oil accommodation. all of these issues have to be worked in concert. that is why our strategy is one that is comprehensive, one that is integrated, and one that has a sense of urgency. the clock is ticking. thank you very much. . .

>> they are hammering like fists on the door to be let into the conversation to add new information, to raise new questions, to suggest new context. >> winners of this year's national press foundation awards talk about the role of a journalism and a changing society put a saturday night at 8:00 on c-span. >> as the international correspondent for the washington post, he has traveled the world. his books are about his travels and his global views on contemporary issues including the united states of europe. life sunday at noon on c-span2. " health and human services

kathleen sebelius met with representatives from several large insurance agency representatives. this is about 20 minutes. >> good morning. want to thank the executives for being here on short notice to have this conversation. the meeting was really prompted in part by the rate increases which been announced around the country and the input that i have had from people across

america who are really frightened by them being priced out of the market and not know what is coming next. they want some information about how all this is happening and what strategies we have for looking at costs and the future. they are terrified their next if they are not affected directly right now, what is galling to happen next. if it is one state or one isolated instance, the individual is seeing double- digit rate increases across the board. that is one of the reasons the president is very eager to have a comprehensive health reform bill that among other things has a different kind of opportunity for people to be pulled together. in the meantime, it is important for us to figure out what ids

there are, what -- what kind of ideas there are, what information you can share with me and i can share with the americans about what exactly is happening and how we can deal with this going forward. i appreciate the effort you made to be here. i think we are eager to talk about what is happening in the marketplace and what you are seeing in terms of cost trends. i have some experience and i know a number of you both as a governor when i dealt with a large state employee plant and a renegotiated -- plan and i renegotiated that.

i did not effort realize i would be in this situation -- to not ever realized i would be in this situation. this conversation is critical to the american people and a timely opportunity for us to talk and exchange ideas and information and where we can go that americans continue to have options for affordable health coverage into the future. with that, i would like to recognize sandy kregger. we served together in the legislator and have dotage other a long time.

thank you for being here. >> thank you, madame secretary. it is a comfort for those of us to have you in your position. you do understand insurance and the critical role it plays. i want to thank you for holding the meeting and for having me and my colleagues from west virginia and pennsylvania in this very important discussion. the american people are reaching out and are reaching the breaking point when it comes to health care coverage. it becomes increasingly important for regulators to terribly and objectively review the insurers are requests for higher premiums to insure that the increases are justified by their actual medical expenses and that they did not unfairly discriminate against any groups,

especially during this financial downturn. state regulators are in the position to perform writ alignments. some have not been given the authority to justify increases before they come on line. we believe several backstops could be put into place with that authority. what is critical is the state role in promoting competitive markets. it is really important in terms of protecting consumers from higher premiums but it is even more important to protect them from insolvency. and they'll let the worst and paying a high premium is paying a high premium and then not having the insurer meet your claim. the review will be done on an actuarial basis.

we have been working with the administration and with senator feinstein and a representative and we believe their proposal will be a kind of state and federal partnership that is necessary to protect consumers. as important as rate oversight is, it will ultimately fail unless the markets are stabilized. key provisions of the president's plan and in the bill from congress will help provide the stability by ending discrimination, bringing everybody into the market and ensuring that [inaudible] . in the end, the rookie will be bending the cost curve. where have all heard -- the real key will be bending the parking cost curve. we thank you for holding this

important meeting and including us in this discussion. our colleagues look forward to working with you and the congress. >> thank you. the ceo of aetna is going to give some comments and i appreciate him being here and being a part of this dialogue. i have had the pleasure of working with you over a number of years. welcome. >> thank you. i appreciate the upper edges seat to be here on behalf of my colleagues -- i appreciate the opportunity to be here on behalf of my colleagues. we need to make certain that working families have access to affordable health care. we recognize that our issues

particularly in the individual insurance market the to be addressed. that is what the industry last year really came forward and supported many of the goals to eliminate [inaudible] we recognize that in order to make that growth, we need to anticipate overall health insurance goals. we are really only successful and we meet customer needs. today, that means affordable health insurance. we also support taking the bureaucracy out of health care. the industry has spent almost $2 billion to ensure that every member has access secure health care. we want the insurance market to work for everybody. in order to do this, we do believe that not only must we deal with access issues where we are making important process --

progress, we need to get at what is driving costs and recognize that consumer experiences. the rate is really reflective of our health care delivery system. the pharmaceutical companies, the hospitals, the physicians, the device manufacturers. they all need to be a part of this collaboration in helping make health care more affordable for working families. last week, i was struck by the comment of warren buffett who said it best, insurance itself is not the problem. insurance is not the reason health care as a percentage of gdp. we do things that do not need to be done like paying for procedures and not paying for results. we really want a system [inaudible] i want to close by thanking the commissioner for working with

us in making sure that we are compliant with all laws and regulations and having a firm hand when we are not doing things we should be doing. i want to applaud the secretary for this collaborative process. i think this is what we need more of. everybody at the table working together to really do what we can to make certain that the rate increases slow down which means the costs of care must come down. >> thank you. burble pause for a minute and let the press and exit. -- we will pause for a moment and let the press and exit. >> we just completed a meeting with five ceo's of the largest health insurance companies in america. the meeting was focused on what

is happening with the kind of jobs -- jaw dropping rate increases that people are seeing particularly in the individual and small group markets and what are the reasons for it and what we can do about it moving forward. i think it was a hopeful conversation. the ceo's were joined by representatives and the leadership of the national association of insurance commissioners who have an oversight responsibility in the marketplace. we talked about some of the rate trends and some of the cost issues but i have to say, at the end of the day, i still think there is a concern that medical trends do not match the rate increases. the costs are ahead of inflation costs are still well below what is being filed and the individual and small group market.

i asked companies and will follow-up with them that they file online their rate requests along with the actuarial data that supports those break increases. what they are paying for overhead, what they are collecting for administrative costs. at a minimum, until we have comprehensive health reform and a new marketplace and rate review and oversight, people at least understand what is going on. the president stopped by the meeting briefly to share his concerns about what he hears. that was acknowledged by the company's president's. as the rates rise, more and more people are leaving the marketplace. they are making the situation far worse for those left in who

are often the sickest and oldest patients who have no place else to go. this is a step and a conversation that will hopefully be followed by some greatly increased transparency about what indeed is going on in these marketplaces. why is that companies who have very healthy profits, the top companies filed for a $12.70 billion worth of profits and to the asinine and pivoted and in this marketplace have filed hoff dramatic rate increases which will further decline of the private insurance in america. [inaudible] >> can you describe what it was like and how ceo's responded when the saw that? >> he described to the constituent who had written from ohio who was a cancer survivor

and had been cancer free for 11 years. her premiums went up 25% this year. they are going to go up another 40% in 2010. she is already paying $7,000. she is paying expenses out of pocket. she enumerated what she is paying for pharmaceuticals. she is still seeing these extraordinary rate increases. the president said this is clearly unacceptable and unsustainable. they admitted it was unsustainable. we talked about what this market is divided into of little bits and pieces. why sick people are segregated, essentially. it is a problem the president addressed at the summit. frankly, that is a big disagreement between the republican strategy and the president's strategy moving forward. the republicans feel that it is acceptable to have a risk pool

that only has sick people. you put people with pre-existing conditions and a high risk pool and that would be their strategy going forward. the president says we need a different marketplace. we need to pull risk once again and some leveraging power. the same power that individuals and small business owners give them what members of congress have right now. this market does not work. in the meantime, we want to shine a bright light. i am hoping that the ceo's respond to the call for putting their information up in public. put it on the website and tell us what you are paying out. tell us what you are spending. tell us your ceo salaries and advertising. let's have that conversation. did they say anything about lowering rate hikes? they admitted it is unsustainable. did they say anything specific about how to act on that? >> when we began to question the rate increase they withdrew that

rate increase for at least two months. what happens at the end of two months i am not sure. california insurance commissioner's are opening an investigation and are asking for a lot of data. that is an example that at the very least, a spotlight of having some transparency, having companies come forward, is a helpful step for consumers. what we really need is comprehensive reform. that is part of what this discussion is about. >> what do you say of the people who are still very concerned that the savings out of this reform package which is still calculated at $500 billion is going to come at the cost of some of the services that people are now receiving. >> that has certainly been a part of the misinformation that has been circulated.

we have seen statements about the enormous profitability in the health-care investment plans. one of the cost savings is not to eliminate the advantage but stopped overpaying the insurance companies for delivering services to seniors. those kinds of savings are long overdue. we are subsidizing insurance companies and not a proven -- improving the health of seniors. we are reducing costs from pharmaceutical companies, not limiting the kinds of troubles -- the kinds of drugs sanders will have but lowering the costs of those drugs which will help close the do not hole. a dollar saved -- dollars saved are mostly in the system but being spent on waste and fraud and abuse that are not contributing to the help of anybody but overspending and overpaying for everything from medical devices to pharmaceuticals.

thank you very much. >> talking about health care today was the senate minority leader. >> the american people are asking us to start over on health care. they are asking us to scrap the massive bills that the democrats have been trying to force on them. they want us to focus on cost instead. that has been there clear message for over one year. yesterday, democrats in washington said they know better. the president and his allies in congress made up their minds turn aside any pretense of bipartisanship and plow ahead on a partisan bill. a partisan bill that americans do not want. in a last-ditch effort to get their way, they stuck themselves to a flawed vision of reform

over the wishes of the public. what is that vision? a division of health care whereby the federal government would become more involved in health care decisions of every man, woman, and child in america. where small businesses are hit with new job-killing taxes. where medicare is slashed for millions of seniors. insurance premiums go up and federal taxpayers are required for the first time ever to cover the costs of abortion. the administration and its allies and congress have tried repeatedly to trim this edition of health care through congress without success. they are doubling down. they have one more tool in their arsenal. they have one more tool in their arsenal and they are deploying it. meanwhile, the american people are watching all of this and

other disbelief. -- in utter disbelief. americans do want perform but they did not want this. they are fed up because the longer democrats cling to the flawed vision of reform, the longer americans have to wait for the reforms that they really want. the longer they have to wait for us to focus on jobs. the president did a good job of laying out the problem yesterday. the heart of the problem as he himself described as the high cost of care. he wants doesn't lower costs. on the contrary, the administration's own experts say the democratic plan increases costs. this alone should be reason enough to start over, start all over and put together a list of

commonsense, step-by-step reforms that will actually lower costs. now, the good news is we already have the list. at last week's health care summit at the white house, both parties acknowledged a handful of reforms that all of us could agree on. that's where we should start, on the things that we agree on. unfortunately, even before the summit began, democrats were already intent on pushing the same old vision, the same old version they were pushing before the summit by any means possible. they couldn't get the old version over the finish line, even with all the back room deals, the kickbacks, the buyoffs, so sometime after the massachusetts election, they hatched a plan to win over wavering democrats in the house by promising to use some legislative sleight of hand that will only require a slim

partisan majority in the senate. this is outrageous on two counts. first, because the method they are proposing has never been used on such a sweeping piece of legislation. and second, because americans have already told us loud and clear that they don't want this partisan approach. what about public opinion do our friends in the majority not understand? the american people are saying loud and clear they don't want us to do this. what's worse, many of the same democrats who are now pushing this party-line vote are on record as being four square against it for major legislation like this. here's what one senior democratic senator had to say about party-line votes on major legislation just a few years ago. "i have never passed a single

bill worth talking about that didn't have a -- as a lead cosponsor a republican," he said ." and i don't know of a single piece of legislation that has ever been adopted here that didn't have a republican and a democrat in the lead. that's because we need to sit down and work with each other. the rules of this institution have required that. that's why we exist." i couldn't agree more. americans expect big bills to command big majorities. americans expect big bills to command big majorities. and that's why this isn't a fight between democrats and republicans. it's a fight between democrats inside the beltway and their constituents beyond it. this is a fight between democrats inside the beltway and their constituents beyond it. there is a better way. there is a better path to reform that none of us will regret.

