we need to leave, i will make sure we recess in time to get to the floor so we do not miss that vote. it is an honor to have mr. lewis, former chairman of the full committee, who as we all know has been a distinguished lifetime of support for our service men and women and our veterans. i would like to recognize you for any comments or questions. >> thank you, chairman edwards, for recognizing me. i was pleased to walk in as my colleague was beginning to ask questions about homeless veterans and what we may be doing with connection to that. if the subcommittee could commit itself to the direction that our secretary would take with the homeless veterans, i believe we can turn around a tremendous problem. the homelessness problem began,

i believe, many years ago in california. we passed legislation that was designed to say that too many of our citizens were finding themselves in mental hospitals. we had a tendency back then to want to throw the key away -- to put them in a mental hospital and stop worrying. we passed legislation to make it harder to put people in institutions. hand in hand with that was supposed to be a critical process whereby those people -- a significant percentage being veterans -- that those people were supposed to go to clinics, get medical help, and so forth. there was never a follow-up to make sure that was taken. we have a potential model to deal with veterans, who make up such a high percentage of this population. patrick kennedy and i have began

to talk -- have begun to talk about this. it is a great opportunity for us to make a real difference. other than that commentary, i am proud to have to be my friend. i am very anxious to work with you. >> let me say thank you for emphasizing the importance of our responsibility in addressing the homelessness issue. i think it is sad to all of us that there is even one homeless veteran anywhere in any community in this country. what you saw in california, i think we saw to some degree in texas as well. i look forward to working with you and the members of this committee to see we make a major push in solving that problem. thank you for your emphasis on that. >> if i could add -- i think you know that while our colleague has suggested he is not going to run for reelection, there is no

doubt he has a commitment to this arena. there is a gate -- there is a great contribution we can make over the next few months with his assistance. >> we will work on that. >> if i could mention -- if i could think congressman lweis for the -- congressman lewis for the observation. i wrestle with this every day. i have two images of men and women who have served in uniform. every year, around 60% of our high school graduates go on to college -- junior college, university, some higher form of education. of the remaining 40%, a good many going to vocational training, some directly into the

workforce. a very small percent join the less than 1% of men and women wearing the country's uniform. of that 1%, i am intimately familiar. they go through all the preparations, whether you call it basic training or boot camp. they get prepared for joining a high performing organization that is well lead, that is mentioned. from the moment they join, they are trusted members of that organization. there is no apprentice. . if the unit deploys, they go, whether it is two months or two weeks. they are given the most difficult, most demanding, sometimes impossible missions. they do that without fail, better than we can expect. the second i will offer to you is what i am troubled with, what congressman lewis raises.

it is a smaller population. the trends are disproportionately amongst our homeless, amongst our depressed, amongst our substance abusers, amongst our jobless. i offer -- these are the same kids in both of those images. there is no difference between them. we have to figure out how to keep youngsters in image 1, continuing to be the high performers they are. with image two, we have to solve those problems so that over time we are not dealing with that. they are the same youngsters. it is not about them. it is about us. >> we look forward to working with you on that important challenge. we show 1 minutes 30 seconds left. should we recognize mr. berry,

or do you want to recess and come back? >> you should ask him, not me. >> why don't i say this. if members feel they have to go cast a vote, i am happy to stay what you ask your question. or we can wait. it is your call. i would like to underscore what the secretary said. thank you for your tremendous leadership, particularly in health care. we will miss you in the years ahead. our veterans will be the beneficiaries of your work on this subcommittee. >> thank you, mr. chairman. mr. secretary, i share the entire committees and the country's appreciation of your distinguished service. we thank you for what you do. my question is -- i have talked about this before. you mentioned earlier in your testimony that you had administratively broaden the the

presumption -- had administratively broadened the presumptions where veterans had not been dealt with earlier. what about veterans from southeast asia that could not document they were in vietnam or cambodia? is it possible to deal with that administratively? >> i am not sure that it is able to be dealt with administratively. i am researching that issue. the majority of folks that operated in cambodia had presence in vietnam at some point. to qualify, it does not require any stipulated number of days or location where. what i need to do is narrow down the folks who may have only

served in cambodia, extracted by air, and find what that population is and get you a better answer. if i might, i will provide that for the record. >> thank you, sir. >> i want to give you the same opportunity we gave mr. berry. i would be happy to recognize you. >> i will try to make it brief. i have had a good visit with the secretary. i enjoyed the visit very much. we talked around a lot of these questions. the first question i talked about was backlog. if you discuss that. as a follow-up question, i am told that word is out that you are experiencing delay -- call your congressman and you will be paid within three to five days. while we appreciate the prompt response to our inquiries, i can

only assume this practice puts everyone else further behind. at this point, we have cases of veterans being told their claims take up to eight weeks, which is the veteran little opportunity but to involve their congressman. i understand this is an attempt to help the problem, but is there something the department can do to help veterans access their benefits in a timely manner and reduced congress's role in the process? >> let me say the 9/11 gi bill -- we started without any automation tools. we still do not have any. the first arrived in april, july, november. i think there'll be a fourth set. we will be fully automated this year. last year, we began in august. zero veterans and rolled. we finished in december with 173,000 in school, being paid by

us. a rocky start. we learned as we went. by comparison, this spring semester, 131,000 czechs were flowing to veterans -- 131,000 checks were flowing to veterans. we are knocking these claims down at about 7000 a day. my sense is the eight-week wait is an aberration, if it exists, or it may be old data. today, there are 229,000 veterans enrolled and we are paying 190,000 of them, knocking down those claims at 7000 a day. within a matter of days, we address this. with the eight week wait, if they get a hold of me, i am

happy to give a personal attention. >> we discussed this a little bit. on the issue of mental health, having sat on the bench for 20 years and dealt with all these issues, the courts and the states -- the courts force the states into turning loose people back in the '60s and '70s. the whole country failed the mental health community by putting people on the streets that needed additional help. it is a concept that was a freedom concept, but they did not have the backup to support those people once they were on the street. that is why we have so many confused, depressed, and schizophrenic homeless people on the streets. we failed as a country to take care of that problem. each state bears some responsibility. texas air's quite a bit of their own. it is -- texas bears quite a bit

of their own. it would be a huge step. we should shame the states into taking care of their business. they do not take care of it to this day. >> thank you. your background as a judge dealing with mental health cases -- we would welcome your leadership. we will put together an ad hoc group of subcommittee members to focus like a laser on homelessness issue. >> love to do it. >> that would be great. we do have additional questions, so we will stay in recess until the end of the third boat. -- of the third vote. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> i would like to bear the -- i

would like to call the subcommittee back into order. >> thank you for bearing with us during those votes. i would like to begin the second round of questions by recognizing mr. wamp. >> i was just enjoying a bite of snickers, from your district as i understand, with all months in it. it is not too much, but just enough. i want to thank you for your willingness to consider a program. i know programs are always hard to sort through when you have a big agency like yours. i had the privilege to get to know a retired marine captain whose pen name -- he wrote a book about his ptsd experience. it is compelling. in tennessee, kentucky, and

indiana, he is very well known among the veteran community because of the extraordinary depths of hell, so to speak, in his experience of ptsd and his recovery and what he went through. he developed this entire program called "the lattedder." many veterans have read his story and his recovery. it is important that as we add money and address this issue as comprehensive as it is that we get real, live veterans involved that have been through it, especially those that have dealt with it in the amazing way that he has dealt with it, in terms of restoring his life to a productive level even though, as he told me, he was in a place where he did not want to be even in a lit room. he wanted to be in a totally

dark room where he could withdraw from the world for days at a time, it was that bad with ptsd. i have provided the materials. i understand your staff is looking at it. i think the more we can engage people like him and not assume that staffers, as competent as they are, or people that have not been there, can even fathom what these veterans are going through. i raise that issue with gratitude that you're considering his work and others like him that could make contributions to addressing this problem. this problem is not just combat- related but non-combat. he was involved in a training crash where he was successfully ejected but the co-pilot was ejected into a pole which dismembered his body as he watched.

