i have a spousal travel allowance to help people get back to work. >> you have been a passionate, eloquent proposal -- supporter of those proposals. >> and i have more. >> i would be happy to talk with you and work with you on that. in your right to remind everyone is that there is a pain not captured in the national numbers where unemployment is much higher, word job loss and the risk is much greater. that is why we have done everything we have as quickly as we have to support this economy and help reinforce this economy. thank you for reminding people about that. .

this proposal would represent an existential threat. >> i yield back. >> i hope we can get together with a bipartisan discussion of the recommendations made by the president and you. if we the -- we look forward to working with you out like to see

whether we can iron out differences. we need your help with the senate. does not make sense to go through all of this only to find out that they have problems. we thank you for being with us. we look forward to being with you again still. this hearing stands adjourned until 2:00 p.m. this afternoon. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

coming up on c-span, and a passport discusses the recommendations for preventing sexual assault in the military. then the the the the medical facilities at the bottom -- bagram air force base in afghanistan.

secretary geithner talks about the budget on capitol hill. >> it is easy to complain but the issue and tried to be entertaining in a way that offers solutions. >> thoma hartman is a guess and then added 8:00. >> for educators, as he is been offered the new c spanclassroom.org. there are videos for use in your classroom. it is organized by subject and topics. there is a chance to connect with other c-span passion teachers. it is all free.

sign up. >> members of the military task force on sexual assault testified this afternoon before the subcommittee. they discuss the recommendation for revamping how military personnel can report sexual assault and increase services for the victim. this is just over an hour. >> good afternoon. the report of the defense task force on sexual assault in the military services. the task force was created by the national defense authorization act for fiscal year 2005 as an extension of the defense task force on sexual harassment and violence at the military service academies.

we are pleased you reported here. we know you got started after this. this is not your fault. we are glad they commenced. thank you so much for that sexual assault is a complex problem. it is not lend itself to a single hearing. last year, we set up to extend it by have a series of hearings on individual subjects some members and witnesses have in- depth discussions to build toward a comprehensive understanding of the problem.

solely on prosecution of sexual assaults in the military, but since the defense task force on sexual assault in the military services released their report in december, we have decided instead to have this hearing fully examine their findings and recommendations. i want to thank the task force co-chairs for the depth, breadth, thoughtfulness, and quality of this report. this is exactly the type of well researched report we hope for when we create these task forces in law, complete with comprehensive and practical recommendations. i cannot promise that all of your recommendations for congress will be implemented, nor that those that are implemented will be done exactly as you have put forth, but i can assure you that each and every and considered by this subcommittee. i do not want to steal the thunder of our witnesses, but there is a recurring theme in their report that needs to be mentioned from the outset: while the department has done much is

recent years to address sexual assault in the military, much more remains to be done. thankfully, due to the work of this task force and others, we have a much clearer understanding of the problem. it is important that we make significant improvements to how the department deals with sexual assault, and that we do all we can to avoid inadvertently making things worse in the process. sexual assault within the ranks is antithetical to the trust and camaraderie that defines military culture. any sexual assault undermines the moral foundation of our armed forces and does irreparable harm to unit cohesion. hopefully today's hearing will help us chart a legislative course to make progress in our assaults in the military. a legislative course to make progress in our goal to eliminate sexual assaults in the military. we have with us two

distinguished members of the task force. rear admiral iasello served as one of the task force co-chairs. brigadier general dunnbar served as the senior military member of the task force. we certainly welcome you to be here. i wanted to mention that i would ask for unanimous consent that mr. turner to participate in today's hearing and be able to ask questions after the subcommittee members have had an opportunity to do that. i now turn to mr. wilson for any of his comments. >> thank you, madam chair. i thank you for the excellent work and report concerning a very difficult important and challenging set of issues. this report is comprehensive, detailed and highly insightful as to how much yet needs to be done to insure that the military culture adequately,

appropriately and effectively addresses the issues related to sexual assault. certainly the report cites many instances of best practices by the military services to illustrate that progress has been made and is being made. among those best practices are the efforts at ft. jackson which is in the second district of south carolina that i represent. the army's largest gender integrated initial entry training center where sexual assault is addressed within the first two days of training. response to victims and accountability efforts of the department of defense and the military services. furthermore, the report is critical of the well intentioned effort by congress to create a new comprehensive article 120 of the uniform code of military justice, ucmj.

practitioners see it as cumbersome, confusing and a barrier to convictions. also significant issues have evolved related to the article's constitutionality. finally, the report touched on implementation challenges of dod policies and practices during deployed joint operations overseas and in joint basing situations in the united states. it is said that near lly 65 yea after world war ii demonstrated the military necessity to expand the roles for women in the military and continuous efforts by congress to facilitate the integration and assimilation of women into the military, we're here today to receive yet another report that clearly indicates so much still needs to be done. i believe the office of this report provide most of the answers to my question. i quote, "the task force believes that culture change is essential for military services to improve how they prevent and address sexual assault."

the lesson we should take away from this report is that culture change is hard, difficult, and neither smooth nor quick. it's a process requiring enduring commitment to change over the long term. in that vein, i'm sure this subcommittee will energetically pursue and support the task force recommendations. but i would also caution that as the subcommittee begins to address other issues that will require significant military cultural changes that i've seen in my 31 years of army national guard service, such change will not be easy or quick. like the efforts to change military culture with regard to assimilation and integration of women like will be to be disruptive and difficult for many years, notwithstanding the assurances to the contrary of some advocates for change. thank you, madam chair, for holding this hearing. i look forward to the testimony of our witnesses.

>> thank you. you would like to proceed? >> chairwoman and other distinguished members, thank you for this opportunity to present the work of the defense task force on sexual assault in the military services. we're honored to discuss the findings of the staff. given the fact that our formal statements have been forwarded to you, we will keep our opening comments very, very brief. as regards to the task force authority, as the chairwoman has already mentioned, the congress directed the task force to be established in 2005 by the defense authorization act. employing quantitative measures, over a period of 15 months, we have visited more than 60 military installations.

we interviewed more than 3500 individuals, 61 victims of sexual assault, senior military and civilian dod leadership, sexual assault response coordinators, victim advocates and, of course, the supervisors. we've interviewed the first responders to sexual assault, the doctors, lawyers, chaplins, the military police, the dod criminal investigative services. we reviewed hundreds of the criminal investigative reports as well as all prior reports on sexual assault leading up to the task force focused the work in three interrelated areas, a victim responds, prevention in training, and strategic oversight. the report recognizes the progresses' by the department of we believe that the

recommendations contained in our report will improve these programs in this critical area rit. the task force recommends that the deputy secretary of defense takes responsibility for the office for ellis' one year off and until the secretary of defense advises congress that the program is meeting the goals. mccammon said the program be given more permit reflection. -- we recommended that the program be given a more permanent reflection burd we recommend that the design, personnel, and mentiomission len

this area. strategically lead in this critical area. we recommend the establishment of a uniformed terminology and core structure to be implemented across service lines. they recommend the professionalization of victim advocates to insure if a qualified personnel with national certification and we recommend that the sexual assault response coordinators be either dod, personnel or uniformed personnel. we have program standards and subsequent metrics which will allow us to measure the healthst programs. and finally in the area of strategic direction, the task force is strongly recommending funding for the research and collaboration with civilian experts throughout our country.

and now i'd like to turn the microphone over to my esteemed colleague. >> congressman wilson, other distinguished members, as a senior uniform member of the task force, i appreciate the opportunity to come before you, to talk about the findings and recommendations of our report. based upon the 15-month review that we had several themes clearly emerged. first, prevention and sexual assault should be the number one goal. to prevent the devastating impacts sexual assault has on member, his or her unit, the readiness of his or her unit as well as the undermining effects, sexual assault has had on the reputation of our arms forces. second, there needs to be greater consistency among each of the services becausest jointness which we see our operations today, joint basing as well as deployed operations taking place. there are also differences

between our components active and reserve. we do not have time to fully address the differences which is why we recommend that dod undertake a separate review of this. the availability and consistency of data also remains a concern for us. finally, in the area of response, notable improvement in that area but additional improvements as we have discussed are clearly needed. in the realm of prevention and training, prevention if we accept it as a top priority, in addition to providing support for victim advocates and being key to combatting sexual assault, we would say that the group needs to establish a strategy. that is not clear. it was not clear during our review. we understand they have since developed a prevention strategy. the implementation will be cue to the sexual assault prevention program. in addition, that overarching

tr strategy will allow greater consistency in the services and drive them into having uniform terms and conditions, positions and approaches for addressing this particular issue. this is a very clear area where the services have made tremendous strides. he would argue that the overarching strategy entails much more. it encompass as sesment of a community's environment in terms of safety, facility, location, issues that we saw in the aor. it is also encompassing of community awareness, leadership, emphasis and involvement. to a certain extent, we have seen where leadership is involved, the success of the program is much more effective stemming from looking at the senior leadership of the military services, holding annual summits, addressing sexual assault, prevention and response to the chairman of the joint chief of staff's video which we saw when we travelled into the aor to the lowest

level, commanders who are very actively engaged in addressing sexual assault prevention and response. we also say that sexual assault from the standpoint of prevention, the strategy we would like to see will guide initiatives, process, training and the public outreach that is retired to address the issue which would also enable the military services and department men of defense to better leverage and partner with out side experts in addressing the issue that affects not just those servicing in the military services but all our society as well. in the training arena, we argue that in order to be infective, the training that is currently conducted must be more taylors a take lo tail order in development level, tailored to skill levels and improving awareness should be one of the key aspects of training, addressing the

frequency of incidents, addressing perpetrator risk factors from age, alcohol, location, acquaintance versus stranger, garrison versus deployed and risky behavior in general. it is accepted by members of society and our military services. and we would also argue that training needs to be less -- nearly focused on women. that makes it all the more difficult for male victims to come forward. we all know that the ability of male victims to report is much less. it's very difficult for any victim of sexual assault to come forward. but currently the training sends to be more geared towards females, that encompassing any individual that might become a victim of sexual assault. we argue that the training needs to be specialized. it has to be specific to the gender of the victim as well as

investigators and prosecutors in order for us to be able to improve successful prosecution of sexual assault. as well as specialized training for leadership as i mentioned at all levels of service. in the victim response area, as we've said, much is done in order to improve what we're doing there. but some of the areas where we see additional improvement is in providing the immediate victim support from the first responders, community based support and victim advocacy as well as greater access, the contact numbers and accessibility, all those are very key for victim to know and in a standardized way if they're anywhere surveying whether it is a deployed environment exactly who they go to, where they can go in order to receive the care and treatment that they need. we heard that the victims are dissatisfied with the treatment they receive during the investigative process. we make a number of recommendations in order to improve how the victims are

treated in order to insure that they are able to receive support from a certified, very well trained victim advocate to being able to get advice from a qualified military attorney to also providing them with privileged communication which we see as necessary to encourage more victims to come forward. and longer term support is something obviously that we need to be looking at beyond an individual service in the military. we offer that as an area to further explore. and accountable, we took a look at the system accountability as well as offender accountability and found we need improvements in terms of the data base, in temperatures of the reliability and validity of the data as submitted by congress. we have concern over the sufficiency of the funding in order to insure timely delivery of a much needed data base and the services ability in order to provide the data to be integrated into a data base

which allows the opportunity for members of congress as well as department of defense to do trend analysis of sexual assault. in t the need for commanders to address the issue of sexual assault at the unit level. we've seen it addressed at the senior levels of the services to include the chairman of the joint chiefs of staff and we have seen it very successfully addressed at some unit locations. but we would argue that much more needs to be done in this area. it helps to increase awareness, reinforce the commanders stance on no tolerance of sexual assault in the unit and instills confidence and the attention given to it. we outlined a number of best practices. 15 are listed. no doubt there are many more best practices out there beyond the locations that we are able to visit. there search that is going on that is very positive within the dod and the military services.

