer dollars intended to shore up our financial institutions and fourth, financial discriminati discrimination, including predatory lending practices in minority communities, and the sale of financial products that exploit the elderly, and the disadvantaged. now, in combating financial crimes, we will aggressively leverage the criminal and civil enforcement resources of the federal government. we will tackle every fraud case with the aim of recovering stolen funds for victims. and we will enhance coordination and cooperation among the federal, state, local tribal and territorial authorities so that the perpetrators of these crimes are brought to justice. now, on this last point, let me be very clear. when we find businesses or individuals whose disregard for the law has hurt the pocketbooks of average americans, we will use every available measure to hold them accountable the.

even before the launch of the task force, the department aggressively responded to the financial crisis by redoubling our fraud fighting efforts. in addition to convicting bernard mad ofoff, who perpetrated the largest ponzi scheme in our nation's history, last year we arrested the largest leaders of the hedge fund, and we secured 30 year and 25 year sentences for two executives of national century financial enterprises, following their convictions on conspiracy, fraud, and money laundering charges. we've also devoted substantial attention to preventing and to prosecuting mortgage fraud. right now, the f.b.i. is investigating more than 2,800 such cases, up almost 400% from five years ago. the recently enacted federal budget for 2010 will enhance these efforts, as will the enhanced legislative authorities that congress provided the

department last year in the fraud enforcement and recovery act of 2009. now, i'm confident that with the new authorities, with the new resources, and a bold new plan of action, we can and we will make measurable, meaningful progress, and working together, with our law enforcement and regulatory partners, we will succeed in restoring the integrity our markets, preserving taxpayers resources, and protecting the vast majority of hard-working americans, investors, and businesses who play by the rules and who adhere to the law. i thank you again for the opportunity to participate in today's hearing. and to outline the department's ongoing efforts, and to address financial fraud in the wake of our economic crisis. i look forward to working with you, and along with assistant attorney general brewer, would be happy to answer any of your questions. thank you. >> thank you very much attorney general. ms. bear.

>> chairman angelides, vice chairman thomas and commissioners, i appreciate the opportunity to testify on behalf of the federal deposit insurance corporation. my testimony will focus on the failure of market discipline, and regulation, that led to the financial crisis and suggests reforms to prevent a recurrence. the last major financial crisis, the thrift and banking crisis of the 1980's, resulted in an enactment of laws designed to improve the financial regulatory system. these laws significantly strengthen bank regulation, and provide a bank with strong incentives to operate at higher capital levels with less risk. but at the same time, they created an intended incentives for financial services to grow outside of of the regulated sector. in a so-called shadow banking km. km -- system. in the 20 years following the reforms, the shadow banking system grew much more quickly than traditional banking.

at the on set of the crisis, it's estimated that of a of all financial services were conduct by institutions not subject to prudential regulation and supervision. products and practices originated by the shadow banking company have proven particularly troublesome in this crisis. many of these non-banks grew to be too large, too complex, and too interconnected to resolve under existing bankruptcy laws. they also cannot be run down under the fdic's current receivership authorities. we are now poised to make far-reaching changes that will affect how we regulate the entire financial system. our approach must be holistic and give regulators the tools to address risk through the system, not just in the insured bank, where we have long recognized that heightened prudential supervision is necessary. to be sure, we can ensure oversight of institutions, but if reforms only layer more regulation upon traditional banks, they will just create

more incentives for financial activity to move to less regulated venues. such an outcome would only exacerbate the regulatory arbitrage that fed this crisis. if that occurs, reform efforts will once again be circumvented, as they were over the past two decades. numerous problems in hour financial markets and regulatory system have been identified since the on set of the crisis. in 2002, and early 2003, encouraged by record low interest rates, there was a boom in the volume of mortgage originations. these originations were driven primarily by the refinancing of existing mortgages. mortgage origination platforms grew to accommodate the surge in mortgage demand. by 2004, house prices were rising at double digit rates, setting the stage for dramatic changes in the structure and funding of mortgage loans. because many prime borrowers had locked in their loans by 2003, the mortgage industry shifted its attention and its ample

lending capacity toward less credit worthy borrowers and home buyers struggle to cope with the high cost of housing. one result was a rapid increase in subprime loan origination, which more than doubled in 2004 and peaked at just over 20% of all originations by 2005. declining affordability and high priced housing markets also contributed to a shift towards non-traditional ports, such as interest only and pay option mortgages. the limited reach of production supervision allowed risky practices to grow unchecked. for example, subprime and non-traditional mortgages were originated and securitized primarily by brokers and mortgage companies and by non-bank affiliates of insured institutions. securitization markets provided much of the funding for these loans. growth and private label mortgage backed securities was enhanced by the development of the cdo and cds markets. the size and complexity of the capital market activities that

fueled the credit boom meant that only the largest financial firms could package and sell these securities. compensation schemes fueled the growth. many compensation systems were not sufficient to risk management. they allowed high, short-term profits to be translated into generous payments without regard to any long-term risks. mortgages and many derivative products created long risk, while compensation was weighted toward short-term results, creating perverse incentives toward riskier behavior. more than cause of the crisis was the lack of non- -- increasingly, complex financial products, combined with owe peak marketing and disclosure practices proved toxic. as a result, foreclosures are nearing 3 million per year, and more than 15 municipal households are saddled with underwater mortgages. finally, many financial firms grew to such size, complexity, and interconnectedness, that the

market implicitly assumed that they were too big to fail. credit rating agencies recognized this implicit guarantee, providing two ratings, one with and one without government support. as a result of their two big to fail status, these firms enjoyed funding at below market rates for the risks they were taking. the financial crisis revealed that risk grew across the financing system. unimpeded by a stove pipe financial regulatory framework, one framework for insured institutions and another less stringent one for non-bank entities. differences in the regulation of capital, leverage, an consumer protection among institutions in the shadow banking system and the traditional banking sector and the almost complete lack of regulation of otc derivatives, allowed rampant regulatory arbitrable. the near collapse of the financial system demonstrate a need for major financial reforms that reduce moral hazard and

improve the system's resiliency. these changes should include a resolution mechanism that makes it possible to break up and sell a large, complex, interconnected firm without taxpayer support and i am very pleased that the bank's c.e.o.'s who talked with you yesterday endorsed this. we believe there should be a p prefunded -- we also support macro prudential oversight and strengthen and harm monday highs capital and leverage liquidity standards as necessary. more effective oversight and improved transparency of derivatives markets is needed and finally, a rule-making authority to ensure uniform consumer protection throughout the financial system. these reforms would go a long way towards preventing another crisis, but as the committee examples the causes of the -- examines the causes of the financial crisis, i ask you to also look at other long-standing

policies that played a role. this is a combination of a decades long process where national policies has skewed economic activity away from savings and towards consumption, away from investment in our industrial base and public infrastructure and away from the real sectors of our economy and toward the financial sector. examples include federal tax and credit subsidies for housing, compensation practices that promote short-term profit without regard for the long-term risks, and implied, now ex police it's government backed stops for large financial firms. such back stops subsidize excessive growth and risk talking. no single policy is responsible for these economic distortions, and no one reform can restore balance to our economy. we need to examine national policies from a long-term view, and ask whether they create the incentives that will lead to better and sustainable standards of living. our financial sector has grown disproportionately in relation to the rest of our economy.

whereas the financial sector chaimed less than 15% of total u.s. corporate profits in the 1950's and 1960's, its share grew to 25% in the 1990's hand to 34% by 2008. financial services are essential to our modern economy. but the excesses of the past decade were costly versions from other sectors of the economy. we must avoid policies that encourage such economic distortions. fixing regulation can only accomplish so much. longer term, we must develop a more strategic approach that utilizes all osama bin laden policy tools, fiscal, monetary, and regulatory to lead us toward a more stable and more widely shared prosperity. thank you. >> thank you, ms. bear. ms. shapiro. >> thank you. chairman angelides, members of the commission, thank you for the invitation to share my in sights as chairman of the securities and exchange

commission into the causes and lessons learned in the crisis. the work of this commission is essential to helping policy makers in the public better understand the causes of the crisis and build a better regulatory structure. many of the foundations of securities regulation and indeed, the s.e.c. itself, resulted from the efforts of a similar investigation following stock market crash of 1929. when i became chairman of the s.e.c. in late january of 2009, the agency and financing markets were still reeling from the events of the fall of 2008. since that time, the s.e.c. has worked to review its policies, improve its operations and address the legal and regulatory gaps that the crisis has laid bear. there were many interconnected factors and mutually reinforcing causes, so i appreciate the enormous challenge facing the commission. my written statement discusses many of the causes in detail, but i would like to use my time this morning to highlight just seven of the lessons.

