account services our clients need. we are only as big as what is required to serve our clients in the competitive market. that is important, but i completely agree with euan that no institution should be in a place -- agree with you that no institution should be in a place where they are too big to fail, and there are two ways to do that. one is to make sure the banks are strong. sometimes size is important. sometimes what they do is important, and you need a strong risk regulator that requires stress tests. let's make sure we played out every scenario and make sure we put these institutions to the test. that is important, and sometimes, things go wrong. we urge congress to act fast on this. >> i want to make sure we

understand your response. when he says he believes it should be broken up, you are saying that is what should be done hamas >> first, i have to go back to what he said -- that is what should be done? >> first, i have to go back to what is said. . with the same objective which is what is the company that best serves our clients, 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 busy that core business is the busy think is going to create the value for our shareholders and, therefore, the government. >> thank you very much. if i could ask another question taking you back to september of 2008. you wrote a letter to your colleaguesality 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 that citi and eight other large financial institutions were taking tens of billions of dollars under t.a.r.p. but the question i have -- i understand markets reverse. i understand there are those who believe that this crisis was not obvious in advance. the part i'm still trying to understand is the second hard bump for citi. when the secretary of the treasury announced on october 15th, in effect, you were healthy, mr. allison says he doesn't know if you were healthy or not. but by the time we come out four weeks, it's clear that citi needed another $20 billion and shortly after that more than $300 billion in guarantees. what happened between healthy and $20 billion and $300 billion

in such a short span of time? >> you're absolutely right. on any fundamental basis we had 10.7% tier one capital. when you looked at the entire portfolio of the assets we were carrying, the earnings power, this was not a rational or fund. issue. but we were in very dysfunctional markets at that point. this was post lehman brothers -- >> i'm sorry, though, mr. pandit, everyone was in a sis functional market. it was only citi that needed an additional $20 billion after having been pronounced healthy. >> madam chair, the capital markets looked at every financial insitution and for a period of time went after the stock prices of every financial institution. that happened to us, too. our stock price started dropping. on that friday when it hit $3.37, the issue was not the fundamentals as much as would that create an issue of confidence not only in citi but all the other financial markets.

>> but why citi? citi was the target and the only one that took the money? >> and we weren't the last one necessarily either. so the -- we weren't the fast. we weren't the last. different banks, different institutions got their own some. some broker dealers became bank holding companies overnight. >> but none of the original nine needed money within weeks of the original t.a.r.p. infusion. you got $25 billion. someone said -- the treasury -- secretary of the treasury said you were financially healthy, and within weeks you needed another $20 billion. i just want to understand why citi is special. >> again, what i would say to you is that you're right, this was not a fundamental situation. it was not about the capital we had, not about the funding we had at that time. with the stock price where it was -- by the way, a lot of that was driven by short sellers. short sellers started selling

stocks, the stocks started going down. when it gets to that point, perception becomes reality. that's exactly why it was important for all of us to take that issue off the table and the package that we got was a package that the federal reserve and the treasury and all the regulators thought was the right package to ensure that confidence. >> this is a not citi was special, just citi had bad luck? >> you know, i don't mind being special and i think we were in the sense that we came in -- sit ti came into this market with assets on which we took a lot of losses. in this particular case the market dynamics were really important and that caused us to get to this point. >> thank you, mr. pandit, i apologize to my fellow panelists for running over. mr. atkins? >> thank you. i wanted to explore a little bit citi group's relationships with the government and with its major shareholder.

to what extent -- we ex-plord this a little bit with assistant secretary allison. to what extent is treasury in contact with either your office or other parts of citigroup on a daily, weekly, monthly, periodic basis? >> treasury is a very critical shareholder, a very important share older for us. we do what we can to reach out to them like we reach out to a number of our shareholders as well. and we have those conversations with them at a variety of different levels in the company. they as a shareholder have every right to call us and ask for the same public information every other shareholders gets. we do that all the time. >> do they get any special information? >> mr. atkins, as you know, under secures laws, given the fact that they have to sell stocks, there are limitations on what we could tell them. >> you know where i was going. all right. so as far as the levels within treasury, you're saying it's at various levels within that --

>> we are completely open on whatever information they want whenever they want, the same information that would be available to any other shareholders. >> now, it's been reported that citi bank or citi group has the largest lobbying budget of any financial services firm in washington. so i was wondering, as far as your activities on the hill and with the white house and your obvious support for, it sounds like, a number of the administration's proposals, how are you spending your lobbying dollars in washington? >> i can't comment on where that budget is or not versus anybody else. let me just tell you that we do have points of view on financial reform. we have points of view on global markets, and we believe it's important to get those points of view across to lawmakers and

congressmen and/or people who are interested in our perspective as well, and we do it. but this is an effort that's driven by what we think is right for the financial system. i think it's the right thing for us to express our points of view. >> well, do you agree with the so-called fol kerr rules where apparently they've sent formal language up to the hill today? >> i haven't seen the language, so i can't comment on the details. but as a company we've sold a lot of proprietary trading businesses, sold a lot of hedge funds, sold a lot of private equity funds and we're completely focused on clients. i do think banks should be banks. so now we're moving in that direction. >> i made this point a little bit earlier. when it comes to system risks, the fol kerr rule, mortgage,

contractual forbearance, how do you protect them against a sort of sit fan tick appearance where we have government motors and allied bank and now maybe government banked. i mentioned when i was in a citi bank branch at every television station there was a barack obama authored book and they were giving it away to new accounts, people who opened new accounts. how do you protect against that? >> first of all, i can't speak for my branch manager who wanted to do that. that's their decision. that's not my decision. i don't make those decisions. but let me say, this is a tough position for me. if i say what happened i believe and it happens to be in line with what somebody else believes in the administration, it looks like i'm doing this because the trez i have a 27% shareholder. there's no a no win situation. i believe these things. why i'm telling you these are the right things to do.

by the way, who better to share with you a systemic perspective other than a ceo who has gone through a very interesting two years. >> i agree. going back to your experience in the capital markets, what is now your strategy with respect to your brokerage operations, if you think an ideal like the fol kerr rule is good, gotten rid of smith barney now. you have compensation that might really harm your investment banking business. going forward, how do you perceive that? >> what do we do? we commit capital on behalf of our clients. that's number one. number twro, we make markets and provide liquidity to the markets. number three, we use capital markets 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 to our clients. those are the activities we're

involved in in our brokerage businesses. again, when you look at that time full gamut of them, the maximum value to our clients comes from performing those functions which, by the way, translates into maximum value for our shareholder. >> would you take a short position contrary to one of your client's positions? >> this is a hypothetical question. >> just in general. >> mr. adkins, you know what it means to make markets, you to be a principal agent to make markets. i would do what is the right way to manage a book on that basis, but i'm not -- if the question is am i going to use some information, the answer is no. >> okay. i was just getting to -- so proprietary trading and other things are still 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's what banks do. we have to make markets. that's really -- that's what

banks do and credit as an example. we have to do these things. proprietary trading is when you have people who actually don't interact with clients and they are actually covered as a client by other people on the street. they treat treat them as a client when you're using the company's capital. i don't believe banks should use capital to speculate that way. >> i agree. thank you. that's the rub that is the definitional aspect of that. perfect. thank you very much. >> mr. silvers? >> mr. pandit, this may seem repetitive. i'm afraid i can't resist this. in october of 2008, say october 1st, was citi group a healthy financial institution? yes or no? >> yes. >> on november 21st, 2008, was citigroup a healthy financial institution? yes or no? >> yes.

>> why do you think that mr. allison was so unable to answer those questions? >> you'll have to ask mr. allison. >> you know, clarity is one thing, mr. pandit. credibility is something entirely different. i think you've given clear answers, but i don't believe you've given credible ones, frankly. i think it's easy to give those answers having weathered the storm with the public's money. now, let me ask you this: did you speak to anyone in the treasury department during the week from november 18th to november 25th, 2008? >> mr. silvers, let me first say that i appreciate -- >> i'm asking you to answer that question. did you speak to anyone in the treasury department during that week? >> i don't recall if i did. >> you don't recall? >> i don't recall if i did. >> did anyone in citi group to your knowledge speak to anyone in the treasury department

during that week? i remind you a few moments ago that you stated, quote, we, some we agreed it would be a good idea to back up citi group during that week. who is we? >> that was over the weekend, the federal reserve and the regulators talked to us, and we also had conversations with the treasury and other regulators. >> who is the we? what human being spoke to what human being? >> at that point in time there were did you open that by saying we are help the bank? >> no. >> how did it go? >> the conversation is very simple. the stock prices of $3.37. that is a bold level of stock. that was a result of short- selling. it was at a point in time where the stock itself would have an

issue of confidence in the conversations where around this. >> what do believe would have occurred? >for did you represent anything might happen in particular? >> no, i did not respond in the conversations where are represented anything. >> did anyone who was represented citigroup speak to anyone in the treasury or fed about what would happen if there was not traditional aid? >> not to my recollection. >> to -- what is your knowledge as to who spoke on behalf of citigroup? >> let me get back to you. >> to i recall the you are the chief executive officer of citigroup during the week? >> yes, i was. >> i find it difficult to

believe that someone in your position cannot recall who you spoke to about the extraordinary a that the government provided to citigroup. o or who spoke on your behalf to the government of the united states about the extraordinary aid that the government provided to citigroup during that period? your memory seems pretty good otherwise. >> i want to give you a very complete answer. you asked specific questions. >> i don't mind getting an incomplete answer. share with me your fragmentary members of that? >> a number of people at citi talked to a number of people at regulators, the treasury, the fed, the new york fed, and the who could be a large list. let me come back to you with specifics. >> okay. let me turn to a different matter before my time expires. mr. pandit, you were hired in early 2007, i don't recall the exact date -- to be the ceo of citigroup. at that time what were your performance goals. i wasn't hired in early

2007. i became ceo towards the middle of december 2007. i came in there when the board decided they needed to make a change and when we entered this market with the assets we entered this market. >> what were your goals at the time you were hired? >> my goals relatively simple, examine the strategy of citigroup, what is the right strategy for the company, examine the capitalization and the financials of citigroup, put the twoing together and transl that into the right culture for the company on a long-term basis. >> examine a few things? i mean i would ask you -- my time is up, but i would ask you in writing to explain the answers to the following questions. i would give you the opportunity to further expand on what the goals that the board assigned to you at that time were. i would ask you to assess whether you met them or not, and i would ask you to disclose the amount of money you were paid for meeting those goals between

that date and the end of 2008 during the time when, at least by press accounts, not by your account, citi group necessitated a bailout, absent which citigroup would have had to file for bankruptcy. >> thank you. mr. mcwatters. >> thank you. mr. pandit, in your written testimony you say citigroup is no longer -- no longer has a goal of being a financial supermarket. i remember the merger with travelers and i guess it was citicorp a few years ago, sandy wild, it was a much touted goal. it was the only way to really compete on a global stage. your goals are different now. why are they different? why has that business model failed or if it hasn't failed, why are you no longer interested in it? >> mr. mcwaters, markets are different, the environment is

different. the way -- competition is happening is different. if we see what's happened over the last couple of years, a lot of the places where funding was received like securitizations and/or other areas are largely not there. so when you look at the changes have that occurred, that has had an influence on that strategy. but more fundamentally, as i looked at the company -- by the way, it was a complete dispassionate review, not examine, but a dispassionate review of what we needed to be. we did it with complete integrity as a company. we concluded, by the way, that that was an interesting model but did not add sufficient value to our clients and did not necessarily create, therefore, sufficient value to our shareholders. the big guest part of the value came from the core businesses we had which was the banks, which

is why we made the change. >> what aspects of your compensation structure, not yours personally, but of your managers, let's say, two years ago or so, when the securitization bubble was inflating do you think may have led to that? in other words, you have people who are compensated on closing deals, but then the deals leave their area. they rather become a problem of the institution itself if they're retained or they become a problem of third party investors. can you explain how your compensation structure has changed? and has it changed in a way where you can still encourage innovation? >> absolutely. i think that is a critical part of how we change culture, how you manage risks going forward in the right way. compensation structure changes we 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 vest as compensation. we have clawbacks so that if something does go wrong, we have an ability to recover compensation. we have stay-on pay as a company. as importantly, we take explicit risk-taking and risk management criteria into account when we pay compensation. we actually put some of that down on our 10k that we just filed. one of the entities that looks at these things, looked at it -- and i just saw something this morning, they call it sort of the cadillac version of how you take risk and compensation and blend theming to. this is to me a very important cultural issue. and actually at the heart of how you change a company into a client-oriented company. >> thank you. last month we issued a report on the commercial real estate

market. did not have a particularly favorable outlook. what's citigroup's exposure today? >> we do have exposure in the commercial real estate market. however, i will tell you that it is a smaller exposure than many of our peers who are in this business, and as well it is to a big portion mark to market. so we have taken the marks. as importantly, a lot of that exz pose your is in large cities, office buildings, leased buildings, et cetera. so 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. >> okay. thank you. could you comment on the activity of the short sellers in the last quarter of 2008? you know, again, as i was

talking about this, there were a number of instances post the lehman brothers collapse and in our case post the wachovia breakup as well where the markets were not really functioning in a rational way. they were frozen. in those markets there's always this battle between fear and confidence. and there are ways in which fear overtakes it and particularly that's the tool that short sellers need to make money. so that was a very dominant activity. there were no real circuit breakers to stop the short selling. that's one of the things that took our stock down. >> thank you, my time is up. >> thank you, mr. mcwaters. superintendent niemann. >> i'd like to come back to your comments regarding looking forward and financial ins tux reform. you were very clear in saying city believes banks should operate as banks, focus

completely on servicing their clients. i could not agree with you more. i think if there's not one lesson learned from the american public, it's what do we want our banks to be. i think the lexicon of the federal safety net is a new term that very few americans have understood previously but are very focused on now, and it goes well beyond fdic insurance to the other implicit and explicit support that are provided to institutions and that can certainly subsidize bank and nonbank activities. can i read your statement to also imply support for the voelker rule as you understand it? >> mr. niemann, i haven't read the rule. so i don't know what it is. >> understanding that, separating out proprietary trading, private equity an hedge fund trading. >> let me be very clear, proprietary trading is not a big part of our business at all. i don't think banks should be speculating using bank's capital. i completely believe that.