i think that the office needs to take a look at what all those best practices are and integrate those into the prevention strategy that is currently addressing. in closing, we thank you for leadership on this issue, concern and invitation to speak before you today. we stand by to take any questions you might have. >> thank you very much. one of the recommendations that you've had and especially as we move forward is to place a sexual assault prevention and response office under the deputy secretary of defense for a year. you thought that would give them a chance to kind of owe prize what's happening. our experience has been that they just aren't really in a position to be able to do that. they're not designed for that

kind of oversight. i wonder if you've had any additional thoughts about that, if you feel that you looked at that and felt that was the only way to give this a kind of stature perhaps that we're looking for. how can we look at that? there is a concern that they're just not ready to do that. we had an experience as well with oversight of the process at walter reed. you know, there is a lot of question whether that is really the best place to put this additional responsibility and for oversight. >> it was our thought aafter 2005 each of the services took off in their own direction trying to answer this issue and trying to confront this issue in the best way possible. and we aplowed that initiative that each of the services took

in sort of taking this forward. i speak for the membership when we say we really would like to see a strategic leadership role taken by the office at the dod. that would help to bring together these incredible efforts that we see now from the leadership of the difference services. the army being one of the many examples that are out there. and especially as the general mentioned as far as the comprehensive prevention strategy that we're talking about, someone really needs to take the lead on that. someone needs to -- to be able to liaison and to partner with the intellects that are out there and the civilian society and capitalize on the great ideas that are part of our american culture. we felt by placing the office under the deputy secretary of

defense that the -- we expect, of course, a lot to be done in a very short period of time. we felt that added support, added attention would in fact help them to realize their goals. >> i think you stand by that statement? i think what we're wondering, if it a decision is made that perhaps they don't have the ability now, the capacity to actually provide the kind of oversight that we're really seeking here, or there's some other thoughts about how this might be done. what i think i hear you saying is you want to have more authority, more oversight and certainly raised the level of -- i'm not sure the word is competency. i think it's the capacity to deal better and to be seen as a office that really means exactly what it says.

we're struggling to define that better. >> i think the intent behind the recommendation is to provide higher oversight. i think that there are a number of ways to do that. the recommendation was geared to highlight the fact that that oversight is necessary. and so that is one recommendation. but there are clearly other ways of doing that. and we indicated in the report one of the areas that we found short coming was just in the staffing alone of the office. in order for it to be able to do what is if you go back to the inception of the office it is geared more toward response. now it is to prevention training. in order to do that quickly, high leverage over san -- level

oversight is prudent. >> we see it important that there be uniform members as part is that step, people in uniform and people that it had the experience of leading and understanding. we are also asking for an officer from the military services to be part of that staff. and to have a victim advocate on staff to handle that and a professional level. >> you mentioned the experience level. what you feel will contribute greatly to that stature and authority that it would have. is there anything in addition to that? >> the leadership of the office is led by a civilian level equivalent of a flag officer. >> thank you.

thank you very much for being here. unnoticed behind you you have an extinguished officer with the. i am a former jag myself. former jag myself. so i appreciate your service. and, however you want to answer and which ever order, you cite there are implementation difficulties with jag -- with article 120 of the ucmj in your report and recommend a review by military justice experts as to its effectiveness. is this related to the effect that the law only went into effect in cases after 2007 and layers not familiar how to use the new provision or are there serious issues with article 120 and on what particular issues should the review focus?

>> i believe article 120 is k m cumbersome and confusing. it is confusing for those trying to prosecute and confusing for individuals hearing the cases in order to listen to the types of charges that encompasses far more and i think as a result of that it's very difficult for individuals sitting on a jury in order to be able to come to a conclusion. the concern is because of the broad nature of it that there may be individuals that as a result may be acquitted. and that is why we just ask for a review of it. those who are implementing it, the jag officers know better than we do. i think that dialogue is

important. >> your report suggests of that you the military is aggressive in propering sexual assault. however, you note that the apursuit of court-martial cases where evidence is not as strong is that might be leads to fewer convictions. this is also an obstacle for obtaining court-martial convictions. what recommendations would you give to the military prosecutor for increasing court-martial convictions? what role can nonjudicial measures such as article 15s and administrative actions have in the effort to prevent and to punish sexual offenders? >> as a former commander this s difficult. i think in the end you want to provide justice for the victim.

what we would recommend and we do recommend for prosecutors as well as investigators is additional training. because sexual assault the incidents level of it spread across all the installations, across all the jags who have to try the cases, their ability to have familiarity with trying sexuality assault cases is not as extensive as one would think. so if you establish a cadre of individuals well trained able to prosecute the cases, the army is doing that. or you bring on additional investigators as the air force and other services are doing. and you provide specific training to sexual assault, we're hoping that leads to increased success in prosecution. to your reference as far as nonjudicial punishment, we argue that certainly when we're looking at cases in the ability to prosecute successfully, those cases that the jag and the commander need to have that discussion and they need to look at the tools that are there to

provide justice for the victim. at the same time, probably merits including some of the consul take theive process there and we have addressed that issue as well. >> and another concern i have is that it indicates victims often jeopardize their option for restrict the reporting because they share information with the assault of a friend, family member or superior. but for a victim to want to tell someone they trust about the assault. do you recommend they make a restrictive report? however, you exclude the direct chain of command or law enforcement from the third parties. why shouldn't a victim have the right to choose restricted or unrestricted reporting regardless of who is accused of the assault?

>> the recommendation is trying to afford the victims with more latitude in terms of who they can turn to in order to discuss their situation. right now they could confide in a peer and it may not guarantee them confidence shalt. having been a commander, for these people to talk to a commander about being sexually assaulted, it puts the commander in a very difficult position. the commander is going to want to seek justice. having that information not being able to act upon that information is problematic. hence the restricted reporting as we have it current set up we believe works very well. built expanding the opportunity for a victim to confide in peers, friends, as research indicates, they are more inclined to do as opposed to going to authorities who they know even offer them confidence.

chaplins is being one of them. we believe provided a support network for the victims which in the end one of the objectives is for us to insure that military victims of sexual assault come forward to receive the care and treatment they need. that is an option that allows that. while at the same time allowing the commanders to have that wall in order for them to be able to seek the prosecution of the offenders. >> i thank both of you for your efforts. they should serve without fear of sexual assault. thank you. i yield the balance of my time. >> would you give me your assessment of why this study -- there was such a delay between time of passage until you all went to work?

>> sir, i cannot comment to that. i was busy doing my job just waiting for us to be able to convene. i couldn't comment on that. >> do you have any -- >> i can't speak to the decision. but what i can speak to is the fact that when members were asked, it was an immediate yes. they saw the opportunity to help men and women in uniform. and they aggressively pursued this task not in a ceremonial fashion but actually giving up a year of their lives to the work of the task force. so we really can't speak to the question of why. but we can speak to the fact that when asked, everyone responded in a magnificent way. >> general, when you look at the differences between how you view this challenges at a military base domestically versus overseas versus overseas in a war zone, do you see them as

being qual take theively different or can there be basically the same approach at all three places? >> is your microphone on? >> i believe there are equally take t qual t equally take theive differences. we need to provide our civilian members, dod, civilian personnel with the support that they require because they're overseas in a different environment. from a military member standpoint, probably not that much different. in the aor compared to the others, especially differences. you have individuals who are moving in and out of theater very quickly. out of bases very quickly. you have individuals that are dispersed over the area. and that need for accountability, the importance

of having individuals know exactly who it is that they can go to is paramount given the circumstances of just operations in the deployed theater in general. so there are differences. >> deals with the issue of letting victims of sexual assault know what the results of formal military disciplinary action is. that's not a problem just for sexual assault though, is it? i mean you could have victims of other crimes that break in their home, destroy vandalize, you know, their favorite trophy. who knows what it is, all kinds of things can happen, beat up their kid. that's a problem not just with regard to sexual assault, is that correct? >> if i may, obviously the investment that a victim makes in the whole legal process is a

very emotional one, very draining one. and also the way that things are handled and keeping the rumor mill under control and so on within a command is extremely important. obviously for the morale and welfare of the members of a unit. and i guess the point we would get at or trying to get at is the fact that too often we interviewed victims or we met with focus groups and people were absolutely unaware of what happened, why someone was acquitted, why charges were dropped or whatever. that's why the recommendation is made. >> my question is -- it's not just a problem. i understand. that's not just a problem of sexual assault. but the disciplinary process may not inform -- you know

whether -- certainly equally take theively different but people who go down and file charges and testify or make complaints may not hear -- hear what the results are in other areas, not just sexual assault. is that accurate? >> go ahead. >> yes, that would be the case. >> yeah. would you tell us why a military spouse who is not dod may not be a civilian, maybe a volunteer or why that breaks down so strongly? >> it's one of the recommendations we felt strongly about because it's really access to the commander. a person's ability to be able to

access their commander and what we found with contractors is sometimes replaced under other organizations like family advocacy groups or community services and so on. we feel there needs to be this immediacy of presence with their commanders, not only to keep them informed but to have that access when necessary. and so the membership as we were talking about ways to make things better, we felt that making the sarc a member of the dod team as far as a dod employee or as the air force has done in some locations making them uniformed members and giving them that sarc responsibility, we saw a great improvement in the areas where that was happening. so that's why we made it a recommendation.

>> thank you for having this hearing. i'm very interested to hear and i red the report with respect to the article 120 comments. and i would like to say that i think some of those comments and there were red herrings and i have a different view of it. but also some of them were due to i think just the nature of law i would love a chance to go back and be able to read you it . i think it is that important for us to bring it into today's world. in the military courts, you had a case by case synopsis of all

sexual assault cases reported. when i look over the number of cases where an individual was convicted of rape or aggravated sexual assault but for nearly received an administrative action. in many cases, no action was taken at all. since one of the reasons we made the effort to change it was so that we could get from execution, now have prosecution and have conviction. i am wondering, why is it that individuals who were clearly convicted are getting away with it the minister did action? unless he can clarify that for me, it angered me. it is my understanding that most of it falls under the commanders

jurisdiction. that is why i added language requiring the comptroller general to provide the committee with the report. ptroller general to provide the congressional defense committees with the report on the capacity of each services infrastructure for the investigation and the adjudication of allegations of sexual assault. so what are the barriers that exist in the sense that, to facilitate a fair and infective investigation, to adjudicate the sexual assault cases to the full extent and why are so many individuals committing the crimes, getting convicted and getting minor sentences or demotions? >> i'm not sure how appropriate it is. we have great legal minds with us. they have studied this for the last 15 months and have poured

over the -- a lot of cases and if it would be appropriate to allow colonel grant who is a member who is also one of our legal experts to maybe address that question for congressman sanchez. >> any objection? >> hearing none. >> ma'am, as far as your initial statement, i believe you are referring to the reports at the end of the sacro report. >> yes. >> the way those are written is the allegation is rated as an assault. and one of the problems that we know in the report itself is there is frequently not a discussion of what the actual -- >> conviction to -- >> the allegation. i'm sure it is very critical of the way that information is related. it really doesn't provide you good information at all. that's why a lot of the

recommendation deals with the report. so you get a clear figure as to what really happens in each individual case. so, in other words, what you're saying is alleged rape and then it went to be prosecuted and we received a conviction we don't know what that person was really convicted of? under the reports? >> i do not believe that the reports actually had that information in them. >> but we do have that information? and if we figured out a way to get that information, we would have better information to tell us what they're being convicted and why. because, again, i saw mere dismissals and, you know, changing units, et cetera, et cetera which if that's the case, that's not the intent of what we had in mind. >> absolutely. what happens is they go and they report to the investigators. they say i was raped. and then the investigation occurs. and there is any number of different conclusions that could be reached as a course of that investigation. there is a gap in the report as to that particular process.

maybe there is an unknown perpetrator. we don't know who did it. she was raped by a civilian, not a military person. she recanted or it really didn't happen, she thought she was raped but actually -- [ inaudible ] there's any number of reasons. again, mostly it's a -- >> but again, there were convictions. so we didn't find the perpetrator. we don't know who he is. i mean you wouldn't convict somebody. >> yes, there are convictions in certain cases. i agree with that. but some of that information where you're saying that there is -- i can't remember exactly what the punishment was, but it was not consistent with a conviction. there are situations where if there are convictions and they are just like demoted, it's possible that the thing they were found guilty of was not actually rape or aggravated assault. >> okay. i understand that. i guess it begs back to the

whole issue we need to have the right information so that we can figure out whether we're really getting convictions or whether, you know, the culture is still one where the commandant or the commanding person is, you know, leery of, you know, ruining somebody's whatever. we've had so many stories of people being sent off to other places. we have to get to the bottom of what is a conviction and why are will just dismissals going on? >> i'm going to move on so we can get at least a question in before we have to break for this. i think, you know, i think what the discussion has been having the results of the disciplinary actions, having more transparency around those and trying to figure out what's the best way to get to that place. so, you know, even we're able to see that in the context of the discussion today. thank you. miss tsongas?