it's time to listen to the american people. it's time to work together on the kind of step-by-step reforms they're asking for. americans aren't stupid. they know the option they are being presented with. the option of some massive bill or nothing? that's a false choice. so let's drop the partisan plan. let's drop this unsalvageable bill and let's start over. as debate continues, you can go online to the health care callhub. .

their hundreds of hours of video, committee hearings and other information. 1gfwg#031/ñ/healthcare. >> and a few minutes, the tarp oversight commission hears from the ceo of the financial services company said the group. in a little less than 1.5 hours, a briefing on operations in afghanistan. after that, house debate on a $15 billion jobs bill. we will later be aired the kong, -- comments of kathleen sebelius on her meeting with insurance company executives to discuss rate increases. >> on washington journal

tomorrow morning, we talk about the political future of john rangel. the head of the u.s. agency for international development will discuss his budget priorities and efforts in haiti. we have representative john dingell of michigan. our stories on the president paz budget continues with the head of the women's policy research institute. >> we are in the business of trying to help our students, predominately them women and some of these older women and men who come to us understand that you should focus on achievement in your own life and not be looking to grab headlines. >> meet the woman credit for

turning around trinity washington university. this weekend, former republican presidential candidate mitt romney and his latest book, no apology,"he argues that a strong america is essential for the world. >> an oversight hearing on government aid to citigroup. the financial services company that has received $45 billion from these troubled asset relief program noticed tarp. witnesses included the citibank ceo. this is slightly less than an hour and half.

>> we will put your written statement and the record. >> thank you. thank you for inviting me here. citigroup today is a fundamentally different company from what we inherited two years ago. citigroup is now operating on a very strong foundation to generate sustained profitability for the benefit of all of our stakeholders. for us and for many other institutions, the bridge to the other side with sound footing came from the american people and i want to thank the country for providing us with part funding. last year, we repaid $20 billion of carper investments. in addition, we paid the government $3 billion on dividends and another 5.3 billion on premiums on the asset

to guarantee program that we have now and to the -- that we have now exited. citigroup pose a large debt of gratitude to the american taxpayer. -- citigroup owes a large debt of gratitude to the american taxpayer. we have reduced our risk exposures, the find a more clear strategy and we have made citigroup a more focused enterprise. at the end of 2009, we are one of the best banks in the world with a ratio of 11.7%. we had $36 billion in reserves. our leverage is 12 to one, down from 18 to one when i became ceo. we have cut the size of our balance sheet by 21% from its peak by half a trillion dollars and our riskiest assets have

been substantially reduced. our cash liquidity is now a strong $193 billion and we have reduced our operating costs by more than $13 billion per year. perhaps the most important strategic action we have taken is to mandate a return to basics, and return to banking as a core of our business and as a result, we have sold more than 30 businesses and substantially scaled back proprietary trading. citicorp is a better bang today but been better is not good enough. our customers and america's taxpayers need a different road map. first, a lot needs to be done to promote economic recovery, particularly in the housing area. since 2007, we have helped 824,000 families in their efforts to avoid foreclosure. total loss mitigation solutions

increased by 50% vs. 2008 and we remain no. 1 in active modifications. in 2009, we originated $80 billion of mortgages and provided $80 billion of credit card lending. in addition, our company used funds specifically to support new lending to individuals, families, communities and businesses. taxpayers have the right to know how we put that money to use. we were the only bank to publish regular reports on the use of tarp capital. america and our trading partners need smart and common- sense speculations to reduce the risk of bank failures, mortgage foreclosures, loss of gdp and taxpayer bailout. i know these are issues that are being debated right now.

let me share with you three areas i think are important. first, financial institution reform. let's address too big to fail once and for all. to the creation of a systemic risk regulator and a resolution of 40. by making sure that banks are banks, focused on clients. second, market reforms. let us level the playing field with a common standard across the entire financial sector. let us create transparency, particularly in the transparency market. third, consumer reforms. we support the need for a strong consumer authority that is part of the regulatory system to promote greater transparency, sound practices, growth, and stability and the consumer credit markets.

banks and nonbanks need to be more responsible. these are reforms that could be costly for the industry but we believe they are necessary. thank you for this opportunity to review our progress. >> thank you. we appreciate your being here today. i would like to start with a quote from the emergency economic stabilization act. or the treasury is to assure that the authority is "used in a manner that protects home values, college funds, retirement accounts and life savings and preserves home ownership and promotes jobs and economic growth." that was congress' statement about why tarp was done. in a june 22, 2009 article, you were quoted as saying, we will

be playing this very clearly. one is globalization and the other is growth in emerging markets. wilbur ross this morning referred to citibank as essentially a foreign bank. the question is, why should the u.s. taxpayer alone carry citicorp? >> we are not a foreign bank. we are a global bank. we are america possible bang. we started in business years ago helping america paused businesses export their products. that is what we have been doing. we need growth and jobs even more important that we help small businesses and medium businesses and large businesses make those exports. as we do that, we need operations on the ground. in many of these operations, we raced deposits to help large companies in the u.s. to get loans on the ground they need

and some of those deposits help us facilitate loans and the u.s. market. >> you describe your growth as globalization and growth in emerging markets. that sounds like, these are your words, about where you plan to expand or activity. >> we are completely focused on making sure that we continue our bending to u.s. customers, make sure we are helping our clients. it is also very clear that our clients are coming to us, small clients, middle-sized clients, they want to tap foreign consumer bases. the growth is coming from the foreign consumer. they believe that is how they will grow and create jobs. that is what i meant. we want to make sure we support the businesses in america. >> good. let me get some data on what is happening. how much the city bank lent to

u.s. enterprises for u.s. operations? >> our total loans outstanding for all u.s. businesses is about $450 billion the >> it is not all u.s. business. i want to ask about u.s. enterprises for jobs in america. >> i think the number is $450 billion lent in the u.s. but the >> -- . >> how much you learn to businesses that did not have foreign operations? >> i cannot do that but i can get back to you. >> that is fair. one other question about the lending that you do. what lending and other transactions have you participated in involving the government of greece? >> we do business with a lot of sovereign countries who need our global expertise. i know we have been doing business with them but i did not have the details with me.

>> do you know how much debt the government of greece -- that citibank holds? >> i did not know the exact number but it is not a large amount in our entire operations. >> that is fine. >> thank you for being here today. i asked the is it some predict assistant secretary last time -- i asked the assistant secretary last time so this has to do with the offering back in december. it seems that the timing of that particular offering is not what we would like to repeat. the taxpayer is the largest single shareholder of citibank. as an executive with a background in equity markets and experience with the capital markets, i was wondering if you

could share with us your reflections on how the treasury department should think about monetizing its position and citibank common stock going forward. >> that is the treasury's decision in terms of how the one to do it. we do know that they will be able to sell stock after march 16. they have announced publicly that they want to sell it over the next 12 months or so. there are a lot of different methodologies in doing that. we believe there is substantial demand for the stock. it is not a secret that the government wants to sell. it is not a secret that the stock price and the market today are reflecting the fact that they are a seller and a large amount. we believe that there are investors here in the u.s. who are getting ready for that offering. those are all the treasury's

decisions. >> when you look back to the offering in december, clearly there was a primary offering that was coordinated with a potential large secondary offering by the government. as far as the interest goes in the marketplace, a large cover ratio for that offering at the time, what exactly was the problem that we saw in december? >> that was the largest common stock offering ever done in the u.s.. particularly, when you consider that as a percentage of our common stock outstanding, but it was extremely large. did not forget, that was done in the face of the market know when the government was going to sell its 27% and not -- in the not too distant future. they have the choice to buy now or by letter. -- buy it later. but we did that offering, another bank said they wanted to do a large offering bright in the middle of what we were doing. we got it done.

we were able to pay back the taxpayer. weaver able to exit the guarantee program. i can titter that to be a success. >> looking forward -- i consider that to be a success. >> that puts this into a special zone as far as institutions and the way the market and use it. what you have as far as plans to address that price of the stock in relation to the huge amount? new party -- you have the largest amount of shares outstanding of any stock exchange listed company. >> we are also there for the most traded stock. at the end of the day come stock prices are important. what is really important is performance. what you earn, sustained profitability, which is what i

am focused on. my biggest job is to make sure we make money on a sustained basis and therefore help the money to make government and the >> in your testimony, you mentioned citi holdings was moved after restructuring your firm. i was wondering, if you have to decide of what is court against what is not core. >> that was job #one for me coming into citigroup trying to figure out what plans we serve. what are we could at? you put those things together and it turns out that we are a great bank that is basically in the business of helping people manage their accounts. providing them loans and capital. providing them investment services.

it became clear that we were in a lot of businesses that were not directly related to being a bank. the fundamental decision that i made was that we are going to be a bank. we urge the went to be the global bank for america's cos. we will serve them here and where ever they want to go. the same capability should be available to individuals, as well. that is the decision we made. on the basis of that, it became very clear that it was a large part of the company. >> my time is up. >> thank you. >> thank you. i want to express my appreciation for your presence and your testimony. you said a moment or so ago in trying to focus on what citigroup is good at, you

viewed a return to core banking as the primary direction you for heading. you mentioned some numbers about loans. i have here the report i am sure you are familiar with from standard and poor's last month that shows, and the numbers cannot match,, commercial and corporate loans by citigroup have fallen dramatically over the last two years. they fell from a level of $206 billion at the year end of 2007 to two under 27 -- 2 under that -- to much less than that. you're divestitures have been largely unrelated to commercial loans. can you explain what is happening? >> when we decided what is corps

and what is not, there were also assets that were a part of what -- that was a part of what was not clear to us. those were either clients that we should not be serving or they did not need us or their businesses that were gathered through core businesses. those numbers reflect selling businesses that are not core to us. selling assets that were not court to us. -- core to us. >> i do not understand how you can reconcile that scale of that retreat from business lending, which is in my view absolutely essential to whether tarp is succeeding, the scale of that retreat from business lending is a characterization of refocusing on core banking. i look at other numbers but i do not see that type of retreat from other types of activities other than things you are

divesting from. " let me assure you, we will make any good loan that we see to a client and regulators want us to make. we are doing that. some of those were part of practices which should not have been a part of. they're not court to the banking mission. it is very easy to look at those numbers and think that they represent our lending appetite for our appetite to serve clients. that is not so. that reflects the narrowing and focusing of our businesses to what we should be as a bank but of course a second question -- . >> one concern of this panel, my survey of the data suggests a flat line in terms of the total assets in commercial real- estate at the holding company level of around $75 billion or