first, requirements around asset securitizations must be strengthened. i believe this is essential, as one of the major factors in the financial crisis was the rise of subprime mortgage backed securities. the securitization of mortgages led to an unintended facilitation of weaker underwriting standards by originators and excessive reliance by investors. in short, the financial crisis exposed serious gaps in the asset backed securities market. as a result, today the s.e.c. staff is engaged in a broad review of the way in which asset backed securities are regulated. we are looking at disclosure, the offering process, and reporting by asset backed issuers, and we're considering several proposed changes, designed to enhance investor protection in this market. this is a vital park and i believe the changes are critical to restore investor confidence and facilitate capital formation. our proposals will seek to align the investors with those selling asset backed securities. among other things, the

proposals will seek to provide time to prior sufficient time before investing, low level data is provided in a format an manner that is accessible to investors and the proposals will seek to investigate a mechanism for ongoing disclosure. a second lesson growing out of the crisis is investors and regulators can overrely on credit rating agencies. throughout the crisis, credit rating agencies perform poorly. by among other things, providing high ratings to complex financial products made up of low quality assets, including subprime mortgages. nonetheless, many relied on the ratings as indicia of quality and liquidity. in response, the commission has undertaken a series of rule makings, to reduce reliance by fostering accountability, transparency, and competition. a third lesson is that standards are weakened and regulatory gaps emerge, when the risks of

deregulation are not adequately appreciated, and when markets are considered to be almost always self-correcting. indeed, it was quite recently when many of the deregulation, particularly in financial services as the key to fostering market growth an ensuring u.s. competitive in the. unfortunately, this met that main elements of the financial landscape, such as over the counter derivatives and hedge funds were meant to no regulation and it meant that investors identified risks in these areas. the result was a proliferation of complex financial products, including il liquidity with products that were not fully understood. one very significant gap in the one very significant gap in the regulatory structure is the derivatives, which were largely excluded by the commodity futures modernization gap. this gap leaves a very large and

risk laden market, almost entirely out of public and regulatory view. to address these gaps and regulatory arbitrage dangers, we need greater transparency and over sight of major market participants and dealers. in such products should be subject to the greatest extent possible to central clearing and exchange training. the current absence of regulation should not continue. a fourth lesson from the crisis is that there can be a direct relationship between compensation arrangements and corporate risk taking. in fact, many major financing institutions created asymmetric compensation packages that made employees enormous sums for short-term success. we know that some of these same decisions resulted in significant long-term losses or failure for shareholders and taxpayers. in december, the s.e.c. adopted new rules that will significantly improve disclosure in the key areas of risk, compensation, corporate governance and director qualifications. the rules require companies to

disclose their compensation policies and practices for all employees, not just executives. if these policies and practices create risks, that are reasonably likely to have a material adverse effect on the company. fifth, the financial crisis revealed that a siloed regulatory framework is unable to monitor and reduce risks, flowing across entities and markets. for this reason, i support the establishment of a council of regulators, empowered to evaluate risk across the financial sector to identify and address systemickish use. in addition, i believe large interconnected institutions should be supervised on a consolidated basis. however, consolidated supervision is not a panacea, and policymakers should remain aware of the limits of such oversight and regulation. this is particularly the case for institutions with many subsidiaries engaging in different, often unregulated businesses in multiple countries. systemic risk management requires meaningsful --

transparent markets to be effective and while a consolidated regulator, large interconnected firms is an essential component to identifying and addressing systemic risk, other tools must also be employed. these include more effective capital requirements and leveraged limitations, strong enforcement, functional regulation and transparent markets that enable investors and counter parties to better understand the risks associated with particular investment decisions. a sex th sixth lesson of the crs market and market regulations should promote, not undermine the investor of can dense, essential to the flow of capital and the long-term success of markets and our economy. but since the financial crisis began, there has been growing unease that markets are being stacked against investors. the roots of any deficiencies in market structure must be addressed head-on to ensure that markets are transparent and investors are treated fairly. accordingly, the s.e.c. has taken a fresh look at market structure and trading activities to ensure they foster fair,

orderly and efficient markets that are designed to protect investors, this includes activities such as high frequency trading,/trading and dark pools. finally, the financial crisis has taught us that consistent and vigorous enforcement is a vital part of risk management and crisis avoidance, particularly in times of substantial financial innovation. through aggressive and even handed enforcement, we hold accountable those whose violations of the law cause severe loss and hardship and we deter others from engaging in wrongdoing. we also help vindicate the principles fundamental to the fair and proper functions of financial markets. investors have a right to disclose you're that complies with the federal securities laws and there should be a level playing field for all investors. over the past year, the s.e.c. has taken steps to improve the speed and effectiveness of its enforcement efforts. from streamlining procedures and removing a layer of management, to creating specialized investigative units. we also are currently investigating a significant number of matters growing out of

the financial crisis, and we have brought more than a dozen cases recently against entities and activities associated with some of the worst practices. there is still much work to do to ensure that we do not see these problems repeated in the feature. for example, in light of the lessons learned from the crisis, brokers are now providing enhanced information about positions, and the commission has strengthened capital requirements by limiting the ability of large broker dealers to use value at risk models for regulatory capital purposes. most importantly, we have established an internal that's correct force to review -- task force to review all aspects of broker dealers, to determine how such regulations can be strengthened. where the s.e.c. cannot act on its own, we are working with congress, to address the problems too big to fail, to ensure strong regulation of otc derivatives, to close loopholes that allow hedge funds and their managers to avoid oversight, to impose the highest standards of

conduct on those who provide financial advice and to invest the resources required to keep up with new products, properly oversee the financial markets, and better deter and hold accountable entities that might be inclined to commit tomorrow's financial crimes. in conclusion, there were many causes and lessons to be learned from the financial crisis. the enormity and worldwide scope of the crisis and the unprecedented government response, required to stabilize the system demands a full and careful evaluation of every aspect of our financial system. no one should hesitate to admit mistakes, learn from them, and make the changes needed to >> in the texas governor's race, the leading candidates meet for a televised debate tonight. governor rick perry, senator kay

bailey hutchinson and debra medina will meet tonight on cspan-2. we will see british prime minister or the brown the pledging of u.k. aid to haiti. -- prime minister gordonçó brown pledging u.k. aid to haiti. sunday night on c-span. >> this weekend, tuffs university history professor, 1965 voting rights act. he will discuss his book with the "the washington post" national editor on after words, part of booktv on c-span-2. the number one news app for your iphone is cspan radio.

there is also a tab to links to all of our podcast, including "q&a and "after words." >> a state department briefing on the earthquake relief efforts in haiti. this is just over 15 minutes. >> afternoon, ladies and gentlemen. we have with us today the counselor to the state department and the chief of staff and the u.s. aid administrator for a briefing on u.s. efforts in haiti. we had a brief window here today, so we will go straight to our first speaker. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> we wanted to provide an update and we will gladly take your questions. i will make a few brief remarks.

we are continuing to see a quite challenging situation on the ground in haiti, and our thoughts and prayers continue to go out to many of the haitian people and their families and others who are there. it is a quite devastating situation. with more visibility on it, we are seeing the scope and breadth of this is quite challenging. as the president said, we are committed to a swift and coordinated response, a very aggressive one. that is what we have been putting on the ground -- a lot of our assets have hit the ground. we have been able to go about search and rescue i. administrator shah will spend some time discussing that. we had several meetings with the president, where all of the various agencies have spent representative. ed.

we have been in touch with prime minister today. the haitian government and the prime minister have indicated they are going to be a place where they can be more effective and being partners in the planning and coordination for the disaster response -- disaster response. now that they have been dealing with the challenging situations, they're looking for to providing that leadership. we are looking forward to supporting them. the equipment and other things they need to it -- to provide leadership to the haitian people. i would like to say, with respect to american citizens there, we are continuing our efforts to ensure we are providing corporate support. for those individuals who are electing to return home, we are

providing passage for them to do so. there might be about 300 people who would be traveling back. other than that, we are not seeing a large number of people have indicated a desire to leave. people are staying to be supportive and helpful. since so many of the citizens make their lives there in haiti, they are continuing to see how they can bestç continue with te community that they are part i want to make one note. we have been getting a lot of offers for it in kind donations, everything from planes to goods. to the extent those kinds of donations are being offered, it would be great if they would make those through www. cidi.org. xdwith that, i will turn it over to my colleague. mr. shah. >x thank you. i would echo cheryl's comments

that upon learning about learning what we were able to survey in getting a better understanding of the extent of the damage, it is a tragic situation. we are in a position where we are learning every minute more information about which roads are passable, which buildings are in which condition. it is a dramatic situation and one that continues to be a challenge to our teams to ground into the work that we hope they can do. nevertheless, we have been mounting as with an aggressive response. we have been doing that in coordination with department of defense, department of state and a number of other assets and entities of the federal government. our first wave of responders are now on the ground and have been actively engaged in search and rescue since last night. -- since yesterday afternoon, the fairfax, virginia, research and rescue team with all of its capacities and 72 professionals have been active for more than