>> so can i- this is important because city, as we all well know, really was the poster child and the impetus for grant ridge blyly and really dramatically changing the glass steagall act. so when we hear ceos say this is a step backward, it could never be implemented, it would have disastrous results for bank's business models, can you say that is unfounded and what is your prospective. >> my perspective is proprietary trading is not a part of what we do as a bank. i don't think banks should be using capital to speculate as well. banks should be using capital committed on behalf of clients, should be using capital to provide liquid tid to markets and they should be doing what it takes to manage that risk. you know, that's fine. occasionally, if you want to use small amounts of capital to create new products, new ideas,

you can do that. but outside of that, we don't see the rest of the activities as core to banking. >> do you think it is reasonable that rules, whether drafted by congress or by regulators to distinguish pure proprietary trading, using capital to support proprietary versus market making or hedging to support client oriented businesses is a practical solution? >> i think the regulators are our best position to look at what everybody is doing. we're in constant consultation with them. they are really quite equipped to say this is not necessarily related to core banking. >> well, i look forward to your -- i think this is extremely important, and not in the sense that proprietary trading contributed to the crisis, but it really goes to the issue of the federal safety now r net and how do you prevent the next crisis? i'd like to know shift over to consumer protection because the scope of the foreclosure crisis

painfully highlights we must do a better job on consumer protection. you make specific comments in your written testimony about the need, support of a consumer protection agency that would adopt standardized rules across the country and to provide a level playing field. national banks have often complained that complying with consumer protection laws is uniquely burdensome. i think another lesson that we all have learned from this crisis is that states were the first to sound the alarm on predator lending, and, in fact, had many of those laws been applied to national banks, we would not have been in the crisis that we have today. >> mr. niemann, i think we should have a race to the top on these things, but we should have national standards. >> i think -- but that's always what we do here from national

bank. i spend a lot of time working -- i started my career at the control of the currency and have worked for national bank. so i certainly understand that perspective. there also is clear, it's clear that there are thousands of state laws that banks comply with, whether it be enforcement of contracts, foreclosure process, zoning, debt collection processes. why is it when it comes to consumer protection that banks don't seem to be able to comply and assert that these are overly burdensome? >> we're living in a national market, whether we like it or not. we're a national business in what's actually a global market as well. for consumers we believe that if you go from one state to tore, there should be some parity on how you are treated. we also believe, by the way, clearly that these kind of rules can increase the cost to us and that can, therefore, unfortunately translate into higher costs for consumers. more importantly, whenever you

have different rules in different states, you create the possibility for regulatory arbitrage which is almost always a race to the bottom. weed rather have a race to the top with common standards. the highest standards. you pick them. >> my time has expired. maybe we'll come back to this. >> mr. pandit, bear with us a bit longer. we appreciate you being here. we're going to do short questions. we'll get through the last part quickly. i want to ask since it seemed to be a problem for mr. >> the rating agency, i heard you earlier, has put out reports where it is their opinion that there are different standard. it is their opinion. this is only their opinion >> is a guy able to have a higher credit rating?

>> let me take you to where the markets are. the market blip the capitalization. the markets would get reserves. we issued debt. or how long and might take. >> i think it would be hard to make the case that we can see some date in the immediate future when citigroup will not be too big to fail put a but me ask it differently. is it bought able to have a high credit rating? >> -- is a valuable to have a higher credit rating? >> it is proceeding very clearly that the resolution is going to get past. despite that, we are borrowing money pitt.

redit spreads. that's the market's reaction. >> but standard & poor's, the rating agency, is giving you a bump. the bump is valuable. do borrowing costs differ for companies rated a, for example as citi is and bb as standard & poor's says it would be if it didn't have this too big to fail guarantee? >> as we look through how the credit markets look at credits, ratings are one of the things they take into account. but in this particular case they've also taken into account the fact there will be a resolution authority. it is our view that we're borrowing on us being around because of our capital base, because of our earnings. >> mr. pandit, it's your view despite your a credit rating you're borrowing at the same cost as all of the bb companies?

>> we're borrowing at our spreads. the markets reflect spreads that are based on our prospects, our earnings, our capitalization. >> maybe i should ask it a different way. is there a competitive advantage for a company that has an a credit rating as opposed to a bb? >> in any normalized market, there can be a competitive advantage for a rated versus bb rated company in terms of cost of funds. >> but it's your view that citi isn't set that from its higher rating, it's not getting that benefit of being a rated? >> our view is we're borrowing on the basis of capital, on the basis of the market's understanding there's going to be resolution authority and we better manage our business correctly. >> unlikes other businesses you don't get a competitive advantage by rag that rate sng. >> ratings are one of the factors taken into account by borrowers -- lenders when they buy our paper. it's one factor. they have to take the whole picture into account including, by the way, the fact that we are

proposing, let's have a resolution -- >> i understand it's one factor. can we both stipulate it is a very helpful factor. >> sn. >> again, how can ratings not be helpful factor. it is a factor. i keep coming back to say we raised money of very long maturity. >> i understand, and if we had longer term we could talk about paying for that. >> i just had quick questions about, just looking forward and the business generating. we all want obviously citi bank to be happy, healthy and ppaying back the tarp funds. when you look at the growth of the target base, it looks like some of your greatest opportunities may be abroad rather than the u.s. do you see any potential problem there, vis-a-vis the treasury's interest, u.s. taxpayers' interest in growing your business overseas?

>> again, a big part of what we do is connect businesses in the u.s. through the world. and we conduct those operations on the ground that are necessary for us to be able to do that effectively. that, by the way, is on top of the fact that we actually are a significant factor in the u.s. market as well we lend in the u.s. we provide credit card loans, provide mortgage loans, provide corporate loans. so our 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, to whichever consumer base you want to sell your product to. >> is it it good to have a business base, deposit base, not just in the u.s., but other country sns. >> i think sources of funding are really important. having diversified sources of funding are always an advantage as well. >> there's a proposal for an

industry liabilities tax which would basically treat foreign source deposits as a tax liability in this case and then thus be taxed. how do you view those sorts of proposals? >> i think each of those proposals have to be looked at in the context of what's the economic impact. economic impact on our ability to serve their clients. what does that mean for jobs? what does that mean for gdp? those are the things that have to be looked at. >> it's a bigger view than just looking at individual small questions, you to look at the totality of it. >> absolutely. there was an organizational study done for you all that i guess you didn't necessarily implement all of the recommendations. did that have an effect in helping you decide what sorts of things went into city holdings or might yet to go into citi hold dijs and what are part of your core business? >> yes, we went through a lot -- again, a very deep, very

thoughtful process. markets had changed. funding markets had changed. where u.s. growth is going to come from changed, including, by the warks foreign consumers are going to consume more. we took all that into account, and that's how we came up with citicorp as our future. >> the rest of these recommendations, are they still potentially on the table or are you still reviewing those sorts of things or do you view it as a closed book is? >> as you can imagine, i constantly look at what's right for citi, what's right for shareholders, what's right for clients. but i believe a large part of our thinking is reflected in what we already talked about. >> okay, super. thank you very much for being here today. >> thank you mr. atkins. >> mr. silvers? >> mr. pandit, you were talking about what's in the interest of shareholders. obviously the united states government is a large shareholder. but i think -- i am concerned about what i read in analyst reports and the like about a

reversion to the kinds of dynamics that led your predecessor, mr. prince, to come to treasury and beg them to tell him to not lever up so much. that effectively there are ways of generating shareholder value that are not sustainable. if those ways are pursued once again, it's the united states government that i believe will end upholding the bag again. in that regard, can you tell me what you're doing to ensure that those types of short-term, unsustainable strategies, particularly releavering are existing? >> we have a completely clear new strategy. it's about serving clients. why am i doing something? is it in the interest of clients? that's number one. number two, i have a completely redone management team, lots of new people who understand what it means to run business. a great team we've puting to. we have a new board with a lot of financial services expertise, regulate erps ton board, people who are asset managers, people who have run banks, run

businesses. they're on the board. in addition to that we changed our risk management completely. the risk management structure looks at products, regions, businesses, triplicate to understand exactly what our exposures are and our risk profile, risk appetite has changed. so this is a different company. that's been the goal i've been moving towards. i still have those assets that citi came into this market with but it's a different company. >> i'm not so much talking about the assets on your balance sheet as the liability side and the pressures that i'm sure you're reading about and hearing as i am opposite ti to relever, to reduce -- talk of city being over capitalized and the like. >> i'm glad to hear that we're over capitalized, mr. silvers. >> depends on who is saying it. if people are saying it who have a clear interest, short-term equity traders, if you listen to them, we could easily endanger the -- we could easily

essentially put the fisk of the united states in play once again. >> you can skount on me. you can count on my management. >> that's what i'm looking for. >> you can count on the board to run this institution prudently in the interest not only of our shareholders, but starting with our clients and being systemically responsible. the biggest change that i'm making at citi is to develop a culture of responsible finance. that's the legacy i want to leave behind. >> mr. pandit, i appreciate the answer. can i ask one more brief question. in your written statement you alluded to citi group's support for a consumer financial protection authority. that's a different word -- i'm trying protect you against my colleague paul atkins' accusation that you're parroting the administration. that's a different word than the administration uses in its white paper. they talk about a white agency. is there a meaning to that difference? >> i do believe we need a folk

cal point of consumers. i do believe this area has to set national standards, has to promote clearful disclosure, look at consumer markets, all of that. there are lots of different architectures that can actually create that. >> so i'm wrong, you do agree with the administration's position on this? i just want to understand what position -- >> my position is that there are a set of functions this consumer authority must serve. my position is that this authority must have the ability and the authority to execute on its functions, but that the architecture of this can be looked at in a lot of different ways. >> thank you. >> mr. mcwatters? >> i have no additional questions. thank you for appearing today. >> i appreciate it, mr. mcwaters. >> superintendent niemann. >> i'd like to come back to our question on consumer protection. i very much liked your characterization of a race to the top. in fact, with your protection,

i'd like to use that in future speeches, because i think that's really where we should be going and how it should be characterized. i would believe that the best way of getting there is that rules at the federal level be a floor and not a ceiling if you really want to have a race to the top. so my question is, is on this issue of preemption in that context, is it a necessity or is it just a preference? >> mr. niemann, i can clearly see the different points of view on this. different people can be there. i can see -- rationally i can see both points. i can just tell you what i believe. i believe it's better for the country, better for the consumer that you take the best standards and make them national. >> and we hear -- and i agree with you, and to the extent that they are made national standards and they are the best, states, in fact, have been very reluctant to go further. one good example, we always hear

that states, the fear from national banks is that there's going to be a patchwork. graham leach blyly in its adoption of the privacy protection rules said we're going to have a national standard, houfr states can go further to protect consumers. only a handful of states have done that. i think that is the right model. so i would be interested in your perspective on that. >> again, my perspective is still the same. i believe in the highest standards for consumers, absolutely. we think what's good for the consumers is good for the u.s., good tore the banking system, et cetera. i also believe we're a national market. real really are a national market and shouldn't we all just get together and figure out the best standards. >> we should. but we also have to recognize that events change very quickly. and one lesson that we've learned is that states had identified so early on issues around subprime lending and predator practices. one issue that we haven't -- is

often lost in this debate is around duty of care owed by financial institutions. there have been a lot of focus on cfpa as to where it's located in terms, product terms. but what i think is at the core that sauchb overlooked is what is the duty of care owed by financial institutions to -- in offering products. interest-only products may be certainly suitable for one level of customers and not another. how have you addressed the duty of care and issues around appropriateness of products in your retail business in particular? >> absolutely. that's one of the first things that i made sure of that we changed when i came in. we've changed the underwriting standards. we made sure that our products are those that we believe are suitable for the customers we're selling these products to. i think suitability is an important issue. >> i'm glad you raised that term because that is at the heart of

it. >> but i also believe, by the way, that you can't be the lone ranger on some of these things and that you do need collective action occasionally, and it's not going to happen by having just one bank stand up and say that's where i am. it needs a focal point. that's why we think we need -- >> that's why i think we need a new federalism, a new level of cooperation between the states and the federal government with respect to bank supervision and consumer protection. >> thank you. i wish that assistant secretary allison had stayed to hear your [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

for >> in just a few moments, a briefing on operations and at guinness tempered and. in a little more than half hour, and looked out of the president's budget will affect the low-income people after that, house debate on $15 billion jobs bill. s>> we will talk above the political future of represented john rangel from the new york post. the head of the u.s. agency for international to a felony. for more about the health care debate with john dingell of michigan. for and our series on the

president's budget continues with heidi, headed the institute for women's policy research. "washington journal" is like every day at 7:00 a.m. eastern. classical live events to tell you about. the british direct inquiry commission hears from prime minister gordon brown at 5:00 a.m. eastern. at 1:00 p.m., mr. romney at the financial press club. his new book is titled no policy, the case for american greatness. >> not a pentagon briefing on afghanistan. thousands of marines and afghan troops are in the seven city of marcia to establish security services. the marine commander is lawrence nicholson. this is 30 minutes.