$80 billion. my question about that is have you taken any write-downs and commercial realistic? how do i understand this flat level? >> a number of things. a lot of that portfolio is market to market. much of that portfolio is a community lending. there are some accrual loans that we have made and those loans are well reserved against. most of our loans are for office buildings against leases and some of the major metropolitan areas. that is a well scrubbed over portfolio. one more point on this, that is less of an issue for citigroup. >> can i then turned to another question about your core strategy? as i understand it, you have been telling the world that you are going to be focused on old-

fashioned banking and to other areas, capital markets desk with broad exposure to currency and derivatives, and that you are going to be continuing the focus on your global transaction services business which has been the consistent profit driver over the last year. am i reading back to you correctly? >> that is correct. >> we have heard a fair amount about the extent to which the gts business makes citigroup a significant but it is my understanding that this was a core argument made to the government during november of 2008. citigroup could not be allowed to fill because of the importance of that business to global capital markets. my question to do is can you justify having that this is connected to the type of capital markets desk if you intend to

keep it connected to in light of something that is so systemically important and tying it to something so risky? >> i do not recall making that statement to anybody nor do i recall anybody who directly works for me making that statement. >> which statement? >> the statement about the fact that this was the argument we made to the government about system safety. >> let me ask you this. would you commit here that as long as you are city -- @ citigroup that you will not come to the government in the future and make the argument that the gts requires being billed out? >> yes. >> that me commend you for giving me a straight answer. it is a rare experience in my world. >> i think that is why we are here. i want you to hear from me what we are doing at citibank and why we're doing the right thing.

>> if my colleagues will indulge me, please explain how these businesses are compatible >> we do business for coca-cola and pepsi-cola. coca-cola is in 250 countries around the world. they need to manage their operations. they need foreign exchange management. pinnate liability management. they need interest rate management. we have to have those abilities to serve them in that way. the fundamental shift i made was to make sure our trading operations and our cash management operations and all banking operations are geared toward doing those things that our clients need. if you do that correctly, having been in the business for as long as i have, those are the kind of businesses that generate good value for clients without creating the risk that has been created in the system.

>> my time is up. thank you. >> thank you. thank you for appearing today. did you have any reason to anticipate that citigroup will need additional park funds? >> no. >> grade. on a fair market basis, is citigroup solvent? >> yes. >> or any material divisions or subsidiaries of citigroup insolvent? >> no. let me be clear. we looked at the entire company. what matters is that we are well-capitalized, we have the liquidity public and we stressed ourselves very often to make sure that is the case. >> speaking of stressing, if a stress test were conducted today under current economic conditions, would citigroup be required to raise additional

capital and if so, how much do you think? >> no. >> could you tell us what specifically citigroup needed a bailout? what happened? what went wrong. ? >> we came into this market with assets on which we took substantial losses in 2008. we addressed that. we raced $48 billion capital and the market in early 2008. we sold another set of businesses and raised $10 billion in capital and got $25 billion from the government for the first round of tarp. the result of that as we had 10.7% tier one. we reduced assets and reduce risk fundamentally.

we were in the right place in any rational market. we were not in a rational market. post-lehman brothers, the capital markets froze, there was a general sense of concern about where the economy might go. where unemployment might ago. different stocks at different banks started reacting to that. our stock started going down in late 2008. on that friday, our stock was at $3.37. in a market of that type, sometimes stock prices can have an impact on confidence. rather than taking the risk, as we talk to the fed and the treasury, the view was let's take that issue off the table. that is what happened.

>> ok. but what actions have you taken to indicate your status up to big to fail? can we get to a point realistically or if this happened again, citigroup is broken up, sold off or recapitalized by the private- sector without government intervention? >> we have taken a number of steps. let's start with capital. we have very strong capital base and strong liquidity and strong reserves. and that is the starting point but the second part is creating earnings. that is why we took $13 billion of costs out of there. the third is to change the risk profile. we have done that. we still have some legacy assets. we have changed that, as well. we managed our regional businesses with cash on the ground. we work with our global regulators. we make significant changes in the financial health of the

company. we have made significant changes in the risk banishment of the company. we also targeted the company toward those businesses. let me also say that i think we need regulation which is why i said in my opening statement, let's get to that resolution authorities so this does not happen again. >> one more quick question. you are a veteran of the capital purchase program. what advice could you give for how that program can be improved? there is money out the door. not every institution is repaid in tarp funds. how can that be improved? >> the top funds, from what i understand -- to park funds were put into place -- the tarp funds were there to that they

could do the right things for the american people and to create a sense of confidence. that is the point on that. for those people who still have tarp funds, i did not have any advice other than step in and make sure you manage your business and take the costs out you need to to manage it as efficiently as possible and create a business model that can translate into earnings. you the news that equity to repay the government. >> thank you. >> thank you. >> thank you. if you were here, and i believe you were when i was questioning mr. allison, i highlighted that the mortgage prices really give rise to the financial crisis. for that reason, i was pleased to see in your written testimony and your oral

testimony that you referenced your efforts toward foreclosure addition and highlighted the fact that citi is the highest percentage of eligible loans in active modification. although you can be applauded for that effort, a more important metric is the actual conversion to permit sustainable mortgages. but the last report from the treasury has 110,000 mortgages better an active trial modifications. we are now awaiting results from other institutions and are anxiously awaiting your results as to how those individuals were treated. the important part is these are

individuals who were willing and able to make these reduced payments and are awaiting final determination. we know there have been problems with servicers. there are problems in the appeal process. can you give us any information about what we can expect to see with respect to those tryout modifications? >> i completely agree with you that tackling housing is important for the economy, but particularly for our clients. we are number one in active modifications. right now, the ratio of completion is about 18%. we think that number is going to go up to 40% pretty soon. that is where we think that is going. not everybody who has gotten into that program is necessarily going to qualify. they might not have the documentation. they might not have the information necessary.

that is why what we have done is created a modification plan on the other side. if you do not qualify and meet every standard, we still have modification programs available for these people going to this change. >> do you see documentation? this has been the issue i have heard from other services. partly, there have been concerns about the resources and processors losing documentations. we have heard of borrowers being reluctant to produce documentation. i am for a concerned that the treasury has thought given enough discretion to servicers and lenders to make those decisions. have you found that or make any recommendation to change that? . .

last year to make sure we can help people get through these documentation issues. these are case by case issues. >> do you -- in your >> do you -- in your modification process are you utilizing principle reductions? could you share the >> we have to make the homes affordable. >> you can do it through a combination of interest and extensions. >> it is delaying the amortization of mortgages pierre >> would you agree that reducing the principal would increase the likelihood of keeping more skin in the game for the borrower? having experienced it to the extent that coming down to the same affordable payment is the long-term benefit? >> what we found is that the most important thing that is

driving the redefault is our unemployment rate. >> i'd agree with you on that. >> last year is not necessarily an indicator of redefault going forward. >> the issue of second liens and. this has been a real disincentive from lenders on making principal reductions. only one institution has signed on for the treasury second lien program. do you intend to join the program? >> we are modifying second liens actively as part of the fdic program. we said to the treasury that we are all willing to work with them. we have just seen the details. is print for us to go through that before resigned on. >> it has been out for a while. i hope is positive response, and we will keep track of that.

>> it started to testimony by saying citi is a fundamentally different company from the company two years ago. nonetheless, citi continues to pose significant systemic risk. citi is cited as the poster child for too big to fail. it is a combination of commercial bank, investment bank, an investment bank, for which glass-steagall had to be repealed so you could fall your business model. i understand your response that we are dealing with the problem of systemic risk and too big to fail by making citi stronger company. i want to focus on a different part. instead of that, why don't you concentrate on breaking citi into more pieces, so that no one piece is too big to fail? why not break it up? it can be done in an orderly

fashion, not in crisis. the shareholders would get all the value and you will have -- we will reduce systemic risk. >> we have the same objective. shareholder value is really important. we are doing that. we are selling 40% of the company. we are breaking it up. that is a huge piece. we are not an insurance bank anymore at all. we are primarily in the commercial, corporate banking, individual banking services and creating services our clients need. we are only as big as what is required to serve our clients in a competitive market. that is really important. i completely agree with you that we are no other institution should be a place where we get to a too big to fail situation, and there are two ways of going at it. one, make sure these banks are strong.

sometimes size is important, and sometimes just what they do is important. for that, you need a strong risk regulator that prescribe such stress test, liquidity requirements. let's make sure we put these institutions to that test. sometimes things do go wrong, so let's have a resolution authority. we urge congress to act fast on these. >> i just want to make sure i understand response. when john leeds says he believes it should be broken up, you are saying that is what you are doing? >> i have been busy managing the company, and i have been managing it with the same objective, which is, what is the company that best serves our client? what business am i in? i have been selling pieces of the company and breaking it up

to say this is my core business. that core business is the business i think is going to create the maximum value for our shareholders and therefore the government. >> they get very much. if i could ask another question, taking back to september of 2008. he wrote a letter to your colleagues at city group in which you said our capital and liquidity positions are strong, and we have tremendous capacity to make commitments to our clients. we all know that within a matter of weeks, citi and eight other large financial institutions were taking tens of billions of dollars under a tarp. i understand markets reversed. i understand there are those who believe the crisis was not obvious in advance. the part i am still trying to understand is the second hard bump for citi.

when the secretary of the treasury announced in october that in effect you were helping, by the time we come out for weeks, it is weeks,citi needed another $300 billion in guarantees. what happened between healthy and $300 billion in such a short span of time? >> you are absolutely right on any fundamental basis, we had 27% tier one capital. this was not irrational or fundamental issue, but we were it in very dysfunctional markets at that point. this was post-lehman brothers. >> everyone was in a dysfunctional market, but it was only citi that needed an

additional $20 billion after being pronounced healthy. >> the capital markets looked at every financial institution, and went after the stock prices of every financial institution. that happened to us, too. our stock price started dropping, and on that friday, the issue was not the fundamentals as much as would that create an issue of confidence in all the financial markets. >> citi was the target, and the only one that took the money. >> we were not necessarily the last one, either. we were not the first and we were not the last. some brokerage-steelers became bank holding companies overnight. >> none of the original nine needed money within weeks of the original tarp infusion. the secretary of the treasury said you were financially

healthy, and within weeks, you need another $20 billion. i just want to understand why citi is special. >> again, what i would say to you is that you are right, this was not a fundamental situation. it was not about the capital we had, not about the funding we had that time. with the stock price where it was, and by the way, a lot of that was driven by short sellers. the stock started going down, and when it gets to that point, perceptions become reality. that is exactly the reason why it was important for all of us to take that issue off the table. the package we got was one the federal reserve and all the regulators thought was the right package. >> so citi just had bad luck? >> how i don't mind being special, and i think we were in the sense that citi came into

the market with assets on which we took a lot of losses. market dynamics were really important. >> i want to explore sigrid's relationships with the government. -- city greigroup's relationshis with the government. >> treasury is a very critical and important shareholder for us. we do what we can to reach out to them. we have those conversations with them through at different levels of the company.

they have every right to call us to ask for the same public information that every other shareholder did. we do that all the time. but did they get any special information? >> under securities law, given the fact that they have to sell stock, there are limitations on what we can tell them. >> as far as the levels within treasury, you are saying -- >> we are open on whatever information they want, whenever they want. the same information that would be available to other shareholders. >> it has been reported that citigroup has the largest lobbying budget of any financial services firm in washington. i was wondering as far as your activities on the hill and with the white house, and your obvious support for a number of

the in ministration's proposals, how are you spending your lobbying dollars in washington? >> i cannot comment on where the budget is or not versus anybody else. let me just tell you that we do have points of view of financial reform. we have points of view on global markets, and we believe it is important that those points of view it across to lawmakers and congressmen are people who are interested in our perspective as well. this is an effort that is driven by what we think is right for the financial system. i think it is the right thing for us to express our points of view. >> do you agree with the so- called blogger rules -- the so- called volcker rule?