>> thank you, madam chairwoman and thank you for your testimony and your report. i found it very interesting, very serious effort to address the great challenge of sexual assault in the military. we know there's much more to be done just from anecdotal stories from people who have experienced sexual assault, who tell us how -- how they feel they're not particularly taken care of. one of the issues that i think we keep coming back to is the role of the commander in making the decision over whether or not a case goes to court-martial. the u.s. versus gamins in the court of appeals stated, quote, one of the hallmarks of the military justice system is a broad discretion in commanders to choose the appropriate disposition of alleged offenses. we know that the military is a unique place with unique requirements. the department of defense general counsel's office

analogized the role of commander to be similar -- and we had a meeting. to be similar to that of a prosecuting attorney in the event of a reported assault. he or she has full discretion over whether or not to take a case to court. the commander may get advice from a judge advocate general on the merit of the case but ultimately the commander makes the fiem decision. my question -- final decision. my question is what mechanisms are in place for third-party oversight of review of the decisions, are a commander's decision on how to continue on a case appealable, how do you appeal such a decision and does the lack of process, do you think, pose a problem? the other question is really the oversight around the jag officer. if the commander depends on the jag officer's recommendations how can we engage in questioning

the jag officer's role in advising the commander? >> those were all very good questions. from the jag officer, taking the last first, the jag officer has reached back authority back to the higher level commands if the individual is feeling as if they do not have all of the data points, all of the advice, all the support they need in order to provide the commander with the advice considering the circumstances. i believe that most commanders, when they are talking with jags, they know that the jags are providing advice. the commanders ultimately make the decision as to what they want to do, where they want to do go in terms of judicial and nonjudicial measures and if the commander is dissatisfied with the advice that the jag has made, the commander likewise has a higher level command

authorities supporting major command in order to be able to elevate the issue in order to seek to get some additional guidance. from an oversight perspective, i will tell you that our task force did not feel that additional oversight was necessary. i mean, the review through the investigative files indicated that where information was available, where you were actually able to make a determination of having sufficient evidence to prosecute a case that the commanders as well as their jags sought to prosecute the case. the concern, as congresswoman sanchez raised, it is difficult to ascertain the information based upon the report and that level of data collection and offender accountability needs to be built into the system accountability so you can see what is taking place. but from the standpoint of

oversight, i personally do not see that as being necessary. i would defer to dr. iacello if he has a difference of opinion. >> not at all. i would like to add that they were great questions, congresswoman. very, very important questions. one of the things we did see as we went around these many locations is we met with the courts-martial convening authority where we went. we saw a desire to aggressively pursue and step forward wherever they thought it was possible. and i say that knowing that as we went in and conducted our interviews with these commanders and with these courts-martial convening authorities they knew why we were there. but i really sensed from them the intent was to aggressively pursue wherever, whenever possible any sort of perpetrator of sexual assault. of course, they know that a they set the tone. commanders set the tone. today send messages within the

command as to whether or not they do pursue and aggressively pursue these perpetrators or alleged perpetrators. i think the intent is there. i think, you know, we have added recommendations such as to recognize the special nature of prosecuting these cases and the need for more training for our jags and those involved in the judicial process. i think with that added training with these specialized prosecutes and with the intent of commanders to eradicate the crime knowing the impact on morale and welfare of the troops i think we're stepping in the right direction. >> i'm about out of time. did you see many instances in which a commander's decision not to prosecute as it went up the chain of command was overturned? that a higher-up in the chain, somebody said, no, that case, you really have to pursue it?

>> ma'am, i have been informed that we didn't see anything like that a. >> thank you. >> thank you. we have the first of five votes. this will be the last votes for the day. i beg your patience and we will return in -- oh, dear. it's probably going to be close to a half hour. thank you.

i think i will start up again. we are very happy to have you here. we will continue with our conversation. i wanted to get into more did the of the privilege of communication and -- more in depth about the privilege of communication. you wanted to enact a privilege for communications. i think some of the more emotional testimony that i have heard is how frustrating that has been. perhaps she can share this and this is one of the areas where you really did feel quite a bit of passion on the part of those who spoke to about trying to

define that better. are you aware of any time in advocate has testified? >> i am personally not aware of any specific incidents, but i know that in the preeti we did it the case said they were called to testify. it goes back to why this is important. mcpherson established at the kid, the intent was to allow the victims to talk to someone who is trained. they thought about the unintended consequence of an individual confiding in somebody. it is back to, what is the

intent of whites this week address sexual assault. we want individuals to come forward to we can help them. in thin and the individual, hopes and they can testify against them. many victims are looking forward. they did not receive the care and treatment thing needed could give >> are there other fax we see as well? think in some cases, it to be a positive thing. does it go both ways? >> as far as with what the general has already said, second only think of one instance of that being reported.

as someone you have the sacred trust, whatever it was discussed would never be discussed outside the four walls. that is a comfort that you give to someone in an moment of extreme personal pain. it is so critical. we do not make this recommendation lightly. in their lives is so critical. we don't make this recommendation lightly. we know extending this military justice privilege is really stretching things. but we feel that for the sake of the victim it's so important to know that -- not all victims feel comfortable going to their chaplain. to have that outlet of having someone else within the command, not within the command structure but somebody in the proximity that they can go to and share

this incredible pain with, begin the catharsis, begin the healing we feel is so critical. even the threat that they could be called in some way to testify and to break that seal that others enjoy, that's why we felt strongly about making that recommendation. >> does that belief also go to -- that it be a uniformed advocate and a uniformed victim? >> ma'am, we were looking at whoever fulfills that role of victim advocate. that's why we see the professionalization of that role and the national certification as extremely important, because along with the privilege comes a great responsibility that needs to be understood and needs to be put in context. so the extension of the privilege is really contingent upon the training and the certification of those individuals. >> did you have any concerns

about the capacity of the system to bring forth individuals who are willing to go to that extent to become a victim advocate? did you sense a lot of willingness for people to be far better trained? and what kinds of benefits might they have to be in that highly professional position? >> madam chair, we actually have a number of victim advocates who are volunteers across the services. and that is actually one of the things we focus on. we have probably far too many victim advocates. as a result, their ability to actually provide support doesn't occur very often, because you may have 80 victim advocates on any one installation and the frequency of assaults is that one or two might actually have some experience. so there is extensive training,

the investment of training to keep people refreshed on the skill, to keep them aware of what is going on, and then folks are doing this as a second collateral duty, additional duty. so what we're recommending is actually narrowing down and professionalizing victim advocates so you may have a fulltime victim advocate that could be a civilian social worker-type. you also need to have military victim advocates because those need to deploy. while civilians do deploy in our services typically that is the military member. so it's a combination of both. it is a smaller group of people, some of whom will be volunteers at a more senior level as opposed to some junior levels we've seen. through the training and professionalization, we'd be able to ensure they could provide the level of support for victims to include being able to

have that level of maturity for the confidentiality. >> appreciate that. mr. wilson, do you want to go on? >> in conclusion, i want to thank both of you. general dunbar, your background here serving as a congressional fellow, senate fellow is well appreciated. just thank you for your service in this regard. admir admiral, i was so happy to find out your background as a chaplain. i'm very grateful the joint chaplain school is located at fort jackson, south carolina. we look forward to a long history of working with the chaplains in your service. as chaplain of the marine corps i represent paris island, marine corps air station. and your service with the navy. thank both of you. it's certainly encouraging to me, and it certainly maintains my high regard serving military for the persons who are serving

in the military that it's a great opportunity of service where people want the best for the young people who are serving our country. so thank you for what you've done to look out for the young people of our country so that they have the best opportunities to serve in the most fulfilling way. thank you very much. >> thank you, mr. wilson. one of the other recommendations in the report is for congress to enact a law that would exempt federal medical personnel from state provisions requiring them to report sexual assaults to civilian law enforcement and ensuring that all service members -- to ensure all service members have a restricted reporting option. how do you see that working? what sort of concerns would you have about that? >> currently we only have a few states that fall in that category. it's problematic if we are trying to ensure that military

members at installations in those states are afforded the same opportunity to be able to make a restricted report. there are agreements that can be made with local officials. but for the most part, one would think you should not have to do that. so that is the purpose of the recommendation that we make for congressional action. >> are there other federal agencies that would be in that same position? >> ma'am, i'm not familiar with that. >> i think california and illinois, are they problematic in this regard? >> yes, those would be the two states. >> thank you. >> and what about federal assaults that don't take place on federal installations? does that provide any different obligation in terms of

reporting?" >> our recommendation is largely focused on those assaults that take place with military jurisdiction. >> one of the other concerns that we talked about in hearings prior to this is the accountability of commanders. the issue was raised whether or not we're certain that the case dispositions under that commander are well-known when it comes to career advancement. did you have a chance to look at where this might really resonate in terms of how people are evaluated for their advancement? do you think that exists? is it part of the evaluation today? is there a way that it could be more transparent in terms of instances that happen under an individual's command? >> currently commanders are

assessed on their performance and command and technical specialty as well as how well it is they take care of the men and women in their charge. i think it is indirectly assessed as are so many other issues that run into areas of domestic violence, suicide, workplace violence, et cetera. i think to specifically categorize the response to sexual assault, again, given the frequency, it occurs during the course of command. when i say frequency, i don't mean to dismiss the fact sexual assault does occur in the military. for instance, when i was in command, it occurred one time, the allegation of sexual assault. and we did what we needed in order to provide support to the individual. in two other commands it did not occur at all. so if you are to separate in a performance report a specific area that addresses sexual assault, given the fact it does

not occur that often, i think that would be problematic. i do think there is such a focus on taking care of people that it is sufficiently addressed as it is. >> doctor? >> i think the general stated it very well that first and foremost, of course, is the completion of the mission and making sure the troops are ready to do what they need to do for their country. but being so involved with the moral and welfare of their troops in every aspect, including family life, interrelationships, and so on, i would say that specifying, you know, this in a way that would identify it as something special from all the other responsibilities would certainly in general be problematic. >> one of the concerns throughout the report is that the strategies in place have been to some extent with the

exception of best practices that you witnessed and wrote about in the report that we haven't had the kind of strategies that really have an evaluation process in place. to be able to go back and understand. now as we move forward trying to incorporate many of your considerations in this report, what should that look like? what would you like to see. the other counter to that would be you feel like all this effort was for naught if you didn't see something that took place in terms of this strategy. >> one of the recommendation was to record the metrics, coming up with a way to measure the effectiveness, efficacy of the

strategies. and in this area we believe it would be very beneficial for us to work with others who are dealing with these issues. those colleges and universities that are addressing the same, youth population, federal, state and local areas that are support providers who have some strategies they believe might work. right now we did a lot of research. we could not find any particular way to measure the effectiveness of existing strategies. that is one area where we believe congress could -- i think there needs to be research that would benefit everybody addressing a major social issue. >> this authority would lie in a more expanded, more tighter authority in the office at the time? >> i believe part of this is actually funding and research that would enable us to better understand what strategies are

effective but certainly the sap ro office setting up it's overarching strategy can determine how it is you're having an effect on training, how it is you're having an effect on prevention. part of it is attitude national, understanding. we do surveys, gender relation surveys every four years. we advocate doing it every two years to see the impact of those strategies. i think as we ask some of the questions in those surveys, they need to be specifically drawn back to some of the strategies we have in place to have a better understanding. that is just one example of being able to do it. but again, there are colleges and universities that have strategies in place. they don't have any kind of measures of effectiveness. we're hoping we might be able to learn from them. it is an area that requires some further study, we believe.

>> ma'am, you've identified an area that for us we all feel passionate about. we would love to see the metrics there. you can't develop the metrics until you develop the standards on which to measure. we see that as an incredible void. not only helping us identify the health of our programs but the way ahead. to identify and give granularity to the numbers so we can begin to identify trends. we can begin to address issues proactively. so we all feel rather passionate about it. >> is there any -- as we're finishing up, is there any interview or discussion you had that just really stands out that i think inspires you or inspired the task force in their work that you would like us to know about? >> i think there are a lot of compelling instances where we

have seen the remarkable instances of how involvement, leadership and awareness improved. at the same time we've seen compelling cases where for us it's unearthed the fact this has been a long-standing issue that needs to be addressed that fekts not just females who are serving in the military but males as well. and i think as we've done the research and realized that others are in communities -- i keep harkening back to colleges and universities, because that is primarily the age group of those who are most at risk, there is tremendous opportunity for collaboration in terms of coming up with some solutions to address a society issue. >> to be very careful this doesn't turn into a sermon but dealing with such a heinous crime can be something that could take the wind out of your

sail pretty easily. for us going to these installations and seeing the caliber of young men and women in uniform for us was an incredibly uplifting experience. i wouldn't go to one area or one command and say this is a very special event, i'd like at them and say our interaction with young men and women have energized us and left us with a positive attitude. no how big the issue, the obstacle to overcome, it will be overcome because of the caliber of our men and women. that for us has been very important in the process. >> thank you very much, we appreciate that. the young men and women serving our country inspire us every day as well. i appreciate that. i certainly hope you will feel and believe your efforts have been well taken and that we will continue to move forward and hope that many of those [gavel]

>> the meeting will come to order. the ranking member and i have been trying to find some way that we can move this forward.

the secretary of the treasury has a limited amount of time. we hope that the members would agree to a three-minute limit in terms of questioning, and we will stick to it. we want everyone to have an opportunity to ask a question. we expect a battery of votes on the floor in a couple of hours, and so, i yield my opening statement to the ranking member, mr. camp. >> with that, i will submit meinecke for the record -- mine for the record the f.a.q, mr. chairman. >> mr. geithner, -- i will submit mind for the record. -- mine for the record. >> is a pleasure to be back here today. one year ago -- it is a pleasure to be back here.