these challenges are enormous. even today, stories of female sexual abuse and all the different contributions to ptsd -- i just want you to address what we are doing to make sure, first, that females have full access to ptsd benefits and that we also give attention to non-combat incidents. this is a very broad issue. again, thank you for your commitment to this. this is one on the mental health side we have to get to the bottom of. a lot of our veterans are in a really bad way when they come home with ptsd. >> congressman wamp, i think you have put your finger on one of these issues that are generational.

i can go back and pull an article out of the 1940's and read about general bradley sitting at a testimony table like this as the secretary of what is today veterans affairs talked about the same issue. it was not called ptsd, but a different name. the similarities are striking. i think this is a generational issue. i was at the university of southern florida and spoke to some of the young veterans, asked how many are combat veterans. most hands went up. in the dialogue, as suggested that they were all carrying baggage just like we all did. there is a transition period that you have to go through, coming from that hyper vigilant , high risk, threat environment.

we all know college campuses. one of the things we are doing at the university of south florida and cleveland state and california state -- there is an employee with rehab skills. this office becomes the organization around which the veterans come in. they get all kinds of assistance, linking in with the administration of the school. on those tough days where they need more help, this is the conduit to get them into a our hospital system where a mental health professionals wait to provide us -- wait to provide them the help they need to get back on their feet and do what they expect -- which is graduate. i would offer that in 2010, we

have put in the mental health budget $5.20 billion. that is an 8.5% increase over the substantial money we put in this year. we continue to see mental health, which include ptsd, tbi, depression, and other things that result when treatment is not provided properly early on to deal with some of these issues. in research, we have increased mental health research specifically 15% from 2009. we are continuing to increase our investments in mental health research. we have also initiated a comprehensive study of vietnam- hero women's veterans to explore

the impact of service on physical as well as mental health. this aspect of mental health is important to us. we are reaching out in a number of ways. your comment about ptsd not being dependent on combat activity is appropriate. i have a similar experience of a youngster coming out of bosnia, which was not a combat situation, but exposed to some of the horrible circumstances that had to do with the mass executions there. he was part of the security force when those mass graves were discovered. he lived with that image and in that environment, from the smell to the physical aspects of its, four weeks. there was an impact. stress is a key word here, not combat. it is post-traumatic stress

syndrome. stress comes in many different experiences. >> i want to underscore in closing the value as we try to reach out to these veterans of having someone who has actually been there. it is invaluable, up verses the people who work for the va who have not been in this condition. that is why i hope you will continue to identify people who have actually experienced ptsd. i think veterans are more inclined to share and open up and participate with people who have been there than they are with the public at large or even a professional staff at the va. >> we will reach out to achieve this objective. >> mr. secretary, let me follow up on the mental health care issue.

where are we in terms of research of and implementation of best practices of how to deal with ptsd and mental health care issues? is the mental health care system in our procedures pretty consistent from hospital to hospital, or are we trying radically different approaches from one hospital to another? where are we in that process? >> i am going to call dr. petzel up here and ask for that comparison. in the last several years, we have hired something on the order of 6000 additional mental health professionals. we have added to the work force. we now have their presence in all of our hospitals and all of our c-blocks.

we also have the capability to deal in this arena. because of the stigma associated with mental health, we have moved mental-health into the primary care area for the average patient, where they are seeing a primary care physician and having initial mental health discussions as well. for the more serious cases, we have a formal program of mental health. let me ask dr. petzel to talk about the hospital comparisons. >> the va has embarked on an attempt to stem the rise -- an attempt to standardize the treatment of ptsd. their art to treatments that have a good evidence base published in the last several years. we have embarked on a program to train our mental health

professionals to treat patients in these two cognitive therapy is. -- cognitive therapies. there is progress in making treatment evidence based. the other part of that is that we are doing an effective job of consistently, in the same fashion, screening all of those people who are returning from iraq and afghanistan for ptsd. in 2009, we screened over 26,000 veterans in the primary care setting. that is growing every day. right now, we have 397,000 veterans receiving care for ptsd in the va. i believe we are making great progress in standardizing both the evaluation and therapy of patience witts with ptsd.

>> do you think we have to do a lot of research in this area? are you using money within the va medical accounts to test various approaches? >> we do need to do a lot of research in this area. the secretary mentioned our budget in 2011 for mental health research is going to be $82 million. this represents 14% of the total research budget and a large part of that is devoted to mental health research, ptsd research. some of the most important parts of that are pre-and post- deployment studies. we have several evaluations of soldiers about to go and are in the process of evaluating these groups as they come back. we are learning a lot about the

incidence of mental illness that occurs in combat veterans and the things that are responsible during that combat experience for some of those issues. we need to devote a lot of money. we are devoting a lot of money to ptsd research and mental health research in general. >> are you working with the nih or the national institute of mental health? are they doing any research that has direct application to how we can help our veterans? >> yes, mr. chairman. there are grants coming from the national institutes of health that looked directly at these issues. it is not a large amount of money, but there is money that is devoted to these types of problems. >> thank you for that. >> i would just add up -- we are also reaching beyond just va.

we have conducted a mental health symposium with dod this year to synchronize our utilities. as an extension of that, we have also had a co-conference on suicides, the more serious issue we have to deal with. i would offer that va has also set up a suicide hot line that is nationally known. it gets something on the order of 10,000 calls a month. a good many of those calls are people in crisis. we intervene and interrupt what could be a very serious outcome. it is the whole spectrum of mental health that runs to the very serious cases. >> secretary shinseki, let me ask about the scholarship program that i have the

privilege to be involved in. it is probably the mos humbling and gratifying privilege i have had in my time in congress, to work to pass the scholarship program to provide a full gi scholarship to all military children who have lost a mother or father in military service in september 11, 2001. because we did not get that bill passed until the middle of last year, we agreed to work with the va and not have that implemented at the very time you were trying to kick off the gi bill. it would have slowed down the entire process. we know now how complicated that implementation has been. since these children who may have started school last year qualified for the benefits last year -- the policy was they would not get their first checks

until august or september of this year. can you give me some sense that the va is focusing on this? i can think of few people in this country that are more deserving of our nation's support than children who have lost mothers and fathers in military service. since they will have gone one year without receiving that scholarship money, i want to be comfortable that there is no additional delay beyond the implementation date. any sense of confirmation there that we are going to get this started on time and get those checks out rapidly when the program kicks in? >> i will colombes mr. walcoff in a second. -- i will call on mr. walcoff in

a second. we agree with you. we are looking at the retroactive aspects of this. let me get mr. walcoff here to provide a more detailed answer. >> for the record, will you please identify yourself? >> i am mike walcoff, acting undersecretary for benefits. i am able to tell you we are on schedule for this. that is something we are aware of. we are working with the i.t. people to support the areas that have to be there for us to process these claims. we are on schedule to be able to implement. . .