>> i have not seen the language, so i cannot comment. we have sold a lot of hedge funds and private equity funds, and we are focused on clients. i think banks should be banks. we are moving in that direction. >> i made this point earlier. when it comes to systemic risk resolution authority, forbearance, these sorts of things, how do you protect them against a psychopathic appearance -- sycophantic appearance? >> there were giving away barack obama books to people opening new accounts. how do you protect against that? >> i cannot speak former branch

manager who wanted to do that. it is not my decision. this is a tough position for me. i say what i believe it and it happens to be in line with what someone else believes in the administration, it looks like i am doing this because treasury is a 27% shareholder. there is no win in this situation for me. that is why i am here telling you that these are the right things to do. it is better to share with you a systemic perspective as a ceo who has gone through a very interesting two years. >> what is now your strategy with respect your brokerage operations? you have gotten rid of smith barney now and you have compensation, things that might relieve our investment banking business. going forward, how you perceive

that? >> what do we do? we commit capital on behalf of our clients. that is number one. no. 2, we make markets that provide liquidity to the markets. no. 3, we is capital market instruments to hedge our risk occasionally. number four, we do use our capital occasionally to create new ideas and new products and test them before we take them out to our clients. those are the activities we are involved in in our brokerage businesses. when you look at the full gamut of them, the maximum value to our clients comes from performing, which then translates to a maximum value for our shareholders. >> would you take a short position that is contrary to one of your clients' positions? >> this is a hypothetical question. you have to be a principal agent to make markets.

i would do what is the right way to manage a book on that basis. if the question is am i going to you some information? the answer is no. >> i was just getting to supervisor training as an integral part of your view of how you think your business should be run on the institutional side. let me be very clear. we have to commit capital on behalf of clients. that is what banks do. we have to make markets. as an example, we have to do these things. proprietary trading is when you have people who actually do not interact with clients. they are actually covered as a client by other people on the street. they treat them as a client's, what you are using the companies capital. i do not believe banks should use capital to speculate that way. >> thank you.

>> this may seem repetitive, but i cannot resist this. in october 2008, was citigroup a healthy financial institution? >> yes. >> on november 21, 2008, was it a healthy institution? >> yes. >> why do you think that mr. allison was so unable to answer those questions? >> you would have to ask mr. allison. >> clarity is one thing, and credibility is something entirely different. i think you have given clear answers, but i do not think you have given credible once, frankly. i think it is easy to give those answers, having weathered the storm with the public's money.

that me ask you this. did you speak with anyone in the treasury department during the week from november 18 to november 25? >> let me first say -- >> please enter the question. did you speak to anyone in the treasury department during that week? >> i do not recall. >> did anyone in citigroup speak to anyone in the treasury during that week? you stated that "we" agreed that it would be a good idea to back up citigroup during that week. >> that was over the weekend, the federal reserve and the regulators talked to us. we also had conversations with the treasury and other regulators. >> what human beings but to what human being? >> at that point time, there were numerous conversations between the people at the new

york fed, people at the washington fed -- >> didn't open that conversation by saying we are a healthy bank and we would just enjoyed having another asset guaranty? how did the conversation go? >> it was very simple. the stock price was at $3.37. it was the results of short- selling, and it was at a point in time where the stock itself would have caused an issue of confidence, and therefore the conversations were around -- >> what did you represent would have occurred if the fed had declined to act? did you represent that anything in particular might happen? >> no, i did not -- i do not recall any conversations where i represent anything. >> did anyone who was

representing citigroup 81 in the treasury or the fed about what would happen if there was not additional aid forthcoming? >> not to my recollection. >> what is your knowledge as to who spoke to either treasury or the fed on behalf of citigroup during that period? >> i can get back to you. >> you were the chief executive officer during that week? >> yes, i was. but i find it difficult to believe that someone in your position cannot recall these 02 or spoke on your behalf to the government about extraordinary aid that the government provided during that time. your memory seems pretty good otherwise. >> i want to give you a very complete answer. >> i don't mind giving an incomplete answer. share with me your fragmentary memories of that weekend. >> a number of people at citi

taught to a number of people at that regulators, the treasury, the new york fed. it could be a large list. >> let me turn to a different matter before my time expires. you were hurt in early 2007 -- hired in early 2007 to be this eeo. at that time, what were your performance goals? >> i became ceo in the middle of december, 2007. i came in there and the board decided they needed to make a change. we enter this market with the assets we entered the market. >> what were the goals at the time she retired? >> to examine the strategy of citigroup. examine the capitalization and the financials of citigroup, put the two together and translated into the right culture for the

organization. >> examine a few things? i would ask you in writing to explain answers to the following questions. i would give the opportunity to expand on the goals the board assigned to you. i would ask you to assess whether you met them or not, and i would ask you to disclose the amount of money were paid for meeting those goals between that date and the end of 2008, during the time when by press accounts, citigroup necessitated a bailout absent which they would have had to file for bankruptcy. >> in your written testimony, you say that citigroup no longer has a goal of being a financial supermarket.

i remember the merger with travelers and citicorp a few years ago. it was the only way to continue on the global stage. euros are different now. why are they different? why has that is this model failed, or why or you no longer interested in it? >> the environment is different, markets are different. the way competition is happening is different. if we see what has happened over the last couple of years, a lot of places where funding was received are largely not there. when you look at the changes that have occurred, that has had an influence on that strategy. more fundamentally, as i looked at the company, and it was a

complete, dispassionate review of what we needed to be, and we did with complete integrity as a company. we concluded that that was an interesting model, but did not add sufficient value to our clients and did not necessarily create sufficient value to the shareholders. the biggest value came from the core business, which was banks, which is why we made the change. >> what aspects of their compensation structure of your managers two years or so ago, when this securitization bubble was inflating, do you think may have led to that? you have people who are consummate -- compensated on closing deals, but then the deal's leas leave the area and e a problem of third-party

investors. can you explain how the compensation structure has changed, and has it changed in a way where you can still encourage innovation? >> absolutely. that is a critical part of how we change culture, how you manage risk of going forward in the right way. compensation structure changes we have made have been those that say you get more stock as compensation. you have to be around for a long time in order for them to best. -- in order for them to vest. we have callbacks so that if something goes wrong we can recover compensation. we take explicit risk taking and risk management criteria into account when we pay compensation.

one entity calls it a cadillac version of how you take risks in compensation and blend them together. this is an important cultural issue and it is at the heart of how you change the company into a client oriented company. >> last month we issued a report on the commercial real estate markets. it did not have a particularly favorable outlook. what is the exposurecitigroup today? >> we have a smaller exposure than many of our peers in this business. a big portion is marked to market. a lot of the exposure is in large office buildings, leased buildings, etc.

when i look at the whole exposure we have, it is exposure on the balance sheet, but that is less of a concern to me as a ceo. >> could you comment on the activity of the short sellers in the last quarter of 2008? >> as i was talking about this, there were a number of instances post lehman brothers collapse where the markets were not really functioning in a rational way. they were frozen. in those markets there is always this battle between fear and confidence. there are ways in which fear overtakes it, and that is the tool that short sellers need to make money.

that was a very dominant activity. there were no real circuit breakers to stop the short selling, and that is one thing that took our stop down. >> i would like to come back to your comments regarding looking forward and financial institution reform. you were clear in saying banks should focus completely on serving their clients. i could not agree with you more. if there is one lesson learned, is what are -- what we want our banks to be. a new term that few americans have understood previously, but are very focused on now. it goes well beyond fdic insurance to the other support provided to institutions. can i read your statement

regarding the volcker rule as you understand it? >> understanding of private equity and hedge fund trading. >> let me be very clear proprietary trading is not a big part of our business at all. i do not think banks should be speculating using the bank's capital. >> this is important, because citi really was the poster child and the impetus for dramatically changing the glass-steagall act. when we hear ceo's say that this is a step backward, that it could never be implemented, that it would have a disastrous results for banks' business models, can you say that is unfounded?