24 hours. they have identified a number of buildings and are also serving as a point of coordination, working with the haitian government and with the united nations and other countries that are bringing search and rescue gear, the equipment and professionals to this problem. we have more than two to 50 american relief workers actively engage -- 250 relief workers. as planes land, we have more that are going in. we have coordinated engagement with a number of other partners, from canada, the u.k., belgium and others. there are more than eight urban search and rescue teams actively working. i mentioned the fairfax team. we have a team from los angeles that has been working today. multiple teams coming from miami as well that are in the process of doing their work. we have been doing a number of

things in the areas of health and medical planning and working with the usaid -- we have a long history of working with a range of nonprofit partners and contract partners in a shady that have been actively involved in providing medical care and services to the haitian population. we are activating that network and exploring how we can expand on their capacities and capabilities to provide access to medical care, services. we are looking at bringing in direct emergency medical assistance teams that will be on the ground there shortly. and we will be able to provide tertiary trauma support that is needed. and we are making active plans forç the transport of food and water and other critically needed commodities. tarps, other kind of equipment that can help enable greater access to shelter for both the haitian people that have suffered in this terrible tragedy. all of this is taking place as

we speak and is accelerating quite significantly. it does amount to the first wave of response. the second wave, that the president alluded to earlier today, that we have a significant military capacity. a number of resources fromç the 82nd airport. the uss carl vinson -- the 82nd airborne. the uss carlç vincent. this will be a significant effort that is really about trying to savew3 lives in this critical 72-hour period. çthen we are providing access o medical services, food, water, water purification. and then lay the groundwork for rebuilding so the teams are there and working hard. i want to thank in particular the fairfax, virginia, a team which was the first on the ground doing this work. they took some great risks but had some early successes. thank you. >> i think we have about seven

minutes for questions, so please keep them brief and we will try to get as many as weekend. ç>> i will keep it short. is there any update on american casualties? p.j. said this morning that we are not taking over haiti. the president made it clear that this will beat -- that we are basically taking ownership of this crisis. i amrujtr'g, who exactly is in charge on the civilian or military sides? arge you, mr. shah, going to be the paul brenner -- paul bremer of haiti? >> with american casualties, we are still continuing to do our research. we know of one instance of an american casualty. we are continuing to be working through it -- looking through the rubble for others. we are hopeful. we still have several americans

unaccounted for that we are aware of. so we will continue our search. once we have a more specific update, we will provide one, likely by the end of the day. i want to say one thing with respect to haiti. i spent a fair amount of time there and the last nine months. the haitians are in very proud people and properly so. particularly, this is a government that is committed to providing the kind of partnership necessary to be effective with an international community. this is a president who actually did have a prime minister and a team that provided the plan for how he could be rebuilt after the hurricanes and more particularly how ok'd could go about seeing the best economic growth that it should seek. -- how he could go about seeking the best economic growth that they could secret we are confident that we wilsee. we're going to bring together

the communities that are out there wishing to help. we're supporting the leadership of haiti. we see our role is insuring that the leadership is allowed -- is allowed to provide the leadership that the people expect. >> said one casualty. the main fatality? >> the president -- a person is no longer alive, yes. >> i would echo that comment. we had example of example. we are working in parts -- in partnership with the haitian government and the united nations. much of our early search and rescue, some of our overnight capacities were engaged in the un compound and rescue efforts there. we have been working on the government sites. we have been meeting regularly and communicating with members of the government. our test team leader, the disaster assistance response team is very engaged and working with the embassy and with members of the haitian government to make sure we

coordinate our efforts closely. the are some unique things we can provide at this time of crisis. for example, part of that fairfax team has been sitting at the airport hoping as other search and rescue teams come in, provide communications and equipment and information. pointing them towards parts of port-au-prince that have not had any search and rescue teams available yet. that is done in coordination with the haitian government. those are unique things we are able to do. we are committed to doing everything we can do to stand up in an effective and aggressive response. >> i was curious what your plan is with this amount of aid that is backed up at the airport right now. a lot of the roads are blocked. can you give us an assessment from your dark teams whether those are starting to open up. from the reports we are hearing, it is concentrated in one place

right now. >> the airport is a primary way to get people and technical capacity and equipment in. we are -- we do have the southern command is operating the airport together with the haitian government. it is running at around the clock so we are maximizing our ability to get planes and their, to unload them and move them forward. there will be times when things do get jammed up there, but we are moving as fast as we possibly can. we are also looking at a range of others tragedy -- strategies to make sure that we get things out of the airport and into town fast. çmany of the search and rescue teams come with their own self sustaining plans. we have teams working on that and we feel confident we can get that done in the next -- and the next day and a half. >> not necessarily the search

and rescue. the aid is sitting there still. the actual pallets of aid that are arriving. >> part of it is it depends on which committees were talking about. our team leader and our team -- disaster response team has identified party commodities. those things are flowing into, per their surveying, are getting out there quite quickly. there are a lot of things that are coming from other countries, coming from other sources that are there that will become part of that supply chain but are not currently part of that supply chain. it is one of the reasons why, for people willing to give and the generosity of the american people is as displayed by giving cash at this point. that is the most effective way to provide individual support. there are a number of different ways to do that. >> we have time for one more questions. >> i want ask cheryl about the united nations mission, what it

was able to accomplish leading up to this. how to help you and rebuild what it had? >> one of the things that has been very successful that the un had done in haiti had been providing the kind of security and stability that allowed the kind of progress we are seen in haiti. and a lot of ways, one of the things we are grateful for is that we have the commander in haiti now and is able to actually deploy his team and a way that actually reminds the civilians that are there that we actually have the support and capacity to be able to help. as a general matter, there are so many things that haitians were beginning to do themselves. there were successful and beginning to attract investment and stand up the kind of resources and arrangements that would make it attractive for individuals to desire to invest in haiti. those are the things we want to continue to and -- to pay attention to. now, this will become a long-

term building exercise. it is critical to make sure that those investors who have been looking at haiti appreciate the support that will necessary. -- that will be necessary pre >> the one thing i would add is that as we are doing this overall, we are trying to be conscious of putting in place resources and as sources -- that will be sustainable for the haitian people. we want to do things now that will help create the basis of effective service provision and effective rebuilding of this partq of the society. çthat is something we are takig really seriously. >> thank you. that is all the time we have at this point, ladies and gentlemen. thank you very much for coming to the state department today. >> later, a state department

official said a career u.s. diplomat died in the earthquake in haiti, the firstçó american victim to be identified. the spokesmant( also answered questions about efforts to evacuate americans and ongoing relief efforts. this is about 25 minutes. >> good afternoon and welcome to the department of state. to begin, we are saddened to report that ms. victoria delong, a cultural affairs officer died in the collapse of rahall following the earthquake in haiti. her next of kin have been notified. she served in haiti since february, 2009. -- at the state department since november, 1983. it is a tragedy for the state

department and for our family and for the public diplomacy and public affairs world. some of you who are old-timers here. she did previously served in our bureau of public affairs during her career. continuing on, we have eight teams, search and rescue teams on the ground, not only u.s. teams but also from iceland, spain, chile. this afternoon, we have been able to rescue a second person from the rubble. there was a second rescue -- the first occurred yesterday at the un compound. today, we were able to free one person from the hotel montana. but these teams, about 260 personnel, continue their life- saving work as we speak. before taking your questions, obviously this is still a very

growing list, but our estimate is that at least 30 countries have meaningful assistance that has already reached haiti or is an ri-- is en route. the international commitment is growing as well as our commitment. it prevents the channel -- presents a challenge for us working with the government in haiti to coordinate this so it gets on the ground in port-au- prince and gets to the haitian people as rapidly as possible. with that, i will take your questions. >> can you give us the -- an update on the state of the airport? the u.s. base had been closed because there were too many airplanes on the tarmac. >> as a general frazier said yesterday, logistics is a crucial -- crucial issue. we are working with the haitian government and with the faa and others to make sure we can

sequence this properly. the airport at port-au-prince -- the good news is it is now operating at 24/7 capability, but the bad news is that it is a very limited airport with one runway and limited ram space. we are working to create a system where we can get the planes stepped down on the ground, offload cargo, of loadie that to raise that might be going on, --ç unload evacuees. a there have been occasions where we have had to hold planes because the ramp is crowded. the level of assistance is expanding. we continue toxd look atç the t and to see how we can effectively deliver, not only the personnel that are doing the work of assessing the challenge, beginning of the work on urban

search and rescue, we have got medical personnel in the pipeline. some will be writing this xdevening from atlanta. yes, logistics remains a challenge because of the limited infrastructure that is available to us. >> when you say holding pla nes -- >> there been airplanes on the ramp, airplanes circling overhead and airplanes held back in surrounding countries or in the united states to make sure that there would be sequence properly. these work occasionally temporary colts for an hour or two hours or so. logistics -- these were temporary holds. logistics is limited right now. the airport -- we have got it open. we are expanding our ability to operate there. but because of a significant flow of airplanes and people and

material, there have been temporary halt. olds. >> who is in charge of running the airport right now? >> we have taken over air- traffic control responsibility. we have got a lot of personnel who are assisting in the process of unloading and offloading. this is somethingç we worked ot with the haitian government for theç express reason that that those haitians, haitian nationals who were working at the airport, in some cases, they are there. in other cases, they are understandably at home looking after their families. we have been able to bring a significant communications and logistical, securityxd people io the airport. that certainly has helped expand the ability to use the airport. but the haitian authorities are still in charge of their airspace, but we are doing the