>> we haven't seen an increase in the total number of veterans per year -- we have been seeing an increase in the total number of veterans per year in the united states. someone had indicated that 2010 might be their first year that leveled out. perhaps because of the passing of veterans from earlier forced the population of veterans is decreasing. certainly the iraq and

afghanistan wars could be pushing the numbers up. where are we demographically, in terms of this year? where are we going over the next five to 10 years in the expectation of total numbers of american veterans? >> i see the estimates that look out 20 years and the veteran population over 20 years, on estimate, says that there is an increase by 47%. >> over 20 years. can you shorten that timeframe over the next five years? >> i do not know. it may very well be 2010. i would like to provide a better answer for the record. what i would offer is that even though the overall veteran population -- 23 million today -- towards the 20-year decline, we are aggressively out reaching to the veteran populations.

the fact that, as i indicated earlier, we processed 977,000 claims and get 1 million new ones in return, suggest that whatever the larger population number is, we are still reaching out to veterans. the 8.1 million veterans who are enrolled today, i do not think those numbers will decrease. we will continue to see the success of our outreach programs and our numbers will grow over the next several years. there is a knee in the curve, but i will get you a better answer on that. >> while the overall numbers are trending down, the number of veterans and roald are not expected to be reduced. i think you said -- and roald are not expected to be reduced. i think you said that -- enrolled are not expected to be reduced. i think you said that the long

er life expectancy has changed that. it did not see a dramatic reduction in va spending ? >> the overall population of veterans has been dropping for a couple of years now and is expected to drop from roughly 23 million in 2010 to deliver 21 million in 2015. that is the larger population of veterans. my focus is on the 8.1 million who are enrolled in our programs. our outreach efforts are being successful. i am happy with that. our enrollment numbers -- there will be a different dynamic here. >> thank you. >> secretary, looking across the concerns of disabled veterans, we have touched on many of the concerns they shared with me today. two i wanted to raise inclosing

-- and i hope that i can finish in five minutes and stick my head in the energy, water, and a clear hearing across the hall. one thing they raised is that when we increase, dramatically, funding, the feeling from certain veterans' groups is that the money does not trickle-down low enough to actually benefit them directly. that is the bureaucracy that you inherited, which is a necessary part of delivering a big government program. be really sensitive, as you can, and your staff, at making sure that there is accountability as far as the money getting to the veterans, particularly the disabled american veterans. they are also concerned about c bought -- cbot. we talked about how certain things are not happening or will not happen as fast as you would

like to see. i come from chattanooga, tennessee, where there is a somewhat degraded service because we are to ours from any inpatient facility -- to two hours from any inpatient facility. we really need it and we're one of the highest service areas without a hospital immediately available. the transport is difficult, dangerous, mostly done by volunteer veterans in old bands. people died in a wreck a few years ago. i want you to speak to what you are doing to hurry the money into the programs to build this as quickly as possible. i do not want to mess up your timeline, looking at -- or try to accelerate or expedite this, but i am very interested at these larger investments in the

outpatient clinics happen so that we can get as many functions of care to veterans as possible, especially to avoid long travel to inpatient or overnight accommodations. >> this is part of our effort of several decades now to provide health care to where veterans live. you are familiar with our 153 hospitals and our 783 other centers and we have our reach clinics, mobile clinics, and we find veterans living in very remote areas. regarding that in chattanooga, we have the project being submitted in the fiscal year 2012 major construction cycle. it is part of our plan to do

this and i will look to ensure that this stays on track. regarding the distribution of funds, we use something called -- we use the model i think most of us are familiar with. it is how we distribute based on the veteran population. the model distributes money -- 97% of the resources i received to the health care budget. there is always unevenness between the various areas. they are required to come back in and we go through an adjustment process. the 3% that is held in reserve is intended to take care of headquarters operations. the majority of that is to adjust what the bureau model has put out there. there is a process by which

adjustments are underway. we provide the money. we are in the negotiation with various businesses who feel they are a little bit short in this. it may be an issue in this case. there are opportunities to make right with them. >> i want to thank you again, the undersecretary, for his willingness to work with the city of chattanooga, that you are already identifying properties that may be available in your efforts to all the property into which time the va could potentially expand. it is a cooperative effort and your undersecretary is really responsive. i am grateful for that. if i might slip out to that other hearing -- if that is okay, i will leave you. thank you very much for your service to our country in your presence today. >> you have my proxy on that committee. thank you for your time this morning.

i will not do anything by unanimous consent that would undermine veterans care in tennessee in your absence. the vice-chairman of our committee is here. we have had multiple hearings this morning and afternoon. thank you for your leadership on the subcommittee. i would recognize you for -- we have had two or three rounds. i recognize you for whatever time you would like to have to ask any questions you might want to ask. >> thank you very much, mr. chairman. it has been an honor to serve with you and i am proud of your leadership for veterans in this country. it is a pleasure to have my secretary, mr. shinseki, here for this hearing. one issue i am involved in is child nutrition and the issue we're doing with john nutrition

in the school peter -- with child nutrition in the school feeding programs was to help kids qualified to get into the military. an incredible percentage of american youth cannot qualify to be in the military because of obesity. we're going to try to raise healthier children for help your soldiers and healthier veterans. we appreciate your leadership. we have discussed a lot of questions about backlog and how to get people off the streets. you are doing a wonderful job of building in our communities, locally, paid for locally, all live shelters. we really have a host of services in those shelters which are really helping people get back into recovery. one thing we found is of the veterans coming in -- we have had difficulty communicating with the call center because it is in a different time zone.

i know we mention this -- we mentioned this earlier. have you considered accommodating the west coast hours? >> this is some and we are working on. i will have your answer when we have better implemented it. our call center services need to address the time differences in this large country of ours. we will do better at it. >> thank you. i do appreciate what you have done to clean up the administrative backlog. i think you are being buried management wise. i appreciate that leadership -- being very management wise. i appreciate that leadership. i am sick and tired of hearing about the committee -- tired of hearing about the force that closed -- the largest military

base that ever close in the history of this country, 28,000 acres and several thousand people. what we have done with that land has been transferred to that community -- we have built a national cemetery, but because the monterey peninsula, where the california government began and the oldest presidio still is a in existence -- we have a history of military there. there are a number of service programs going on. we have tried to convert this into a national cemetery. because there is one in the san walking valley -- san joaquin valley, they are ineligible, due to a geographical restriction. we need to look at this 70-mile

radius and suggest to squeeze it into -- instead of a round circle, an elliptical circle, which would take in the entire coast of california, from san francisco -- certainly, that is where the people are. the san joaquin valley as no service support -- has no support services. it is essentially a truck stop. i did at town hall meeting last night and one of the questions was, my husband died 12 years ago. i have his ashes in my closet. i am just wondering if i can bury him in monterey california -- monterey, california. that is what i hear over and over again. we cannot build a national cemetery there until you have fully filled the one in existence. that will take a long time.

this property is ready to go. we have an estate auction, but california is not building cemeteries. -- we have a state option, but california is not building cemeteries, regardless of who the governor is. it is not a partisan issue. they have decided there parties are in housing soldiers, and retirement homes -- their priorities are in housing soldiers and retirement homes. we have a pliancy, to try to raise the money locally for the state -- a plan c, which is to try to raise the money locally for this day, but that is not working because the economy is so flat. there is a lot of talk about bending the curve. if we bend that circle, we

qualify. we would appreciate your help on that. >> i assure you that i will look at this personally, very closely. we have been in to you with three things that have suggested where we are. -- with briefings that have suggested where we are. as you have indicated, the state solution will probably not happen. we will take a look at this and see whether there is a solution we can come to that does not have a circle on it and looks more like the political use suggest. >> we have the property, title to a, and the master plan for the cemetery built to federal and national standards. we are ready. if we can get authorization and some money, we can go.