>> my perspective this proprietary trading is not a meaningful part of what ideas the bank. it is not a big part of the business, and banks should not be using capital to speculate. they should be using capital to make markets, provide liquidity to markets, and doing what it takes to manage that risk. occasionally, if you want to use small amounts of capital to create new products and new ideas, you can do that, but outside of that, we do not see the rest of the activities as supporting banking. >> is it reasonable that rules to distinguish pure proprietary trading, using capital to support proprietary versus market making are hedging to support client oriented businesses is a practical solution? >> the regulators are in the best position to look at what everybody is doing. that are equipped to say this is

not necessarily related to core banking. >> i think this is extremely important, not in the sense of proprietary trading contributing to the crisis, but it goes to the issue of the federal safety net and how you prevent the next crisis. i would like to shift over to consumer protection. the scope of the foreclosure prices painfully highlights that we must do a better job in consumer protection. you make specific comments about a consumer protection agency that would adopt a standardized rules across the country, and to provide a level playing field. national banks including yourself often claim that complying with consumer protection laws is uniquely burdensome. another lesson we all have learned from this crisis is that

states were the first to sound the alarm on predatory lending and had many of those laws been applied to national banks, we would not have been in the crisis that we have today. >> i think we should have a race to the top on these things, but we should have national standards. i spent a lot of time -- i started microcurie at the control of the currency. i certainly understand that perspective -- i started my car rear at the control of the currency. -- started my career. why is it that when it comes to consumer protection, banks do not seem to be able to comply and assert that these are overly burdensome? >> we are living in a national

market, whether we like it or not. will our national business in what is a global market as well. for consumers, we believe that if you go from one state to the other, there should be parity on how you are treated. we also believe clearly that these kind of rules can increase the cost to us, and that translates into higher costs for consumers. when you have different rules in different states, you create the possibility for regulatory arbitrage, which is almost always are raised to the bottom. we would rather have a race to the top with higher standards. >> if you could bear with us for just a bit longer, we appreciate you being here. we will get through the last part quickly. does citi get a ratings bulk from the market perception that

is too big to fail -- does citi get a ratings bump from the market perception that it is too big to fail? >> the rating agencies have put out reports where it is their opinion that there are different standards, not only for us but for other banks out there. this is only their opinion. >> it is valuable to have a higher credit rating. >> let me take you to where the markets are on this. the markets look at capitalization, reserves, liquidity, core earnings power. in our case, we have issued debt that is substantially longer in maturity than any presumption of government assistance or how long it might

take -- >> let me stop there. it would be hard to make the case that we can see some date in the immediate future when citi will not be too big to fail. let me ask it differently. is it valuable to have a higher credit rating? >> where the market is today is that it is presuming very clearly that the resolution authority is going to get pass. despite that, we are borrowing money at longer maturities based on our credit spreads. >> standard and poor's rating agency is giving you a bump. the borrowing costs in the effort for companies that are rated 'a'and bb as it would be if it did not have the rating guarantee? >> credit ratings or one of the

things that take into account. in this case, they have taken into account the fact that with resolution authority, it is our view that we are bar wing on us being around because of our capital base -- we are borrowing on us being around because of our capital base. we are borrowing at are spread. spreads are based on our prospects, earnings, and capitalization. >> is there a competitive advantage for a company that has an "a"credit rating as opposed to bb? >> there can be a competitive and they did shadvantage. >> it but it is your view that city is not getting that benefit of being a-rated?

>> we are borrowing on the understanding there will be a resolution authority. >> and unlike other businesses, you do not get a competitive advantage? >> ratings are one of the factors taken into account by borrowers or lenders when they buy our paper. it is one factor. they have to take the whole picture into account, including -- >> can we both stipulate it is a helpful factor? >> of course. how can ratings not be helpful factor? i keep coming back to saying we are raising money a very long maturity. >> if we had longer time we could talk about that. >> just looking forward, and

generating business. we all want citibank to be happy and healthy. when you look at the growth of the deposit base, it's things like some of the greatest opportunities may be a broabroa. is there taxpayer interest in growing your business overseas? >> a big part of what we do is connect businesses in the u.s. for the world. we conduct those operations on the ground that are necessary for us to be able to do that effectively. that is on top of the fact that we actually are a significant factor in the u.s. market as well. we provide credit card loans, mortgage loans, corporate loans. a more full package as a company is we can help you in the u.s.,

but we can help you where you want to go to sell your products. >> but on a risk-management basis, isn't it good to have a broad based business base, not just in the u.s. but in other countries? >> sources of funding are really important. >> there is a proposal for an industry liabilities tax that would treat foreign source deposits as a tax liability. how you view those sorts of proposals? >> each of those proposals have to be looked at in the context of the economic impact. what does it mean for jobs and for gdp? those things have to be looked at. >> so is a bigger view than looking at individual questions.

there was an organizational study that was done for you all that did not necessarily implement all the recommendations. did that have an effect in helping decide what sort of things went into citi holdings and were they part of your core business? >> we went through a very deep, very thoughtful process. money markets had changed. where growth comes from changed. we took all of that into account, and that is how we came up with citicorp as our future. >> or the rest of the recommendations still potentially on the table? are you still reviewing these things or is it a closed book? >> i constantly look at what is right for citi and our

shareholders and clients. a large part of our thinking is reflected in what we already talked about. >> thank you very much for being here today. >> you were talking about what is in the interest of shareholders. i am concerned about what i read about a reversion to the kind of dynamics that led your predecessor to come to treasury and beg them to tell him to not let her up so much. it is the united states government that i illegal in of holding the bag again -- that i believe will end up holding the bag again.

>> we have a completely new, clear strategy about serving clients. why am i doing something? is it in the interest of clients. i have a completely redone management team. lots of new people who understand what it means to run business. we have a new board with a lot of financial services expertise. regulators on the board, asset managers, people who have run banks and businesses are on the board. we have changed our risk management structure. it looks at products, regions, businesses, to understand exactly what our exposures are and our risk profile-risk appetite has changed. i still have those assets that we came into the market with. >> i am not talking about the

assets as much as the liabilities. the pressure on citi to relever. the top of being overcapitalized and the like. >> i am glad to hear that we are overcapitalized. >> if you listen, we could easily in danger -- >> you can count on me, my management to run the institution prudently, in the interest not only of shareholders but starting with our clients and being systemically responsible. the biggest change i am making is to develop a culture of responsible finance. that is the legacy i want to leave behind. >> in your written statement,

you alluded to a consumer financial protection authority. that is a different word. it is different than the administration uses in its white paper. they talk about an agency. is there a meaning to that difference? >> i believe we need a focal point. i believe this area has to set national standards, has to promote clear and full disclosure. there are lots of different architectures that can actually create that. >> said you do agree with the administration's position on this? >> my position is that there are a set of functions the consumer authority must serve. my position is that this authority must have the ability and the authority to execute its

functions, but the architecture of this can be looked at in a lot of different ways. >> i have no additional questions. thank you for appearing todayformr. pandit. >> i would like to come back to our discussion on consumer protection. i like your characterization of a race to the top. with your permission, i would like to use that in future speeches. i think that is really where we should be going and how it should be characterized. i believe that the best web getting there is that rules at the federal level the eighth floor and not a ceiling -- be a floor instead of a ceiling. is it a necessity, or just a preference? >> i can clearly see the different points of view on

this. different people -- i can see both points. i can tell you what i believe. it is better for the country and better for the consumer if you take the best manners and take them national. >> i agree with you to the extent that they are made national standards and they are the best. states have been reluctant to go further. we always hear the fear from national banks is that there will be a patchwork. states can go further to protect consumers, and only a handful of states have done that. i think that is the right model. i would be interested in your perspective on that. >> my perspective is still the same. i believe in the highest standards for consumers, absolutely. we think what is good for the consumers is good for the u.s.

and for the banking system. i believe we are a national market. >> we also have to recognize that things change very quickly. one lesson we learned is that states had identified predatory practices. duty of care is owed by financial institutions. there has been a lot of focus in product terms. what i think is at the core that is often overlooked is what is the duty of care owed it by financial institutions in offering products? interest only products may be suitable for one level of customers but not another. how would you address the duty of care and issues around appropriateness of products in

your retail business in particular? >> that is one of the first things i made sure of that we change when i came in. we changed our underwriting standards and made sure that our products are those that we believe are suitable for the customers we are selling products to. suitability is an important issue. >> that is at the heart of its. >> i also believe that you cannot be the lone ranger on some of these things. you do need collective action occasionally. it is not going to happen by having just one bank say that is where i am. it needs a focal point. >> that is why we need a new level of cooperation between the states and the government with respect to bank supervision. >> i wish assistant secretary

alison had stayed to hear your testimony and to participate in this part of the oversight process. we appreciate you coming here today. on behalf of the entire panel, thank you. the record will be held open so we may submit additional questions in writing and you may submit additional answers. otherwise, this hearing is now ended. >> thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> in a few moments, a briefing on opera operations -- a briefing on operations in afghanistan. later, health and human services secretary kathleen sebelius on her meeting with insurance company executives to discuss rate increases. later we will reassure the tarp oversight commission hearings with the ceo of the financial- services company citigroup.

a couple of live events to tell you about tomorrow here on c- span. the british iraq inquiry committee hears from prime minister gordon brown at 5:00 a.m. eastern. at 1:00 p.m. eastern, mitt romney at the national press club. his new books is titled a goat no apology, the case for american greatness." >> which for presidents live past 90 years old? there were john adams, herbert hoover, ronald reagan, and gerald ford. find these and other presidential fax in art newly updated book, "who is buried in grant's tomb?" >> it is a mini-history or biography of each of these presidents.

>> a resource guide to every presidential gravesite, the story of their final moments, and insights about their lives. now available at your favorite bookseller, or get a discount at the publisher's web site. >> over 1000 middle and high school students entered this year's student camp documentary with a short video on marked trees greatest strengths, or a a challenge the country is facing. we will show you the winning videos at studentcam.org. next thousands of marines and afghan troops are in the southern city of marja to establish security and basic services. the marine commander is brigadier-general lawrence nicholson. this is a half-hour.

>> why don't we go ahead and get started? i understand we have good audio and a good picture there of general nicholson. it is my privilege to be able to have the commander of the second marine expeditionary brigade. he assumed his duties in afghanistan in 2009 and is joining us from camp leatherneck and southern afghanistan today. i would just give you a brief overview of what he has been doing and then take some of your questions. general, welcome, and thank you for your time this morning. let me turn it over to you. >> good morning and thanks. i do not have an opening statement, but i have a few

comments. right now we are on day 20 and going into day 21 of a planned 30 day operation. my headquarters is working [unintelligible] the part we will talk about tonight was in the southern district that we better know as marja. we had afghan, green, navy, and an army striker. you see a lot in m the lot

inarja being a city. -- ec a lot in the papers about marja being 8 city. it is a significant area. rct 7 inserted three companies of afghan and u.s. marines between 2:00 and 5:00 that night. they were supported by colonel john simmons. what we wanted to accomplish was to get into this it -- into the center of marja and start clearing out. we were able to insert all of our forces without incident. at first light we began moving

our ground forces in. we were prepared to breach at several different sites. we had a deception operation. at first light, we moved swiftly and were able to get through the minefields which were significant. we had lots of time to plan and shape those, but we were able to move in unencumbered. we got about 4000 marines and afghan soldiers into maja relatively quickly. within marja today, we have about 2500 u.s. marines and about 1500 afghan soldiers. in addition we have about 600 national police.

the u.s. army striker battalion 423 infantry did a great job of holding 11 bridges that connected marja on a canal. our goal was to come in strong and fast on the horns of the dilemma. we understood from the beginning that the people here were the objective of the operation. as important as the tactical ops were, it is a distant second to the psychological this location. we have been here for 10 months. wherever we go, you can say you did a good job, but when you go into marja, there was a

pervasive question consistently about women with the marines or the afghan government go to -- a question about when it would the marines or the africans go into -- or the afghans go into marja? it will have tremendous benefits for all of southern afghanistan. talking about the afghan army, we have had about 40 media embedded with us over the last month. i think the afghan army is doing very well. we have an afghan battalion that is operating independently since the beginning of the operation. we have some your afghan units that we have to part with very closely. they are just out of recruit

training. there is a lot of variety of the afghan army experience here in marja. i am exceptionally proud of their great service. when i talk to the young marines, they tell me how happy they are to have them. marines do not search any of the homes in an area this large. the guy's going in will be afghan soldiers. they have earned the trust and confidence of the marines. overall, we are in good shape. in july, for every afghan soldier we had about 10 marines. for this operation, it is almost a two to one ratio, maybe a little less, maybe closer to three to one, but the fact is, it is a tremendous improvement not only in numbers but in the capability of the force that we have.

we are now in the process of recruiting young men to become the future police force in marja. one of my greatest concerns from the beginning has been the type of young men we are getting in. at the end of the day, stabilization inside of marja by the afghan government has to be led by the police. on day three we had 36 troops in contact. we have now not had direct fire in marja in the last eight days. we are very pleased with how things have settled down. it does not mean it is over by any stretch, and the threat is

real and formidable, and we'll continue to work in terms of clearing it. i went to a school this morning in marja. there had not been schools open there in many years. the fact that we now had 107 kids in this city center was pretty significant. we have a very skeptical population there. unlike some of the other areas that were glad to see us, the population here is concerned about what we will be able to do for them. . .