it is my privilege to be able to have the commander and second marine of the brigade. he assumed duties in june of 2009 and is doing this from camp leatherneck in afghanistan today. it is going to give a brief overview of what they have been doing it takes some of your questions. welcome. thank you for your time this morning. let me turn it over to you. >> good morning. i do not have an opening statement. i have a few comments.

and he hit a few of those. probably, it will cause some interest in a wide variety of topics but we are on day 20. we are going into day 21 of operation restore, plan 38 off. my headquarters is working. we have asked ken marines, and navy, and an army strike and. i would just like -- he see a lot of it about marjah the

mukasey. -- it being a city. it is almost 200 square kilometers. it is a pretty significant area. on the 13th of february, rtc 7 inserted three companies of afghan and u.s. marines afloat between the hours of 02 and 05 that night. for it was supported by colonel johnson. but we wanted to accomplish was to get into the center of marja and start clearing out. we were able to insert all of our forces. we wanted to wait until first like to be a will to move our

ground. we were prepared to reach several different sites. we have a deception operation. at first light, we moved swiftly. we are able to get through the minefields which were significant. we have a lot of time to plan. we are able to move in relatively unencumbered could do we got about 4000 marines and afghans into marjah relatively quickly. then never has grown quickly. the include all the support there is involved. within marjah marsha today, we have about 1500 afghan soldiers.

we did a little shaping. the time for 23 did a great job of holding 11 bridges that connect it marjah to the canal there. >our goal was to come in there and grab the horns of the dilemma. there was a prize. every objective was to get to the people. as important as the tactical operations were, the tactical objection of the tub and the psychological. we have been here for 10 months. wherever we go, they did a good job. when you go into marjah, there

was a provision consistently about when with the backing government go into marjah. i understand it. -- the afghan government would go into marjah. i understand it. for i think the second and third quarter will have tremendous benefits not only for hellman, but for everyone from t. we've had about 40 media with us over the last month. i think the afghan army is pretty well. some units are better in units. they have done exceptionally well. they have been operating independently. we have some newer asking units. i think there is a wide variety

of the afghan army experience here in. i am exceptionally proud of their great service. they run as the sound of gunfire. i talked to the marines. they told us how happy they wear. marines in the surge in the homes. if you search a home, the guy's going and will be afghan soldiers. they have done that very well. they have earned the trust. when we did the operation in july, for every afghan soldier, we had about 10 marines. for this operation, it is our is a two-one ratio, maybe a little less. it may be closer to 3-1. this is a tremendous improvement in not only the numbers but the capability of the forces that we

have. we are working with the cop. i do not know how long we will have. one of my greatest concern to in the beginning has been the type of police that we are attracting. at the ended the day, the stabilization inside of marjah by the afghan government has to be led by them. we understand. on day three, we had 36 context. the contact. >> did not had direct fire in marjah in the last eight days. i think we are very pleased with how things have settled sell. it is not mean it is over. the threat is real.

we will continue to work in terms of clearing it. since i went to school this morning in marjah, there is not been schools open there in many years. the fact we now have 710 attending school was pretty significant. we have a very skeptical population. unlike some of the other areas, we are always wondering -- the population is concerned about what we are going to be able to do for them. they are tainted by the former experiences under the afghan government. i think the governor and his team are trying to convince that this is different. this is not the government of three or four years ago. the forces and police sector here, the leadership, is here to serve the people. i think all of us understand

that in counterinsurgency operations, the people are the prize. the people will vote. we are in competition every day. oopwe are in competition with te taliban. i think we have a narrow window of opportunity in marjah to make the first impression. you get one shot dead. we are working very hard 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 two 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.

pan2. >> "washington journal" continues. host: our final guest is ron haskins, economic studies senior fellow at the brookings institution. we will be talking about programs within the federal budget that our aid to middle- class and also people who might be living below the poverty line, how the need has changed and federal budget and congress has responded. to tell you about our guest and what brings to it, he spent in number of years at the house ways and means committee on capitol hill as staff director when the welfare law was written and was part of the human resources subcommittee. he also was a senior advisor to the president for welfare policy from february through december 2002. phd in developmental psychology and also was nco in the u.s.

marine corps. he brings all that to the discussion. thanks for being here. guest: glad to be here. >host: let us talk about what has been in the use because -- in the news bause of senator bunning's hold, unemployment benefits program. how has the financial recession change in the demand level? guest: huge. they are all out -- at their all-time high. we could spend as much as $150 billion and in a typical year we would spend 20 million -- 20 billion or $50 billion. the program is in tiers -- fundamental, everyone has a right to 26 weeks if they need qualifications and sometimes an extended benefits program if unemployment reaches a high level in certain states. people could get up to 90 weeks of benefits, and we will spend

$150 billion. one of the worst consequences is the states have to pay the benefits, the basic benefits and part of the extended benefits. and they have an account that the federal government keeps. it is based on state taxes, so states pay money to the federal government and put it in an account and supposedly save it for the state. these states accounts are devastated. more than $30 billion in debt. it is predicted they will go to $90 billion in debt and that is all money the states have to pay back in the states are already in worse financial. the impact of unemployment on the whole system has been gargantuan. host: why are the state accounts in such bad shape? guest: we are paying such high benefits. host: but the people working to pay taxes -- guest: and that is as well. and almost every state -- already 30 states are raising their taxes for 2010, which is a no-no during the recession, but they have to because they are

belly up in the trust accounts that they have to pay back. yes, increased taxation -- in fact, it is a principle of government if you spend a dollar, eventually at some point there has to be a dollar worth of revenue. we are violating that now because of the deficit but in the long run we have to live up to it. >host: what is cobra? guest: policy put in place many years ago that allows people to keep their coverage if they lose their employment, so they still have to pay but they can keep their coverage. that was a very important policy, a very good policy. that has been extended as well. host: are there any federal dollars to support it? guest: i am not sure exactly how it is financed. it is primarily financed by individuals paying for their insurance. you get to keep the policy, but you have to pay both your share and the employer share. mostly health insurance is paid for, most of the insurance,

other than medicare and medicaid, is paid both by employee and employer. and obviously once you are laid off the employer no longer pays a share so primarily they come from employer and employee, so when the employees of it is just a ploy he. host: we are talking about federal programs supported by your tax dollars that provide either temporary or long term assistance to people in need and how they might have changed as a result of the recession. the phone lines will be on the screen. you're welcome to call-in entellus about your experience. the job is to give the basic primer. i have a chart that gives you a big overview. let me put them on the screen so people can be familiar with some of the areas we're talking about. first, a program we all call food stamps but the acronym for the federal government is snap. guest: they changed it because the food stamps had negative

publicity. host: that will help a lot. guest: a big difference. host: $57.2 billion. a unemployment insurance, $49 billion. supplemental nutrition program for women, infants, children, $7.6 billion. heating and energy assistance, 3.3, tempore assistance for needy families, $2.5 billion, homeless assistance programs, $2.1 billion. i will stop right there because there is a lot of detail. let us start with food stamps. again, how has the demand changed? guest: demand for food stamps has exploded just like demand for unemployment insurance. host: who qualifies? guest: roughly speaking, people who are poor. you can get food stamps something on the order of 22 for $23,000 of income. most people on cash welfare --

temperate assistance for needy families, eligible for food stamps. but a lot of other people. the elderly, kids. food stamps is in effect a guaranteed annual income. everyone is qualified if they meet in, and resource requirements and they could get several hundred dollars a month. i think $100 per person per month. there are restrictions. it is food. you can buy cigarettes, wine, liquor. you can't buy hot foods and you cannot eat out. only four food in the grocery store. host: has congress responded by increasing the dollars allocated? guest: they have to. the way it works, the congressional budget office at the beginning of the year estimate how many will be eligible for the program, so in times like these, the estimate big numbers. they missed it the first year because nobody realized unemployment would go so high. but congress has the appropriate more money. this is called entitlement

programs, it and if congress does not appropriate money people still eligible so congress has to make up later. others are not entitlements. if the money is out -- almost all of the housing programs are like that. in food stamps, if you are eligible you get the benefit. host: 1 administrative change, anyone on them or in grocery line -- they use debit cards. guest: that is a fairly old policy. there was major legislation in 1996 that advanced that policy and it was quickly implemented after that and i think every state now uses the debit card. i think the general feeling is when it was passed -- they had done experiments in several states -- it worked well. it reduced fraud. i would say on the whole it has been very good. host: also administrative cost, not mailing vouchers. guest: it should. most of you talk about the change in the name because of a stigma that might have been

attached. debit cards, everybody uses the cards. is that another byproduct? guest: you don't have to flash out the food coupons. there are people who recognize the debit card -- it does not completely eliminate the stigma but it is a step in that direction. host: let us do the cash program -- guest: used to be guaranteed income. now it has a strong requirement. an amazing results. there used to be 5.2 million families on the temporary assistance for needy families program and now there are less than two and 80% of those mothers went to work. over 90% mothers on the program. host: is this what we called welfare? docca it is still called

welfare. but in 1996 -- guest: it is still called welfare. the cash payment has gone down. it has been controversial in recent years because unlike food stamps and unemployment and medicaid, those programs that responded when the recession came they increased. but it did not for long time. it is not clear exactly why. but many people pointed out, republicans and democrats, that a safety net program should increase during a recession, it stands to reason. it is increasing a little bit now but nothing like food stamps and unemployment insurance. so the probably needs to be some changes in the program because people need cash during a recession just like unemployment insurance, which is also cast. some people who run up and and -- run out of unemployment qualify. but i would point out, this is the only federal program that really has a strong work

requirement and it is observed, the states enforce it and it has made a tremendous difference. host: the spending on welfare is how much? å4 dollars been well spent, how effected is the federal government in ferreting out fraud? guest: in welfare programs i

think the federal government does a fairly good jobs. there are strong requirements. you always have a trade off of really giving benefits for those who need it and have a tight program that refuses benefits to people who miss some qualifications. i would say on a whole, on a 10- point scale, on welfare, seven. food stamps -- in the old days, i would get eight or nine, but it has become so tight so the back of a little bit. i would say on a whole, waste and abuse -- the federal government and the states do an excellent job. host: a primer on how the social programs work. austin, texas, ardell is on the democrats' line b caller: thank you. my question -- hello? i'm self-employed and have been

self employed for the last 14 years. self-employed a mover. the most money i grossed one year is probably $25,000. yet i pay taxes every year. i have never gone a year where i have not had to pay taxes. i report my money honestly. i have never been eligible for unemployment. i make too much money to get food stamps. it is very hard for me to believe in any of these policies because they cannot apply to the self-employed, it seems to me. and the reason i am self employed because of a felony i got probably 15 years ago, never in trouble since. but because i have a felony conviction it is hard for me to be hired in the regular market, so i work for myself. what is being done to help other people -- some people are self

employed -- what is being done to help us to be able to get these things that everybody else qualifies for? for the last two years i lost at least 90% of my business because of the way the economy is, but i can't get any assistance. i never hear you say anything about the self-employed. host: on eligibility and the self employed. guest: i congratulate you for starting your own business especially given the disadvantage is you have. i think that is a wonderful thing and i congratulate you for paying its taxes. if you lost 90% of your business and your former income was 25,000 you are definitely eligible for food stamps. everybody in the country who has low income and low resources -- you might have to much property, a car, house, what ever, that would keep you from getting the benefit. but i think you'd need to check into that. you are eligible for food stamps. the concept of welfare is that

people who do not have many resources and did not have much income, are eligible for these programs. some of the programs -- but the cash -- like the cash program, as strong work we -- work requirements because americans do not like to give work -- and my way. you could qualify as long as you meet income and resource standards, you would be eligible for the benefits. host: question by twitter -- guest: the states with the most population -- california, new york, florida, texas. some have low benefits, especially florida. a this is a long, complicated story. in some of the programs they get less money than they should based on their population, because that is because of the old days they had low benefits. those to get the most unemployment insurance, they get the most in food stamps, they get the most in medicaid.