>> i will be on the ground there next month -- and this month, and i will make it a point to look at this. >> thank you. let me correct the record on one point. i will never get tired of hearing you buy for the veterans of your district and state -- fight for the veterans of your district and state. my mentor was a great world war two veteran -- world war ii veteran. he is buried at arlington national cemetery and is one of the worst cold war ii veterans to serve in the house and his era -- one of the most decorated world war ii veterans to serve in the house in his era. please keep up that fight. mr. secretary, i want to

finalize one last question. as we have talked about this, we have given unprecedented increases to the v.a. health care system. anecdotally, i sometimes hear from individual hospitals that, while we were passing 10%, 11%, 12% a year, that the individual hospital allocations were only going up 1% from a 2%, 3%, or 4% -- i know that if that anecdotal information is correct, it may lie in the fact that we have to be a programming money. i would like to ask you or the va leadership if you have any information, either right now -- either specific or general, to tell me whether over the last

couple of years it has been 10% or twelvers unsigned -- what have the individual hospitals and designs and -- 10% or 12%, what have the individual hospitals been receiving? if you would like to follow up in writing in greater detail, that would be certainly appreciated. >> mr. chairman >> thank you. this is an important question. -- mr. chairman, thank you. this is an important question. they are far more familiar with that model then i am. i would like to assure them that the model is the starting point. we negotiate after that. 97% of our resources are distributed and 3% are retained

at the vha level. the average funding growth is 10%. that is across the system. >> over what period of time? >> this was for the year 2010 -- 2009 to 27. -- 2009 to 2010. there is a portion of them that are above and a portion of them that are below. the lowest one comes in at 5.3%. i will be happy to give a more detailed information -- give you more detailed information. some of them are -- some of them have received a greater percentage because of special things that were underway.

>> do you have that information on the hospitals by hospitals -- on the hospital-by-hospital basis? >> we can probably get from 2010. we have a raid their cash to their hospitals -- arrayed their cash to their hospitals. at some point, we will have a lot on what those actual numbers are. i would be happy to provide those to you. we are in the process of being adjusted across the system. the average funding growth was 5.7%. that is the breakup. let me just -- i may have entered -- provided more information than you wanted me to provide.

let me see if he has anything to add here. >> thank you, mr. secretary. mr. chairman, as the secretary has pointed out, while the budget increased on average -- or the average distribution say in 2010 was 10%, that is an average. the money that we distribute -- we distribute the money where the work has been. if a network has been growing in terms of the work, it will receive more than the average. if the network has been growing less than the average, they will receive less than the average. the same bin would apply to a medical center. there are medical -- the same thing would apply to a medical center. they would be the medical center's you might hear saying that we only got 1%, 2%, 3%, 4%

when the national average was 10%. the general answer to your question is that it is related to the workload of those individual medical centers. the networks do not hold onto any money. they have a modest reserve. all the money they get is distributed out to the medical centers. it is also true, as you pointed out, that there are program- specific moneys that come to each medical center. in 2010, 5.7% was the increase, but there was another almost 4% that was related to other program moneys. i think the general public is that it goes to the medical centers. it is not -- the general powell is that it goes to the medical centers. the general point is that it

goes to the medical centers. the disparity that you see in distribution is mostly related to the work. >> right. i think it makes sense that the va has the flexibility to send the money were the work is going on in where the growth is. if you have one that is growing and the number of veterans receiving health care is growing, is there a two-year or three-year delay in the actual checks going to that region to reflect the increase in veteran population? >> the distribution is based on historical data. i think it is about 18 months. the other is based on a rolling average of the workload, so there is a delay. it requires a network to give

some cognizance to that when they are distributing the money. >> i would imagine that creates challenges if you are in an area in the country where there is a significant increase and the veterans you care for -- those are real costs being incurred. you do not get the fund increase for 18 months -- are they having to cut corners? do they have reserve funds? do they have to just stretch in whatever way they can to maintain their services? >> there are several ways they would cope with that. in the network i came from in my prior life in that -- in minneapolis, we had a fund that we called "new workload." we would fund incrementally throughout the year each of the medical centers for their new work load. i know there are a number of other networks that function in that fashion. there is a reserve.

i know that each network monthly reviews their work load and funding so that there are opportunities throughout the year to see that the funding is not being adequate for the new workload. i am not aware, at this point in time, of any network or facility that is having difficulties meeting their workload demands. we have enough money, it is a matter of getting it to the right places. >> on the program money, you said there represented a pretty significant part of the increase in funding. does that money, on average,, in the first quarter, second quarter -- again, this is anecdotal. feedback can be dangerous. i do not want to draw too many

conclusions from that without looking at all the data. congress designates this. does that program money, sometimes later in the year? can you use that money as effectively as the formula money? for example, i wonder if you get a new program money for women's health care, can you hire a physician's -- hire physicians on a long-term basis not knowing if that money will continue? how does that work? what are the challenges there? >> mr. chairman, this year we received our appropriation in december and distributed it in early february. a little bit of whether got in the way. -- weather got in the way. that is why we are a little bit

late in our negotiation. the directors are rightfully a little bit concerned at getting their hands on their funds. it is out there now and the negotiations are underway. we are a little bit later than our usual cycle. it could be up to two years for a new start. as the doctor indicates, there are internal procedures for dampening some of the impact. we look backwards and we anticipate what the cost might mean in the future 18 months to dilute two years for that model to catch up. -- might mean in the future. 18 months to look too good years for that model to catch up. -- 18 months to deliver ttwo ye

for that model to catch up. we tried to be sensitive to make sure that the directors are heard. probably the first time in this department, in april, they are coming up to give a midyear execution briefed on the funds we have provided them, so that i can hear the back. -- hear feedback. >> congress does not pass its appropriation bills on time. on the program funding, it is always well-intentioned for high priority causes. is that more difficult to use efficiently, bursas formula money? -- reverse -- versus formula money? how do you hire new doctors and nurses and make commitments with

one-year program money? is some of that money not guaranteed for the future, but predictable? in your experience, is that a challenge? >> generally speaking, program money comes in two-year bundles. two-years gives you the opportunity to have it takick in to help fund the new initiative. one thing i want to do as much as i can is to ensure that there are two years' worth of funding with most of these new initiatives. the world health money which congress gave us -- rural health money which congress davis has been partially rolled into 2011 -- which congress gave

aus has been partially rolled into 2011. >> ok. mr. secretary, did you want to add to that or not? >> i think the doctor answered the question. i was looking at some statistics here. >> ok. very good. let me conclude by banking you all for your time today -- thank ing you all for your time today. as we hear about individual cases where someone did not receive the care he or she deserved, my experience, overwhelmingly, is that our va employees are dedicated, hardworking employees that do that every day to try to figure out how they can support our

veterans. that is why we have the system. i do not just thank you, i thank your 200,000 employees that you represent every day and the difference they make in the lives of our veterans. mr. secretary, with that, if you would like to have a final word, we will adjourn. >> i just want to very simply thank you for your leadership and longstanding support of our men and women in uniform. your insights into the feedback that you receive, not just that you received as a member of congress in texas, but at the gchairman of this committee,

you received feedback from all across the nation and i appreciate that. thank you for the very kind comments to the 300,000 employees of this great institution called the department of veterans affairs. when i look at the year i have spent here, a little bit of what i have learned about the organization -- is described as the second-largest in federal government which has some importance. more importantly, it is the work force that comes to work every day to try to do the right thing. they are responsible for $9 billion of education loans. 565,000 veterans are pursuing their dreams, which i think is important for the country and the veterans.