>> we are working for a hard in trying to get the resources in here and trying to have that civilization that will show those people that the new government is here to help them and that is a challenge. a committee-based approach, we work with the local appointed and elected leaders but with the tribal leaders. one of the more innovative things that we have been pursuing its religious leadership. it has always been a little bit awkward in gauging -- engaging

but we are going after them. that third leg of the spool is necessary. -- that the third leg of the stool is necessary. and we are working very hard to gain the trust of the local mullahs. we did that today and marjah. the marines always give me a big eyeballs when i say we cannot win this war. we can help the afghans when it, though. every day, what you will see, is a partnership that we think is a model. we are very aggressive on all lines of operation. we are very patient. we will drive the prt crazy over the next couple of weeks to get those resources and trying to get those services to the people. i think we have a limited amount

of time to win but the respect and cooperation. that is what we're after. i will close by saying that i am for a proud that the afghan flag flies throughout marjah and that we are ready to work with the government in bringing these services to the people. the experiences so far have been good. i can tell that there are a little more standoffish than other populations we have been in. i think the taliban has worked hard to convince them that we are here not for their benefit but to take things from them. as hard as that was, i think this piece of stabilizing, that is worth the heavy lifting begins. with that, i will cease-fire and

turn over to you for any questions. >> thank you, general. you will get started here. >> can you talk a little bit about the time line? you mentioned the afghan government providing services. the you expect to thousand 500 marines will be needed that entire time? >> -- do you expect the 2500 marines to be needed that entire time? >> we have to marine battalions in there. we will make a decision later in terms of whether we keep two in there or go down to one. and there is no short-term plan for the titans that are there. we are very conscious of the fact that this is a fragile area. the necessity to keep the security forces in place for the

foreseeable future is critical. as far as the time line for services, nothing can arrive soon enough. we have opened the roads. commerce has started. the return of families has begun. i was in marjah twoi days ago and we saw families coming back. that is a great sign that there is beginning to be some trust. the area is increasingly secure. in terms of medical and construction, i think we would all agree that unemployed men and women are bad news in any society. our goal to get out there and hire more than 1000 to get them off the street and get them working. a lot of the people we hire have

probably been taliban and on time. the notion of integration probably a flawed assumption. they just quit being taliban and upon to do something else. they go back to farming or come work on projects, cleaning canals, clearing rubble. there is so much work to do, of the mythology thatm was this wealthy place -- that marjah was a well-placed is a fallacy. my opinion is that the portions i have seen are some of the poorest areas i have seen here. there is a lot of opportunity that presents itself. we are going to keep pressing prt for the coalition services

to come in here and help. >> i thought you said that the ratio of u.s. to afghan soldiers was three marines for every afghan. how does that square with the repeated statements from officials and fall to this operation that the afghans are in the lead? how does the statement that the afghans are in the lead square with the casualties which are skewed on the side of the marines died in the most. -- marines taking the most. >> we have two marine battalions and three afghan the titans. when you look at the amount of marines better in there, at can

the titans are a little lighter. probably 83 to one ratio. -- probably a 3 to 1 ratio. these are the functions that the afghans are not to we get but we hope there will be soon. i looked at these. i think the ratios are probably representative in terms of the amount of people in there. in terms of an afghan lead, i call them a partner. and i think we are very closely partner. we have squads and platoons that live together, eat together, and are fighting together and doing a great job. there are no cosmetics. i am the guy that was blasting pretty hard about the fact that we brought 4000 marines and we only had 400 afghans.

i have been kind of a squeaky wheel on this. i am not shy about calling it out. i tell you that right now, i have been pretty impressed. we have had in betted media and i think -- we have had embedded media. i think the stories have been very positive. >> if i could go back to the question, recruiting men is one of their greatest concerns. the type of man that you would be recruiting. this that could towards what you were telling anne about reconciliation? are you concerned that some of these former tell them -- some of these former taliban are infiltrating?

>> we have been recruiting. and we run recruit training here at camp leatherneck. one of the things we never thought about was getting here and running our own boot camp for police. we have not seen any evidence that the taliban has joined our police. we have never had a negative incident. i do not have concerns about that. i do have real concerns about the quality of the police overall. we have been very public to say that i would rather have no police than half police. they turned the population against you. if you are seeing as supporting a corrupt police force, you are seen as corrupt. it hurts your credibility. it is interesting and almost counterintuitive but the afghan army largely to not even speak

the language down here yet there are really looked up to the people admire them for the institution they represent. it is very rare that you hear about an afghan soldier doing something to fleece the locals. but there have been too many examples, especially when the first got here, about police in uniform not acting the way we expected them to. we have probably sent a number of them home. we are very encouraged by the latest wave of recruiting. the ministry of interior does the formal recruiting. when help by talking to the elders. that is how we recruit. we encourage them that if you want the security to be better, you have to contribute. your young men have to be able to support the security to the problems.

that has been effected. our personal relationships with those local leaders and trouble elders have gotten us a better quality -- those tribal elders have gotten us a better quality of man. we have to get it right in marjah. one-third of the police should be local. two-thirds should be outsiders. we are proponents of the one- third, two-thirds rule. we think that limits corruption and reduces the tribal incumbrances and affiliations that sometimes tie things down. we are moving in the right direction. we are certainly not there yet. i would rather be short of the leash than to have the wrong guys in uniform that we had when we first got here. >> you mentioned that the

population in marjah is standoffish. to what degree is that because they feel left out by the afghan government and to what degree is it that there were probably -- broadly supportive of the taliban and their goals? >> there were 40 or 50 elders that showed up and one of the first guys to make any kind of appearance was this man who stood up. he stood up and pointed at the americans and said i like the americans. the bill to marjah -- the built marjah. he pointed to some afghanistani leaders and said i did not trust

you. -- i do not trust you. he said i am a taliban leader. we are all taliban. the amazing thing was he put it at the afghan leaders and said i am going to give you a chance. you have a limited amount of time to prove to me that you are not the old government. one of the great talking points right now of the new afghan government that is coming into marjah as we are not the guys from three or four years ago. we are different. you need to give us a shot. you need to give us a chance to earn your trust. that is a positive. we have to get in here and start demonstrating and earning that trust. >> note that the ospreys words

used in the operation but there were some question as to whether there were doing runs there and if the got into the fight. can you give us a rundown on how you used the osprey? >> i would be glad to. if there is any perception or notion that we are babying or coddling the osprey, you have to come out here. we went behind enemy lines at 3:00 a.m. because they're the right platform for that mission. i have been flying around in them for the past two weeks almost every day, in and out a small and very rugged scenarios. i note that impression is out there. i am telling the street, we are using the hell out of these things and we are using them in

challenging environments. i can offer you to come out here and we will fly you in and around marjah. there is no shortage of correspondents writing and these things. daytime, night time, and surgeons, sometimes under fire. -- insertions, sometimes under fire. the colonel has probably been pushing these things to make sure that we give them a good workout. how are you doing as far as having them available? >> what is the question? >> reliability. >> every morning, i get the

reliability test. we are averaging about 70%. 70% is pretty good. that is standard for my helicopters. we are doing very well on reliability. we know a lot of people are watching the osprey. they are doing great and working very hard. >> if i could go back to the recording question, my understanding is the existing police that were in the town were essentially pushed out and started a new recruiting campaign. i know you explained how you are talking to the elders to encourage them to bring people and. what exactly is the vetting process so you did not prevent

infiltration or the old police force to come back in? are the marines doing any? what part are you playing in making sure the force is going to be legitimate? >> i just want to be clear. maybe i was not clear. there has been no police in marjah for the past few years. it is not a question of coming in here and getting the old boys out. the old police were driven out by the locals. the locals probably working with the taliban. this is what is so important to understand. back to my opening statement, the population chose the taliban. they chose them because a couple years ago, it felt the police and government that represented them did not serve them well.

it was probably corrupt. i really feel that we have that opportunity to bring in new police, fresh police, after they are trained in after they have been vetted. right now, we have 600 of the national police. these guys are terrific. they over around from area to area and a backfill wherever there are problems. the areas we need them most was in marjah. we were not going to bring in other local policeman. we wanted a chance to start fresh. we are going to go out and recruit some of the best and brightest that we can. we are going to bring them here and put them through eight week boot camp which any graduate of

paris island would recognize bridget would recognize similar is. we are not trying to make parades' but we are good at entry-level training. -- we're not trying to make marines but we are good at entry-level training. we worked very hard on these guys to make sure that they are going to be an asset to the community and not a liability. we spend no shortage of time talking them through scenarios and talk to them about protecting the population. we bring in guest speakers whether they are american, british, afghan. we bring in police from all over. they get a good education. we are proud of the product. as far as recording goes, we go to elders to ask them to send their very best. we have not yet had a case of

infiltration of taliban into the police force. i cannot guarantee that would not happen but he would have to put up with eight weeks of tough training and frankly, we have not seen it. we are always on the lookout for somebody that is not with the program. >> what is the number of recruits that you have since started? >> right now, 200 recruits are going to training. we have already graduated a class. we are not yet training marjah police. we are in that process right now, working with the ministry of the interior. we are at that icebreaking stage with the elders. today is day 21.

we are just at the beginning of building those relationships which are so important to recruit some of the best young men. >> we have time for maybe one more and then we will let you go. >> there have been reports about creating regional command. did you talk about burning that under a two-star marine command? -- could you talk about bringing that under a two-star marine command? >> i am probably a bit ahead of this. i know there is a lot of discussion about the command southwest. i can tell you those physicians have not been announced.