one year ago, the economy was contracting at an annual rate of about 6%. the financial system was on the verge of collapse. credit was frozen. the housing market was in free fall. millions of americans have lost their jobs, and the economy was losing jobs at the rate of three quarter million additional jobs a month, and this is very important. when the president came into office, he faced a deficit of $1.30 trillion and projected deficits before a single bill was enacted that according to cbop with more than double the nation's debt in the next decade -- according to cbo. i want to say this again. in january 2001, cbo, which is your designated, non-partisan, neutral scorekeeper was talking about $5.60 trillion.

in january 2009, before the president stepped into office, those projected surpluses turned into $8 trillion in projected deficits, so let me just repeat that. over the course of eight years, we went from $5.60 trillion in projected surpluses to $8 trillion in projected deficits. that is a swing of $13 trillion. now, this recession caused tremendous damage, and today, millions of americans are still living with the consequences of that recession, and we all know that the road to jobs and to economic security and fiscal responsibility starts with economic growth, and today, in large part, the actions congress took and that we took to put out this financial fire, our economy is now growing again, and in the fourth quarter, it grew at the fastest rate in six years.

this is progress, but it is not enough, and that is why we need to work together to intensify our focus together on job creation, on investment, and on innovation. now, when you talk to small businesses across the country, as i know that you do, they tell a similar story. they worry about whether they will see demand for their products and their ability to expand and hire a depends on their access to credit, he and that is what the president in new hampshire yesterday proposed new legislation to create a small-business lending fund. we need them, if we are going to be able to grow and create jobs. that is what the president is also proposing to substantially expand what the small business administration can do in terms of higher loan limits, lower guarantee fees. we want to build on the provisions. now, in addition to helping small businesses get access to

credit, we are proposing tax relief for small businesses. expensing, bonus depreciation, and we are proposing zero capital gains for small businesses, and we want to work with you to design a credit to help small businesses expand hiring. the president's proposal is, and we are open to ideas on how best to do this, is to give small businesses to add jobs $5,000 for each net job they create and combine that with some payroll tax relief. now, in the presence of the budget, we have laid out a comprehensive agenda for innovation and to strengthen our foundation. this budget is concerned to -- is created for the private sector to grow so that business is small and large can create jobs. to do this, we need serious financial reform, to make sure our financial system is taking

the savings of americans and financing future growth and innovation, not financing financial and real estate boom is. we want to encourage american innovation. not financing financial and real estate blooms -- not financing financial and real estate blooms -- booms. we are committed to working with this committee and the congress to produce strong trade agreements, because the more american businesses are able to export, the more jobs they can create in america. we want to invest in education. and finally, we need health-care reform so that we can provide greater economic security for tens of millions of middle-class families and help reduce the extraordinary cost burdens are existing health-care system puts on businesses large and small.

now, these are reforms the government has to make. if the government fails to meet these basic challenges, americans and businesses will suffer. the market cannot solve these challenges on its own. the government needs to address these challenges in order to provide a strong foundation for a dynamic growing sector. now, part of this foundation requires returning as a country to living within our means. when we have strong growth in place, we need to begin the process of bringing down our deficits. çóthese deficits are too high. they are unsustainable, and the american people and investors around the world need to have the confidence that we are going to work together to bring them down when the economy is stronger. now, the president's budget proposes important steps towards that objective. starting in fiscal year 2011, we propose to tax non discretionary -- suddenly, there are some important changes for a

tax system to make it more fair and to bring down those long term deposits, so we are proposing to allow the tax cuts put in place for the richest americans to expire, to close what is called a carried interest in the poll, so we are taxing the interest of hedge fund and private equity managers in the same way we tax the incomes of teachers and firemen, and we went to eliminate unnecessary and unfair tax subsidies. -- and we want to eliminate those. we went to extend a tax credit for 95% of working families -- we want to extend a tax credit. we are looking at closing down the tarp. if you join with the president in passing this, the taxpayer will not be exposed to one penny of loss on the actions the government was forced to take to fix the financial system. third, we have to restore basic

disciplines in budgeting that all american families live with by reinstating pay as you go. any new initiatives should be paid for without adding to the deficit. in the 1990's, those disciplines help move us from the deficit that was over 4% of gdp to a substantial surplus in 2000. now, this budget outlined the past to bring our deficit down as a share of our economy to below 4% -- this budget outlines the path. we cannot let our future deficits and debt continue to grow faster than our economy without hurting future prosperity. this is going to be a difficult task. it will require tough choices, politically difficult choices. but it is important that we work on that, and that is what the president has proposed a bipartisan fiscal condition that will be charged with identifying responsible policies that can win support across the aisle to

bring down the deficit. @ @ @ @ ground today. deficits matter, and ours are too high. we have to pay for the programs that we have proposed to undertake, but our priority today, our priority today is to

make sure we get americans back to work and that we of the conditions in place for a sustainable recovery. -- and that we have the conditions in place for a sustainable recovery. i want to conclude, mr. chairman, just by saying one thing. you read the news today about aig. what happened at aig was an outrageous failure of policy. as a country, we should have never let a company take on a scale of risks that could threaten the stability of the financial system, and we should never allow the taxpayers ever again to be in a position where they have to pay one penny for rescuing a financial system from the mistakes caused by not just government but the decisions of the people running these major firms. part of what contributed to this was a set of compensation practices that defied gravity. they were deeply irresponsible. in a simple way, what happened

was people were paid if things went well, but they were not exposed to losses if things went bad, and what happened at aig is the people running that firm, as they were taking on a level of risk we had not seen ever before, there was the presumption that they would share on the -- in the gains if things went fine, but if things went south, they would be protected from those losses. these contracts were put in place in december 2007 and in march 2008. big company came to the government and ask for help. -- that company came to the government and ask for help. -- asked for help. i asked kenneth feinberg to come and help us work through this. he knew he was not going to make

anybody happy, and he did a very good job of negotiating down those payments and trying to make sure that we did not have any of that kind of stuff in place in our major firms in the future. now, if you join with us in passing this proposed fee on our largest financial institutions, then you'll be able to say as we do that the american taxpayer will not pay a penny for what happened at aig, and if you work with us on financial reform, then we can put in place the kind of a bankruptcy procedure we have for real companies and banks -- and small banks, without having to face the kinds of averages things we have had to confront in this process, -- the kind of outrageous things we of had to confront. we have always to go, and we are looking for the best ideas -- the kind of outrageous things we

have had to confront. understand the deep obligation we have. this is so we can have a secure economic future. thank you, mr. chairman. >> let's see where we have a common ground. we will talk to mr. camp.

the misery and the pain out there is not republican. it is not democrat. i think there are looking for some degree of unified support, so we have got to give it our best try. mr. camp and i. and we do hope that you share with us to help us to get through the political problems that, unfortunately, we face. i thank you for your testimony, and i yield to mr. camp. >> thank you, mr. chair. obviously, we will do what we can to work on all of the issues facing our country during this difficult time, and i want to thank you for being here, mr. secretary, and the opportunity to have a hearing on the president's 2011 budget, and it appears that the president is calling for about $2 trillion in tax increases. is that correct?

i think it is. >> what we are proposing to do is -- >> i would like to get your comments. >> we are proposing to let expire the tax credits for the 2% to 3% of the richest in the country. we think that is there. we think that is just, but we are extending very important tax cut for the vast bulk of americans. the vast bulk of american businesses, and these are powerful, very powerful tax cuts. they are good policy. we should work together to make sure those happen. >> and i notice that the budget does not factor in the house- past national energy tax, if you did factor that in the budget, it would be closer to $3 trillion in tax increases in the budget -- does not factor in the house-passed national energy tax. since the democrats came into

the majority, the debt limit has increased by 60%, and now, you want to pay for all of that spending and all of that debt with about $3 trillion in new taxes if you add in the two plus the $1 trillion in cap and trade, and those taxes on small businesses and the benefits of working americans, and as i said, taxes on energy. now, i understand the president has called for money to a small businesses, and on the surface, i think that sounds pretty good, but as i look at the president's budget, this would hit small business is particularly hard, because you're increasing taxes on nearly to -- this would hit small businesses particularly hard. small businesses would pay an additional $10 billion in taxes in 2011 alone, and a total tax increase over a 10-year period of over $200 billion.

it seems to me that $30 billion in held pales in comparison to 250 dollars billion in tax increases -- it seems to me that $30 billion in help pales in comparison. >> the tax benefits for small businesses in the president's budget are very, very substantial and dramatic, and, again, one very important point, and these are not our numbers. letting the tax cuts on high- income americans expiry affects only 2% to 3% of american small businesses -- letting the tax cuts on high-income americans expire. what we will give them is very, very substantial, and we hope you'll join with us in extending as incentives. >> in light of the private- sector losses, further job

losses in january, i do not see are raising taxes will have the effect of leading to job creation, and when you look at the turtle tax relief, it is a significant tax increase, particularly on small businesses -- and when you look at the total tax relief. >> could i just respond to that last point? i just want to do it one more time. i have been in public service all of my life. my first job in public service was at the treasury department. first undersecretary jim baker. lloyd bentsen it be my first job at treasury. when i left the treasury, we de la hoya bensen gave me my first job at treasury. -- first under secretary jim baker. lloyd bentsen gave me my first job at treasury. there was nothing good for business and that swing.

-- in that swing. we are trying to dig out of it. we are willing to work with you on how best to do that, but our priorities, again, are to fix what is broken, people are back to work. if we do that well, then we will be in a better position to help dig ourselves a lot of that fiscal hole. >> where i come from, when you're in a whole, you stop digging. -- when you are in ta hole. we want to see where we can find ways to move ahead and get jobs started again in this country. thank you. >> we can start the clock over for mr. lwevin. -- levin.

>> i just want to be clear about the numbers. there is a new category now called the democrats' control budgets, -- democrats control budgets. [gavel] >> mr. levin will proceed. >> i think we need to find common ground, but it will not work if people try to escape from the past, and i think everyone needs to remember that the sentence you read simply put over $8 trillion of the projected deficits -- they were due to the fiscal policies of the last eight years and the facts of the deep recession as president in heritage. i want to ask you then, mr. camp talked about the impact on small business, and when they do that,

they talk about the 250 categories. 250 thousand. not maintain the tax cut for those people, and they include everybody, lawyers, etc. repeat for as the impact, if you would, mr. secretary, of not continuing the tax cut for wealthy americans. who is hit by that? >> roughly 2% to 3% of individuals and roughly 2% of small businesses. >> ok, that is a fact. also, there has been opposition to the fee on financial institutions. say a word about why the administration is proposing that. >> the law that was passed to fix this financial mess require the secretary of the treasury to propose a way to recoup -- required the secretary to propose a way to recoup, so what we did was a simple, common-

cents thing. that was to impose a fee on the largest bank -- what we did was a simple common sense thing. that was to oppose a fee on the largest banks. it helps make the system stable if it is designed well. >> i hope as we search for common ground that those on the minority side will indicate their position on that, and the same on the $30 billion for community banks. just some of quickly what you suggest we do that and what you suggest how we pay for it. -- just sum up quickly why you suggest we do that and why you suggest how we pay for it. >> they need to have access to capital.

what we are proposing is a simple thank. that is to give them capital and design it that the more they lend -- what we are proposing is a simple friend -- a simple thing. alongside these tax incentives for small businesses, it is a powerful package of measures. >> mr. chairman, i hope that those on the minority side will expensed -- express their position. >> doctor? >> thank you, mr. chairman. a budget is setting the priorities of how the group spends their money, whether we are talking about a family or we're talking about the federal government, and as you look at the situation today where everybody wants a job, and all we're talking about is jobs, jobs, jobs, the example of the priorities of franklin delano

roosevelt was to create jobs@@@

small business, hopeful job creation -- because of people do not have money, they do not go to small businesses to buy stuff, so -- >> i agree with you, and that was well said, and that is why we a been so supportive of very substantial investment in infrastructure across the country -- and that is why we have been so supportive. it is good for the economy as a whole, as well, because as you know, there are parts of our nation's infrastructure that have been allowed to decay over time. so infrastructure is very park " and its we will be supportive -- so infrastructure is very important, and we will be supportive. in addition, one of the most effective things we can do is to make sure that at the state and

local level, there are resources so that teachers can stay in the classroom teaching, firefighters are able to stay on the job, and those that are first responders, helping state governments avoiding making deeper cuts, that is good policy, very powerful, and can operate very quickly, so you are right to say that tax cuts alone are not going to solve this problem, and you are right to say that we need to do other things are wrong side that -- other things along side that. but come together, we think that package could be quite powerful -- other things along sidside t.