the work force in va is that eighth largest insurance entity in the country with $1.30 trillion for over 7 million clients. it guarantees home loans to 1.3 million veterans, to the tune of $175 billion, and it has 96% success rate among some of those insured. we receive a higher response from them. the lowest mortgage local -- foreclosure rates of any financial institution in this country. what this organization does -- and health care, 153 hospitals and great resource programs that will serve veterans for years to come -- it is a terrific organization, but its ability to be effected is very much a

product of what congress permits. we thank you for your partnership and your leadership in helping us meet those obligations to our veterans. >> it is a privilege. we live in an age where the good stories do not often get a hold on the national level. thank you for sharing some of the tremendous things and that you are doing, even as we work together to face the challenges that are still out there. thank you for being here. the subcommittee will stand adjourned. c-span3[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> the associated press is reporting that there cannot this is resigning his seat -- that the congressman air mass a -- eric massa is resigning his seat

and stepping down with of profound sense of failure. this is good news for nancy pelosi as she struggles to work on the health care overhaul. >> up next, a look at u.s. aid efforts in haiti. rajiv shah was a guest on this morning's "washington journal." host: we have the administrator for the u.s. agency for international development, usaid. he is here to talk to us about foreign aid and different aspects of the foreign aid budget. doctor, if we could start with current issues, do you know how much has the u.s. government spent so far in haiti and chile? guest: between the two more than $600 million with the vast

majority of that being focused on the relief effort in haiti. when this incredible earthquake happened, it was the worst natural disaster to hit haiti in centuries and destroyed critical infrastructure in and around port-au-prince. the main city. the president immediately asked for a swift and aggressive and coordinated response, so we put together a broad range of assets and capabilities and started to provide water, shelter, food and sent more than 500 search and rescue experts to go that you buildings, remove rubble and identify people. it is a massive effort and continues and we will continue to stand with haiti going forward. host: what about chile? guest: in chile they have been hit by an 8.8-magnitude earthquake that has affected

more than two million people. the city most directly hit has been concepcion where most of the damage and loss of life where more than 800 have lost their lives much the president and secretary of state was just there earlier this week, had asked us for specific resources and specific help in areas like water, medical and field hospital support, communications equipment to help their own relief system operate more effectively. chile has had an effective national response system like our federal emergency management system so they are providing a great deal of their own support for what is a tremendous tragedy. host: where does that money come from, disaster aid in is it budgeted for? guest: it is budgeted for. and we just sent the president's 2011 budget request to congress so that is a great question and very timely. the american people invest in in our ability to provide services and meet the needs of

humanitarian emergencies around the world, primarily by funding the office of foreign disaster assistance, which is part of the u.s. agency for international development. it critically important we continue to provide resources and capabilities so we can act quickly and aggressively and often the united states offers the first humanitarian assistan assistance. in haiti it was the u.s. capability that kept the airport open and made it accessible to people around the world so that we could bring in and coordinate assistance not just from the united states but more than 40 countries. host: let's put the numbers on the screen. we have dr. shah for 20 minutes. he is the administrator for the u.s. agency tpfor international development. you can see the numbers on the screen. first-time callers only. in your view is there a secondary purpose to foreign aid

besides humanitarian aid? guest: lu predent said and setting can't secure unless they have access to meet basic needs. secretary clinton and secretary gates have both spoken about our ability to provide resources and cooperation to other countries to help solve critical problems, whether extreme poverty, poor health, vulnerability to climate, these are the challenges of our future in an interconnected world and if we can help countries resolve those problems and put themselves on a path of sustainability and growth we will have more trading partners, we will be more safe and secure and kids that have access to education and young adults that have access to employment are far less likely to be vulnerable to threats of extremist ideology or other things that could take them in a different direction. this is a critical part of foreign policy and sraoelt to

national -- vital to national security interests an aside from the humanitarian efforts this is critical to our national security. host: does u.s. get political good will out of aid, or is it -- guest: we do. i will tell you when i was in haiti i visited a town outside of port-au-prince. that town had a u.s. a.i. tkfd. built school near where you enter the opportunity and it was built to earthquake standards and it was one of the few buildings left standing. they were using it for jackson and distribution of relief supplies. there is a little plaque that it was the generosity of the american people that enabled that to happen. that is recognized around the world. i have visited those types of sites, whether schools, hospitals, health clinics or any

other facilities, all over the world. in india, parts of africa, latin america. so, this is how we express our abili ability. this is really the expression of what is best about our country. it is a hopefulness that all people no matter where they are born should have the opportunity to lead a healthy and productive life and that we care about the well-being of people who may be born into extreme poverty and misery in some other part of the world. this is really an expression of american values. we recognize we have to be accountable for how we spend and be focused on results. but people do recognize the value of this generosity from the american people. host: the chairman of the joint chiefs just said that the military is doing too much when it comes to foreign aid. do you agree? guest: well, i agree with the admiral's speech. i thought it was a very important speech and echoed many

sentiments expressed by secretary gates an secretary clinton where he basically said as part of our foreign policy we have to have a multi-facetted foreign policy that includes a strong and capable and very effective military presence. but also it includes a strong diplomatic capability with active and effective diplomacy. and alongside that a strong development capacity. so, if countries are experiencing an actual increase in the number of people who go hungry or starve or kids who are m malnourished or extreme poverty going up in places where it has been going down the past several decades, those trends work against our national interests. so, if we can do things that are effective and efficient to help kids go to school and have access to healthcare, make mature mothers with give birth without the risk of death

themselves, then we should do something about that to create a just and more peaceful world for our own safety and security. host: how gdo you go from beinga medical doctor to being director of usaid? guest: before i went to medical school i worked in a tuberculosis program in india and saw the value of u.s. assistance and it could improve the circumstances of people who live in circumstances that i have a hard time understanding, being born in raised in michigan -- born and raised in michigan. it is unbelievable and it touched me very deeply. there is an opportunity -- to have the opportunity to serve in this capacity is tremendous i have the opportunity to participate in the gates foundation and that philanthropic efforts to do good around the world.

we're focused on results and accountability. we will make mistakes, but we will learn from them and get more effective and efficient in the execution of our work. host: the first caller is from stone mountain, georgia. color >> good morning. thank you for addressing such a complex matter. i would like to shift back to haiti. he made a comment about the presence on the ground shortly after the earthquake. is it not true that he had already -- and have pretty much always -- had a presence in haiti? why is it that, for the most part, the corporate-run media, and c-span 2 a large degree, ignores the efforts that are

made by the people in the nation who are not occupying haiti with the military presence, but are actively engaged in humanitarian work? host: why you care so much about cuba? care so much about cuba? caller: because i do think there is an unfair policy that has been in place for years now that has unfairly targeted cuba for its politics. host: all right. dr. shah? guest: thanks for that question. i do think in a humanitarian crisis and emergency our goal both on behalf of the united states and our president but the buyer international community is to work with everybody as effectively and rapidly as we can. so, our initial effort was to open the airport, get the seaport working, make sure assistance could flow in.