air traffic control in and out of the airport. >> are the air traffic controllers u.s. military? >> there was a team that came in last night. the coastguard cutters -- this is probably betterç answered at theç pentagon. but ixd think this is primarily there are military personnel, coast guard personnel that are helping with air traffic control. but obviously, in terms of the control of the overall aerospace, that remains under the haitian government. >> evacuation's -- >> somewhere between 304 hundred will be the fallout today. -- 300-400 will be the flow out today. they will move out of haiti today. >> were they going? >> for the most part, they go to the dominican republic. >> he did mention that three

possible -- >> we do not have any further confirmed u.s. citizens, fatalities. >> anything further on the death toll, other than 50,000? >> as the secretary said this morning, we know that the death toll is going to be in the tens of thousands. i think this is going to be a process that goes on for some time. you know, and you have the 82nd airborne, elements will be arriving today. there will be able to augment the un force. they are already out around the city, but as you've extend that presence beyond the city, they are beginning to clear roads so that more and more of these activities can happen throughout the city. obviously, in the coming days, we willç be able to start to clear rubble. when you clear rubble, we are going to find people who have

fallen because of debris and other things, collapsed buildings. so this number will clearly go up. and we have no reason to question that estimate. >> let me ask you about president preval. which do not get the sense he is actually in charge of anything right now. >> we have had and continue to have consultations. i cannot say we have had direct contact with president preval today. we have multiple contacts with him over the past 48 hours with this tragedy. we remainç engaged with these - with the haitian government. we have had a clear line to the haitian embassies here in washington. but we are bringing in at some capabilities, communications capabilities that came in yesterday. we are making that available to the haitian government so that we can rebuild capacity of the government to be able to function and to be able to

communicate to the haitian people. one has to step back and say, that he has obviously taken a devastating blow. this has damaged the fundamental capabilities of haitian society as well as the capabilities of the haitian government. clearly, the haitian government was challenged before the earthquake two days ago. but we have been working with haiti. it is one of the reasons we have a lot of americans there working in a variety of capacities to help build the capacity of the haitian government. that process was ongoing at the time of this tragedy. so we are committed to helping the haitian government restore its capacity to function effectively. in our conversations with the haitian government, we have made -- they have made clear to us what their priorities are and we believe that the support we are providing is directly in line with what they have asked us to

do. >> understand that he has been a victim of this as well, it is his home been demolished. is he making any decisions? >> i will defer to the haitian government to describe what they are doing. we have had contact with the president and contact with the prime minister and other ministers. it is hard for me to describe that interaction. i think it is ongoing. -- as we speak, but we clearly -- clearly the haitian government has taken a significant blow. you're helping them to rebuild their capacity. >> -- other than the two conversations with the u.s. ambassador described in the first 12 hours per >> i am not aware of any additional contact? . i am not excluding -- >> yes? >> those have happened at the ambassadorial level.

my sense is there have been additional contacts with the president. but i have not got that -- >> has spoken to secretary clinton? >> not to my knowledge. i think the answer is yes. i will take the question and see what other context he has made. >> about security over time. it is hot. these people have endured a devastating blow, as you mentioned. they may be lacking for water and for food. are you worried about tempers flaring and how to secure neighborhoods? >> is that a concern in these kinds of situations? absolutely. the haitian society has taken a devastating blow. and we expect that there will be pressure that builds over time -- we do expect, whether in different parts of this city, there will be shortages that emerged in terms of food, water

and other things. there has been some minor looting, but so far -- all things considered, we have not seen the kind of civil unrest that you have seen in previous situations like this. that is one of the reasons why it is important to not only help the un and get back out on the streets and provide the basic law and order they were law and o haiti before the earthquake. haiti has a police force, it is a limited force. it does not really have an army. so we aret( augmenting that capability with the second airborne, and we hope that presence will be able to maintain the kind of law and order that allows us to do the important work of saving lives in getting more support to the haitian people. >> -- is the 82nd airborne going

to become haiti's de facto army? >> they are there to support. and to provide the kind of stability and law and ordersk >> what is the plan for the ports? ççmy understanding is that thy areç already destroyed. okq>> it is probably a better question to ask the pentagon, but it is a significant factor. it is a limiting factor right now in terms of how much support we can offload. as shah said in his briefing yesterday, we are about creating different kinds of options. clearly, you are going to have to deliver assistance through a variety of means. the airport is fundamental for that, being able to restore roads so we can deliver assistance by ground. if we can talk large ships at

the port, and right now does not appear that we can, then we have to look for other ways of doing that. some of that can be through rate aircraft. some of that can be by having ships hovered just off shore. we are looking at all of those options. but, to some extent, if we can find ways to at least use the port for smaller vessels, that would give as a major boost in terms of being able to deliver assistance -- assistance. >> ships. i know you did this at some point during katrina. have you talked to any crews ship companies -- cruise ship companies that they could come near the port and provide makeshift housing or any types of services? >> i cannotç say that any of those types of conversations have taken place yet. that would be an option. in the greater scheme of things, >>t( to you have an age?

i]>> i doççó not. we will see what other information we can get. >> can you give us the spelling? >> d-e-l-o-n-g. >> kept the fatalities, you said probably tens of thousand. the release that came out a half an hour ago said at least one letter thousand. >> and release that we did? >> yes. u.s.a.i.d. >> that was a haitian figure put out a couple of days ago. the short answer is we do not know yet. the magnitude of this situation cannot be under estimated, but can you put in order of magnitude on it? we just do not know. that number is going to grow. and the number is going to be considerable. ç>.ç fát(one more question.

have you taken any moreç injurd to guantanamo bay? >> not to my knowledge. but that remains a valuable outlet. as far as i know, we've taken seven out so far, plus the spanish ambassador. but we do have a major medical facility at guantanamo. we have a runway, and a large red space, so as we go through this,ç guantanamo will pay a significant role. >> xdi am wondering,q this may e way tooç far ahead of that gam, but one of the jails in haiti collapse. hasç anyone given any thought o prisoners escaping? as anyone given any thought to using guantanamo either for prisoners from haiti?

>> not to my knowledge. >> or for refugees, people who might beat -- would be call lists and could be temporarily shelter there? >> i am sure we are looking at a variety of options, but not to my knowledge. >> what about taking an some haitians that are left homeless? is there any kind of thought or discussions about possible refugee issues or anything like that? ç>> i think we're getting ahead of the game here. and those issues reside at the department of homeland security. but right now, we are focused on saving as many lives as possible. stabilize the situation. after that, we will see what he needs and then consider those options in time. -- we will see what haiti needs. >> there is a report are reporting the name of the contractor who was detained down there -- allan ross.

>> we do not have the privacy waiver on that individual. i am not in a position to comment. >> have you learned any more about the googled decision? more about china's response? >> we have had a discussion today here in washington with officials from the embassy. we raised the issue. as the secretary said, it is a serious issue. the incident raises questions about both internet freedom and the security of the internet in china. and we've asked them for an explanation. çç>> what they called to the e department for this meeting? they met outside the state department. >> [unintelligible] >> david sheer was out -- with dcm.

here in washington. david sheer is -- david is ain the state department, in the asia-pacific region. he focuses on china. >> did this come up at the secretary's dinner last thursday? >> not to my knowledge. >> china relations. he did talk about that yesterday. this is also a business issue. if business is one of the brighter spots of u.s.-china relations, can business goes sour -- if thosexd relations gos sour, what else is there is a glue to hold them together? >> you are talking about interaction between the two largest economies in the world. so we are going to do business

together. that is not the issue. the issue is whether the issue is within our economic relationship -- this is a serious issue. -- on a number of levels. as we have talked about, there are business standards and expectations, international norms that you expect of your business partners. and we have had multiple conversations with china about activity both in this area and more broadly. we have a mature relationship with china. we have an extensive economic relationship with china. we have had various issues and disagreements that have cropped up over time with china. we have raised this issue today in saying that we have serious concerns about this and its ramifications. and we are going to continue our dialogue with china on these and other kinds of issues. >> -- outside of the state

department? did it occur the chinese embassy or a third location? >> third location. >> why? why not the state department? >> it might of been at lunch. -- might have been at lunch. >> was it specifically about this particular issue? >> that was a fair question. we had interaction with our car parts from china all the time. at the meeting that we hadç ha, this was a major issue. >> did the u.s. asked for this meeting with the chinese specifically to discuss this or were they meeting about a bunch of stuff and this just happened to take up a lot of the time? what was the context for that meeting? >> i do not know. >> -- between turkey and israel recently. both sides threatened to pull back their ambassadors from tel

aviv and ankara. there are some anti-semitic programs on the turkish television. is there any reaction? >> these are two important allies and friends of the united states. turkey has played an important role as an intermediary in working through issues on their way to middle east peace. we value that interaction and turkey's role to help countries work through these issues. and i would expect that to continue. >> speaking of business partners -- have yet heard of any interest on the part of the uae government in reviewing the

acquittalw3 ofç sheikh isa? >> not to my knowledge. >> thank you. >>ç now today's white house briefing with press secretary robert gibbs. topics include earthquake relief efforts in haiti. the new fee on bank assets and health care legislation. this briefingç is an hour, 10 minutes. the president has invited a delegation from the u.s. conference of mayors to come to the white house onñrxd thursday, strengthening the economyçq and creating jobs inxd communitiesç large and small across america.

enior advisor valerie jarre, jqáary tim geithner, and dr. larry summers will also convene a discussion on jobs and the economy while the mayors are the economy while the mayors are here in town. ti+ t(on wednesday, january 20, firt lady michelle obama will deliver remarks to the u.s. conference on mayors 78th winterç meeting and discuss the launch of a major initiative to address the problem of childhood obesity and the impact that it has on the health of the nation and communities around the country. and with that, mr. feller. >> thanks, robert. two topics, please. on haiti, secretary clinton said states is providing a lot of theçq glue that is keeping peoe communicating and working together as we try toç assert authority, reinstate the government, and begin to do what governments have to do to rebuild" the country. and then the president said "this is one of these moments that calls out for american leadership." is the u.s. government essentially in charge of haiti, at least for the foreseeable future? >> no. obviously you know haiti is governed by a sovereign haitian government. we have been in contact, our administration has been in contact with theççç haitianod government, as they have with

governments around the world, in seeking and requesting the type of assistance that our nation and other nations are providing, ben, even as we speak. the president last evening spent a little more than an hour in the situation room and was clear with the entire team involved that it was important that we do everything in our human power toç help american citizens that are in haiti, to help the haitian people recover from a devastating earthquake. he was clear with all of us about the need to demonstrate american leadership in dealingç with a disaster that happened so close to our home and is in a region -- is in basically our own neighborhood.