the biggest states. roughly speaking it is proportional to population. roh host: is following up on the changes -- guest: i would think the honest answer there are moderately good day care programs. there are some excellent programs. but roche -- most research says 70% are mediocre and maybe 15 percent are bad. the federal government more than doubled the amount of money for day care. there is still not enough to go around. this program is capped. even though congress doubled the amount of money and increased it a lot more sense than and even though we had $7 billion -- there is still not enough to go around. president obama has already increased daycare twice now and it is in the budget now. there will be even more.

but families still have to pay some of the money runs out. it may not be fair but that is the way the system works. host: michigan, independent line. caller: i've got kind of a comment and maybe more requests and, i will try to make it brief. i am retired. i work two part-time jobs because i cannot find a full time. as everybody knows or should know, michigan is in a real economic depression at best. i guess my comment is, i hope that people in washington are paying attention to those of us out here who really got hit hardest. i say that because everybody knows it is the lower and middle class who pays most of the taxes when you look at it on the scale. the higher up, they are able to find ways to get out of taxes. we need some help out there. i have never had issues in my

life and now i'm looking at i'm the only one bringing money in and i'm bringing in every time it checked that looks like every few months i am paying more and more out of my retirement check for health care, whatever. taxes and the states, as mr. haskins says, states are looking to increase taxes. it is hard to pay taxes if you don't have the job or money coming in to do it. it makes it kind of rough. host: a question for you. if you are working two part-time jobs, as you transition into this sort of work, have you applied for any federal or state assistance programs at all? caller: no, i have not. host: have you given it consideration? caller: i have not heard there has been anything available. so far i have been kind of holding my own because i did not know where it is going because my wife's unemployment has been cut. she has been collecting for just a hair over a year and all of a

sudden even though the benefit was supposed to be there, it is not there anymore. guest: i would check back on the unemployment because congress just passed another extension, and if she had a year of unemployment, michigan has some of the highest unemployment in the country and that triggers these extra tears of benefits. she may qualify. it sounds to me from what you said you probably qualify for food stamps. but let me say a word about taxes. taxes are always so confusing because we just say tax but they're all different kinds. there are lots of federal taxes for roughly speaking, two kinds. income taxes, which are inversely proportional to your income, and social security taxes, which you paid from the first hour, which are very different. individual income tax is extremely fair, extremely graduated, upper income people -- they may be able to achieve here and there but they paid the overwhelming majority of federal

taxes, people who make over $150,000. people who make a lower amount of money, especially people under say 30, 35, 40 and change, they pay no taxes. and indeed, the mothers who left welfare, they actually pay negative taxes. the federal government sends them a check, earned income tax credit. that is primarily for families with children. it sounds like you would not qualify. but i think your taxes are primarily social security taxes and state taxes and not federal income taxes. many americans do not understand we have an extremely fair individual income tax system. host: we have a debate on twitter about the cost of all of the programs and deficit spending and increase in the federal debt -- this person says, how will we pay all of the debt back?

guest: funded out of deficit spending. i am at brookings institution but for seven years we have a project -- we published books and articles and we even toward the country, been to something like 60 cities, trying to tell the nation we got to start paying our bills. this deficit financing is a very bad. and it has been a bid conflict in washington about the stimulus package. almost everybody thinks we should spend more in a recession but we do have to pay it back so we ought to make some kind of commitment and actually initiate starting paying back some of the money like the states are having to do with unemployment insurance. so whoever wrote that is exactly right. this is a huge problem and it will haunt us until we do something about it. host: rolling rock, north carolina. steve on the republican line. caller: ever since i was 15 i have been paying income tax and now i was 68, i got my hand out

to get social security that -- back. they cut the 3% increase last year. i understand they will do it this year. taxes have gone up. milk has gone up. i'm taking so much less home. i am wondering, if you want the seniors to be in that line, too, collecting benefits? i can't understand why -- who in the white house, underneath the white house of ruth, doesn't get a raise every year? that is really my question. guest: of the way social security works, there is an automatic cost-of-living adjustment every year. last year -- you said 3%, that is roughly what it is most years. last year, though, there was actually a decline in average incomes of the cost of living did not go up. but nonetheless, the president decided and the democrats decided to send a check to

people anyway so people who previously got a cost of living, so called:, got a flat payment -- i think it was $250. so people on social security are protected from inflation because they get the annual cost-of- living adjustment. social security payments are usually not enough for people to live on certainly compared to the way they lived before they retired but it does increase every year. host: waldorf, maryland. thomas on the democrats' line. caller: this is directed basically -- senator barraso was on earlier regarding health care. he is a prime example of the republican platform. if you say something long enough people will start to believe it. the president answered his question about the money for people who are -- who have health care as catastrophic care. the president told him if he was

making $40,000 a year, how much money would he have to put in the health savings account and he answered that in the american people heard what the president said and his answer. he did not have an answer but he came back with the foolishness about health savings accounts is only good for people who make decent amounts of money. i would just like someone to bring this to the attention time he is on tv. this question was answered so why do you keep bringing back up the same foolishness? host: thomas, thanks. that leads me to ask you about qualifications for federal programs. this week we began to hear a discussion about a new formula being proposed to look at the definitions of poverty. " the washington post" story yesterday --

guest: this is an enormously complex discussion. let me be very simple about this. first of all, to have a poverty definition you have to define a line and say people below this line are poor and then measure of their income to see if they are above or b#"úú)#j and we really have been at loggerheads. 15 years now, we have not really moved. so we have had several meetings at brookings. other people have had meetings.

so, the obama administration decided they were just going to move. so they are taking the results of all of these various studies. they considered -- they had meetings across the country and they will define a new poverty measure. this poverty measure, this is crucial, will not be the official. it will be published for the first time in fall of 2011 and it will take into account how much it will cost to have adequate food, clothing, housing, utilities. there will be consideration of geographical differences. there will be consideration of spending for medical care come out of pocket. it will change the definition of poverty and generally speaking there will be a few more people who did not meet this line, and baron lies the controversy. some people did not want more people in part because they say it is an argument for more benefits. it is not official, and it would be many, many years. it will not affect any benefits distributed to states or individuals.

host: at georgia, gregg on the independent line. caller: i had this question. i have had it for a long time. i keep hearing people talking about the insurance companies, health insurance companies, they take one-third of the money they received to pay for administrative costs, advertising, and profit. my question is, how much of the money that the federal government takes out of my pocket that goes through the process actually reaches the individual or the project on the grounds? what percentage of the money? guest: the federal government spends money in many different ways. i can talk with most knowledge about the welfare programs. typically in the welfare programs, that as virtual -- there is no -- virtually none that have 10 percent administrative costs but most are 5% or below. in the welfare programs, a very

high percentage of the money that the government gets from taxpayers actually goes to people who get the benefit. there are some exceptions. there is some cheating. there is a big program called the earned income tax credit that we talked about before, there are some overpayments in that program and they are way above 10% or 15% but the administrative costs are very low. the internal revenue service does a great job with the program. i would say the administrative costs are no more than 3% or 4%. host: maryland, maryann. caller: how are you, hun. mr. haskins, you just said and light. i worked for walmart -- i was forced to quit because there was a lady who came into the store with a card, the food stamp card, a debit card, and she kept telling me i've got money on

this card. i said, before i can help you, you've got to buy something. she went and got a cellphone and brought up to me. it would not go through. however, the black supervisor turned the key and it went through it and she got her $100 back. she said, i need two more hundred. the supervisor told her, go get a candy bar and i will ring up each transaction. she got $300 off of that debit card, plus she also got the cellphone. now, i'm asking you, i am 70 years old and i lost my job and i'm living on $1,000 a month from social security. i worked since i was 16 and i went and i asked to help me because i had build and rent -- they turned me down. they said i'm already getting money from the government. no, i worked for that money. i work for my social security.

i am 70 years old and i could not even get $5 for food. i am living right now on $20 a month on food. now, you tell me -- this is maryland. but i can tell you, it is not fair. and i thank you so much. guest: i agree, it does not sound fair to me the way you describe it. it is certainly not fair that the supervisor fired you for trying to uphold the law and then the supervisor broke the laws. you cannot buy things like cameras. there is no such thing as a foolproof system. unless the federal government had an fbi agent in every wal- mart, k-mart, grocery store, how could we know about these things? many of our programs depend on a basic level of honesty on both the people who receive it and the administrators to get the money. 99.9% of the cases they are honest. in a case you just described, they were not in the complicated it even more for some reason i

firing you. that is certainly not fair. i did not know exactly your whole circumstance so i cannot reflect on the food stamps, but i can tell you this, the food stamp criteria of how to make decisions on who gets food stamps and who does not are completely objective. in most places the program is barely -- very fairly administered. you may not like the requirements and the costs, and maybe you think people with more income should be eligible for food stamps, but that is a different issue than the fairness. the program is fair in this sense that it has carefully define qualifications and they are generally speaking equally applied. host: ballston, -- boston, democrats line. caller: until i became a part of the pool of job seekers i was an executive in the public work force system offering -- i would

hate to see the work force investment act not be represented in the conversation. i mean question is, i am curious why the obama administration and, frankly, previous administrations have not embraced reauthorization to get people reemployed or trains -- trained. it is underrepresented program. it helps people get jobs, connect to training, especially in in demand jobs that are desperate to find workers. when people say there are not jobs, there are jobs but there is a major skills gap. we were designed to take care of that but yet the reauthorization of the funding has just -- and the funding has been ignored for the last five years. host: i will jump in because our time is short. the workforce investment act is on that list. the funding level is $321 million. tell us more. guest: department of labour --

$10 billion this year. the money is focused primarily on low income families and people who are unemployed. and the program, even though -- here is the confusion. when you reauthorize the program you basically open up the statute and congress can do anything it wants to. it can amend the program, repeal the program, change and whether -- do whatever it wants. often because of this leads to such a big battles and congress is busy -- because this leads to such a big battles and congress is busy with health care, they will do what is called extending the program. it has not been reauthorized of the funding has been continued so the program continues to operate. it is rare that a program is authorized and congress cannot reauthorized it. it is just the money is not continued. that is what happens. no changes in the statute.

it is not an unusual thing. wia is somewhat controversial but i think it is more congress has not got around to do it but the money still flows. host: administered by the department of agriculture, correct? how about unemployment insurance -- does the department of labour and the states. host: how about the cash -- guest: health and human services. there have always been some people, and i think more and more every year, who think we have too many programs and to many departments. you just mentioned the big ones. we have 1000 programs. host: literally? guest: literally 1000, yes. we should have fewer programs. some of these are because the way congress operates and a member of congress who is powerful ones to have a certain program and they get it through we would do better if we had fewer programs.

they would be easier to administer at the federal and state level. host: sylvia, independent. we have 30 seconds. caller: will there be an unemployment next month for those of us in ohio? i heard it would probably end of the end of this month unless they pass another bill, and nine runs out in seven weeks. host: sylvia, thank you. guest: yes, t re:

without objection, so ordered. the gentleman from north carolina 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 what we had, but it makes a difference.