the united states, of course, has had a presence in haiti for many years making significant investments in building schools and providing health services to low income children and doing a range of other things. so, we did have a presence and we had many of our own staff and organizations and partners who had been working on the ground before the earthquake, lived through the earthquake and continue to provide results and humanitarian solutions after that. one point of note is that we actually do work with cuba in haiti through the medical care system and in support of cuban doctors in particular. we were really in a position where we wanted to provide as many medical services as we could to the people who were affected. more than 200,000 people almost immediately needed some immediate medical attention, more than four million were affected overall by the earthquake. so away worked with everybody. and i think that it is great the cuban doctors were there and able to provide services in some

of the hospitals. we september our own medical assistance teams that saw more than 30,000 patients and performed hundreds of surgeries. it continues to be an international effort and in a time of crisis like that it is wonderful to see people and professionals and assistants come together against that common service mission. host: our us aid people still in haiti? >> absolutely. we have a full team there. we have expanded it significantly to include people who can work directly with the military and go up for guidance in support of the ability to the military to provide support to the humanitarian mission. and we will continue to thereby for some time. we have had a longstanding special relationship and commitment to haiti and we will absolutely see that through going forward. host: easton, maryland. phillip, republican line. caller: good morning, dr. shah and thank to you c-span.

you helped my drive time go quicker. my question is this. i will take the answer off the air. during the vietnam war us aid was using or was employing military officers to work in an advisory capacity in helping the populace. i was wondering if that is still used in any areas where we have had recent conflicts, whether it be in bosnia or, say, in afghanistan and/or iraq? guest: i would say in all of those places we work very closely with the military. we have a strong connection with the military through a variety of different personnel relationships and offices of civilian and military affairs. and it really is important to be very coordinated as we do this work. afghanistan is a great example where this is our largest u.s. aid mission in the world. we have had some successes going

from 900,000 kids in afghanistan had access to school and now we have more than 6.2 million children six or seven years into that effort that are going to school and 40% of them are girls. so, there are some big improvements and there is a real opportunity to create improvement in meeting human needs and laying the basis for a stable and sustainable society. in places where there is a military operation we of course work very closely and in tight concert with our colleagues from the department of defense. host: a tweet, early after earthquake i heard relief planes brazil and france were turned away while our dignitaries and press landed. is that true? guest: well, the airport was very challenging. right after the earthquake the control tower had collapsed and the airport was actually not functional. so, the united states military went in and within 24 hours had the airport up and running. that is an airport that had about 20 flights a day before

the earthquake. with effective military operation of the airport they had it up to 160 flights a day at peak. so we had more than eight times the stashed capacity. -- standard capacity. even at that increased capacity we had to make some decisions with the haitian government and with the united nations about prioritizing flights. the priorities were always heal health, food, water, medical supplies and relief personnel. we didn't have any situations where certainly on behalf of the united states where u.s. dignitaries took flight slots that could have been used for foreign assistance. we were very specific about t that. the haitian government set a number of other priorities so we did have dignitaries from other parts of the world coming in at their request to help coordinate and lead the relief effort and do other things. but this was a real success story of getting that airport up so quickly to high capacity. now it is down far below that because the seaport is working

at a capacity that is 400-plus containers a day which is more than twice the capacity prior to the earthquake. but when it kind of earthquake happens and we lost access to the seaport and airport, it just became a challenge at the beginning and it was a great thing we were able to get so much more through-put into the country to provide relief. host: on our independent line robert from rosemont, pennsylvania. caller: doctor, thank you for your service. it outstanding. given yesterday's one million homeless and the rain and hurricane system how do i get involved in building homes, orphanages. we have built hurricane proof homes in two to four weeks. guest: that is wonderful. i would appreciate learning more about that and you could connect with us through our website at w wfrw www .usaid.gov.

you can collect to the clinton bush haiti fund which is the primary vehicle for getting private and donor khreuplts. it is clintonbush haiti fund.org. that would be a way to do that. it true right now we are in an absolute race against the clock. there are efforts to get emergency shelter materials to 1.3 million in part principals in -- in port-au-prince in advance of the rainy season in april. we are working with partners and encouraging as many creativity and innovation in the process. i just got a briefing yesterday about how our teams on the ground and i applaud their incrennel work, are -- incredible work are clearing rubble, working with haitians and often in haitian job programs, making sites safe, surveying which settlements are in and which people are in very

flood vulnerable plains and areas and moving them to safe are places in advance of the rain. so it is a big effort and requires a tremendous amount of logistics and i applaud the interest of the caller and look forward to learn more. host: could you speak about the coordination between federal and private funds in because we talk about usaid funds. how much in private funds and what kind of control is there over the private funds in guest: first in has been a tremendous private response and shows the common humanity and commitment of the american people. we believe more than half of all american families have given in some way to haiti and if you think about that, that is a tremendous achievement and something that all americans should take great pride in. the clinton/bush haiti fund is the primary vehicle for acknowledging that if money comes in we can account for its

effectiveness and allowing it against the top priorities coming out of the relief effort. host: is that a fund controlled by usaid? guest: no, it is a private fund. presidents clinton and bush were asked to come together as they had around the tsunami effort and do that in order to facilitate getting private resources into haiti and doing it in a coordinated way. so, that is deeply and tightly coordinated with the process on the ground. for example, i think they just took delivery in haiti of some 70 trucks that are being used to move rubble and move people and do all of that. but, knowing where to get those types of contributions and knowing which organizations need them, getting them to them quickly and picking the things that are most important is a significant coordination challenge and that is why we encourage people to use that fund. host: last call for dr. shah

administrator of usaid from akron, ohio. caller: i'm independent. host: go ahead. caller: thank you for taking my call. dr. shah, it is wonderful to talk to you. you sound like a very knowledgeable, caring person. one of the things i don't understand is why not, if it is ever talked about that we have a vital interest in haiti. we took out an elected official and flew him to another country and hand picked who we wanted to lead their country, who now is off site. host: could you expand that a little bit? the political aftereffects or political importance of usaid? guest: thank you. we have such a strong vital interest as juanita indicated to making sure that societies have the ability to protect their vulnerable populations grow and

have an opportunity to connect to a more interconnected global economy. doing that in a way that is effective and sustainable so that we can all benefit from the fruits of a global economy that is peaceful and just. and that is a critical part of our security. in so many countries that is more acute than other places and haiti is one of those places we just have a longstanding commitment and relationship to the people of haiti and its leaders. and we have been working very closely with president preval in coordinating our effort and working in support of what the needs of the haitian people are. so, that is the spirit that continues to guide our work in haiti. but in countries all around the world we want to be respectful of governments and work in deep partnerships so we are tphnot exercising our work at patronage but real partners and we want to

listen ultimately to the most vulnerable people that we serve so we can meet their needs and help them pull themselves out of poverty and lead better lives. and when we are successful, i have had the chance to visit schools or hospitals or entire societies that have graduated from usaid commitments and programs and gone on in many cases to be donors of the activities and you. the gratefulness and connection of that work when we find scholars that performing a curl kinds in africa or medical doctors in asia. they value the fact they had the opportunities because of usaid programs and commitments of the american people and i believe this country will benefit from that good will. host: what is your response to people who say we are spending $8.5 billion on global health, $7.7 billion for afghanistan, pakistans iraq, $4.2 billion for

humanitarian assistance and our budget is 40% of our current budget is deficit spending? guest: well, a few things. i come back to admiral mullens' article and speech. these are investments we are making in our own security and well-being. these are also investments we are making because they are the right thing to do and when we have the opportunity to save lives as at $11 it $14 we can do in vaccination or have the opportunity to treat we are saving money in the long run in are more stable and creating a more just world for us to participate in. that is the responsibility of a superpower that has the capability to do this. we need to hold our partners accountable. we should make sure that every dollar we spend is worth it. we should be very focused on

that. when we know we are generating results -- these are some of the best investments we can make to protect ourselves. >> dr. shah is the administrator for usaid. i hope you come back. >> thank you >> this is c-span, public affairs programming, courtesy of america's cable company. and next, the joint economic committee gets that every employment figures and then president obama comments on the job market. congressman barney frank talks about home ownership and senator christopher dodd discusses average about the consumer protection agency. .