>> so is it the feeling of the white house that the haitian government is literally in a position to assert leadership there, given the devastation? >> the haitian government is in control of haiti. they're the government of haiti. they have asked for, as you can imagine, to meet the devastating earthquake, extraordinary assistance that the president has instructed all of theç members of our team to work as hard as humanly possible on helping to provide to them. we will -- the president will continue to get regular updates on this. you heard him speak this morning on this. i assume there will be more meetings with him this afternoon on this topic as well.

ç>> i also wanted to ask you about health care. what can you tell the american public about this breakthrough the white house has reached with union leaders about the taxation of high-value insurance plans? t(>> i don't have any announcements to make at the moment. çwe may have more later in the day. i can tell you, ben, that, as you got in the statement last evening, the president and democratic members of congress and the senate worked throughout the day yesterday, made aq tremendous amount of progress in bridging the differences that existed between the two pieces of legislation that havexd passed the house and the senate. we've discussed many of those

issues here, one of which obviously was an excise tax on insurers that offer health plans that exceed a certain threshold. and we will -- we may have more on that for you later today. >> just a very quick follow on that. you're not able to say more now because the details are still coming together, or why? >> we are not ready yet to talk about all of what may be pending. yes, sir. >> also a couple questions on haiti. the president announced $100 million in immediate assistance, relief aid. considering -- given the magnitude of the damage and destruction ther-xhow much higher is it likely to go? >> i don't know, honestly, that there has been -- i don't know how much focus there has been on tallying, in monetary terms, matt, the devastation that we've all seen on television over thei] last many hours since the earthquake struck. i know at this point,ç the president's focus is in search and rescue. we know there are some 40,000 to 45,000 american citizens that are in haiti. obviously, there are -- there's the u.n., there are ngos,

there's millions of haitians in the capital city. and time is critical to ensure those safety efforts. we want to make sure that we're doing all that we can right now, in this window of time, to get materials and assets as quickly as possible there to assist in that search and rescue. we know that there are likely people trapped, still trapped in this rubble, that have a good chance if we can get to them. i think that's what our primary focus is right now. >> and on the bank fees, the president expressed outrage today about the resurgence of wall street bonuses. how can the administration practically get these banks to roll back bonuses or hold down on them, and to use that money to repay the bailout funds as he suggested? >> well, the second part i don't -- ç>> well, he said that they should roll back their bonuses,

then use that money to pay the bailout funds, instead of passing it on to the customers. ç>> well, let me go through -- there's a number of different questions. first and foremost, the president discussed today his proposal for a financial crisis responsibility fee. taxpayers that acted quickly to deal with, quite frankly,xd the wreckage left by excessive risk- taking and its threat to our financial and economic system,xç çç be made whole and paid back for the money that was lent toççç financial institutions that have caused all this damage. we think it's structured in a way that is reasonable. it is a little hard hearing some of the criticism coming from banks

about what the president has proposed, based on the fact that the taxpayers have so time in which exponentially more money has been set aside for bonuses and compensation, because they think the good times are back. it doesn't seem to make a lot of sense to me. it doesn't make any sense to the president. and i can't imagine it makes any sense to anybody watching in america to believe that somehow somebody that sets aside exponentially more for bonuses is going to take -- is going to pass this fee on to their customers. now, if they do, they putq themsa+es at a competitive disadvantage, and iç think americans will look at one of

the 8,000 or 9,000 banks in this country that acted responsibly and move their money there. americans have a choice in where they bank. çagain, i don't -- i think it strains your credibility toç somehow believe or even make the case that this is something you have to pass on to your customers if you're setting aside somewhere on the order of 10 times that amount of money just to pay out bonuses. this is a responsible way to ensure that the law is upheld and that taxpayers are paid back in full for the money that they lent to stabilize our financial system. >> but if the marketplace does not -- fails to discipline these banks and prevent them from passing on the costs of these fees to their customers, are there any legislative

measures that the administration would contemplate? >> certainly i'll talk to the economic team, but it's a little play off that old slogan -- i think you can let your money do the talking. you just -- if your bank has decided that as a way of repaying your generosity in papering over their excessive risk-taking that almost crashed this economy into something as deep as the great depression,ç if their great reward to you is to pass the bar tab for their wreckage on to you, i would suggest to anybody that is at a bank like that to move it to any number of small and community banks throughout this country that somehow got by all these years playing by the rules. jake. >> there are reports from sources familiar with the negotiations that a tentative deal has been reached on the excise tax in the health care

reform measure. what can you tell us about that? >> nothing more than i just told ben in answering -- in askingç me largely the same thing. if we have more later today, we will certainly -- if we're in a position to talk about -- moreç about that, we will. çóobviously the president met a few days ago with representatives from laborçw3ç unions all over the country who are concerned abouti] the structure of the tax impacting their working men and women, their members. the president has obviously a strong desire to see a bendingt( in the cost curve for health care, while at the same time not impacting working men and women. ççso those meetings have taken place in order to try to find some sort of compromise that

does not impact working men andç women, while at the same time we take responsible actions to ensure that the amount of money that people are paying for health care, that we change the direction of that curve. >> when you say working men and women, do you only mean working men and women who are members of unions? >> i mean that, iç guess euphemistically, for those that are largely middle-class employees. >> as a theoretical -- theoretically, is it fair to exclude -- and i'm not saying that this is what the deal was -- but as a theoretical question, is it fair to exclude health insurance plans that were the result of collective bargaining from this tax, and ones that were not a result of collective bargaining be hit with this? >> well, jake, let me wait for us to get into where those details are. i would say that throughout

this legislation there will be -- there are in a number of areas measures and ideas that are phased in over time in order to transition from where we are to >> and the right to work state. the administration would never agree to something that would exclude working men and womenç. >> it( think we will have a betr chance to talk about this when qwe walk through hopefully something that has been agreed w3upon that moves health care

closer to passing. >>ç one follow-up. yesterday when i asked you how çówe havei], how you guys are gg to avoid banks passing on this fee, this tax, to the consumer, you said it would be constructed in such a way. but so far all i can believe discern, that the only thing that will prevent that 50 banks are going to be hit and eight others -- and 8000 others are not. >> the way this is structured, you could of structured this a number of different ways. we could have sought -- >> you could of taxed the bonuses. >> you have 100, we believe and we will show the budget, $117 billion left to repaidç to the tarp to make it whole again.

that isç down from earlier in e year on the order of about $340 billion. we structured this in a way that we felt was reasonable and responsible for an industry that has,ç quite honestly, bounced back pretty quickly, again, largely because of -- excuse me, almost entirely because of the help of taxpayers in making sure that there was a floor. we believe it's structured in a way that banks shouldn't pass this on, and that it should not be something that is considered so amazingly onerous on them. if you are a bank and you are going to pay into a fee structure that we think will recoup on the order of $90 to $100 a billion, let's use that as a range over a 10-year period

of time, because we think that $117 billion is still likely to come down. if youçç, if that's the pool f money you are talking about, there is a number greater than that pool of money that is now being set aside for bonuses. maybe i missed their testimony yesterday where they said we are going to pass all of our bonuses, the costs of all our bonuses on to their customers, and we are going to pass each it is structured in aç rational and reasonable way that would allow banks to meet their requirements, meet our requirements under the law, not be overly onerous, but at the same time not be such that it is such a tremendously new business expense that would need to be passed on.