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 lately? it hasn't been used properly. a voluntarily employment verification system. while not perfect it is certainly far better than the current paper-based

verification method. if the majority insists on moving forward with this flawed bill, that in the end i believe will do little to create new jobs, we must ensure that this hiring tax break isn't used to hire those heree@,&mwrr 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 act and we should act today to bring them closer today. i wanted to remind our colleagues to focus in time -- just over a year ago this congress passed the american recovery and reinvestment act. as a result of that, more than two million jobs were saved or created. very important. all over the country, as members go home to their districts, they see evidence of investments in the future, clean energy jobs for the

future, the education of our chirp, the safety of our neighborhoods -- of our children, the safety of our neighborhoods, the creation of jobs, the stabilization of our economy, the stabilization of state and local budgets. as a result of that, just think of what's happened since this one@@@@@@@ @ @ @ @ @ @ b@ @ u℠,"

before president obama took office, america's g.d.p. shrank by 6.2%. g.d.p. for that quarter was negative 6.2%. just one year later, the g.d.p. grew in the same period by 5.9%. over 12% change in the growth of g.d.p. thanks to the american recovery and reinvestment act and, again, other actions taken. you know, when we were debating the recovery bill last year around this time, earlier in january, february, the stock market was around 6500, 7000. it's 10,000, an increase of over 3,000 points.

and yesterday we learned that america's manufacturing base grew for the seventh straight month and was now at its highest level in five years. still we must be unrelenting in our efforts to create more jobs. too many americans are unable to find work. in some cases we're talking about putting people back to work. in some cases people haven't had opportunity. coming out of school they have not been able to enter the work force. it's not just about putting back to work. it's about creating a broader universe of jobs to have many more americans participate in the economic prosperity that we hope for our country. today, we are taking another step in creating jobs along the foundation for long-term growth and prosperity. with the $15 billion in critical investments, this bill includes a payroll tax holiday for businesses that hire unemployed workers, to create

some 300,000 new jobs. with that privilege alone. and an income tax credit of $1,000 for businesses that retain employees. specific support to small businesses with tax credits and accelerated write-offs, extension of the highway trust fund. this is very, very important. allowing tens of millions of dollars -- tens of billions of dollars in infrastructure investment. $15 billion bill, but it triggers -- it triggers tens of billions of dollars more by eliminating the rescission of last year, by restoring the interest to the trust fund that was -- it was deprived of and by triggering contracting, tens of billions of dollars, probably one million jobs in this bill alone. in december, the house passed the main street act, jobs for

main street act, a broader measure for creating good-paying american jobs paid for by redirecting tarp funds from wall street to main street. . our key element to get americans back to work and strengthen our economy. i believe both sides of the aisle understand the urgent need to create jobs for our country and today we have an opportunity to do so. i know that some people have some concerns on one side of the aisle or the other about this provision or that provision, but the fact is that a million jobs will be created by this legislation. vote for jobs, vote aye on this legislation. i thank mr. etheridge and all concerned. mr. oberstar, the distinguished chairman of the transportation committee, so many others for

making this important legislation possible. it's difficult. it's challenging. and more is yet to be done. but i urge my colleagues on both sides of the aisle to vote for jobs, vote aye on this legislation. with that, madam speaker, i yield back the balance of my time. the speaker pro tempore: the gentleman from california is recognized. mr. nunes: i'm going to have to yield myself 30 seconds. the speaker pro tempore: the gentleman is recognized. mr. nunes: i would like to remind my colleagues here in the house that last year there was a provision offered that didn't cost $1 trillion, didn't cost $1 billion, didn't cost $1 million, didn't cost $1. that was a provision to let water flow to mike constituents in the san joaquin valley of california so people could go back to work. but instead nearly every member, every democrat from california in this congress opposed that amendment. last summer we had tens of thousands of farmers and farm workers standing in food lines in the most productive ag land

in the united states. the speaker pro tempore: the gentleman's time has expired. mr. nunes: i would like to yield an additional 15 seconds. the speaker pro tempore: the gentleman is recognized. mr. nunes: so, a zero cost provision could not go under this bill. and now we have farm workers eating carrots imported from china. so all this, talk about jobs, it's all phony. the american people have had enough of this nonsense. i would like to yield three minutes to my good friend from ohio, mr. latourette. the speaker pro tempore: the gentleman from ohio is recognized for three minutes. mr. latourette: madam speaker, i thank you very much. i have spent many times on this floor about my great admiration for the chairman of the full transportation and infrastructure committee, mr. oberstar. and he knows that this bill isn't fair. and he knows that this bill isn't fair because he produced a chart last week that has all -- has 15 states plus the district of columbia, so it's 51, and 22 states get nothing

under this bill. and four states walk away with 58%. not surprisingly i heard the speaker likes the bill, california gets 30% of the highway funding under this bill. and any member who is interested is more than free to come and purr you ruse this at their leisure. i give the chairman great credit. he was unhappy with this last week and he fate with his leadership and he has produced today a letter from senator reid saying he's going to fix it sometime in the future. now, two things, that's the second big lie. the check's in the mail. the other thing is i hope the majority understands a letter from senator reid just doesn't fill us on this side of the aisle with warmth and fuzzy feelings. if you want to fix the problem, fix the problem. and the problem is not fixed. this is not a jobs bill and i also admire the speaker of the house, but i admire her more today because she did not break into laughter when calling this a jobs bill. this is a no jobs bill. this is a faux jobs bill.

i look forward to the unemployment statistics tomorrow because i believe that within about 100,000 americans will have lost their jobs in the last month despite all these great successes. and continuing with my admiration for chairman oberstar, my favorite part of the speech that he gives on the stimulus package is, all those jobs which he created through the infrastructure spending and stimulus, 8% of the funding, so that means, you'll have to figure out math, but that means in an $800 billion bill, half the jobs were created by 8% of the funding. and that's thanks to you and the work that you and your colleagues do on the committee. the other half were created by about $750 billion. that's a strange, strange, strange investment. mr. oberstar: would the gentleman yield? mr. latourette: i would be happy to yield. mr. oberstar: just briefly. if the gentleman, madam speaker, could assure us there would be no senate filibuster or hold on the bill, senator reid would have been happy to accept our changes. but he estimated he couldn't

get that through the senate. so he agreed to fix in a subsequent bill and he put it in writing and we have to accept his written commitment. mr. latourette: my pleasure. my appreciation of you grows every day. i will tell you what, if you can crack the code of the senate, republican or democrat, then you deserve much more money than you make as chairman of the full committee, because they are a strange bunch. it doesn't matter who is in charge. they don't seem to do anything. i want to get to process now because the president down at this health care summit at player blair house said nobody cares about process. i got to tell you, i have never seen this. this is my 16th year in the united states congress. mr. etheridge made his motion, mr. etheridge of north carolina moves that the house concur -- the speaker pro tempore: the gentleman's time has expired. mr. nunes: an additional two minutes. the speaker pro tempore: the gentleman is recognized for two additional minutes. mr. latourette: i appreciate it. mr. etheridge of north carolina moves that the house concur in the senate amendment to the house amendment to the senate amendment with an amendment.

that is really a procedural mouthful. you know what it means? it's a procedural way to screw the minority, the republican party in this house, not only can't we amend your bill, not only did we get it at 9:30 this, we can't offer a motion to recommit. you know what mr. hoyer would be saying if we pulled that on him when we take the majority back next year? he would be screaming bloody murder and he would be right. madam speaker, as a result of that i would like to offer an amendment to this bill. the speaker pro tempore: the gentleman from north carolina would have to yield to that request. mr. latourette: i'll request the gentleman from north carolina to yield to me to offer an amendment to the bill. and if the gentleman doesn't think i'm sandbagging him, let me tell you what it is. i would move to add mend this bill to transfer the $13 billion in the sham tax credit that's not going to create one job and the dumbest idea i ever heard to infrastructure spending. i would further have in that amendment that the infrastructure spending now at $14 billion be distributed

pursuant to the house proposal that mr. oberstar has proposed which means every state in the unedown benefits not just california, not just states that are walking away with a bunch of money. mr. etheridge, will you yield to me for the pumps of offering an amendment? mr. etheridge: would the gentleman yield? mr. latourette: i sure. mr. etheridge: i thank the gentleman for his willingness to help. the rules do not provide for that. the speaker pro tempore: the gentleman from north carolina would have to yield to a unanimous consent request. mr. latourette: mr. etheridge, we'll give it another shot because we are not going to be able to hide behind the rule. the rule doesn't provide for amendment. it doesn't provide for motion to recommit. the only tool in the minority's toolbox. so, mr. etheridge, i ask unanimous consent -- i guess you need to yield to me for a unanimous consent request. would you yield to me for a unanimous consent request? do i have to ask him to yield to me or do i yield to him to yield to me?

the speaker pro tempore: the gentleman from north carolina would have to yield for any unanimous consent request. mr. latourette: mr. etheridge, i'm asking you to yield to me so i can make a unanimous consent request that you can deny. mr. etheridge: it's your time. mr. latourette: i'm asking you to yield to me -- mr. etheridge: no. the rule does not provide for it. mr. latourette: that's nonsense, first of all. because the speaker just indicated if you yield to me i can make my unanimous consent request. the speaker pro tempore: the gentleman's time has expired. mr. nunes: i would like to yield an additional one minute to make his unanimous consent request. mr. latourette: i'm going to tell you what, mr. etheridge. here's the deal. if you would yield to me, which apparently you can under the rules but don't want to because you think the rule says so which it clearly doesn't, read the bill. i want to make a unanimous consent request that the $13 billion in this worthless tax credit be transferred to infrastructure spending and further that that additional $13 billion be distributed pursuant to the house plan as opposed to the senate plan.

the house plan -- the senate plan rewarding only four states with 58% of the money, 22 states getting zero. mr. etheridge, i'm asking you to yield to me for that purpose. mr. etheridge: what was the gentleman's question? mr. latourette: i'm asking you to yield to me for the aforementioned unanimous consent request. mr. etheridge: the gentleman is trying to dot same thing that happened in the other body. you are trying to slow down this process. mr. la tourt: is that a no? is that a no? is that a no? mr. etheridge: the rules do not provide for that and need a u.c. to do that. mr. latourette: that's a soup sand writch answer. the speaker just said you could do it. the speaker pro tempore: the gentleman's time has expired. mr. latourette: madam speaker, this is nonsense. the speaker pro tempore: the gentleman's time has expired. the gentleman from north carolina is recognized. mr. etheridge: i thank the gentlelady.

i now yield two minutes to the gentleman from rhode island, mr. langevin. the speaker pro tempore: the gentleman from rhode island is recognized. mr. langevin: i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection, so ordered. mr. langevin: i thank the gentleman for yielding and for his outstanding work on this important bill. madam speaker, i rise in strong support of h.r. 2847, the hire act which will strengthen our economy by limiting job loss and creating new employment opportunities. in addition to provision that is will spur investment and infrastructure in construction projects, this bill provides much needed assistance and attention and support for small businesses in america. this bill includes a payroll tax holiday for businesses that hire unemployed workers. and tax cuts to help small businesses expand and hire more workers. small businesses, madam speaker, have borne the brunt of this economic crisis and their inability to act as credit to keep their businesses operating has clearly added to the high unemployment rate

across the nation, especially in my home state of rhode island, which has right now the second highest unemployment rate in the country. so, madam speaker, i urge my colleagues to support this jobs measure as well as working on additional legislation that helps small businesses and@@@@@

program that was supposed to keep us from going to 8% unemployment. now we are at 10% unemployment. the stimulus program before just added 31 brand new federal programs and increased spending. i'm the ranking member of the agriculture committee and spending in the usda has gone up 26%. at some point we are going to figure out the federal government doesn't have the solution for everything. this is not our only stimulus proposal or jobs proposal. in may of 2008 we had $168 billion stimulus program that did not work. in march of 2008, the federal reserve said we are going to shore up wall street with bear stearns, $29 billion. in july of 2008 the democrat congress and president bush came in with a $200 billion bailout of fannie mae in order

to shore up real estate. and not to be outdone the federal reserve a month later with the a.i.g. bailout, $85 billion that is now up to $140 billion that was supposed to avert financial collapse. and yet it did not. and then in october of 2008 we had a $700 billion tarp bill. then in january, $410 -- january, 2009, under president obama, $410 billion omnibus spending bill that was supposed to shore up the economy. and of course that brings it back to the other stimulus program. after a while we are going to figure out, everything we do is like cash for clunkers, it just doesn't work. if we want to help small businesses, we got to quick spending money. -- quit spending money. number one, number two -- the speaker pro tempore: the gentleman's time has expired. mr. kingston: 30 more seconds? mr. nunes: an additional 30 seconds. the speaker pro tempore: the

gentleman is recognized. mr. kingston: number two, we need to let community banks be released from some of the overbearing and unnecessary regulations in which they have to comply because that causes them not to be able to lend money and thus small businesses are tied up in a credit crunch. number three, we've got to let small businesses compete. we set rules, big business and big government, sets rules so that small businesses can compete. there are things we can do, things we can do together on a bipartisan basis. we need to vote this bill down so we can get through them. i thank the gentleman and the speaker for the time. the speaker pro tempore: the gentleman's time has expired. the gentleman from north carolina is recognized. mr. etheridge: madam speaker, i yield myself 10 seconds to remind the gentleman that how we got here was the american people lost somewhere in the neighborhood of 15-plus trillion dollars in the value of their homes and assets over the 18 months through july of last year. and until we passed something it started to turn around. since they gained about $5 thrill but we have a ways to

go. i yield a minute to the gentleman from kentucky, the gentleman, mr. chandler. the speaker pro tempore: the gentleman from kentucky is recognized for one minute. . mr. chandler: i rise in support of the hire act. this piece of legislation will help our small businesses heal during these tough economic times and help unemployed kentuckyians find good local jobs. the hire act cuts taxes for our small businesses and makes it possible for them to hire new employees making our small companies stronger and creating jobs for out-of-work kentuckyians. madam speaker, the unemployment rate is around 11% in the commonwealth of kentucky, and we have to do all we can to create and save jobs throughout this nation. small businesses are the backbone of our economy and the engines of job creation. investing in the long-term

health of our small businesses is one of the surest ways to economic recovery. this legislation isn't just about small businesses, though. it's about helping that mom, that dad who was laid off in the midst of this recession find a good-paying local job. the speaker pro tempore: the time of the gentleman has expired. mr. chandler: 15 more seconds. mr. etheridge: i yield 15 seconds. mr. chandler: i urge members on both sides of the aisle in favor of this legislation today because it's a vote for middle-class families, for small innovative startups and the long-term economic health of central kentucky and the nation. thank you. the speaker pro tempore: the time of the gentleman has expired. the gentleman from california is recognized. mr. nunes: thank you, madam speaker. i'd like to yield myself 30 seconds. the speaker pro tempore: the gentleman is recognized. mr. nunes: madam speaker, i still have yet to have someone explain to me from the other side of the aisle how the trillion dollar stimulus bill passed last year that was supposed to create 3.7 million