i could tell you that i am being relieved by a marine two- storar. he will probably be here in late april. i am not sure if decision has been announced. i cannot want to get ahead of that discussion. -- i do not want to get ahead of that discussion. >> we will end on that one. before we close, any final thoughts? >> no. i appreciate the opportunity to tell the story. we have a team here. we have been a great team for 10 months. and we have been an instrument of change. we have done great things. we are very focused on the population. the clearing is something we are

good at. that is our stock and trade. i am equally proud of our ability to get in there and start making good things happen for the people. at the end of the day, it is the population that is the price and that is what we are after. we will continue to work with our afghan partners and their civilian partners in trying to achieve a stable and prosperous marjah. from here at camp leatherneck, thank you for the opportunity to tell the story. >> thank you for your time. it has been very helpful for us better 9,000 miles away to get a perspective. thank you. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2010] >> and a few moments, house debate on a $16 billion a jobs bill. in a little more than one hour, health and human services secretary kathleen sebelius on her meeting with insurance company ceos. after that, the tarp oversight commission hears from the head of citigroup. we will reread the briefing on operations in afghanistan with the commander of the marines involved of the marjah offensive. >> on washington journal tomorrow, we talk about the political future of represented charles rangel. the head of the u.s. agency for

international to the element will discuss his agency possible budget priorities and efforts in haiti. more about the health care debate with representative john dingell of michigan. our series on the president's budget continues with the head of the institute for women's policy research. that is live at 7:00 eastern. >> the next journalism must be left open to the fists pounding on the door to give new information, to raise new questions, to suggest new context. >> winners of this year's national press foundation awards talk about the role of journalism in a changing society. saturday night at 8:00 on c- span. >> our public affairs content is

available on television, radio and on line. you can connect with us on twitter, facebook and youtube. sign up for our schedule alert e-mails @ c-span.org. >> the house approved its $15 billion bill aimed at creating jobs. a key part is a tax credit for employers who hire workers who have been out of work for at least two months. it will continue federal aid for state costs for federal transportation projects. and here is the house debate. it is one hour. is recognized. mr. etheridge: thank you. i am pleased to rise in support of h.r. 2847, the hiring incentives to restore employment act. the hire act is really all about our three most important priorities in this congress, jobs, jobs and jobs. the hire act builds on legislation that the senate passed last week, including

direct hiring tax incentives for business, support the recovery act bond incentives that put local dollars to work creating jobs across this country, and transportation funding that improves our communities, builds infrastructure and supports local businesses. all told, more than one million jobs would be created by this legislation. this bill really is help for small businesses on main street and millions of americans who are ready to see the benefits of a growing economy. across this great country, our economy is showing signs of recovery, but consumers need more confidence and employers need incentives to hire workers. today, we give business direct incentives to hire new workers. and i am pleased that the hire act accomplishes this in a responsible manner. not only does it fully pay for

all the important investments in job creation, but it actually contributes to reduce our deficit by nearly $1 billion. let me repeat that again. reduce the deficit by $1 billion. the bill is a good step to rebuild our job market, but we still have a ways to go. i expect this will be just a down payment on our continuing work to create jobs and restore our economy. this bill includes, as you've already heard, about $77.1 billion in the surface transportation projects. it also re-authorizes federal highway public transit initiatives and highway safety funding that's needed all across america. when the extensions were blocked last week in the senate, transportation projects across this country were held up. and nearly almost 2,000

employees were furloughed. today, we are going to take action, not only to make sure that doesn't happen again, but that we create the kind of jobs by investing in local priorities across this country. not only transportation projects that needs to be moving in our community, building on infrastructure and providing jobs for america, but also the hire act that creates tax credits for local businesses. representative kagen and myself introduced a bill back in january for tax credits to hire new employees. this bill builds on that. it's a little different than what we had, but it makes a difference. despite some economic growth in recent months, the unemployment rate around the country remains high, and too many americans are unemployed. in my state it's above the national average. almost 11.2%. just this past week, i visited an employment office were

people were saying, all we need is a hand up, not a hand out. give us an opportunity to go to work. in addition to that, we are providing funds for making sure that our qualified school construction bonds in the recovery act that we passed last year will work. this bill really is about jobs. i can say to you when we're talking about jobs we're talking about education, and i happen to believe that education is that one thing that levels the playing field for everyone. today, we're going to have the opportunity to put our stamp and vote for a piece of legislation that will provide good places for teachers to teach and children to learn. with that, madam speaker, i reserve my time. the speaker pro tempore: the gentleman from north carolina reserves. the gentleman from california is recognized. mr. nunes: thank you, madam speaker. i yield myself such time as i may consume. i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection, so ordered. the gentleman is recognized. mr. nunes: madam speaker, if you first don't succeed try,

try again. that seems to be the democrats' creed and motto. there wouldn't any need for today's bill if the failed $1 trillion stimulus package passed last year worked. they promised the so-called stimulus kept unemployment at 8% but today we are near 10%. put simply, you can't create jobs by dumping $1 trillion into federal agencies. the administration claims that $1.5 billion in stimulus moneys saved or created 1,664 jobs in california's san joaquin valley where i live. even if one assumes the accuracy of these numbers, the federal government has spent a whooping $900,000 to save or create one job in the san joaquin valley. despite spending $900,000 per job, there are still communities in the valley that suffer from 20% to 40%

unemployment. in fact in the wake of the stimulus we saw three million additional americans lose their jobs rather than the 3.7 million jobs that are now being promised by the obama administration. sadly, a record 16 million americans are now unemployed because the stimulus promises were empty and unaffordable. is it any wonder why the american people continue to ask, where are the jobs? it appears that the stimulus was not very stimulating outside of washington. so here we are back again with yet another multibillion dollar plan slapped together by the democrats that will probably once again fail. madam speaker, the soviet union experienced that just because you're going to grow a billion bushels of potatoes does not mean that there will be potatoes on the shelves. similarly, just because the

democrats have continued to message this as a jobs bill does not mean that it will actually create a job. the centerpiece of the democrats' new bill is a payroll tax exemption, a hiring credit for employers to bring on new workers. while i give the democrats credit for acknowledging that tax cuts are prmble to spending increase -- preferable to spending increases, sadly it is a political charade and it won't work. how do we know? because it didn't work when jimmy carter tried it in the late 1970's. numerous studies by noted economists from all across the political spectrum have confirmed that these temporary hiring incentives will have little, if any, positive effect on jobs. .7 c16 c13 think about it, if you're an employer are you really going

to hire someone for a permanent position because you get a modest temporary tax incentive? we could have improved this bill had the ways and means committee actually held a hearing and a markup, but once again we see significant tax legislation taken directly to the floor without a committee hearing, without a committee markup, and without an opportunity to even offer amendments. i understand there was a change in the chairmanship of the ways and means committee yesterday, but in fact this bill on the floor today proves that it's a political sham. it is far from serious to enact sound policy to improve our economy when you can't even decide who the chairman of the ways and means committee is going to be. you don't have to read adam smith to know that markets cannot thrive with uncertainty. what employers really need from washington is the assurance of the democrats' massive big government tax and spend agenda

-- isn't going to drive them out of business. employers face uncertainty about the democrats' massive takeover of the health care system, about the new trillion dollar cap and trade energy tax. they face uncertainty with environmental regulations like those that have driven 84 sawmills from california since 1989. and they face uncertainty about the largest tax increase in american history that will be enacted this year. madam speaker, employers don't need more federal spending to create good private sector jobs. they already know how to create good jobs. if washington would just get out of the way. i reserve the balance of my time. the speaker pro tempore: the gentleman from california reserves. the gentleman from north carolina is recognized. mr. etheridge: i would remind the gentleman i was a small business man in the 1970's when this tax credit was in before. not only did we use it and create jobs, we had tremendous growth in this country. i talked to two chambers of

commerce in the last month. they are tickled to death somebody is willing to help them instead of doing the he very thing the senate did last week and hold everything up. it's time we move on got something done. i yield three minutes to the gentleman, mr. oberstar, who knows something about infrastructure. the speaker pro tempore: the gentleman from minnesota is recognized for three minutes. mr. oberstar: i thank the gentleman for his time and use this brief moment to be very specific. under the programs in the stimulus, under the jurisdiction of our committee of transportation and infrastructure, we can account for $1,095,005 jobs in the past year. one year from the date of enactment. we have this documented in 14 incentive monthly hearings on

progress made by state d.o.t.'s, transit agencies, metropolitan planning organizations, and state revolving loan fund organizations, as well as the other portions of our stimulus for which you have documented the funding investments that have created jobs. these are real jobs, building trades, associated general contractors, putting people to work, putting their equipment to work on job sites where they were shut down the previous year. with those jobs we are paying those workers are paying $353 million in federal taxes, avoiding $279 million of unemployment compensation checks because they are getting a payroll check in12ed of an -- instead of an unemployment compensation check. we have 25,000 direct on project full-time equivalent in the revolving loan fund

program, and paved 24,000 lane miles of highway and restored or replaced 1,200 bridges. that highway mileage is equivalent to half of the interstate highway system that took 50 years to build. this was done in a year. this extension of funding for the surface transportation program will provide $77 billion to continue safetea-lu for the next 15 months, for the 15-month period, that is this fiscal year and three months beyond. it's a $21 billion increase over the funding levels of the continuing resolution. it restores the $84.7 billion revision that occurred september 0 that everyone was wringing their hands about but required by the bush administration and consented to by house and senate republicans in the last meeting of the house-senate conference on safetea-lu. that money is restored. we said we would do it. it's done.

the bill also restores $19.5 billion of interest foregone since 1998 when we had to agree to concession insisted upon by then speaker gingrich and then the clinton administration, treasury department to forgo interest on the trust fund. that interest is restored. repatriated to the trust fund and in the future will collect interest like all other trust funds. mr. etheridge: another 30 seconds. the speaker pro tempore: the gentleman is recognized. mr. oberstar: but there are two issues in this bill that i was very concerned about. the senate passed the bill that had a funding formula that was very, very discriminatory. four states benefited with 58% of the funding and 22 states got nothing. senator reid has consented in a letter he sent to me and to speaker pelosi to restore the

house funding formula that we proposed in a subsequent bill that will pass the senate this month -- the speaker pro tempore: the gentleman's time has expired. mr. oberstar: to get those additional highway formula funds as we pros posed in a formula -- the speaker pro tempore: the gentleman's time has expired. mr. etheridge: 15 seconds. mr. observer sta -- observe -- mr. oberstar: and the letter from senator reid, which he's discussed with various committees, that letter will be available at this table at this desk to show that we will restore the funding formula the way it is intended in safetea-lu. the speaker pro tempore: the gentleman's time has expired. the gentleman from california is recognized. mr. nunes: i yield two minutes to the gentleman from california, my good friend, mr. lewis. the speaker pro tempore: the gentleman is recognized for two minutes. mr. lewis: thank you, madam speaker. mr. chairman, i rise to speak on the highway provisions of h.r. 2847.