i think it the way it's structured -- >> 1 not tax -- not -- why not just tax the bonuses? they cannot pass that on to the customer. >> they will pass that onto. >> they already are. they are are pretty sang -- >> what do you care what they say? i am not caring what they say. i am trying to enter the question. >> 1 not tax bonuses? >> i understand. it was structured in a way we believe this was structured in a way that makes this the most responsible way to do that. >> taxing bonuses would not be the most responsible way? >> we came up with the way that we thought was best to do this. >> are the banks supposed to

have four years to pay this back? >> the law calls for i think by 2013, congress and the executive branch have to have a way to make taxpayers whole. i do not believe the law stipulates that length of time for the actual repayment. çi do not think they got into that. >> if the president pleased with the pace of the u.s. response in haiti? >> he is. but i think he was clear with the team yesterday that day and night we have to do all that we can, as quickly as we can, to get assets, to get teams, to get personnel, to get resources as quickly as possible to haiti. obviously, as i talked about

here earlier, there is a window of time whereby we have the greatest ability to impact the search and rescue portion of what is likely to be a very long mission for the international community in dealing with the devastation that we have seen. that has been our goal, that has been the president's goal, is to possible. obviously there are logistical ñrhurdles to overcome. it takes a few days to get ships there. we have got an aircraft carrier that is heading there now. obviously the devastation in and around the capital will make -- no passing notes in class. teachers used to take that stuff and read them but i won't. obviously there are logistical hurdles in moving some of the stuff.

unloading, ensuring that there are platforms for aircraft and helicopters, getting stuff moved around the roads, i would say this, i think the president is pleased but took the beginning of the meeting last night to remind all of us that precious lives were at stake, that time was of the essence, that he expected the team to continue to work around the clock as they done literally since we first got word of this many hours ago. >> any plans to send in former president bush or former president clinton on behalf of the administration? >> president george w. bush, obviously, after the tsunami struck several years ago, enlisted the help of his dad and former president clinton in coordinating and raising money

for the efforts in the area affected by the tsunami. president obama last evening spoke with president george w. bush and asked if he would take part in an effort similar to the good idea that he had around what has happened in haiti. obviously the administrations of george h. w. bush, the administration of bill clinton, the administration of george w. bush, and now the obama administration have worked and we have seen a lot of resources go to haiti and the haitian people. t(we obviously have a vested interestç in the government and the people there. he asked them to come together

in an effortq similar to the one to was done for the tsunami. we will have more details on that in the coming days. again, our focus right now is on ensuring that what resources and capabilities we have are gotten to the region and gotten to haiti as quickly as possible to affect that window of time for search and rescue. >> can you tell us if they have at least initially agreed to go >> i'm sorry. both of them have agreed to take part in this. i did not have details past that at this point but in the very, very near future we will as we focus and for the time being on the search and rescue. ç>>ç on banks and bonuses, the president sounded particularly angry today. çwhat made him catch up with te street and the outrage of the

people? >> i would remind you that little more than one yearxp=ì(lc the president was angry in the awful -- in the oval office about bonuses. i think when you read, as many of us did this weekend, about the newest bonus season coming around and the money that's being set aside, and it appears as if banks that through excessive risk helped cause -- through that excessive risk helped cause an economic catastrophe believe that the good times have returned. i think that is upsetting and would make angry many people in this country. >> especially those of a fork. >> especially those of work, absolutely, who have seen their tax money go to ensuring that a financial system does not collapse any further and now are having trouble either finding work or those that do have

work, if they are in a small business, are having trouble finding a loan. you have heard the president talked about this in financial reform. we have in financial regulatory reform our proposals for shareholders to have a say on executive compensation. companies that have received extraordinary assistance have to have their pay packages approved. alice asked this yesterday before the hearing started about what caused all this and whether or not the companies or the banks should apologize, and i said yesterday, and i would say is the least that the american people are owed. what the president outlined today was a plan for ensuring that thew3 apology came with beg

made whole for the memory that was lent to them after what they did to the economy. >> one more question, does the president feel remiss by not attaching some conditions except for repayment of the -- >> tarp was structured in september/october of 2008. it included the provision obviously in the law that requires repayment in full. it did not require measures on executive compensation. so unfortunately that is a time that is passed. in all honesty, extraordinary assistance was rendered by the fed and other places even before tarp was set up. so you even have companies, aig

received the bulk of their assistance in a setup that even is a concentric circle outside of what part is. i think we have all been remiss that there weren't stronger guidelines on that. >> following up on her question, this does notç apply only to tarp banks, right? >> i think the call that we did last night lays out the formula for how this would be, who this would apply to. i would have to go back and ask some of these guys exactly which one of the ones are in there. there were big banks, some of whom got tarp monday that said they didn't want it or didn't

need it. but their excessive risk-taking contributed to an industry that made decisions that, in all honesty, i don't think were even in their own best interest and certainly not in the best interest of a stable economy or the american taxpayer. >> there are obviously a lot of other banks that were tarp banks that pay their money back. why is it fair to now go after them if they have paid the money back? >> because of what they caused this economy. >> so it is punishment? >> no it is making the taxpayer whole for the aid the was extended to the industry for a problem caused by the excessive risk-taking of the industry. >> so if your bank behaved without engaging in that kind of risk, how you get your bank off the list? >> it depends on whether your

bank is on the list. there are 8000 to 9000 banks in this country. i think the call said around 50 or so would be paying this fee. ças you can see, this is desigd for the biggest banks that we all know had the biggest impact on what we all felt and are continuing to feel. >> some in the financial community who follow these things very closely on capitol hill say that it is clear to çthem this won't pass the senate, but republicans will vote against it, a lot of moderate democrats will vote against it. >> we will see. >> in that case, is this just politics? beat up on wall street banks? >> no. it is a proposal by the president to uphold the law to ensure that taxpayers are made whole. if individual senators in either

party want to make the decision that they do not think this is a good idea, they're certainly free to do that. they can explain to you just what i have explained our viewpoint on this responsibility fee. >> this does putçç republicann a difficult positions? >> i do not know why it would. t(do you believe it is unfair to go back after banks that already paid the money? >> they can explain that to their constituents and the american people. if you want to be on the side of big banks, this is a great country, you are free to do so. >> it sounds like it's about politics of trying to define the culprit. >> i will lead to the own devices as to why you believe that all the republicans are in

favor of big banks. maybe they are, maybe they are not. there will be a vote and we will take to determine who is on what side. the president has throughout this process laid out that the american taxpayer is not going to be left holding the tab for the reckless behavior of the banks. they're going to be made whole -- >> this does not include fannie and freddie, right? this is going to have to go through congress and people are going to have to decide where they stand. there has been an awful lot of teeth gnashing and there has been an awful lot of hand wringing about the way these banks have acted. we will see if the people that have their comments be known about the irresponsibility of their actions, we will see if that is backed up by ensuring

that the american taxpayers are made whole for what they have lent these bankers. >> the president pushed these bankers very hard to lend more money when they were here. isn't this $117 billion that they won't be able to lend? >> if you believe that, then you should get an interview with one of these bankers and ask one bank why their bonus pool is $28 billion. it strains any common sense to assume that their share of $9 billion in a year would somehow preclude them from loaning money to a small business when they have set aside $20 billion for bonuses. i do not know how math works on wall street, that is not the way it worked in alabama. >> i have a quick one on haiti but i want to follow up on chips

and question. you are making the taxpayers whole through the banks but the largest outstanding owners of tarp, the top creditors or debtors, is aig. are they a part of this? >> let me give and tito i do not think there are. gmac, general motors, chrysler. >> aig i believe is in here but i need to find out and the background to go but the automakers to go right. >> i understand aig is sort a fuzzy. >> no. i did not think it is fuzzy. >> they are supposed to be part of this but the automakers are not. does this mean you have written off the automakers paying back carp? >> not at all. >> what happens when that money comes in? >> that's where the money comes from. >> you are making the taxpayers whole to go understand this --

>> or just the extra money come from? >> the extra money would go into the treasury. we are not absolving the auto companies for all the bad decisions that got us to the point or that contributed to those decisions that contributed to getting to the point where two out of three of the american auto companies were in a position of needing to declare bankruptcy. >> i understand that but you are getting the banks it looks like to pay their debt. >> note because one, we expect, you have seen these companies say, they do expect to be making payments. the largest contributor to the acceleration in the downturn of car companies' economic health was the overall economy. çwhen you are selling 16, when you're producing cars and selling cars at a pace of 16 million a year, for american auto companies, and then because

of excessive risk-taking that caused an economic catastrophe to happen in this country, and we are now dealing with an economic situation as we were last year where 10 million cars were being sold, that is going to affect anybody's bottomw3 li. this doesn't -- >> you are saying -- >> let me just to go the financial crisis and the auto industry was on the right track. >> the decisions that have been made the key to that point. there is no question. but do we not think that? if you sold 16 million pairs of shoes inç 2007 or 2008, and thn you sold 10, do you think your company would be improving the economic picture? not likely. certainly not if you had now on

his question. >> duly noted. procedural. you've got a structure that is set up for the production of 16 million cars, an economic catastrophe hits, caused a again, primarily by a series of excessive risk-taking that causes an economicç slowdown, e do not think that the structure of this unnecessarily penalizes banks in making those payments. >> are you absolving the auto companies -- >> no. >> you are getting the money back from the banks. >> we have a plan to get all the money back. at the american taxpayers get more, that will go into the treasury. >> i have a follow-up on haiti.