the balance of the rest would go to things that we think would also complement that, help repair infrastructure, the first responders, make sure we have teachers in the classroom, so that is one to cut the package. >> thank you. >> thank you, mr. chairman. secretary geithner, it has been one year since the president signed the so-called stimulus bill, and americans are still wondering where are the jobs. in my own northern california world district, the unemployment rate is over 15% -- in my own and northern california rural district. the last thing we should be doing is passing legislation to make this worse. the president's budget assumes that congress will pass a health-care bill. this raises taxes by more than

$732 billion over the next decade. using the methodology developed by christina romer, president obama santop economic adviser, these tax hikes could cost -- president obama's top economic adviser -- does losing 5 million jobs on top of the double-digit unemployment rate concern you? >> congressman, those are not our numbers. of course, we would not ask you to support programs that would carry that risk. >> the methodology by the president's own adviser, that calculated this -- >> there is not a chance that a reasonable independent economist would look at that package of measures and suggested that would be the effect over time.

one thing is important -- and suggest that would be the effect over time. the board and of the current system is not good for business. they normally put it at the top of their basic concerns -- the burden of the current system is not good for business. even the national number does not capture it. there are much higher numbers in many parts of the country. that is why it is so important that we are on this and keep working to reinforce this. the worst thing we can do today is to stand back and say, "all right, we are going to hope that our challenge is now can be best addressed by cutting these dramatically today -- our challenges now can be best addressed by cutting these dramatically today." it would not be good for the country. >> i would like to ask you

about some specific tax issues. the president's budget does not provide any details of what he is asking congress to pass. does the administration supports a new 8% payroll tax on employers who do not offer health insurance that meets the government's standards? a tax that could result in the loss of millions of jobs? and does the administration supports a tax on any american who chooses not to by government-mandated insurance, a tax that would fall on millions of americans making less than $250,000 per year -- a tax on any american it chooses not to buy -- who chooses not to buy? >> what they would like to know is what the rules of the game will be. they would like to have uncertainty lifted and for the debate to end.

and they would like us to lift the burden of cost the chrysostom put on them, so i know you have spent a lot of time on this -- lift the burden of cost the current system puts on them. we want to expand coverage, improve the quality of care, and and the huge hidden cost and and fairness in our current system. -- and anend the huge hidden cot and on fairness -- unfairness in our current system. >> trying to restore fairness to our tax code. i am also glad to see that the president is taking on to reduce

a gap. could you please take a moment to share with us some of the ways in which the president seeks to close the tax gap? and could you please tell us why this is so important? >> we are following the lead of this chairman and many members of the committee. and let me give you an example. this creates a range of incentives that encourages companies to shift investment in incomes offshore. -- investment and incomes offshore. if one of them ships overseas, it pays less in taxes. -- shifts overseas. we do not

think that is fair. they can make the system more fair -- if one of them shifts overseas, it pays less in taxes. we do not think that is fair. we want to make the system more fair. there are subsidies that go to oil and gas, for example. the other is the tax of hedge fund managers and private equity people. these are simple, fair things. we want to make permanent the middle-class tax cuts that, again, go to 95%, 97% of

americans. we want to do this in a way that is there and that is responsible. there are other things we can do, but we are starting with that, and we are proposing have to dig ourselves off of this -- how to dig ourselves are out of this hole we are in. it is fair to the american people. >> thank you. >> it sounds good to me, mr. chairman. thanks, mr. secretary. first, thank you for including my bill in your legislation. i do not understand why there would be any opposition to that. it has been well met by insurance agents and credit unions, as well. i also want to say, as mr. lewis mentioned ago, i appreciate the inclusion of reinsurance. i do appreciate the simplicity of your proposal, but it might

still allow a significant shifting of profits offshore, outside of the reach of u.s. tax system. domestic companies are upset about this. this is not an issue that was brought to my attention by the afl-cio. this was offered by domestic insurance companies who want something done about it. they do not understand why they have to compete with companies that move offshore. in addition, mr. rangel has been talking about tax reform, and i appreciate the time and effort you put into these. recently, the chairman asked me to look into transfer pricing. i hope that we can were together on these international reforms, because mr. rangel's proposal does encourage companies to stay here and to prosper. now, would you explain briefly the changes and how they have

changed since the last budget? >> again, we are trying to balance a simple imperative. we want to make sure there is a level playing field for american companies, so we are not creating an incentive for them to ship jobs overseas. we want to do it anyway -- not creating an incentive for them to shift jobs overseas. we want to do it in a way -- we have for a lot of reaction. we took that into consideration -- we have heard a lot of reaction. we made some additional suggestions, too, but there are different ways to do this. of course, we will work closely with you on this. we are open to suggestions, and we understand a lot of people think you cannot really do this without doing comprehensive tax

reform, or corporate tax reform, and that may be true, but we think these are sensible common sense things, and we would like to move on them. >> i hope it remains a priority with the administration, and, lastly, mr. secretary, could we get treasury to submit to us what the cost of the war in iraq will be? and not just the immediate costs, which are now north of $1 trillion, but just as importantly, the obligation we have to be men and women who have served as honorably -- the obligation that we have to the men and women? this is part of where we find ourselves, so it is ok to suggest that if we are digging a hole, and we find -- that

obligation is a very honorable obligation, to pay for those veterans hospitals for years and years to come, so i would hope that you can give us a cost and what we find ourselves in some measure with these deficits we have today. >> is to be honest and account for the cost of governing -- is to be honest. -- it is to be honest and account for the cost of governing. we want to make sure that we are being fair and honest. i completely support that principle. >> mr. geithner, i would first like to express my appreciation for the president including something in his budget, which i introduced along with my colleague, earl pomeroy, about

removing cell phones from property. that is dumb. >> i thank you@@@@@ @ )g",$ make sure there is growth and demand for products people want to buy. i think if you look at what is

happening across the country now, it is not just that the economy has stopped shrinking and that a group at the most rapid rate in six years last quarter, -- and that it grew at the most rapid rate in six years last quarter -- as that happens, when this will do is make it more likely that people add jobs in at -- what this will do is make it more likely that people will add jobs. this does not solve all of the problems, but we think it will make a real difference. >> you need to fix the bank problem first. let me ask you question about the president's fiscal condition. our tax increases on the table for social security reform? yes or no? >> thank you for asking that. .

in this commission, our view is that you need to have democrats and republicans together recommending things that will work. it will not work to just have republican ideas or democratic. these are big problems and we have got to work on them together.

>> social security can be fixed but it does not need to be taxed. >> allied to recognize the gentleman from tennessee. >> thank you, mr. chairman. i will be very brief. i hope you all will talk more about the dangers that we face as a country if we do nothing about the structural deficit. in 2000, if you look at the website of the treasury department, revenue expenditures were around 90% of gdp, basically breaking even. the sec it worse thing in 2001 happened in february when they projected a surplus. i was wondering what the price of cotton would be in 10 days and they were telling me what

the surpluses would be in 10 years. in september, we had 9/11, and every assumption was no longer a valid. the administration had not gone back and revisited the fact that since that time, revenue has never been as much as 90% of gdp, and expenditures had never been less than 20%. in iraq and afghanistan, we borrowed money, never before had been done. it is a structural deficit. and this idea that we can just cut spending here or there, we all know that it is not possible. to and to do not equal four anymore. i told someone the other day that the way this congress

operates, and has since basically i have been here 21 years, no matter who is in charge, we would still have pony express days in wyoming if it was up to congress and we did not have the commission for defense spending. the temptation here is to put off the tough decisions, but we are rapidly reaching a point where we cannot any longer do that. i just want to thank you for what you're doing, but i think the more if this we put on the american people about this structural deficits, and be honest with them, i think this idea of that you raise taxes -- rich tax is a penny on someone making more than $10 million is a crime, that has got to be

addressed. we cannot get along without some acknowledgment that revenue and expenditure have to somewhere equal about the same on this percentage of gross domestic product. i am making a little speech here. i hope that people understand it. >> our fiscal position is unsustainable. we will be poorer as a country if we do not fix that. our priority has to be growth in jobs. without that, you cannot fix our long-term deficits. but even when we're growing again, when everyone is back up to speed, we're still left with an unsustainable fiscal position. so if we do not commit to bring that down, we face the risks unfair not just a businesses but the families.

i agree with you. even though it is a deeply political movement, it is encouraging. people do not say that deficit -- people do not think that deficits do not matter or that tax cuts are too big. we cannot make huge commitments and perpetually -- in perpetuity without paying for them. and that is fundamentally encouraging. to get this economy growing again and job creation up again, and then next year we start the process. that next year is not too late or too soon to start. but we recognize this. >> thank you, mr. chairman.

mr. secretary, i have two questions regarding your testimony this morning. your goal is to get the best thing for the buck to get people back to work. the first thing concerns the comment you made this morning that repeat what the president said in his radio address, that we need to close the tax loopholes that have corp's shipping jobs offshore. i've read your budget proposals and their exactly the ones you a dance last year -40% of the revenues from multinationals who have exported jobs overseas and shelter their income. set to announce the proposal last year, other than an occasional reference to it, i have not seen anything done to achieve these objectives other than the "wall street journal"

report that you assured multinationals that they should not be worried about this. my question is, what reason is there to believe that the administration will do anything more of the 60% of the proposal left to close the tax loopholes the resulting jobs being shipped overseas than they did last year? my second question, mr. secretary, refers to the job tax credit. everyone is for a tax provision that will produce more jobs in a cost-effective way. but there is question about a particular proposal for $30 billion that this administration advance. a former treasury official, and it -- commented that that tax credit is a stinker. it simply encourages people to do what they would have done anyway.

center proposal is retroactive, surely there can be no claim that there is a new jobs added in january or february before this bill was signed which was caused by this provision. it also distorts the market. for my small business in texas hanging onto its employees even though it's painful to do so, they get nothing out of this jobs tax credit. but for those who dismissed employees or a new company coming into town, they benefit. one of your secretaries has said we don't know how effective it may be, but even if we got to% at of this, that would be great because it would ensure liquidity for small business. surely the treasury can come up with a better way to promote job growth than a proposal that may be 90% ineffective.

the congressional budget office has also noted that this provision will be the least used. >> i'll suggest that you respond in writing to the eloquent questions. i would like to recognize mr. brady of texas. >> i am confused. your grip of $1 trillion annual deficit that you were handed -- but congress controls the pocket books, remind us who was in charge of congress for two years when you're handed that annual deficit? >> you know the answer to that, congressman.

but the damage to our fiscal future, the transformation from $5.60 trillion -- >> i just want to make sure our listeners were not confuse by who handed to that horrible deficit. i want to bring up aig. there is common ground. the anger and outrage at the way a i.t.'s bailout has been handled by you in treasury. congress, democrats, republicans, you saw the deal that gave one hundred cents on the dollar to the counterparties of aig. if they had been trying to advance the public from knowing the details of that. a year later, $100 billion -- $100 million in bonuses come

out. the administration handling of aig resembles the keystone kops. it would be funny if it was not the taxpayers crying about it. i do think that you've taken your eye off the ball pursuing an extreme agenda and failed economic policies. the viewers have no confidence in the economy. people are frightened by the thought of health-care costs, higher taxes. but where there is common ground in the president's commitment in the state of the union to double exports over the next five years. other economies are growing faster than the united states. that is where the customers are at. that will create jobs in the united states. i'm putting up a graph of what

our exports are doing. it took 11 years to double the exports during pretty strong -- pretty strong economic times in global growth. my question is, there is common ground for that on this panel and in the congress. so what is the president's plan to double exports over the next five years? >> i am going to ask the secretary to respond, however. i hope that members give time for the secretary to respond within the three minutes. it's not fair to the new our members will not get a chance to ask questions. please be brief with the secretary so that we can make certain that we get answers. >> i am glad to hear what you said about exports. i think it is a realistic objective.

the world is growing fast -- faster, and because companies are very good at competing in a range of things that the world needs, it is a very realistic objective. ns)@@@@@@ @ nn n@ @ @ @ @ @ @ @ market share around the world. i think you're right to emphasize it.

exports have been doing quite well recently, but we want to make sure that we are reinforcing that. >> our trade agreements part of that plan? >> absolutely, and as the president said, it is not just that. we need to be in the game in asia. they moved to try to negotiate, we want to make sure that the broader multilateral agreements are in place in a way that are going to be good for american companies. >> mr. pomeroy, north dakota. >> thank you, mr. chairman. comments from my friends on other sides of the aisle about aig and the other regulatory failures from the last and ministration, it seems to me incredibly out of place. we've seen a lot of regulatory

resolve. i used to be an insurance commissioner. it does not mean that you don't watch the swindlers and short cuters. people are still picking up the pieces at great expense to the public for that misguided, unbridled faith in the marketplace that occurred in the last administration. the question i want to ask about relates to job growth. in this tight budget time frame, one area where we can have job growth consistent with sound budget principles -- we played a part in putting into law an extraordinary stringent funding regimen for pensions. i believe that it made no sense.

that was before. we have crushed portfolio values with the market correction, lower interest rates which produced an onerous funding picture. not to the jeopardy of the solvency of the plan, but bringing in funding requirements more in line with solvency principles. if we do that, mr. secretary, we could have more companies maintaining their pension plans, more cash and the operation to support the company. >> we think that there is a good case for that plan for relief. i could work with you on doing that. i don't know that this is the precise way to do it but we are prepared to work with you on that. >> mr. thompson, california.