jobs, instead we lost three million, and how this bill that spends $13 billion or so, still a lot of money but not nearly $1 trillion, is going to create a million jobs as they continue to repeat on that side of the aisle. i'd like for someone to answer the question. i yield back -- i reserve my time. the speaker pro tempore: the gentleman from california reserves. the gentleman from north carolina is recognized. mr. etheridge: thank you, madam speaker. i yield two minutes to the gentleman from oregon, mr. defazio. the speaker pro tempore: the chair recognizes the gentleman from oregon. mr. defazio: well, i ask answer the gentleman's question. the emphasis is on small business, which is an incredible economic engine in my state and other states across the country. and secondly, there is an extraordinary emphasis on transportation infrastructure. the gentleman may be unaware that in august of this year, the transportation infrastructure trust fund is going to fall short of funds, delaying reimbursement to the

states and stalling out needed projects and investments across the country. this bill fixes that and once and for all we will get interest on money borrowed from the highway trust fund. that's what people pay gas taxes for. we are not going to reclaim that money. we are going to put people back to work and rebuild the crumbling infrastructure in this country. it will give us $1 billion more a month. i heard the gentleman from california talk about 58% of the bill. no, what he was concerned about was 58% of 1.2% of the bill which is .7% of the bill which under the agreement the chairman has reached with the leader of the senate will be fixed in the near future. and in fact ohio will get an extra $38 billion -- $38 million because of that and my state will get less. >> will the gentleman yield? mr. defazio: i will not yield. >> ok. mr. defazio: i thought it would be fair to put that in the

overall formula so that all 50 states would benefit because almost every state is suffering from unemployment including the gentleman's state. this will bring an extra $38 million to his state. and for every $1 billion we spend in infrastructure we put about 33,000 more people to work. we sure as heck need those jobs. so i stand here saying we need to pass this bill. yeah, the senate's dysfunctional, it's a mess and it would be cleaner to do it all at once but it's the best we can do dealing with a body that's just ridiculous. with that i yield back the balance of my time. the speaker pro tempore: the gentleman from california is recognized. mr. nunes: mr. speaker, i'd like to yield knives 15 seconds. the speaker pro tempore: the gentleman is recognized. mr. nunes: madam speaker, if you are going to spend $13 billion to create a million jobs, then why don't we just spend another $200 billion and we'd create 16 million jobs and everybody would have a job?

i'd like to yield two minutes to my friend from ohio to clarify an earlier point. the speaker pro tempore: the gentleman from ohio is recognized for two minutes. mr. law torette: thank you, madam speaker. -- mr. law torette -- mr. latourette: thank you, madam speaker. oregon gets $40 million under the bill of the $1 billion and over $11 million under mr. oberstar's proposal. are you going to give me a 7% -- are you going to yield to me if you say it's not true? mr. defazio: i signed up on the chairman's agreement and my state would not get those other funds. mr. latourette: that's what i'm saying. mr. defazio: i get about $30 million less. mr. la tore receipt: that's -- mr. latourette: no disrespect to your majority but you have not done such a great job passing bills so waiting for another bill to come -- try not to be partisan about this -- but this mess was created by

george bush and perpetuated by president obama because his transportation secretary says they don't want to deal with the six-year bill until march of 2011. 30% of the construction trade in this country is out of work. why would you do this? and to my distinguished friend from oregon is transfer the $30 million and put it in the infrastructure. put these guys to work. actually build something. and again, going back to mr. oberstar's wonderful speech that he always gives, jobs with 1% of that. wouldn't it be great if we could give him $14 billion rather than coming up with a goofy tax credit, if you hire someone for $30,000 you can save $1,300 if you give someone a bill. this bill is wrong. that's what i was talking about. i yield back.

the speaker pro tempore: the gentleman from north carolina is recognized. mr. etheridge: i reserve. the speaker pro tempore: the gentleman reserves. the gentleman from california is recognized. mr. nunes: i have no further speakers at this time. i'd reserve the balance of my time. the speaker pro tempore: the gentleman reserves. who seeks time? who seeks recognition? the gentleman from california is recognized. mr. nunes: madam speaker, if there's no additional speakers i'm prepared to close. the speaker pro tempore: the gentleman is recognized. mr. nunes: madam speaker, during this entire debate today, as the gentleman from ohio said, this is just a sham. and to sit here and complain about the senate and procedural things, i mean, we ought to do another sham wow summit at the white house. maybe that would clarify and fix the problem. we're not senators. we don't control the senate. i don't understand the math that you guys use. and no one's answered it yet. you guys spent $1 trillion last year, said you'd create 3.7

million jobs but lost three million jobs. now you say you're going to spend $15 billion and create a million jobs. so let's go over some math just so we can clarify things because i know that we're going to continue to hear that republicans are obstructionists, republicans have no plans. so let me just go over some math that perhaps folks will understand. the democrats have 250 some-odd votes in the house. it only takes 218 votes to pass a bill. and the u.s. senate, you still have almost a supermajority with 59 votes. so what's the problem? quit calling republicans obstructionist. you have the white house, you have the senate, you have the house of representatives. no more sham wow summits, madam speaker. let's get back to work. vote no on this bill. this is a scam. and i yield back the balance of my time. the speaker pro tempore: the

gentleman yields back. members are reminded to direct their comments and debate to the chair. the gentleman from north carolina is recognized. mr. etheridge: thank you, madam speaker. madam speaker, today we have an opportunity to start the process of putting people back to work. and i would remind and encourage my colleagues on both sides of the aisle to support this piece of legislation. a piece that some my colleagues have disagreed with will put people back to work. i'd remind you that there were nine republicans on the other side who joined as co-sponsors in the piece of legislation. so it was bipartisan in the senate side. and the hiring act does four key things. let me remind my colleagues of this in closing. first, it will give direct tax incentives to businesses to hire new workers. a provision still to the bill

that i introduced earlier this year. it also restores full value of direct payments, options for certain tax credit bond programs, including a program that has been supported for previous congresses. it really goes to the heart of what we're about. you know, if we really believe and say we are for children, if we really say we're for jobs, there are $22 billion worth of 0% school bonds, tax-exempt school bonds in this bill and this bill fixes the problem so they can go directly to the treasury and get the credit. those bonds can be sold. we can put people to work across this country building schools and infrastructure. that's in addition to the highway dollars we have just been talking about. and finally, madam speaker, it would give small business tax incentives to buy new equipment and to grow. that is an important piece. if we truly believe we are for small businesses, today's the

day we get a chance to put a vote on the board. are we for them or are we against them? they can tell very quickly because this bill will go to the senate and then it's going to the president of the united states for signing. and finally, it would fwiff our state and local -- give our state and local governments certainty for funding highway projects. you know, i've long believed if we invest in schools now it will save money in the long term and make our economy stronger and make a difference in the future. i served eight years as state superintendent of the schools in my home state. i co-authored the provision that we're talking about here. we can now fix that problem. madam speaker, i urge my colleagues to vote yes on this piece of legislation for jobs for the american people, schools for our children and

the chance to help heal and >> we're standing by to take you live to london, england for the british iraq war inquirey. testimony this morning by british prime minister gordon brown the spaniel examining involvement in the war and the circumstances which led to the 2005 invasion. also the war's aftermath. mr. brown is expected to take questions on british funning of the war. he served -- funding of the war. he served as prime minister

since 2007. our coverage will get underway just as soon as we begin to receive the signal from london. let's take you live now to london, england. >> good morning, prime minister. >> good morning, everyone, today the prime minister is here to give evidence to the iraq inquiry. this hearing takes place in the month leading up to a general election. from the time we began our work last july we have been at pains to provide the absolute

impartiality to have iraq inquiry. we've had to remain outside party politics and we have asked the political parties to respect that position and we repeat that request today. it was for that reason my colleagues and i originally decided that we should ask to see the prime minister, the foreign secretary and the development secretary after the general election. on january 19, the prime minister wrote he was preparing to give evidence whenever the committee saw fit. we discussed this letter and concluded that in the interest of fairness, we should offer the prime minister, the foreign minister to chance to give evidence before and all three have taken up this offer. we'll see the foreign secretary on monday morning. we have a very serious task before us to establish the u.k.'s involvement in iraq between 2001 and 2009 and to

learn the lessons for future british governments facing similar circumstances. we can only accomplish that task successfully if we are seen to be fair, impartial and apolitical and we are determined to do so. we recognize that witnesses -- of their recollection of events and we cross check what we hear. i will remind all witnesses they will be asked to sign a transcript that the testimony they give is truthful, fair and accurate. prime minister, you have been a senior member of the cabinet since 1997 and prime minister since june 2007. it has been borne in on this inquiry from the outside that the coalition's decision to take military action led directly or most often indirectly to the loss of lives

of many people. service men and women in the national forces, the iraqi forces and many civilians, men, women and children in iraq. still, more have been affected by those losses and by other consequences of the action. given all that experience, i should like to ask right at the outset whether you believe the decision to take military action in march 2003 was indeed right? >> it was the right decision and it was for the right reasons but i do want at the outset to pay my respects to all the soldiers and members of our armed forces who served with great courage and distinction in iraq, for the loss of life and the sacrifices that they have made and my thoughts are with the families. next week, we will dedicate a memorial to the 179 service men and women who died in iraq and

and the thoughts avenue prepares with all the families today. there were also many civilian injuries and deaths in iraq as well. british citizens and my thoughts and prayers are with them and we know there was a huge loss of life in iraq among civilians so any loss of life is something that makes us very sad indeed. i would like to acknowledge the sacrifice of those who lost their lives. i think that this is the greatest decision of all, to make a decision to go to war. i believe we made the right decision for the right reasons because the international community had for years asked saddam hussein to abide by international law and the obligations that he had accepted. 14 resolutions were passed by the united nations and at the end of the day it was impossible to persuade him that

he should abide by international law. my feeling was and still is that we cannot have an international community that still works if we have terrorists who are breaking these rules or in this case, aggressor states that refuse to obey the laws of the international community. i do think we have lessons to learn however, i think in three areas, i would like to discuss with you and i hope that you will take onboard the questions and the answers that come from these issues. the first is that we have been fighting two wars and it is essential that we have the proper structures of decision making and of course as time has gone on, both tony blair and i have changed the structures of decision making in the government and i think the second thing is we won the battle within almost seven days but it has taken seven years to win the peace in iraq and i think we are developing the concept of a just peace and how

we can actually manage conflicts like this -- in this case, the iraqi people and the third thing we have learned and i would like to discuss it with you. there will be interventions in the future and international cooperation has got to be far  greater than it was. global problems require better global institutions and i would particularly draw attention to the importance in all of this of the relationship between europe and america, something that i'm determined to build up and to continue to make stronger in the future. >> thank you, mr. brown. we would like to begin, if we may by discussing your role as a senior member of the cabinet. we would propose then to come to the specific issues, your responsibilities as chancellor and then your role as prime minister after june, 2007. first your role as a senior

member of the cabinet. >> prime minister, as the chairman said, i want to discuss your role as the senior member of the cabinet in the period up to march 2003. but before that, i would like to get a better understanding in your views about iraq because by 2005, the government had been in power for four years and had taken the action that iraq -- after 9/11 -- in afghanistan and what conclusions did you draw about the role of force in supporting the policy objectives? >> i think we had no alternative but to intervene in situations where there were two risks to the post cold war world. the first, the action of terrorism and the second is the action of rogue state or in the case of iraq, aggressive states and? the world community is going to mean anything in terms of our

ability to hear and our ability to deliver peace then we have to be prepared to take international action. it is of course, far better, if all countries are united in the action that is going to be taken but it has been necessary to take action in situations where either through terrorism we have been at risk in our owe country or aggressive states, the region in this case, iraq, the region of iraq, has been a risk swell. -- risk as well. >> mr. blair -- on march 18, 2003. that they were the link between terrorism and weapons of mass destruction, which constituted what he said a fundamental assault on our way of life and that -- regimes the w.m.d. extreme terrorist groups with the possibility of the two coming together rented what he

called a real -- represented a real and present danger. he made similar points in january to the inquiry. did you see a real and present danger of this kind coming from iraq in 2003? >> i think we're dealing with this post cold war world. after the end of the cold war, and the expectation that we would have peace and that the instabilities that existed because of the cold war were over, we found that there were a number of states and then we found that there were a number of non-state terrorists that were preparing to cause huge instability around the world. we will be seen as a post cold war era where you had terrorism like iraq and the relation to iran and kuwait.