>> i know we have a number of members who will be here, and as they come in, we will be able to prepare for the questions. i want to thank you and your team for once again being here. we are in a period of tremendous, for a lot of americans. i know in pennsylvania, by way of example, we do not have one of the highest unemployment rates, but the numbers are staggering. we have had about 560,000 people out of work in pennsylvania. we do not know what the number will be for february, but a lot

of people in pennsylvania across the board, it is not limited to one region, have had great difficulty. the recovery bill has worked in some places insubstantial ways. that is not enough. we have taken steps that i will highlight later in the last couple of days. another house just worked yesterday to pass legislation that the senate worked on. we will have that return to the senate and get that piece of legislation worked through the so-called hire act to create

more jobs. in addition to that, we have other legislation as well. i am grateful, as many americans are, that the unemployment rate has remained unchanged at 9.7%, but as i said before, there is much work to do. in february of 2009, across america we lost 728,000 jobs. that was after january of 2009 where we lost about 740,000 jobs. we lost over 600 -- over 600,000 jobs in march last year. a year ago, every single month for at least four months will losing over 600,000 jobs.

the job loss is still too high. we cannot rest in terms of moving forward. instead of losing 740,000 jobs, or 726,000 jobs in those months of january, february and march of last year, or around that number, we are now losing in the tens of thousands. we lost 26,000 in january 2010, and this month of february 2010, 36,000 jobs. we know that the congressional budget office, which for a lot of americans, because of health care and some other debates we have had here, it has been recognized as an arbiter or the

one office in washington that has had a significant impact on certifying are stating what the numbers are, whether it is healthcare, scoring the healthcare bill, telling the american people what it calls, but also in terms of what is happening with employment. the congressional budget office reported last week that the recovery act added between $1 million -- 1,000,002.1 million jobs in the fourth quarter of 2009. it raised economic growth by 1.5% to 3.5% over that period. the cbo director said in a prior hearing of this committee that the policies enacted in the bill are "increase in gdp and employment relative to what it otherwise would be." however, we are not anywhere

near a out of the woods yet. we have zero ways to go. i mention that the senate and house had worked on the so- called hire act. there are four basic strategies, four basic elements. a payroll tax credit for those of our new employment, number two, a build america bonded tax where local government entities can borrow money in a way that is more affordable, and thirdly an extension of the highway trust fund, essential to preserve jobs. there are hundreds of thousands of jobs to be preserved by just a one-year extension of the highway trust fund. fourth, the hire act focuses on small business, the ability to

write off certain strategies. if a small business wants to invest in equipment, we can give them an opportunity to do that in a more substantial way. currently the senate is working on an additional piece of job creation legislation, the american worker, state, and business relief act. upon passage of this legislation, it will provide a couple of things. number one, energy efficiency tax credits, tax credits for businesses that free up cash flow and enable them to expand and hire, no. 3 the extension of important safety net programs. is critically important that we do that for cobra, health insurance for those who have lost their jobs, unemployment insurance for those who lost their jobs through no fault of their own, and we have big

numbers of americans in that category. millions of people that have lost their jobs. we have to help them get from here to there, from unemployment to employment. we cannot ask them to do that and have their families do that alone, as some in washington seem to want to do. so we need to continue to focus not only on new and more focused job creation strategies. we also have a safety net in place. by the way, the safety net programs also have an economic benefit. it's been a buck on unemployment insurance or food stamps -- you spend a buck on unemployment or food stamps and you get a return on investment of more than that. we need to continue to make sure that americans know is not only the right thing to have a safety net, it also has a jump-start in effect on our economy and creating jobs.

we are going to continue to work on this legislation that i mentioned in the senate. we will continue to focus on job creation strategy is as we move forward. i will wrap up so we can move forward with our opening statements from our members, and then we will get to the commissioner. congressman brady. >> i am pleased to join with you before the committee this morning. the report is more bad news for american workers and their families. the number of discouraged workers reached a high of 1.2 million. early this morning the

administration attempted to spin these numbers as a result of storms in the northeast, but in truth is the blizzard of bad policy proposals, health-care mandates and dangerous levels of debt, the real reason people are delaying key investment in hiring decisions. coupled with consumers concerned about their finances, as well as the government's unsustainable finances. we have the real answer why this economic recovery is so sluggish. the uncertainty in america among job creators is powerful. demming and other wasteful spending bill for congress will not restore confidence. with two-thirds of the stimulus left to be spent, it is ludicrous for congress to attempt a second stimulus bill, one which for small and medium- size businesses, they said it would do nothing to encourage

them to hire new workers. a $1,000 tax credit or payroll holiday to hire a $40,000 a worker is not good math. i know the president and congress are well-intentioned in all these efforts, but i am puzzled by the president's's economic approach. i do not know what you call it. if you can blame it, you can tax it. we are seeing that in proposals to punish u.s. energy companies to produce jobs here in the united states. u.s. banking and financial- services industry, u.s. insurance industry, investors with high taxes on dividends and capital gains, higher income tax on professionals and the wealthy, higher taxes on real

estate partnerships, hedge funds, forced -- pharmaceutical companies here in the united states, companies that compete around the world. i think when the white house sees these four numbers, they wonder why isn't anyone hiring? it could be that these proposals are having a huge dampening effect on the ability to recover. i am convinced that if government does move out of the way, american consumers and american business leaders are inherently optimistic. they bounce back from a severe or -- severe recessions more easily than any other country. what they see are the bad policy proposals that are having a huge impact. we talk about restoring consumer confidence, but i know this is

the week that congress was snowed out, dispirits of the american public lifted. perhaps the best emulous package, and i say this half jokingly, would be for congress to adjourn for the rest of the year to allow businesses to move forward with their investment decisions without the heavy hand and dampening effect of these proposals. i think we can do better than this. i am anxious to work with other senate and house members on issues that really can get government out of the way and allow us to prosper again. i yield back. >> in january in this committee , kristina romer, head of the president council on economic advisor, responded to the losses of jobs in december defensively by stating that sometimes real

recovery occurs in fits and starts, but we need to focus on the overall trajectory. ok, let's do that. we have 14 months of the trajectory of the obama administration. in the state of the union, the blame was cast on previous and illustrations in bringing us to the current situation, but realistically, a year ago last month, with the passage of the stimulus bill, this administration began ownership of what was going to be their recovery. they advocated for a $787 a bill which now cost the american taxpayers $862 billion. we had to pass it without reading or thinking about it because we had to act quickly to keep the unemployment rate from going above 7%.

it did not work out. since we borrow that money, unemployment has been on a rise to 10%, with a small reprieve today, and congressional budget office said the economic effect of the stimulus bill would go- negative starting at the beginning of this fiscal year. the country has lost 3 million jobs since the bill passed. the question is why? why did the administration and this congress passed this bill only to sit on the money, all the while paying interest on the loan, all jobs are leaving in droves? yesterday's in one of the little

newspapers that is published here on the hill, they reported that energy department got $33 billion from the stimulus and has been $2.4 billion. i never thought the day would come when i would agree with senator schumer, but he is right to want to freeze the stimulus spending on renewable energy grants, because the oversight is nonexistent. there is no looking into how these funds are being spent or if they are being spent at american companies. or consider the education department. the secretary received stingless funds, doubling the budget from the previous year, and despite his albert commitment -- his outward commitment, the administration could not even be bothered to give the district of columbia the $8 billion it needed to fund the d.c. opportunity scholarship fund that has helped over 3300

students in washington d.c. improve their quality of life. i cannot even calculate the percentage, it is so small, of what that percentage is of deep hundred billion dollars they got for the education department. i hope as we continue to look at the unemployment numbers, we consider this administration's solution to unemployment and hold them accountable as to how the money is spent, if it is spent at all, and how many jobs have been created. i will deal back the balance of my time. >> i appreciate calling this hearing and the two hearings that were held last week on job creation as well as all the fine work this committee has already done on this very critical issue. the matter how many hearings we hold, it will not be enough.