>> mr. secretary, thank you for being here. i want to thank you for your responsiveness and working on issues through my office. two members before me talked about this new jobs credit. i want to associate myself with their concerns. mr. mcdermott talked specifically about projects that actually generate jobs and at the same time generate security to communities. i just think it is an congruent that we want to spend money to hopefully create jobs in small businesses. i do not know anybody in business who hires employees because they are going to get a tax break. people hire employees because they have work to do. and at the same time this budget cuts the corps of engineers -- and there are things critical to

the public safety and the people that we represent, projects beyond shovel-ready, but terribly underfunded. it seems to me we can get a lot more bang for the taxpayer dollars by looking at that rather than putting this together on how we hire employees. >> i completely agree. the most important thing we can do is make sure there is growing demand for the products the american businesses are creating. that is a necessary thing. nothing is possible without that. but take a careful look at the way this was proposed. there were a lot of concerns about this. we listened carefully to those concerns. i am not sure we address all of them, but this is designed to meet most of those concerns. we do not have a monopoly of ideas on this. we want to do things that have

the highest prospect for providing a spark to investment, a spark to job creation, and we think that this in play a role alongside what you said. >> another proposal in the budget is the idea of doing away with the lifeboat, last and, first out accounting practices. this is one that works well for some u.s. businesses. if we do this, if we end it, what is going to happen is that u.s. small businesses will take a big tax hit. their competitors overseas are going to have a terrific advantage over us in the marketplace. there are some industries that have to hold their inventory for a long time. this is a fair and reasonable way to recognize that and i would strongly urge you to go back and revisit that, along with the user fee that this

budget imposes. i cannot think of anything that would be more difficult for the small businesses to deal with than this. it charges people who do not use the tv. and gives a terrific advantage to our overseas confect -- competitors of the marketplace. i would urge strongly to revisit these two issues. i yield back. >> the majority and minority make it together in the workshops with your office to thrash these ideas out. mr. ryan, it seemed like you have been with me all week. >> we should get together more often. first order business -- we've

been talking about salary pensioners, and it could get back to me, i would like a response from you. i brought out page 126 in your budget, and when you take a look at this, i just find this amazing. you get your budget totals here, which by your own admission, you're wrong budget director -- you're a smart guy with smart economists over there. all of them say that the medium and long budget deficits has to get below 3% of gdp. but this plan that you are bringing to west does not even get close to it. >> you're exactly right. >> i only have three minutes. you get the cigarette tax and a magic box that says we're going have commission here. we're going to have a bipartisan -- a bipartisan

commission -- a partisan commission, to to one democrat. >> that is not fair. >> we're going to solve the problem that we inherited. >> why don't you put it in the budget? you're the guys that run the government. why don't you do that? why don't you give us a budget that actually gets the budget -- deficit to a sustainable level? [unintelligible] let me quote this from the "wall street journal." the unusual situation that the government finds itself and will not last. and he adds, how you get ahead of the downward spiral of the plunging dollar and the sinking economy?

>> i think that is a good ". >> the american people are going to get hurt. why don't you give us a budget, not pointing to a commission, but giving us a budget that is actually sustainable. a>> a budget that takes the huge deficit that we inherited -- >> you can only blame bush so long. [unintelligible] >> when i left the treasury, it was surpluses as far as the eyes can see. >> you obviously inherited a tough situation but you are making it worse. >> we're working with you in digging our way out of this mess. we're bringing this down from the ridiculous levels that we inherited.

we get down below 4%, but we need more assistance to getting at down further. you're absolutely right about that. it is very good for the country to hear you and your colleagues stand here today and say we're ready to be responsible. it is a good thing for the country and we welcome working with you and how to do that. [unintelligible] >> mr. lawson of connecticut, so much for the bipartisanship. >> thank you so much for your service to the country. mr. secretary, i wanted to ask you specifically, and i know you may have said something in your opening remarks, but with regard to the privatization of social security -- or the idea

being one that includes the privatization of social security or vouchers for medicare, what is the administration's position on that? >> the president would oppose that. i would oppose that. it is not fair to say to americans that we're going to privatize social security, leaving elderly americans with a voucher that would not cover the cost of basic health care as they go into retirement. i do not think that that would be fair, and we would work against that. >> is this anything different than we heard from the previous of bush administration about how they would privatize social security? >> congressman, i have not seen the details of the proposal. but i actually do not think that their proposal would have had a

lot of support on the other side of the aisle. >> i want to thank the secretary, and certainly would support the administration in that respect. with regard to small businesses, it could further enlighten us with regard to -- if you could further and likeness with regard to why the administration is focused on and -- for the small businesses that are hurting? >> this does is create jobs. we need businesses, small and large, to add back the jobs that they cut as the -- as they feared the economy was falling off the cliff. that requires growth and the economy is not growing. but we want to make sure that we are reinforcing that. growth is not enough. with growth, we want to see more jobs created. for that to happen, it is a good

place for targeted incentives, and they need some credit if they are going to be able to spend three lots of small businesses across the country through no fault of their own, they are hurt because the credit prize in the economy are still blocked. but we need to open those up so they can start to meet this growing demand. that's the basic. infrastructure, help for state and local government, those kinds of proposals -- this is a good place for targeted tax incentives and get that credit to the best policy can be used. >> i hope the president continue to go out on the road and talk about small business, but especially about the preservation of social security and medicare, and how important that is -- and so many baby

boomers now in a position to see these benefits. it's true that we have to make sure it is sound and secure into the future. but that does not mean throwing out the baby with the bathwater. >> it could not be more important understand that. important understand that. @@@@@@@ @ @ @ @ @ @ á'

follow-up with you. i learned some, not disturbing, but confusing information about how you track those. >> i would be happy to do that. >> our overall number on contracts, it is quite low, and a lot like to do better. >> i would follow up it. there is a chart that should go right before that. take a look at the chart, you'll see that this is a chart that tracks our annual deficit since 1981. i go back always because too often the conversation here is very limited in scope. talking only about this year's deficit for this year's problem or this year's accumulated deabt.

i thought i would go back 30 years to talk about what is going on. deficits and surpluses, and if you take a look, it is very interesting. that chart in 2009 when president obama was handed the keys by president bush. you can see the decline that we were in. that is in terms of our annual deficit. the only time we were in surplus was under president clinton. now go to the second chart. but that first chart amounts to is a chart that shows how many years of deficits we had, and quite honestly, when you total up, it turns out to be a lot of that. we ended up having a doubling, a near doubling of the size of the national debt under the previous administration. if we will go to the next chart, it's tough to turn that

deep hole into a pile of good news. what has not been the best news for americans this past year, things have got much better. we of ashley seeing economic growth for the first time for some time. now we're beginning to experience that. as we go to the next chart, we will see how that uptick toward economic growth, some of that due to the policies of the administration. losses were this many when obama got the keys from president bush. to the point where we saw little bit of job growth in november. a vast reduction in the jobs that we've lost.

and finally, the last chart, i want to point out, is that it does matter if we have deficits adding to the dead because the american people may not think in terms of the national debt but they certainly know what they have in their bank accounts. we saw the bank accounts of americans dropped dramatically. while the news is not all good, it is improving, and you have to put it in the historical context of where we were. mr. secretary, let me ask this mr. secretary, let me ask this question -- you have a train with 120 cars on a traveling at 50 m.p.h. and it is traveling recklessly, fiscally recklessly. how long does it take to stop that train when the conductor says i have to pull the emergency brake and change course?

how long does it take? >> it cannot turn on a dime but you have to start. >> it would take a least a mile and a half to stop. it will take awhile for this country to turn around. >> in your opening comments you stated the obligation of your department to come up with these proposals including a new tax on banks. when did this proposal originate? who originated it? how long was under discussion? >> congressman, we at the treasury started to take a look at how attend meet that obligation under lock in the fall of this year. -- how to meet that obligation under law in the fall of this year.

>> whose proposal? >> this is the president's proposal and we recommended it to him. and it had his full support. >> could you share in the interoffice memos on this? >> i would be happy to explain -- >> with the interoffice memos explain the origination of the tax? >> i would talk to committee about the best choices on how to do this. but the simple point, i think, is that the law required us to recoup losses. we did a bunch of different ways to do that. it was put on the people that benefited the most and did not leave the taxpayers exposed to a dime. we wanted a way that it was a fee on leverage and risk. that is why we chose this model. we know that there are other ways to do it but we think that this is a pretty common sense

solution for >> can you share with us these memos? >> i would be happy to talk with you about all the discussions that we had about the alternatives. >> would you give us some of the memos between you and others in the department to show how this was arrived at? >> do you want to have a debate about the merits of the proposal? >> i would like to see the memos. >> i would be happy to be responsive to a new request you made about how to do this. >> in the tarp wind down, he made some mention in your opening comments -- you made some mention in your opening comments about paying down the deficit. >> when repayments come in, they go to reduce the debt.

it's important to recognize that we have been successful in getting $170 billion back from the banking system, and that goes directly to reduce our long-term fiscal challenges but it did not reduce the authority. we're still left with that. we think it's a good idea with some of that existing authority to make sure that we're helping small community banks do with the need to do to help their business customers to the full extent. that is the basic principle and design of the bill. again, i hope this is something that we can do together, because community banks across the country in every district and every state, they will say what is true even though they are well run banks, they do not have opportunities to spend

three there's a good economic case to make that to take a dollar of investment in their -- they have the highest return on a dollar of tax revenue than anything that we have seen. >> your answer is that you are reusing the money. >> to $175 billion that we took back from the banking system when i came into office goes to reduce the debt. but we're going to take some of the authority that congress authorized to make sure that we're helping the small banks. >> if you could identify these documents, i would help you get them. >> thank you, mr. chairman. and thank you, mr. guy, for joining us. -- mr. geithner, for joining us.

members of congress all think it is important to be fiscally responsible. it's important how we do it. i commend my friend, paul ryan, who is leading the charge for republicans on the budget, coming up with some specifics. how will debate -- i will debate paul on a few of those but i think he is offering of valuable service to say here is what we need to do. i think this is something that we need to continue to do. to have some element -- you have got some elements of the budget which alike. and i think you have some unjustified subsidies to ad business -- ag business that does not help farmers or ranchers. you've offered up their reinstitution of attacks -- the superfund tax that would help us create jobs and protect the

environment. what you said a moment ago about the fiscal situation not be sustainable and that our priority should be on jobs and recovery of the economy, i could not agree more. but i would hope that as it developed this and you work with congress, you can think about one area like our infrastructure spending. we are hearing a common theme at least on this side of the aisle. we have a trust fund in deficit for the first time in history. for shoring up the general fund which is adding to the deficit in the long run. we are at an impasse with the authorization. and so we're not dealing with the long-term investments in transportation that would create jobs and revitalize the community. i am hopeful that we can have a thoughtful discussion about the

wisdom of spending about as much money on more tax breaks, extending the provisions for business which would be about the fiscal had room necessary to fully fund a transportation bill, that would put people to work and would have a higher economic multiplier for the task ahead of us. any comment about actually financing the infrastructure deficit? >> what is going to do the best job of getting growth, more per, more jobs? and to do that in a way that is fiscally responsible over the longer term and in a way that is fair? bear on businesses, working families -- that is basic and i agree with you if you do infrastructure spending right,

you get a very high return and it affects how fast businesses can grow. people depend on the basic infrastructure but we have out -- find the balance. will be working with you to find the best balance. >> thank you. >> mr. secretary, thank you for your testimony today. in speaking about fairness, there is a lot going on right now about the causes. a lot of people should know better. recent history shows that while republicans were in control, the past two large tax breaks that affected the most wealthy. not a nickel of it was paid for in the budget. two wars overseas, not a nickel paid for. and the largest expansion of entitlement spending when they passed the prescription drug plan. analysts say that that will cost the country about 1 $2 trillion

over the next 10 years, not a nickel of it paid for. we came into the -- this administration came into a budget mess worse than any previous administration since fdr. it took awhile to get into it. a lot of bad policy decisions in my point of view, and it will take awhile to get out of it. i am glad you're focused on the small-business agenda. that will be the locomotive that pulls the sad of this mess. pulls the sad of this mess. in the family farmers are the backbone of the economy. you have to help them keep the doors open and expand their options. the immediate expensing -- no gains tax for small business, and the $30 billion loan program that you want to set up. i want to make certain that the family farmers are eligible,

because they will need this credit during the spring. this will be an important component. i want to focus on the new credit. this is in the category of, we do not do anything that is new around here. this is something that we tried in 1976. from the analysis and the information from this tax credit -- this was a little bit flat and we did not get anything. what do you see in your proposal that may give us some hope that this will lead to some job creation, perhaps with the small businesses in the country and get everyone back on track? >> there are two parts to this proposal. if you add the job, relative to the amount of people that you had on the payroll in 2009, you get the $5,000 tax credit.