ççon the security situation, s there an unlimited amount within reason, but is there an anticipation the you'll end up sending more troops? the president said today that brazilians are in charge of the u.n. security force right now. >> the you and provide a c dividend amount of security, particularly domestic police security. >> what is a significant amount? do you have numbers? >> let me get them for you. i think it is on the orderrjtxd 9000. but the question, it is likely that the u.n. has suffered devastating losses, likely as heavy as ever been sustained on a single day.

the 82nd airborne is being moved. çparts of it, i should say, are being moved for security as well as, there will also be units that will go in that deal with logistics and supply chains. obviously movingñr, there will e a tremendous amount ofçó resources, food and water that will be on its way in that will have to be distributed and moved and we will be working through that. >> are there troops ready to go? how many more are ready to go? >> the president last night and the situation room discussed the secretary -- discussed with secretary gates, with admiral ensuring that all is being done

that can be. secretary gates said that there was no higher priority right now for the military in this country than ensuring our rescue and relief efforts, part of which obviously goes to that security. >> there are rumors about roving gangs from a prison that collapsed. is that something that's going to be our responsibility at some point? >> based on the devastation that's happened to the un and has certainly happened in haiti, i think the international community is likely to have to contribute to a security force and a stabilization effort to ensure that what is on its way can safely get to where it needs to go. >> back in the issue of haiti, first of all, has the president talk to president preval as of yet? what does that conversation --

what is that conversation going to entail? >> we tried a couple times yesterday and as of me coming out here, they had not spoken directly. our ambassador on the ground in haiti had spoken several times with him yesterday. as soon as that call is completed, we will have a detailed readout on it for you. >> there are conversations on the hill about issues of medical attention and medical help for many in haiti. they're saying because the hospitals are in shambles and things of that nature, there could possibly be need for many of these haitians to be able to be airlifted to local or field hospitals or medical facilities in the area nearby. there is a conversation on the hill about this. is this white house in agreement with if haitians have to be airlifted here for a specific matter of taking care of medical

treatment? >> first and foremost, i have not heard discussion and i will check on whether discussion about bringing anybody here. obviously there would be the dominican republic. there may be some staging in guantanamo. one of the assets that is being readied to be moved is the ship, the comfort, that obviously played a big role in tsunami efforts that has a primary mission of medical capabilities to ensure, we have seen reports of the sheer scope of the devastation relating to hospitals and medical facilities. >> what if there is an overflow, 3 million people were affected

in port-au-prince and these areas you said, gitmo, dominican republic, and the uss comfort, that has a certain amount about what -- >> i would say this. the president asked our team to continue to examine any way that we can help. as time goes, more assessments will be made about the level of resources that are needed from the international community and the world that we will play in providing that. >> on the bank fees again, and the spring president said that he would recoup the bonuses that being promised to aig executives. there was legislative -- legislation introduced to congress but it died there because the white house did not like it. that in addition to the fact that this is a $90 billion recoup over 10 years which is not even reach this year's bonus pool, can we believe the president is serious on aig? is this a symbolic gesture in terms of the $90 billion being

recouped through this? >> it is not a symbolic gesture. $90 billion is what we believe when you subtract what is likely to be repaid from the $117 billion, off that taxpayers are owed. the president is the one to get that money for taxpayers. that is not symbolic. i do not know who considers $90 the president does not. the president has a plan that will go get that money back for the taxpayers of this country that lent it to banks so that our financial system would not collapse. >> the the idea for reaching out to president bush and president clinton come up in the sit room meeting last evening? >> the call to president george w. bush happened i think about 30 minutes before that meeting convened.

within 6:45 if my memory serves+ >> why did he not announce it today? are you planning an event with them? >> i]i do not know what the details exactly are. i will be honest with you. our focus has been and continues to be on the ensuring that all of our energy is dedicated to quickly as possible to affect the search and rescue phase of this operation. there is a window of time but those on the ground and those here believe is crucial for those that may be trapped still to have hope to live. that is our focus at the time, and for the time being and in the immediate future. çóbut again, the president

believed that the partnership that george w. bush created between his dad and former president clinton was obviously a highly effective way of ensuring that after this phase of the operation, the search and rescue phase of this operation, after that concludes, obviously there's still going to be a tremendous need and there will probably be a tremendous need for many, many months to come. that is the best vehicle and the most effective vehicle for settingç that up. id not know whether we are talking about only a few hours from now giving you those details or in a couple of days but we understand you are anxious for those and as soon as they are complete we will make sure that you have all of them. >> is a president obama plan to restore haiti to its pre earthquake conditions or make it

better? >> i think that the international community has been workingw3 for years and american governments, as i mentioned, going backok many, many administrations, have focused efforts on the haitian people. immediately we're focused on ensuring their safety and security, finding them, getting them out of buildings that may have collapsed, ensuring that they have food and water. obviously the rebuilding effort will take quite some time. i think all those involved believed that the goal here is to create something that was stronger than it was in the few moments right before the devastating earthquake.

>> have a quick health care question but i just want to clear up one loose end. he said primarily at night just want to see if i understood you correctly. the you mean to indicate that the auto industry's insolvency was primarily the fault of the banking industry or is it the auto industry? >> i am not absolving the auto industry for the decisions --ç off for the decisions thatxd contributed to over the course of many years, decades, that we witnessed a decrease in the share of auto sales in this country, in their auto sales worldwide. nobody would absolve them of a series of exceedingly poor decisions. what accelerated that in the short term was a downturn in the economic -- in the economy that we've not seen since a long time

since the economic conditions of this country have equaled but the did last year. >> the primarily reference was to the executive. on health care and the $80 billion deal with pharma, any deal to bump that up? the issues that were being discussed was the doughnut hole. i did not know whether they have made that. çfrom the call last night, aig would be covered from the outline put forward byw3 this legislation. >> i want you to answer

elizabeth's question but on h -- but on aig, why shouldn't aig if you are going to be punitive about this, why should they not pay more for a fee? >> the believe the fee is structured the go back bay took a greater risk. >> what about fannie and freddie. >> we believe this thing is structured based on the size of the institution and is positioned at those that have seen their institutions become healthier faster in a way that allows us to recoup this money. in terms of fannie and freddie, they are not at an economic health standpointç yet that wod allow us to do that. >> on health care, on the timing of the next couple of days,

there seems to be some evidence or suggestion from the hill that maybe this could bleed into the first part of next week but that the white house would like to see some sort of broad outline of a deal done by friday. did you talk about the timing and what's going to happen? >> they will be here at 2:15. i do not honestly know if the could you want to see something done by friday? >> by last august. >> you blew that one. >> in the event, i think that speaks for whether it is friday or monday. >> how -- i want to leap on bonuses. >> back to haiti. who is in charge in haiti and you said the haitian government is. i understand from a diplomatic standpoint you have to say that and they are. from a practical standpoint,

their institutions are broken, their buildings are collapsed, they have no power. are some haitian officials working with out of the u.s. embassy physically and do you have a sense that there is a joint -- >> i will certainlyç check. i can check with our representatives atq the embassy. we have all seen the pictures. we have all heard the accounts. the scope is devastating. i did not remember the graphic i saw on television of what they've been through, i did not have the sound up for the first part of that but they listed the magnitude of earthquakes and they had several thousand on the scale based on their level on the richter scale. and i think the number of earthquakes is that 7.0 or above in these several thousands, either 17 or 18 were in this 7

and above. the devastation is immense. it is unspeakable. it is understandable that the capabilities that existed for the government in the moments before it struck did not exist in terms of power and to indications, water, food, resources, roads, the airport. they have asked for international assistance and i think we have contributed, others have contributed, and i think what is nothing short of an extraordinary way to ensure safety and security. >> i guess i am interested in anything forç the actual workig of the two governments and who's talking to who and what decisions are being made. >> i know that our ambassador spoke at least twice yesterday

with the president of haiti, not the president but i will haveç tommy check specifically on it. is it clear to you why the president has not been able to speak to the haitian president? >> largely because of communications. @> china and the google. is there any concern within the administration that this issue could explode to affect the rest of the relationship with china, particularly if it cuts wings or legs on capitol hill or within the american public? >> wings or legs, how? >> if this strikes a chord with the american public. >> i am sure it does. i think the notion of what we

have seen happen, i cannot imagine that it has not struck a chord. you heard the president in shanghai take a question from the internet about the universal right of a free internet. he strongly supports that and we support gogol's action in a decision to no longer censure searches that happen using the google platform. whether or not it affects our relationship -- look, we have, the president has, strong beliefs about the universal right of men and women throughout the globe. those are not carved out for

certain countries. that is what the president answered the way he did in a importance of that freedom. >> how you manage to keep it contained? you have several different issues with china. you have china on iran, you have the -- china issue, if you start getting things coming out of congress and this starts to actually strike more of a cord with the public, do you think, how you manage the larger relationship? >> do you mean legislation? >> are you worried at all about managing this within the frame of the larger relationship? >> i think our concern is with actions that threaten the universal rights of a free internet. >> one more quick question. what did you think of pat robertson's comments yesterday that the haitians brought this on themselves by making a pact with the devil? >> ççit never ceases to amazee