in my view, the world community is just find in taking action where international obligations in this case accepted by iraq at the enof the kuwait-iraq war will not be -- and if you are going to have international law and international community then you need to be absolutely sure that the world community can constrain and impose rules and regulations that allow us to live in a peaceful world. so i'm not making a distinction between the two problems. these are two problems however that lead to -- >> i understand that. what i really want to establish is whether you saw this as a real and present danger in march 2003. >> the evidence that we had, i met the intelligence services on a number of occasions during the course of 2002 and early 2003. and in addition to my

discussions in the cabinet and in addition to my discussions with tony blair himself, i was given information by the intelligence services which led me to believe that iraq was a threat that had to be dealt with by the actions of the international community. of course, at all points, we wish the diplomatic road to be successful. throughout 2002 and early 2003, we were hopeful that the diplomatic route and the 1441 of the united nations would bring iraq to a sense that they had to cooperate and they had to disclose as well dismantle what weapons they had but the information that we had was information given us by the intelligence authorities. >> so you would agree with mr. straw, who i think told the inquiry that military action stood -- whether iraq posed a threat by reasons of weapons of

mass destruction. would you agree with that? >> my thesis is this. persistently iraq had been asked by the international community to disclose and dismantle weapons that every country who signed that united nations resolution believed that they had and that we had a responsibility to ensure that international law was upheld and the international community would mean very little if we could not in the case of a country that was in fact a serial violator of international law, we would have no sense that the political will would be there for future interventions which may be necessary if we could not show that we could come together to deal with the problem of iraq, but of course what we wanted was a diplomatic route to succeed and right up to that last minute and that last weekend many of us were hopeful that that diplomatic

route could succeed. >> your concern mainly was about the breach of the resolutions. >> yes, my view has always been throughout this episode that the sanctions and then the no flight zones and then the tightening of sanctions and then of course the deand in iraq disclose to the international community what it had and what it was doing. this was all about the implementation of a new international set of rules that were necessary in a post cold war world. that we had already seen how much instability could be caused by individual states that were either failed states of r or rogue states. that we have essentially failed in are you wanda to take action when it was necessary. we have triled hard in the balkans to take action but it

was hard. it was our responsibility to make sure that the international order could work for the future. >> can i move to specifically about your role as a senior member of the cabinet. we understand from early evidence that mr. blair discussed iraq frequently with you in private conversations. is that correct? >> yes, we had formal meetings of the cabinet. >> i'm coming to that but i'm talking about private conversation. >> i was going to say in addition to these formal meetings with the cabinet, i talked with mr. blair frequently. we're dealing with the economic issues and the reforms of the health service and issues including dealing with the euro and inquiring to how we would approach the euro but i would

talk about iraq and about the process of diplomatic negotiations. >> so you would say you were in the loop from 2002 to -- >> yeah, i think we have to understand foreign affairs, that i've understood since i became prime minister is quite different from the conduct of domestic policy and there has been a whole debate over many, many years. what you've got now is a unique situation where in the past 50 years ago, prime ministers and foreign secretaries would operate through ambassadors and memos and you've got instant contact between the prime minister and the american president and instant contact between foreign secretary and the secretary of state. that is true of france and germany and our relationships with them. foreign policy is essentially the prime minister and the

foreign secretary and the defense secretary involved directly with their numbers in every country and they are in a position to report to you and report to the cabinet about what is actually happening on a day-to-day, sometimes hour-to-hour basis and sometimes the intermediaries of the past there is a huge issue about how -- how individuals that work far more closely together. the better the relationships, the better the connect of the foreign policies. >> i understand. mr. blair told us there were lots of ad hoc meetings and he described a constant misdirection among the government on the key issues. were you part of that? >> i was talking from the defense secretary from june 2002 about what would be necessary in case we failed in

our diplomatic -- >> from what time 2002? >> from about june 2002. what we would have to do, i think you will find that the correspondence between the defense secretary and the treasury, that we were discussing what if our diplomatic efforts failed, what would we do and what would be the nature of our military engagement and i said immediately to the prime minister that the military options that were under discussion, there should be no sense that there was a financial restraint that prevented us from doing what was best for the military. i think the treasury did a paper in june about these very issues. i was then advised i think to talk to mr. blair. i told him that i would not -- this was right at the beginning. i would not try to rule out any

military option on the grounsd of cost. quite the opposite. he should feel free and it was the right action to discuss the military option that was best for our country and the one that would yield the best results and we understood that some options were more expensive than others and we should accept the option that was right for the country. >> when did you support the u.s. invasion for iraq? >> the decision was made by the cabinet. >> when did you become aware? >> at the last minute in march. right up until the last minute. i was hopeful, as i think the whole country were that we would reach a diplomatic resolution of these issues. >> that was a decision to go to war. but i'm talking about -- on u.k. support for the u.s. invasion if one was to take place. >> that we would support the u.s. invasion only at the last minute when we were deciding that it was not possible for the diplomatic route to work

any further. i remember going on television the sunday before the parliamentary board and the day before the cabinet decision on this matter and even backstage, we were hopeful that diplomatic routes could work but we were also worried that the united nations were preventing a resolution and it was not possible to imagine this could be sorted out simply by a delay. it was for me a hope right up to the last minute that a diplomatic action could work. i think in putting our case to other countries and the united nations, they should not be faulted because they tried everything in their power to avoid a war and i think you will see when i spoke to the cabinet on the meet, the day before the parliamentary board, i was very clear that we have had to exhaust all dip maic

avenues before we could conclude that it was in evidenceable or impossible to avoid a decision about war. these diplomatic avenues consider tried right up to the last minute. >> in the wake of 9/11 and the change of approach of the u.s. administration in 2002, mr. blair said that there were whole -- of discussion about sanctions and a very structured debate about the review policy of government strategic options. now you were not at the meeting that took place on april 2 at crawford. for craufed on april 2. -- crawford on april 2. were you part of this review that took place? >> well, clearly when sanctions were being examined, the treasury and the foreign office

would be involved because the implementation of those sanctions depends on the treasury's ability to do certain things as it does the foreign office but we were coming to a position where sanctions were being accepted by saddam hussein. he was finding ways around them. >> i know that. my point really is were you involved in discussions about -- and were you part of these discussions about -- considered in the early part of 2002? >> i was not at any meetings prior to the prime minister's visit to crawford but i would know about the discussions about sanctions. if sanctions were to be changed, the treasury would be involved and i would be involved in taking skgses. >> you will be kept informed by the officials in the treasury? >> yes, we would cobt continue to monitor what's happening with sanctions. it was obviously our policy in

reaction to iraq. the conclusion that we had reluctantly to draw was that sanction were not being effective in the way that we had wanted and were inflicting damage of the iraqi people and at the same time causing the greatest of concern to the ruler of iraq. >> has the situation evolved 2002, 2003. were you and other senior members on the policy? >> of course. we had reports that you will see regularly in the cabinet about the diplomatic course that was being taken and of course a lot of the discussions, the cabinet was being kept in touch about what was happening. i cannot see an argument that the cabinet was not informed. we were informed fully.

they were essentially focused on the diplomacy and the problems as well as the opportunities that came from that diplomatic process. >> were you informed with number so's exchanges with the white house and did you see mr. blair's letters to the president? >> no, i would not expect to see private letters between mr. blair and president bush. >> the conversations he was having, the private conversations. >> i would be discussing with him all the other issues we were dealing with and he would keep me up to date as he did with the diplomatic route. at the same time as i'm making it clear to you from june 2002, we at the treasury had to start making preparations in case there was a possibility of war. in june, we looked to the defense secretary with a number of options. we said finance was no barrier to discussing and concluding on

the best options. in september we wrote a paper about the reconstruction of iraq and looked at the problems that had to be dealt with if there was to be reconstruction had we ended up in a war that we had not solved. i think we did some very important work in estimating what the cost of the war would be and i think we got it -- i think our first estimate was $2.5 billion by 2006 and then it was $4 billion. i think we were right. >> ki just go back to your point -- can i just go back to your point about the cabinet meeting. mr. blair told us there were some 24 cabinet meetings. was the discussion substantive? was it an assessment of the risks or was it just information? >> i think at the meeting they

are getting a report from each of the crares where there are issues that have got to be reported. in the case of iraq, everybody was trying to get a diplomatic solution. the discussions of the cabinet were how we could push forward on diplomatic processes so we could get a diplomatic solution to prevent war. what was being reported to the cabinet on most occasions, what were the difficulties and successes of our diplomatic efforts to persuade the rest of europe and other countries in putting pressure on iraq or pressure in some cases of discussions with some of the other arab states. that was the main i think recorded in the cabinet -- at that time. we were anxious to avoid war. we had to prepare for it and are doing it in ways that were suggested. the cabinet was suggesting how

we can do more to move forward on a diplomatic route. >> my understanding is that was of course a diplomatic route backed by military threat and the information that the preparations and the meeting at crawford, the options that you discussed but were these properly explored in the cabinet? were contingency plans being made? talks about the military operation. was there proper discussion at these 24 cabinet meetings? >> i was aware because of the discussion i was having with the department of defense about the various military options that were being looked at. in fact, as you probable know from the evidence that you have received, one set of military options would have led us to -- if war had to happen, would have led us into one part of iraq. eventually the decision was to move into another part of iraq

and we became responsible for the basra area. that was not the original plan and that changed over a period of time. i was involved in discussions about making sure that sufficient resources were available to do that and i've always said the resources would be available but i would say the most general discussions that we had were generally the discussions were about the diplomatic effort but in different committees obviously, the prime minister was talking to the foreign secretary and the defense secretary about the options. i was not involved in these discussions but i was aware of the discussions because of the role the treasury had to play. >> you received, i know all in written briefings about the polls and planning. what issues did the officials raise with you? >> first of all, the cost and we looked at different estimates of what intervention

would cost depending on the options that were decided on and my view was that it had to be the best military option and we had to support the military decision that was made an not rule out any option on financial grounds. the second thing we looked at was the reconstruction of iraq and we how that that there would be world economy implications, for example. the oil price spiked $10 higher and that was an effect of the initial part of the war. we had foreseen that but we also had to look at reconstruction. i was determined, i may say, it is one of my regrets that i wasn't able to be more successful in pushing americans further on this issue was that the planning for reconstruction was essential just at the same time as the planning for war if the diplomatic avenue failed and we were working on reconstruction and what might be done. what i've called earlier, the search for a just peace.

we were looking at that early on. we had a paper in september. we discussed a number of options when it came to march, we had a special -- >> this is discussion within the -- officials. >> discussion with the treasury and officials but also discussion about how the international institutions could be brought in. >> did you discuss those concerns raised with the prime minister? with the cabinet? >> of course. we had a meeting with the cabinet at the beginning of march. >> march -- >> 2003. where we discussed the construction issue. i offered a paper that was to be sent to americans about the issues of reconstruction that was to be dealt with if there was to be military action. we were determined to understand how we could get the international institutions involved in reconstruction. we didn't see that it was possible for britain and america. there were some 40 countries available in the original --

but we didn't see how it was possible without the international monetary fund, the world bank and the united nations in the end being involved in reconstruction to get finance that we thought would be $45 billion for reconstruction. we were focused on this issue of reconstruction and, as i say, i wish that it had been possible to follow that through much more quickly in the aftermath of the first few days of the battle. >> what you're telling me, it seems to me that you have very comprehensive submissions from officials and you were fully appraised of these issues. how can you be sure what what was represented to the cabinet by your colleagues, how were you able to influence your colleagues about this issue? >> i think we had a meeting of the cabinet at the beginning of march in which we discussed -- the cabinet committee, we

discussed these issues of reconstruction. tony blair asked know prepare a paper that he then sent. >> what about the options? because there was a question, -- involved in south of iraq, the cost of that? >> i have already made it clear, the military option, to be one that was best for the military, the treasury would not in any way interfere and suggest that there were cost grounds for choosing one option against another. that was not our job. the treasury was there to advise on how we could deal with the financial issues that were roles from the military decisions and the political decisions that were made. so there was no time from june when the treasury said this is a better military option because it is cheaper or lest costly at every point, i made it clear that we would support whatever option the military decided upon with the prime minister and the cabinet there

would be no financial -- what was to be done. >> we've been told by some cabinet members that they had -- on intelligence. did you receive such briefings? >> i asked to be briefed. >> when was that? >> i've got the dates of the meetings for you. march 4, 2002. very early. december 9, december 13. february 24. i had five meetings with the intelligence. i was briefed on the evidence and information that they had and it was -- these were very full briefings. >> and you were convinced that w.m.d. was a real threat? >> it was evidence that was known to many countries. not just our country about the weaponry that the iraqi government held. and of course, at that time,

there was a greater certainty amongst the intelligence community that this weaponry was there. i think we have learned that intelligence can give us insights into what's happening but we've got to be more sure as people have recognized about the nature of intelligence that we were sing from certain people. >> thank you. >> prime minister, i wonder if i could just pick up one vital detail from your conversation, which is that in march of 2002, the cabinet's office produced an options paper, a streamic review of the -- strategic review of the courses available with iraq, the continuing containment of regime change in different forms. obviously a very important paper which we discussed with mr. blair. did you see that paper? >> i don't recall seing that paper. my main involving in looking at

the options started in june. >> do you think this is one of the most senior members of the cabinet that you should have seen that paper? you are going to have to obviously pick up the bills and you are also a key member of the cabinet? >> yes, but i think everybody knew that we were pursuing the diplomatic route and that sanctions were being considered and how we dealt with them. a no-fly zone had been an issue of course. there were options available to us. it was only when we became clear that we had to look at specific options. >> the treasury role was your role, as a very, very senior member of the cabinet. here was the government looking at the fundamental question of whether you continue the movement. people were pushing for regime change there. the government was looking at this choice.