and if you increase the hours -- if you raise wages for them, you get a role relief alongside that. -- pedro relief alongside that. it is buried -- you get payroll relief alongside that. there may be different ways to do that but we've made that it is much more effective in providing a bit more spark to hiring as demand picks up. but you are right, this is a controversial proposal. we're trying to be creative and pragmatic about it. we recognize that what businesses say most is they want to make sure that they are growing orders and advancing enough to meet those orders. we want to provide more spared

to create more jobs than we otherwise would. >> mr. secretary, thank you for being here. the president said that we must budget our money the way the american people do. i am sure that you agree with that. my dad came to america literally on a vote and got a job at a manufacturing plant. some years he made less than others. when he met less, we spent less. when he lost his job in his pension and we lost our health care, we spent even less than the year before. you recognize this document. >> i do. >> i thought you would. back in 2007, the american people gave up $2.50 trillion of their money. we spent $2.70 trillion. two much. the deficit was hundred $56 billion.

after several years and other events, our deficit was too much $160 billion. two years, the economy off a cliff. according your numbers, the american taxpayer is giving to $0.10 trillion -- $2.10 trillion. we're spending $2.50 trillion. in 2015, because of tax increases, we're going to take $3.60 trillion -- my dad would say, we are taking an $3.60 trillion? long term, no, but that would be highly disappointed because we are going to spend $4.30 trillion. that is not how the american

people budget, mr. secretary. small business -- everyone talks about small business. >> can i respond to that point? >> you can answer that question and in this question. in this proposed budget, we did you -- if you and the irs the authority to classify independent contractors to work across the country for small mom-and-pop businesses, carpenters, people to lay carpets and to put on a route, independent contractors, and you could be classified them for payroll taxes? this will put small businesses across america out of business. >> we're not proposing to do that. >> you're going to take that

out? >> we're proposing to work together to legislate a party -- authority to clarify that. small businesses look at the current system. you have to take in consideration different factors. it is not fair to them be estop large businesses. -- versus large businesses. we make it easier and we're not point to change that basic line. i completely agree with the concern that you have. i would not support that. it is much worse than you said. it is not just that we came into office with a $1.30 trillion deficit, but the projected deficit at that point, we're

going that ad and an additional -- we're one add an additional $8 trillion over 10 years. we have to live within our means, too. but in a financial crisis and recession, you cannot save your way out of it. you cannot cut spending and expect to lift your way out of this. when you're facing this type of damage, it was expensive in the great depression but we learned our mistake. you cannot cut deficits in the middle of a deep financial crisis and expects to do anything but seat thousands of jobs, thousands of businesses close. >> my time has expired. >> thank you, mr. chairman.

despite the promises made in tarp, it seems as hard as it was a year ago for small businesses in my area in north jersey to get loans. you know that better than i do. taking $30 billion from tarp to create a special program designed to buy and -- provide capital for small bags, i understand. i think that we should not look like we at the deficit reducing suggestion. what is the justification and evidence that this will open up lending? we had a justification last year that did not work. what makes this justification any more cogent? >> we are recession caused in part by people across the country ball rolling too much.

and we had the economy shrinking at an annual rate of 6% after they had borrowed too much. there was no way to seek borrowing come down as people went back to look live within their means. you've seen a substantial drop in loans and credit to small businesses. the problem for us as a country is when a good business, a viable business with good customers that can expand, wants to grow and meet tha÷i demand with access to credit. >> and that is a lot of business. >> i agree with you completely. that is not easy to fix. what this does is help open up the pipes to make sure that a small bank does not haveñr to ct further. >> you thinkçóñfiñi that is the difference and providing park money for the smaller banks compared to what we did last year? ñrñr>>ñi the capital that with e

small banks last year was very helpful. -- that went to small banks last year was very helpful. in a simple way,ñr a dollar of capital from theñi government creates a $8çó to $10 in lending capacity. çóñrñibut it is good to recognit we had more than 650 banks, small banks, with applications for assistance from the government for a lot of reasons. one was a public perception created that that made him look weak. many competitors ran ads against them. there were very scared that this would come with burdens and conditions making it harder for them to run their bags. >> i just wanted to say to the secretary that we need to do something about the expanding of

foreclosures. and finally, the amt -- as i read this budget, the talk about a permanent solution to at&t, but it was like you're paying for with deficit financing. you go back to the past administration, and it seems you are replicating it by not paying for the reduction permanently of the alternative minimum tax. you're doing the same thing as the other guys. >> absolutely not. >> how are you paying 4for it? >> add we're facing exactly the concern you raise. >> good to see you again. i feel compelled to explain to you and highlight was brought up

earlier today, kevin brady from texas, talking about aig. i've been a ball with this issue with you. it is important that we -- i think you did a good job in your opening statement i wanted to clarify again that the former president and his party bag this congress to create the park. the former president and his party gave the money to aig almost unfettered. now they want to blame this administration and your office for their mistakes. just like they do on the deficit here today as well. mr. secretary -- >> i need to start further back than even that. what happened in this country is that we allow people to get

around basic protections we put on banks and to build up huge risks and leverage outside the things that banks do. this is true in a number of institutions, without effective oversight or constrained or that kind of basic tools for bankruptcy to handle these problems. those failures, the failure of regulation and policy, and the regulation of lack of tools, that is why it is so important that we fix them so we're not faced with those choices again. >> i agree. if we took all the spending, and a markos card, no more food safety inspectors, air traffic controllers, and did not pay any federal employees, we would still have a $1 trillion deficit.

>> i think that is exactly right. >> the principal factors driving in our social security and especially the eye control costs and the medicare system, is that correct? >> yes, but it is not just that. tax cuts put in place for the most fortunate americans. >> i'm one to get to that 0.3 -- i am going to get to that point. i one of lloyd mr. -- i want to applaud mr. ryan as well. but going against the failed policies of the former ministration projected by the american people, and providing vouchers to the medicare system, they were rejected before. i'm glad to hear that the president strongly rejects that proposal. >> we would.

>> i thank the chairman. mr. secretary, i have a series of five questions. if i may submit them and ask mr. geithner to submit written answers? >> without objection. >> the most recent estimates indicate that the u.s. will spend about $700 billion a year in interest payments by the end in interest payments by the end of this to put this in context, this is like a new troubled asset relief program every year. and the taxpayers get nothing in return. right now, you are financing the current interest payments by borrowing even more. the freeze of the budget is a drop in the bucket.

what happens when the interest on the treasury bonds is skyrocketing. community banks are still doing some lending. and yet, your proposal is to escalate this. the larger banks that we held out are not doing anything. ñithey are bringing in lines of credit, and they are putting businesses out of business. this is one of the reasons why we have such a problem today. why not deal with the large banks that took the money from the american public? >> you are absolutely right about the cost to the economy by having large deficits and a huge increase in the debt that we inherited. we will have to work together to bring this down.

i agree with you. let me talk about the financial system. when we came in office, we took back $170 billion from the largest banks in the company by forcing them to raise private capital so that the american people could take those resources and use them to meet our long-term needs, including the ones that you pointed out. it is important to keep working together. >> i don't think that you can use this money twice. i don't think you can give it to community banks and comply with the deficit. >> the way that this law was very carefully written, it says that when we -- $170 billion in repayments replaced by private

capital. >> my time is almost up. one other question. when we talk about the fact that we had a surplus, no one is saying who was in charge of congress. i think you know and i know and the american people know it was the republicans who insisted on that. it was the republicans to control congress at the time. with that, mr. chairman, i yield back the balance of my time. >> mr. van holland. >> it is indisputable that the obama administration inherited an economy in free fall, and before the president even put his hand on the bible, we had a $1.30 trillion deficit last year. the question is, how do we go forward? the more we hear ideas from the

other side, the more we hear that they want us to turn back the clock and that the proposals from the bush administration that got us into the mess to begin with. let's talk about tax policy. the recovery bill provided tax relief for 95% of working americans. the head of the republican house congress decide -- described those as boutique tax cuts. and then as the president it would to a tax cut that help the wealthiest. -- and then he asked the president if he would do a tax cut that helped the wealthiest. and at the same time, you've got to get those deficits under control. you cannot have it both ways. the bush tax cuts that the president proposes to allow to expire on their own terms these

are on incomes over $250,000. and by doing that, we would reduce the deficit by $826 billion over 10 years, almost $1 trillion. it's interesting that they say we should turn back the clocks again in give disproportionate tax breaks to the wealthiest americans and then say, well, let's work together to reduce the deficit. we also adopted the statutory paygo, which most americans understand, you have to make do, and make sure that you were going to add to government programs and all said one way or another. -- and offset one way or the other. we have to have a discussion about our. the president told us that we're

going to wrap it up. the president said, it was necessary to turn things around. now what are we going to do to get the money back? your proposal on the table to make sure that aig and the financial industry that got taxpayer money has to pay back every cent. i hope our colleagues on the other side will work with us, because when we passed the wall street accountability bill, we had a proposal to do that, but we did not get a vote from a single republican member. i would just ask you to get back to me on a proposal to establish a financing authority for clean energy. i think there were some promising ideas and the president's budget to create a $4 billion infrastructure innovation projects. i hope that we can develop that

the clink energy initiatives. i look forward to the conversation with you on that. >> mr. davis of kentucky. >> allied to continue our discussion where we left off last february. regarding last 1in, first out accounting. it is not a loophole, but speaking of turning the clock back, going back to the roosevelt administration, most of that got shot down by the senate as a result of overreach. my concern is that if we want to create jobs in manufacturing, it is a well established practice. our foreign competitors do not

have lifo, it is one of our small and manages. how we complete -- how we compete with the chinese. in industries like distilleries were you have to sit back and mentor for many years, and the costs of a cruel are dramatically higher, -- and the cost of a cruel -- accruel are dramatically higher. i can see this killing jobs, reducing investment, where that is already a challenge now. congress rejected a proposal to repeal it last year. you brought it back to us. you told me there was a difference of opinion on that. there was broad bipartisan support to keep it.

what is the compelling reason to repeal this? >> you make your case and i understand the concerns. but we're following them lead of many members of this committee. i would be happy to talk to you and to respond in writing and walk you through what the impact might be. we thought it was good policy back then and we think it is good policy. i understand the concerns that you raise. i know not everybody agrees. when it is a delicate these proposals and figure out the best benefit. -- we need to work through these proposals and figure out the best benefit. >> i don't sit attacking republican presidents on infrastructure. were calling for bipartisanship and in making endless attacks. i put this in light of going

into a failing plant, the one thing that you never do is hurt the things that are ashley maintaining financial stability. it's a further burden on cost. when you come in with $160 billion deficits, and then if i took that before a board of directors, i would get fired. that is what the american people are going to do if we continue this at a control spending. >> i think he said an important thing. a failing company, we have to turn around a problems. i don't think we have a failing economy. but we have a turnaround problem. we're beginning to make some progress turning it around. we would like to find ways to work together to make it more likely we get this economy back on track and repair the damage

and wreckage, and as we grow, produce more jobs. >> miss swartz, pennsylvania. >> thank you, chairman. i appreciate your comments. i think a colleague on this side of the house at best, we inherited a mess. thank you for your comments and clarifying the reality of what we inherited and some real remedies, all we can do to stimulate the economy and job growth. i appreciate the focus on small business and small business lending. and also the focus of the pay- as-you-go, the commission, and the fact that we're trying to balance this.

the actions of this administration and congress and what we're going to do going forward. something that has not been asked yet, on the issue of helping encourage americans to save. in retirement, there were some comments that we have had more like families do, and a lot of american families that troubled by borrowing more that they could repay. but we do not always make easy decisions. some of the things that happened during this terrible recession -- it is challenging for families that are facing very difficult questions. it is easier when you can save for your employer.