fçç asbñhvg human suffering somebody says something that could be so utterly stupid, but it like clockwork happens with some regularity. >> you were going to come back on aig. >> you wantedokñç to say somet. >> universal right of a -- >> on burden yourself. >> i will tell you afterwards but it applies to what i might have said and quickly formulated it through and go ahead. >> it would have been very stupid. >> is the group coming in at 2:15 the same group as yesterday? a different subset or staff? >> i believe staff are probably

already here working on what was worked on yesterday. we will get you a list. i do not know that they will match up perfectly. some people may or may not be in town. >> can you at least give us a general sense of how close you think things are to a deal, and it least a deal that could be submitted to cbo while other language -- >> i think we are hopeful that by day's end they will have worked through, house, senate, and the president, worked through any number of issues that remain outstanding, not just the excise tax on cadillac health plans but other issues. i think we are very very close. i think they made extraordinary, tremendous progress mr. dick. as you know, the president's had a meeting that was supposed to go several hours went several

more than originally planned. >> you said very close. for the whole thing or just the economics? >> on many aspects of what remains to get an agreement. >> and your favorite subject, the president was talking about to go what is my favorite subject? >> bonuses. the president was talking about recouping money for the taxpayers which the tarp large -- which the tarp law does require, and you said earlier that tarp didn't require action on bonuses. >> her original question was and the original tarp, as it was passed in october, did the tarp include strict requirements on executive compensation and bonuses. the answer is no and i said, i did not think people could go back to the way back machine about that time to go the way

back machine. >> that is what mine is called. >> their call time machines. >> mine is the way back machine. w3back then. >> ok, i understand that. that may be what ethan understands it -- what ethan calls it. i think i did make mention of in one of the economic answers here, it all runs together. last spring, early last summer, restrictions were put on banks that received extraordinary assistance. most of them are out from under that. >> what i am trying to get at is he mentioned four times in extremely strong language today bonuses. i guess what i am trying to figure out is the reason why somebody is so angry about bonuses seems to be almost going out of their way not to do anything about the bonuses. what is preventing you from

going after them or is there some other reason you've chosen not to? there has to be a reason. >> you made mention in clarifying my first answer that steps have been taken to deal with firms that had received extraordinary assistance. >> he's talking about bonuses today. >> i understand. in totality, trying to answer your question. one of the reasons, and this was mentioned also on the call last night when we talked -- when we walked through the plan, you have heard and seen the banks somehow discuss that while we put aside hundreds of billions of dollars for bonuses, it is this $9 or $10 billion that will fundamentally change the way they do business. i think that strains all credibility in making that analogy. >> i still cannot understand the reason you've chosen not to go after bonuses. >> the structure of this what -- the structure of what was rolled

out was what the economic team felt was the best way to get at the money that is owed taxpayers to you ruling out proposing anything legislatively on bonuses going forward? >> i am not ruling it in or out. >> what about aig? you guys made no move to recoup those bonuses. >> as a result of what happened last spring, restrictions were put on companies that have received extraordinary assistance from the government. >> the white house proposed that legislation and it died in congress. >> right. we are continuing to work through this. in this process, work through the best way that we felt in order to recoup the money if that had been lent to aig and to other banks in preventing that economic catastrophe.

>> but, robert, they were allowed by the white house, through your opposition to the measure in congress, to pay bonuses to their executives. what is being done to recoup that? >> i think the wall street journal understands the problem that was had were contracts that were in existence prior to legislation that prevented bonuses. i have probably read a few of those articles on say, your editorial page. now you're proposing new legislation so why not include a measure to recoup those bonuses? >> we are working on how to get the money back that is owed for tarp to the american taxpayer. >> i want to go back to the choice of george w. bush. i am just curious, given how much this president criticized george of the bush for his response to katrina on the campaign trail time and time again, what does he think that

the president is the best person to partner with on relief? >> i guess the answer would probably be contained in why bill clinton worked with the guy he beat to come to the white house. >> but this president specifically campaigned constantly citing the response to the trend. could i do not think george bush would hold up -- i think if you ask george bush whether the government acted up to his ability in responding to katrina, i think that answer would be no. i think the actions that were taken to deal with the humanitarian crisis from the tsunami, on the other hand, i think worked quite well. if everything i criticized precluded me from ever doing something with them on an issue that we agreed on, read all be walking around as 300 million people unable to communicate or deal with anybody else. i mean, i just think that the notion that somehow because you have been criticalç of the

previous administration does not mean -- i mean, why do we ever come here to have lunch with them? why do we ever come here to ask them what it is like to be the president? i think that -- >> yes, but campaigning on that, i mean -- >> go-ahead. >> talking about relationships and partnerships has the president or anybody from this administration in this effort reached out to president chavez of venezuela or anybody from his administration? " not that i'm aware. >> in addition to the relief efforts, some lawmakers are calling on the devastation to grant haitian illegal immigrants and legal visitors temporary protected status which would give them a chance to live and work third legally while their country recovers. >> i did not know where that is at this moment but i will check on that. >> i know you think of the one- year anniversary as a hallmark holiday, but nevertheless people will be telling that story in

the coming days. how do you tell the story of the first year when you are talking to people about. >>çñr in the circles under my . >> just a visual. how you describe the year? what are the things you hit? what do you think in terms of lessons learned, adjustments that the white house will be making for the new year? >> the would describe the first year and i should, permission to revise and extend their remarks into whatever happens in the intervening six days. i think this president was sworn in under a series of circumstances that had quite honestly not be seen in quite some time. we had an economy that was in absolute freefall, an economic downturn that has exceeded anything in memory since thec great depression. we were involved in active wars

in iraq and afghanistan. in a series of issues that has been discussed and not dealt with for years, dealing with health care, ensuring that our country was on a path towards energy independence call -- independence, all with the backdrop of the budget deficit that had swelled from a period of budget surpluses. in those 12 months, the president has had to make a series of decisions, first and foremost, to move us back from that brink of economic

catastrophe, to ensure that we did not see in a horrific recession the next great depression. çnot all of those decisions hae been popular, but the president knows that he was elected to deal with the circumstances as they existed when he came, to make decisions that he thought was in the best interest of this country in moving forward, from the brink, but ultimately creating a new foundation for long-term economic growth that was not predicated on bubbles and busts, to deal with the problems that he talked about that had been neglected for years, to deal responsibly with an end to a war in iraq, as we focused on those that did us harm on 9/11, with renewed

emphasis on a very dangerous region in the world in afghanistan and pakistan. i would end probably largely with the fact dead but all this work continues. you mentioned the notion of a hallmark holiday. i do not think many people recognize the day as anything other than another day in which they believe their country is on the road back to economic recovery, to a place where we have better relations with the rest of the world, and and are taking steps that are necessary to deal with the long-term problems that have existed for

so long in our country but have not been dealt with. >> could you mention any lessons learned or adjustments that the white house wants to make going into the next year? >> let me noodle on that one and we will do this each day for the next five days. thank you. >> rush limbaugh says americans should not donate to haiti. what you say about that? >> i would refer you, again, i think in times of great crisis there are always people that say really stupid things. i do not know how anybody, i did not know how anybody could sit where he does, having enjoyed the success that he has, andxd t feel some measure of sorrow for what has happened in haiti. i think to use the power of your pulpit to try to convince those not to help their brothers and sisters is sad.

my sense is that most people, though, because they understand we are part of an amazing world, will not listen, and instead will seek to help those that they know, because through no fault of their own, have suffered an unspeakable tragedy. >> an update on the continuing helped send negotiations on health care reform. >> true armstrong of

congressional quarterly said there are reports that there have been agreements reached on cadillac health care plans, one of the chief issues. what is the compromise? ç>> the specific agreement reached between top leaders of union groups in negotiations with the white house and congress some time late last night and they have been finalizing the details earlier today. the original policy in the senate bill was such that a very high-cost cadillac interest plans be taxed as a way to raise revenue and to bring down insurance costs. the compromise has been reached. the effective dates that these plants are taxed is the week to be rolled back by about five years. there is a transition period 4 plans for unions and workers to adjust to those taxes. the threshold at which they are taxed has been bumped up a little bit. it would have been a plan that cost over $23,000 for a family would be taxed and that has been

moved up to $24,000. for individuals, $8,500 to $8,900. >> what about senate democrats? are they on board? >> we do not know at this point. this is just coming out, the details. it has been confirmed by people at the union and a few but house officials. it was literally minutes ago. the white house and union officials have beenç working wh harry reid who obviously has a responsibility to make sure this is kosher with his caucus. we do not know about the senate if everybody has signed off on that. it does seem to fit the broad parameters of what people said favor willing to support and settle for in the senate. >> if the compromise diminishes the revenue brought in by the cadillac plans, are you hearing

how democrats might pick up the slack? >> the white house is not talking about that yet. they are: to make sure the revenue is balanced and it is paid for. çunion officials were estimatig that the changes reduce the çamount ofw3 revenue by about 0 billion over 10 years. that hasç to be made up somewhere. there are a variety of ways to do that. taxxd the wealthiest americans. ok" the so-callemó plans,xd what qualifies a health care insurance plan as a cadillac v:plan? q>> in the broad sense, it is a plan that is a very expensive but and generous insurance plan. they often cost much more than your standard insurance plan. unions have fought hard to get these generous benefits. that is something they want to protect.