i think it's important that my colleagues understand that the bill before us isn't a clean extension of safetea-lu highway and transit programs. but includes new policies that would continue the program on the current road to ruin. i support a strong surface transportation bill. i worked with mr. oberstar for years in connection with that. i know our constituents depend upon this program to keep our roads and transit systems opened and safe. and to help keep economic investments coming to our communities. but we also know that the highway trust fund is badly broken. it has been broken for some time. the trust fund has been in a nose dive for years due to overspending, but nothing was ever done about that, and, madam speaker, i ask unanimous consent to revise and extend my remarks and yield back the balance of my time. the speaker pro tempore: without objection, so ordered. the gentleman from north carolina is recognized. mr. etheridge: thank you, madam

speaker. i yield two minutes to the gentlelady from nevada, ms. berkley. the speaker pro tempore: the gentlewoman from nevada is recognized. ms. berkley: thank you, madam speaker. i rise in support of this jobs bill. nevada is experiencing unprecedented economic challenges and an unemployment rate of well over 13%. it is essential that this congress institutes policies and programs that will spur long-term economic growth and create the jobs that the people of las vegas and across the united states so desperately need. this legislation is a positive step in that direction. incentives such as payroll tax holiday, a tax credit for retaining workers, the extension of enhanced expensing for small businesses will all help create conditions for increased hiring and retention of new employees. in addition, the extension for funding for highways and surface transportation projects will provide employment both today and in the future by continuing the infrastructure

investments that are critical to long-term economic growth. and finally, the direct payment option for certain tax credit bond programs will enable the clark county school district which i represent to increase school construction and continue to fund essential projects. nevada and the nation needs the jobs and other support provided in this bill. i urge my colleagues to vote no on -- vote yes, a resounding yes on this piece of legislation. i yield back the balance of my time. the speaker pro tempore: the gentleman from california is recognized. mr. nunes: madam speaker, at this time i would like to yield two minutes to the gentleman from texas, mr. johnson. the speaker pro tempore: the chair recognizes the gentleman for two minutes. mr. johnson: thank you. i thank the member for allowing me to speak. on behalf of the american taxpayer, i'm deeply disappointed that the democrat majority is not allowing me to offer a commonsense amendment to protect the american taxpayer.

the amendment was simple. it would require businesses seeking to use a hiring tax incentive in the bill before us to check the legal status of potential new hires through the e-verify program. you seen that in the papers@@@@8

speaker. i yield two minutes to the gentleman from oregon, mr. blumenauer. the speaker pro tempore: the gentleman from oregon is recognized for two minutes. mr. blumenauer: thank you, madam speaker. i appreciate the courtesy of my friend, the gentleman from north carolina, permitting me to speak on this. this piece of legislation is sadly a product of our time with a breakdown with our friends on the other side of the capitol. seemingly unable to proceed with regular order. we saw sadly this last week one person bring the transportation funding in this country to a halt, hold up unemployment benefits, affecting literally hundreds of thousands of americans in the most negative of way and that is passing for

regular order over there. this bill is an opportunity for us to break that impasse. it's significant in three ways. first of all there were five republicans who were willing to join with the majority to be able to move things forward. and in some sense i think we ought to try to reward that sense of at least breaking the tyranny of the 60-vote majority requirement. second, the real job generator in this legislation is to be found in extending the transportation funding through the end of the year. madam speaker, the most effective job generating legislation that we could put forward at a time of 40% unemployment in many metropolitan areas in the construction trade is to put americans to work rebuilding and renewing america. this legislation provides $77

billion towards that objective, fully funding the first six months of this year and extending it through the full 15-month cycle through the end of this calendar year. this will give certainty to the men and women who are dealing with our transportation system, roads, bridges, transit, the whole range. it will save hundreds of thousands of jobs. it will incite economic activity and maybe, just maybe it will be a signal that we bring together a larger vision of rebuilding and renewing america and putting our fellow citizens back to work. the speaker pro tempore: the gentleman from california is recognized. mr. nunes: thank you. madam speaker, i would like to yield myself 15 seconds. i just want to clarify i heard the other side of the aisle say that this bill was going to create a million jobs. we are going to spend $13 billion to create a million jobs. the $1 trillion last year was promised to create 3.7 million.

mr. blumenauer: would the gentleman like to qush -- mr. nunes: i would like to yield to the gentleman. the speaker pro tempore: the gentleman will suspend. the gentleman from california's time has expired. mr. nunes: i yield an additional minute. mr. blumenauer: what i said, i want to be clear if i misrepresented it, the $77 billion in transportation funding will protect or create hundreds of thousands of jobs. that's what i said. mr. nunes: reclaiming my time, i ask mr. blumenauer, my good friend, spoke about the jobs. earlier i heard another gentleman on the other side of the aisle speak about a million jobs. i'm just trying to figure out the math. this is a $1 billion to $15 billion to create a million or hundreds of thousands of jobs. last year we spent $1 trillion to create 3.7 million jobs and we lost three million jobs. . mr. blumenauer: will the gentleman yield? mr. nunes: yes. mr. blumenauer: the bill includes $77 billion of

transportation funding. that was my reference, and i think the experts agree that it would be hundreds of thousands of jobs, if not a million, saved or created with that transportation funding. i appreciate the gentleman's courtesy. mr. nunes: thank you. well, i'd like to -- the speaker pro tempore: the gentleman's time has expired. mr. nunes: at this point i'd like to yield two minutes to the gentlewoman from florida, a member of the ways and means committee, ms. brown-waite. ms. brown-waite: the gentlewoman from -- the speaker pro tempore: the gentlewoman from florida is recognized for two minutes. ms. brown-waite: i want to make clear there are some items in this bill, provisions that everyone in this chamber could support. providing tax relief to small businesses is good. this raises an important question. if the majority recognizes that lowering taxes for businesses is a good -- is good for employment and certainly good for the economy, then why do they insist on dramatically raising taxes everywhere every single chance that the democrats get? i also think that it is worth

discussing the nefarious accounting gimmicks in this bill. i voted for the principle of pay-go because i believed in it, but no sooner did the democrats finish patting themselves on the back for passo than they came back -- pay-go than they came back waving it and then sort of bernie madoffing it -- i think i created a new word, madam speaker. i don't want to get too far in the technical words here, madam speaker. this is pay-go compliant because of some accounting gimmicks. first quarter money into future years -- in the fourth quarter of the previous year and presto changeo, the bill becomes pay-go compliant. the american people know we can't spend the same money twice. so let's take a closer look. the official cost estimate of the bill does not include a $20 billion transfer from the general fund to the highway fund. meaning we'll have to find that

money someplace else. we'll have to find that general revenue money someplace else. probably china. and the cost estimate doesn't reflect $142 billion in new spending authorization for transportation projects that we don't have a source of revenue to pay for. and maybe that's why we were only given a few hours to read the bill before it was -- it's going to be voting on it. and in the issue of transportation funding, i did hear mr. oberstar say that the senate was going to fix it but the bill before us is not one that is good for transportation for the various states. the speaker pro tempore: the gentlewoman's time has expired. mr. nunes: i yield the gentlewoman's time has expired 30 seconds. -- i yield the gentlewoman 30 seconds. the speaker pro tempore: the gentlewoman is recognized for 30 seconds. ms. brown-waite: it leads the rest of america have to say, what's it for us? well, i say zero. florida is a donor state and

pays far more transportation taxes than it gets back. i can't support the bill before us today for that reason and several other reasons. with that i yield back the balance of my time. the speaker pro tempore: the gentleman from north carolina is recognized. mr. etheridge: thank you, madam speaker. i now yield two minutes to the acting chairman of the ways and means, the gentleman from michigan, mr. levin. the speaker pro tempore: the gentleman from michigan is recognized. mr. levin: thank you. i ask to revise and extend my remarks. the speaker pro tempore: without objection, so ordered. mr. levin: and thank you to my friend for yielding. the theme of this bill is very clear. back to work. i would think that would unite us and not divide us. we are seeing recently economic growth, but we have not seen enough at all is growth in jobs. and that's what this is really all about. there's no easy or perfect way

to bring this about. it takes a number of steps. the tax credit in this bill is one approach. we're going to need additional steps. another way that relates to economic growth in jobs is infrastructure. and we can argue about how many jobs, what the estimates are about how many millions will be created, but it's clear. the secretary of transportation has said that he can verify $60 billion to $70 billion in infrastructure for roads, bridges, ready to go this spring and this summer. and we should be united behind providing the authorization for this to happen. it should not divide us. there's money, also, as has

been said for school construction bonds and energy bonds and also very importantly relating to expensing by small business which is very much within the jurisdiction of the ways and means committee. that also should unite us and not divide us because it's critical that we extend that provision. so for all these reasons i urge that we join together rather than dividing and pass this bill. the speaker pro tempore: the gentleman from california is recognized. mr. nunes: madam speaker, at this time i'd like to yield three minutes to the gentleman from florida, the ranking member of the transportation committee, mr. mica. the speaker pro tempore: the gentleman from florida is recognized for three minutes. mr. mica: my state with 11.8% unemployment, one of the top 10 unemployment states in the united states, i would love to come before the congress and

say pass this bill titled the jobs bill, but i can't do that today for several reasons. first of all, let me say that those who have come before us and said that just getting more money even in a short-term transportation bill will get things going don't know the facts. over one year ago when we passed $48 billion in stimulus money that went to the department of transportation that so far as of march 2 only $8.8 billion has been spent. this is not a six-year bill we're passing, and that's what we should be doing to ensure that states can do long-term projects, not just repaving sidewalks and simple things that we've seen done. this bill does not contain elimination of the red tape and the hoops that states have to go through for compliance to do

a project. so this is -- this will be our fifth extension. it only goes to december 31. i was also told that we had to pass this because it was going to go straight to the president for his signature. intervening we did pass a 30-day extension. so this is not going straight to the president. we did not have an opportunity to correct the flaws in this bill. you heard of the senate passing -- what was it -- the nebraska deal, the louisiana purchase. i'm telling you, this is the four-state grab. california gets 30% of the additional money in this bill. 58% of the money goes to four states. 22 states get nothing. i'd like to ask unanimous consent that this chart be made part of the record. the speaker pro tempore: without objection, so ordered. mr. mica: and this shows each

state, 22 states get nothing, 46 states are disadvantage because of the four-state grab in this. and it could and should have been corrected if it's going back to the united states senate. it should be corrected so everyone is treated fairly and exwitably in the transportation fund. mr. oberstar has ton a level best, and he was a written letter from ms. pelosi and mr. reid to correct it after we pass it. if this was the only flaw in the bill maybe we could look away. you heard democrats who also voted against the rule and almost took this bill down also state their objections to provisions that should have had the opportunity for at least an amendment by this body. so no consideration of changing the bill, making the appropriate fairness changes, equitable changes so we would all be treated equitably.

i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. the gentleman from north carolina. mr. etheridge: i yield a minute to the speaker of the house, speaker pelosi. the speaker pro tempore: the chair recognizes the speaker. the speaker: thank you very much, madam speaker. i thank the gentleman for yielding. i appreciate his leadership and his intensive knowledge of this legislation and how important it is for us to proceed much madam speaker, i will not speak long because the sooner we debate it the sooner it goes to the senate and goes to the president. i agree with much of what the distinguished ranking member on the committee said about wanting a six-year bill. our chairman, mr. oberstar, has been advocating for that and i agree. i also agree that the language has to be changed, and we have the commitment to do that as we go forward. but that tonet mean that americans are not suffering, that they do not need jobs and that we should actn