70 million working americans do not have any kind of retirement plan or savings plan at their workplace. what i want ask you is -- the proposals to encourage small businesses to encourage retirement savings, speeding up 401(k)'s, and even a small businesses that do not do a 401(k), did do some kind of automatic savings -- to do some kind of automatic savings for their employees. the money that you put away adds up over time, and i encourage my younger staffers to do that. this is really important and it is something that we can all agree with in a bipartisan way. >> let me tell you the problem that we have here with the members that have not had an opportunity to inquire and we

have 10 minutes to get to the floor. for those members that want to stay, you can have one minute of peace, or at the 2:00 hearing, give priority to those who are not able to make inquiry. who would want to wait to 2:00? ok. [buzzer sounds] >> how to close by saying thank you and i look for to working with you. >> i would be happy to give you more detail in writing. >> do i have one minute? do we have time for three minutes? mr. chairman, how much time do i have? thank you sir. mr. secretary, you and i had an exchange regarding trade. i want to go back to that

quickly. for 1995-2007, we had growth in our exports but there were 93 trade agreements passed during that time. mr. chairman? the president has said that he wants to double our exports. we need to have treatment -- trade agreements past three years supports the idea of free trade? >> yes. >> the korean agreement, the colombian agreement, yes or no? colombian agreement, yes or no? >> we support having arthur for american. >> do you believe that trading creates jobs? the believe that we are losing jobs by not passing the trade agreement. >> my time is not up.

mr. chairman. >> thank you. thank you for being here. put me in the category of the people who support the tax credit. this is similar to what the president has. the state has 11.2% unemployment so let me ask you -- we were on the chambers and want to see something happening with the chambers of commerce. we introduced the tax credit bill -- and the market has been slow to develop. this is on the financial side of that issue. you were trying to give us some idea of where the guide says. this is the america bond act.

i hope that you will look at the qualified school construction. these are ways to put a lot of people to work very quickly. >> happy to see you again, mr. secretary. my district is in a world of hurt. at that 13% unemployment. a that the highest mortgage foreclosure rate in the country. i have a service economy. i have a spousal travel allowance to help people get back to work. >> you have been a passionate, eloquent proposal -- supporter of those proposals. >> and i have more. >> i would be happy to talk with you and work with you on that. in your right to remind everyone is that there is a pain

not captured in the national numbers where unemployment is much higher, word job loss and the risk is much greater. that is why we have done everything we have as quickly as we have to support this economy and help reinforce this economy. thank you for reminding people about that. . another -- i know that you want to talk about exports. the manufacturing sector is one

of the growing segments. 20% of the industry is up -- and the proposal would represent an extent -- a threat to many of the authorities. >> i hope that we can get together with a bipartisan discussion of the recommendations that have been made by the president. we are looking forward to working with you outside of this hearing to see whether we can find our differences. and we will need your help in the sand -- senate. we do not need to go through with us only to find that they have problems. we look forward to being with you again, very soon. we are adjourned until 2:00 this afternoon.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> today on c-span, obama will speak at the annual retreat for senate democrats. and then, "washington journal" with the state of the small business. and the u.s. house will work on the debt limit and cyber security. >> comcast has a deal with general electric to take over nbc universal. this is waiting for federal -- federal regulatory approval. a subcommittee will be looking at this and the effect on the

marketplace. we will have coverage beginning at 9:00 eastern on c-span3. >> "in depth" welcomes paul johnson, author of 40 books. his latest is on winston churchill. join us with a 3 hour conversation, sunday, at noon eastern. >> following the meeting with house republicans, obama spoke yesterday at the annual retreat of democrats. and he answered their questions. this is one hour, 20 minutes.

[applause] [applause] if i can have everyone's attention? i want to talk for just a moment, about where we were.

problems with security, trillions of dollars of tax cuts that were not under control. let's talk about where we are. i want to talk about some of the things that we have done to establish where we are. the first thing that we were able to pass was a bill -- and it was not very sexy, but we have editorials all across the country -- the most significant environmental legislation in a quarter of a century. thousands of miles of rivers, 5,000 miles of trails, and many other things, affecting all 50 states. ledbetter came to see me with a great smile and tremendous energy. we had equalized pay between men

and women. [applause] we advanced the children's health insurance program, now covering 14 million children. [applause] something that people do not focus on that often, but one of my favorite things i have been involved when is the national service legislation, for people to be involved in their community and get support to go to college. we have done this. and we did something related to mortgage fraud -- and this -- there were problems but this would be so much worse if we had not made a lot to prevent people from doing things to people who are in trouble. we also did something about credit cards.

those payments cannot be charged, and the hidden costs no longer exist. people may not realize what we have done, but this is so important as it relates to credit in america. tobacco. all of my family -- they were smoking, and they began when they were children. the food and drug administration is regulating tobacco. we have been trying to do that for 60 years. the economic recovery. preservation of jobs -- the story is yet to be told. 50% of the money is not out among the people. health care. we have done remarkable things on health care, and there is much left to do. to each of you democratic senators, from the state of maine to the state of new hampshire, minnesota and

louisiana, how hard we have worked, together. there have been some good people in the history of this country. one of the greatest teams in the history of the country is the group that you were part of. i am appreciating this, very much. so now, where are we going? we have a lot left to do. we have the economy, jobs, health care, and we are going to move forward. this is good politics and this is good for the country. behind everything i have spoken about, is the president of the united states, barack obama. [applause] >> thank you, thank you.

please take a seat. you had to listen to me at the state of the union, or at least pretend. i will try to keep this relatively brief. we will open this up later for questions. the first thing i want to do is i want to offer thanks to harry reid. [applause] he has a difficult job, managing a group that is difficult to manage. i have been part of the caucus, and i do not think anyone could have done a better job under more difficult circumstances. [applause] now, let me say that we always knew that this was going to be a difficult year to govern. a very difficult year to govern.

we began 2009 with a financial system about to collapse, and an economy losing 7000 jobs every month. at 1.3 trillion dollar deficit. we knew that the solutions would not come easily, or what they come quickly. we knew that the right decisions will be difficult, and sometimes, they would be unpopular. we would have to make them without any support from people on the other side of the aisle. but we have made those decisions. those actions prevented another great depression, and did a great recession, and the economy that was falling by 6% one year ago, is now growing at 6%. this is because of the work that you have done.

he spoke about some of the work that you have done under these difficult circumstances. health insurance for 4 million children, protecting people being taken on by their credit companies and big tobacco. you have reformed the system and save taxpayers billions, as you kept people safe. billions of dollars in tax relief to small businesses and families in america. you face procedural objectives -- procedural issues that were unprecedented. you had to break more filibusters than in the 1960's and 1950's combined. he did not let this stop you.

as he has mentioned, the mystery -- the mission is far from accomplished. there are far too many americans who are still hurting after this storm. you have seen this at your districts, and you have heard this from the constituents who are desperate for work. we have seen this in the burdens of families that have been dealing with us long since the recession began. we have been talking about the burden of working longer and harder for less money and not being able to save or retire, to help with college expenses, and the rising cost of health care. these problems have not gone away. this is still the responsibility that we have to address these problems. the change has gone -- we have the largest majority in the generation, to the second largest majority in a generation.

there was a headline after the election in massachusetts. they announced that republicans have a 41-59 majority. that is worth thinking about. we still have to be the leader. creating jobs will continue to be the focus in 2010. we have expanded lending -- and these loans have gone up 70 or 80%. this indicates that there is still a huge demand among the small businesses. the banks say that there is not as much demand out there, but many of the small businesses are wanting to have loans. i have proposed additional ideas

to help the small businesses raise wages and expand. to get the credit that they need to stay afloat. we should put these proposals into action without delay. we have invested -- we have invested in the infrastructure, putting people to work and strengthening the community and the country. the recovery act was designed so that much of this will be taking place this year, not last year. many of the projects that we funded are coming on-line in the next few months. with the investments in clean energy, we have been putting americans to work and we are on track to double the capacity for renewable energy over the next few years. i have proposed tax credits that will promote energy

conservation. we should do this without delay. i think that ideas like this should be palatable to the other party. these seem very centrist, and we should be able to hear their ideas as well. that is why i spoke to them last friday. i think it was to the benefit of the country that we had a discussion about the challenges facing the american people. [applause] i was having a little bit of fun. [laughter] >> we did not agree on some issues. and on some, we did agree. when it came to health insurance reform, i supported the republican ideas from the beginning. and you did as well. you can testify to listening to republican ideas. so can christopher dodd and tom harkin.

you considered hundreds of amendments and incorporated those ideas into the legislation in the senate. when i start hearing that we should accept their ideas, we should be clear. we have. what has not happened is the other side taking the ideas that we have. i said i want to work together when we can, and i meant what i said. i also made it clear that we will call them out when they say that they want to work with us, and we extend the hand, and get a fist in return. for example, last week, he put up a bill that i supported. the fiscal commission -- and we were told that this would be bipartisan, only to see the republicans who co-sponsored this suddenly decide to vote

against this. now, i am open to honest differences of opinion. i am not open to changing positions for short-term politics. i am not open to a decision to stay on the sidelines. i have no patience with the kinds of political calculations that say that the cost of passing everything is equal to the cost of passing nothing. if you what a loser, i am the winner. that has been in the politics for too long and the american people are left out of the equation. i would say that if you want a lesson from massachusetts -- the answer is not to do nothing. the american people are impatient with business as usual. they are angry with the washington that is so absorbent who was up and who is down, that we do not see how they are

doing. we should worry less about keeping our jobs, and more about helping them to keep their jobs. they want to see this business done in a transparent way. now, when we took back the senate in 2007, we did this by making a case by saying that we would be better on ethics. by beginning to address the abuse of earmarks -- we should be proud of those accomplishments. but if we should work on the deficit of trust, we should do even more. we should make all these requests public on one website. we should request the lobbyist to discuss their details on the contracts with the clients with the administration or with congress. working with people like dick durbin, we have to confront the

gaping loopholes that were open in campaign finance, allowing special interest to spend without limits to influence the elections in america. we have to get back to fiscal responsibility. 10 years ago, america had a budget surplus of $200 billion. people were worried about what would happen with the surplus, and whether there would be problems in the financial markets. after a couple of words, two tax cuts, prescription drug programs, none of which were paid for, we face a deficit of trillions of dollars, a debt of eight trillion dollars, before my administration had spent a single dollar. i am asking you to adopt the non-discretionary spending, starting next year.

we are still having a difficult time right now given that the economy is picking up steam. i am happy that you have restored the rules that worked in the 1990's. i also mentioned the fiscal commission. we will report the commission by the executive order. we should take these issues seriously, not just for ourselves, but the children and grandchildren. i know that these are difficult times to hold public office. i am there with you. the unhappiness is intense -- and the economy is massive, and so are the consequences. what effort brought -- whatever buttons that we press -- this is needed to provide relief to so

many constituents. in that circumstance -- there is the natural political instinct to tread lightly and keep your head down. to play this safe. i have said this before and i will say this again. for meet -- is constantly important to remind myself why i am in this business in the first place. why i am -- why i am ok with being away from my family and the financial sacrifices that so many people have made, being subject to criticism, constantly. you do not get in this business for the title. you'd do this because in your background, at some time, he decided there was an issue that was so important that you were willing to stand up and you were willing to be counted.

you decided that he would run as a democrat because there was a set of values within the party about making certain that everyone had a fair shot, and making certain that the people in the middle class were treated fairly in the economy. making certain that those on the outside were able to get in. they were able to get involved in public service. we have to remind ourselves about this. especially when this is difficult. if you look at an issue right now like health care -- so many of us campaigned on the idea that we were going to change the health care system. we were looking people in the eye who had been denied with pre-existing conditions or no health insurance, or small business owners who said that the premiums were up 25%.

we told them that we would change this. now, here we are with the chance to change this. all of you did extraordinary work last year in making serious changes that would not only reform the insurance industry -- not only cover 30 million americans, but would also save one trillion dollars in the government, according to the congressional budget office. there is a direct connection between the work that you have done on that, and the reason that you got into public office in the first place. as we think about moving forward, we cannot lose sight of why we are here. we have to finish the job on health care. we have to finish the job on financial regulatory reform.

[applause] we have to finish the job, even if this is difficult. i am confident that if we do so in an open way -- in a transparent way, with a feeling that says to the political opponents that we welcome their ideas -- and that we are open to compromise -- what we are not willing to do is give up on the basic notion that the government can be responsive to the ordinary people and help give them a hand up to achieve the american dream. if that is where we go, i am confident that politics will take care of itself in 2010. thank you very much. [applause] thank you.

>> the first question. people have come to me, and they have told me if they want to ask questions. the first is arlen specter. >> i will applaud your decision to place the economy at the top of the agenda and put america back to work. i have a question in two parts and a brief statements of the issue. we have lost 2,300,000 jobs because of the trade imbalance with china. this was in 2001 and 2007. the remedy to save those jobs -- these are very ineffective, with long delays and proceedings before the international trade commission being overruled by the president.

china is violating international law, with subsidies and dumping. a form of international banditry. they take the money and then they give this back to us. and they are now owning a major part of the united states. the first part of my question -- do you support more effective remedies to allow injured -- to allow unions to lose jobs, companies which lose profits, by endorsing a judicial remedy. if not in u.s. courts, perhaps in international courts. and eliminate the aspect of having a decision that is overruled by the president --