isn't it curious that you were not actually shown the paper? >> i think i knew what was happening at the type. i don't think i needed to see every paper that was about this. by june i was very much involved in looking at the financial aspects. >> moving forward by then. ok. i would just like to form a clear understanding of the situation that the cabinet faced in march of 2003 as it came to the point of decision and perhaps in a few minutes move on to the conflict itself and its aftermath. you have talked about the need to exhaust the opportunities for diplomacy in trying to make peace. were you convinced that we had exhausted all possibilities for a solution via the u.n. and through diplomacy by the middle of march 2003? >> yes, i'm afraid we had to draw that conclusion. i think members of the cabinet

when presented with the information and the evidence drew that conclusion as well with one exception. i think that we have tried very hard on the diplomatic route. we have reached a situation where everybody agreed in november that there was an issue with iraq that the weapons had to be disclosed, that disclosure had to come and there was a final opportunity to do something about it. this had not happened in the intervening period. we have therefore reluctantly to come to the conclusion that there was first of all little chance the that saddam hussein would take the action that was necessary. unfortunately the countries that had signed for one, including syrian countries, like that, that we couldn't find an agreement about the nature of the action that was to be taken. >> we were still in a situation in which the u.n. inspectors were reporting they were

getting some cooperation from iraq and they wanted more time to pursue their inspections and many members of the united nations agreed with them. so shouldn't we have given them more time? >> but it was also obvious, i'm afraid that some countries were making it clear that they would not support action under any circumstances. whether we had begin them more time at that stage, of course it would have been far better if we had begin them more time. countries that signed 1441 were prepared to reach a decision at some point and that was not the information that was available to us as we made our cabinet decision. >> i would like to come back to that in a minute. on march 17 the cabinet decided that time had run out. is there a contradiction there? >> no, because i think people did want to exhaust the diplomatic process to the full

but by that weekend, it was clear to us that there was a number of countries that supported the original resolution that under no circumstances would agree to military action, even though people thought that was the only route ahead as saddam hussein continued to defy the united nations. so it was the conclusion that arose from other countries now saying that even if there was more time for the inspectors, they would not support action. >> you refered to iraq as an aggressive state and clearly iraq had been an aggressive state. had an appalling record of aggression under all of its neighbors under saddam hussein, but at the time we're talking about in march of 2003, was there actually a current threat of aggression by iraq? >> i think all the evidence that people had in november, let's say, before we come to

the march resolution, that all the rest of the world agreed that there were problems that had to be addressed by iraq if they were to be a member of the international community and they felt they had a final opportunity to deal with issues where he had not been honest with the international community and had nozz disclosed or dismantled any of his weapons. from november to march, the issue is not it seems to me that the rest of the world did not agree that there was disclosure problem or disposal problems. the question was whether people would be prepared to follow the rules of the international community that where someone consistently and persistently is a serial violator over the rules of the international committee, action has got to be taken. >> iraq had been in breach of these rules for many years and many resolutionses as you pointed out and the international community

responded to that through a range of measures. you responded through sanctions and no-fly zones. my question was was there a threat of aggression from iraq that required us to take this military action? >> the diplomatic route appeared to the cabinet to have reached a conclusion where we could not see the possibility of saddam hussein abiding by the rules of the international community. i come back to my original argument. for me the issue was we're in a post cold war world. we're dealing with instabilities that exist in different parts of the world. if the international community cannot -- then we are sending a message to other potential states and aggressors that they are free to do as they will. for me the issue was are we as an international community prepared to follow through the logic of our position and when the diplomatic route has failed then we have either got to show ourselves unable to take action

because we can't agree or we have to be prepared to take the action if necessary for me it goes back to we as an international community where you have rogue states and failed states and obviously non-state actors who are terrorists. if we cannot find a way of dealing with these problems then the world will be a very unsafe place in the future. this was a test of how the international community would deal with problems in the post cold war world. >> it was that reason rather than the threat of aggression that convinced you? >> i've always taken the view that if we can build a strong international community where people abide by the rules that are set, and if we can not do so, then we are sending a message to other states and countries that they are free to do as they plfment >> this is a message that other states will have heeded because

of the action in iraq? >> this is one of the issues. one of the lessons i learned from iraq and i think it is the less often the whole of the world has really got to come to terms with. the international institutions for global corporation on these matters is not strong enough. one of the problems in iraq was that closeness of working was not seen, american-europe -- working together closely with the americans. if we are going to build an international community where people will feel safer from the threat of terrorism and failed states or rogue states then we have to have an international system of governance which people feel that will take action when those people who break the rules are -- >> yeah. from the answers that you gave -- would i be right in

understanding that you were briefed on the terms in which mr. blair had pledged the u.k. support to president bush in the first half of 2002? >> i believe right up to the last moment, we in britain were trying to get a diplomatic solution. i'm not sure i accept the premise. >> given by a number of people, mr. blair himself. you said you didn't see the correspondence between mr. blair and mr. bush. but you understood the gist of what he was saying to mr. bush in terms of pledging our support? >> we had to make the diplomatic process work or there was a danger that we would be at war with iraq. our effort right to the last minute were to try to make a

diplomatic solution work and even in that last weekend where i talked in detail to tony blair and was working very closely with him, we were trying to see whether we could get some of the countries who had indicated they would support no action under any circumstances to change their position. i would say that the decision was made only after the diplomatic course was fully exhausted. >> because we have heard from a number of witnesses, we have told the white house privately in the first half of 2002 that we couldn't make the diplomatic -- what was obviously the preferred route for us and them, couldn't get a peaceful resolution to this issue, that we would stand with them in taking firmer action. r well, we had to prepare for war, as i said, because from june, we were in the -- the treasury and i was looking at options that were available. i still insist to you that at every point in that year, our

first priority was to get a diplomatic -- >> that was clear. the prime minister of the day had told you effectively what he told president bush? >> we knew that the options available to us included going to war. we knew also, however, that the best chance of peace and the international community working to best effect was a diplomatic -- and i still hold to the position that i think you're trying to move me from. the final decision -- >> some yes or no answers to what he told you or president bush. >> the final degrees decision was made in the end by the cabinet after the diplomatic option was sexausted. i kept in regular touch with tony blair. i also knew that he and i were trying to make sure that the diplomatic option was the one to be used and successful and until it was exhausted there

was no decision about going to war. >> you haven't told -- what he said to president bush? >> i had regular conversations with tony blair and we talked about these issues. i don't have copies of these letters and you wouldn't expect me to. >> in these exchanges between himself and president bush's staff, he had emphasized that there were a number of points that the british wanted to establish before any possible conflict took place with iraq. he put great emphasis, as we have heard in evidence on the u.n. route on building a coalition of international support, public opinion and our own countries and proper preparation including preparation for the aftermath and not least on achieving substantive progress in the middle east peace process. and i assume that you would be fully aware and supportive of

those points? >> yeah, we discussed the middle east peace process particularly because we felt that progress could be made. the treasury at that stage and i were working on an economics plan for the middle east where we could underpin the political -- with -- where we could offer the palestinians the chance of greater pros parity if violence was abated and we were really learning the lessons that we had learned in other parts of the world, including northern ireland if we could reduce the incentive incentive to violence by making sure that people were more prosperous we might have a better chance that the process was working. >> why hadened we succeeded in

achieving more -- on the peace middle east process by march, 2003? >> i dealt with friends in israel and the palestinian authorities and the progress of peace making in the middle east is one where it is very difficult to get both sides to do the same thing at once and it is an experience of small steps forward and sometimes steps backwards and of course, the splits within the palestinian organizations have made it more difficult and the changes in israeli politicians obviously mean that you often have to start again. >> we have heard from other witnesses. while the americans heard what we said about the importance of putting pressure on the process, effectively, they did almost nothing to achieve this except at the very last minute to publish the road maps so in

our efforts to persuade them to push this forward haven't succeeded. >> president bush became the first president to commit himself to a palestinian state. it was an important step forward. we recognized that we have to get the balance right between the security the israelis needed to reach an agreement and persuading the palestinians -- a viability -- economically viable palestinian state and in all the times i've been involved in this, vary between wondering whether you can proceed inch by inch or whether you have got to bring things to a head as has happened in some instances over the last 20 years and trying to work for a solution that is all encome passing. people were looking for a solution that was all encompassing. >> we're still in the same

position today where we're trying to get small advances that would allow people to have confidence and negotiations on the bigs issues. >> you said as prime minister in october, 2007, that in the house of commons that you were convinced after you made a visit to the region that progress in iraq cannot be fully achieved without progress on the israeli-palestinian issues. doesn't this imply that we should have continued to contain iraq while trying to achieve more progress beforehand on the middle east peace process? >> i don't think so. there is a debate about this. obviously you as a committee will be wanting to enter into that debate. look. in the middle east, when i talk to palestinian and israeli people they all know that the settlement is likely to

involve. jerusalem and a land exchange and an agreement about the palestinian refugees. it is how they get to this final settlement that is the issue and how we can move them along when there are so many difficulties enroute and every time we try to move forward, there is something that happens to that makes it more difficult to do so. more recently it has been the problems in gaza that have prevented us from doing it. >> that wasn't the point i was making. let's come back to the cabinet meeting. as you have emphasized. the meeting of march 17, 2003. that was the moment when you and other members of the cabinet, except of course the late robin cook, who resigned, accepted shared responsibility for the decision to go to war with iraq and if you look back from that point, do you feel that there should have been a

cabinet committee set up before the conflict happened? one was set up immediately afterwards to deal with this but people like you should have been represented on i think -- if i'm right in interpreting your answers, you haven't actually been to mr. blair's ad hoc meetings on the subject that he told us about. you were not at his meeting in april 2002, which was an important one and on july 23 2002 which was an important one. yet the cabinet now had to make this very big decision over whether or not to go to war. shouldn't you have been cut in earlier? >> the chancellor has never been on this these committees. i don't think it happened previously. >> on what cabinets in the past? >> when it came to the war cabinet being constituted, the chancellor was, as i understand its previously, the chancellors

under previous governments had not been a part of that. >> you are widely seen as one of the most influential members of the cabinet and the most likely successor to the prime minister. >> i did not feel at any point that i lacked the information that was necessary. that i was denied information that was required. but my role in this, was not to second guess military decisions or options. my role in this was not to interfere in what were very important diplomatic negotiations. that was what the prime minister and the foreign secretary and the defense secretary were involved in. my role in this was first of all, to make sure that the funding was there for what we had to do and we did make sure that that happened and secondly, as a cabinet member in the discussions that took lace, that is what i did. on the monday before the tuesday before the house of

commons, i spoke of the cabinet and made my position clear. >> you said in your opening remarks that one of the points from which we needed to draw lessons is that we needed proper structures of decision making. >> that's right. >> looking back at the situation in the year and a half before we went to war with iraq, did we have the proper structures of decision making? shouldn't we have had a cabinet committee since it existed in many previous governments but didn't interfere with business but reviewed the strategy and diplomacy and preparations. shouldn't we have had a committee to do that before the conflict rather than just set one up afterwards? >> i think we did learn lessons. i think after the butler inquiry, tony blair set forth a more formal way of decision making. i have taken this further in the position that i hold now. we have a national security

committee that includes in attendance all the intelligence chiefs, the chiefs of defense as well as the senior ministers and it will meet regularly to discuss issues related to afghanistan and iraq. it is underpinned by senior officials meeting prior to that and junior officials meeting prior to that. the foreign secretary and the defense secretary and the international secretary have to meet before these meeting about the relationship between these departments and as i said right at the beginning that we are learning rightly so when you are facing two wars, the structure of decision making has to change and you have to involve in that decision making all the security and defense chiefs in a very direct way and formal way and you have also got to involve all the senior politicians who are involved in this. and that is the structured decision making that i think is necessary for a world where we

have an interventionist stance related to difficult problems where we are part of an international community trying to resolve these problems. we have to have that formal process of decision making. i agree with you, we have learned lessons from the procedures. as a result of what he learned and iver made further changes which i think are the right things to do. as a committee has worked well and allows on equal terms all people who contribute to that discussion should contribute to that discussion to make the contribution so this is a reform of the machinery of government that i think has already been made and if we have to learn further lessons. >> very important point for us as an inquiry trying to learn lessons from this. in the absence of the structures that you have set up and mr. blair set up after the

butler report, was it the situation on march 17, 2003, that the cabinet in particular, the most senior members of the cabinet was adequately briefed and informed and aware of all the different aspects of the question in order to share a responsibility? >> i was. >> you were? >> there was nowhere where i had a sense that i had inadequate information. obviously the intelligence information has had to be reassessed as a result of what we had learned. certainly on my part, i was fully engaged in the discussions that had taken place that weekend before the cabinet meeting but equally i was involved in the financial decisions that involved also being aware of all the military options that we had to consider so