there are 14.9 million unemployed americans, and the damage done to them, their families, and their communities is an ending. the unemployment crisis we face right now was preceded by the collapse of a nationwide housing bobble. falling home values left boris underwater, and in many cases unable to make -- let borrowers under water and in many cases unable to make ballooning payments. unemployment leads to more foreclosures, which drives down demand and feeds more unemployment. last thursday in the oversight and government reform committee we heard again about the havoc wrought by foreclosures. this time it was officials from the northeast ohio area, discussing the destruction that

foreclosures have done to the city and the outlying suburbs. we saw pictures of bacon homes in cleveland, side by side with pictures -- vacant homes in cleveland, side by side with pictures of post katrina new orleans. you could not tell the difference between the two. i do not need to attend a hearing to learn this. i just had to go home to my baltimore neighborhood or across the city and i could see the same things. thus, i have made a foreclosure prevention my highest priority and will continue to do so. as the witnesses told us last thursday, we can only six the economy if we can keep people in their homes. as long as the perfect form created by unemployment and foreclosures remain over us, it is incumbent on us to do more and soon. i know the senate passed a $15

million jobs bill and yesterday we moved the bill toward president obama's desk. i did not cast my vote for mayor satisfaction. there are too many people sitting at home, six or even 12 months unemployed, with a house worth 20% less than the note on it, and they need more than a watered-down jobs bill. before i close, i will pass along a quote from last month's ""atlantic monthly." reading it will not solve anything, but i still keep it in my head as a reminder. there is unemployment, a brief and relatively routine transitional state that results from the rise and fall of companies in any economy, and there is unemployment, chronic, all consuming. the former is a necessary lubricant in any engine of economic growth.

the latter is a pestilence that slowly eats away at people, families, and if it spreads widely enough, the very fabric of society. history suggests that is perhaps society's most obnoxious ill. mr. chairman, thank you again for your leadership in addressing the employment and housing crisis. i also thank dr. hall and his colleagues for their consistently strong work at the bureau of labor statistics. >> i want to introduce commissioner pauhall. it is an agency that collects, processes, analyzes, and disseminates a central statistical data to the american public, the u.s. congress, other federal agencies, business, and

labor. he also served as the chief economist for the white house council of economic advisers for two years under president george w. bush. prior to that he was chief economist for the u.s. to part of commerce. dr. hall has also spent 10 years at the u.s. international trade commission and received his b.a. degree from the university of virginia and degrees in economics from purdue university. >> the unemployment rate held at 9.7%. employment fell in construction and informational temporary help services at a jobs. severe winter weather in parts of the country may have affected

payroll employment in february. as i will explain in a moment, there are too many unknowns to say precisely how the weather might have affected these measures. construction employment fell by 64,000 in february, about in line with the average monthly job loss of the prior six months. job losses continued throughout the industry although nonresidential special trades accounted for much of the over the month decline. temporary help services employment increased by 48,000 over the month. since last september, this industry has added 284,000 jobs. health care employment continue to trend up in february. employment in most other industries showed little or no change. average weekly hours for all employees in the private sector decreased by a one-tenth of an hour in february.

hours declined in construction and manufacturing. these declines likely reflect the time lost due to severe winter weather. turning to data from the survey of households, most key labor force measures were essentially non change in february. employment rate remained at 9.7% with jobless rates showing little or no change. of the 14.9 million unemployed in february, the proportion who had been jobless for 27 weeks or more was 40.9%. the number of individuals working part-time rose to 8.8 million in february, offsetting a large decrease in january. in voluntary in part-time employment levels held at or near 9.2 million in the final

months of 2009. before closing out like to return to the issue of how the severe winter weather in february may have affected the payroll employment estimates released today. major snowstorm struck parts of the country during the referenced. for our established survey. many schools, government agencies, and businesses closed temporarily and many people were off work for a time because of the storms. in the establishment survey, workers did not receive any pay for the entire period and therefore were not counted as employed. not every closure or temporary absence caused a drop in employment. workers are counted as employed if they are paid for a single hour during the referenced pay period. whether they were not. half of all workers have biweekly, semi monthly, or monthly pay periods. i would assume that most of them worked during the part of the

pay period that preceded or followed sesno events. we do not know how many workers may have been added to payrolls for snow reproval -- snow removal cleanup. we do not know how many new hires are separations were affected by the weather. we cannot say how much february's payroll employment was affected by the severe weather. persons with the job his work for weather-related events for canada's employed whether or not there were paid for their time off. in summary, non-farm payroll was little changed in february and that the unemployment rate held at 9.7%. my colleagues and i will now be happy to answer your questions. >> using the phrase used earlier, little changed, is encouraging.

from my vantage point, it is hard to use phrases like good news to be overly positive, but it is encouraging that we are at least stabilizing. that is critically important. i wanted to ask about a couple of sectors. i want to ask about health care. consistently, health care employment as an industry has been fairly strong. i want to get your sense of that over the last couple of months of what you see for the rest of the year, to the extent that you can predict or identify a trend in health care. >> health care has continued to consistently add jobs, even during the worst times during this recession.

this past month health care at about 12 dozen jobs. over the past four months we added an average of 15,000 jobs -- this past month healthcare added about 12,000 jobs. >> i know we have had a manufacturing challenge for a long time. any other areas within the last year or last couple of months that you can point to? >> manufacturing, job growth was flat this month. that is the first time manufacturing has shown job gains in three years. >> i would call that good news. >> a lot of the industries have stopped losing jobs.

they have been fairly flat for a few months. the actual job loss has been centered in things like construction. we lost a notable amount of jobs in local government this month. >> in my opening remarks i talked about comparing january 2009 and february 2009 with the 2010 months. do you have those in front of you? i just want to establish that on the record. >> in january 2009 we lost 779,000 jobs and in february lost 726,000 jobs. that is compared to 26,036

thousand in 2010. -- compared to 26,000 and 36,000 in 2010. >> i know my time is running out. veterans and americans who have disabilities, i was handed a note here that i wanted -- if you could answer this, because i know we are low on time.

veterans from the post-2001 gulf war, i am told that rate is higher than the national veterans rate. can you just walk through some of those? >> the unemployment rate for february was 12.5%, well above the national average. >> is their no. 4 overall veterans? >> for overall veterans, the unemployment rate is 9.5%, actually a little less than the national average. >> so the folks serving most recently are having a tougher time? >> yes. >> persons with disabilities, do you have that number? >> yes, i do.

the unemployment rate for persons with disabilities is 13.8%. i will say that the more notable fact on people with disabilities is a very low labor force participation rate. it is only about 21.9% for people with disabilities, as opposed to over 60% for a national average. >> earlier this week the white house attempted to spin the bad numbers in advance, knowing their policies have failed our economy miserably. larry summers said that the snowstorms localized would distort that unemployment jobs numbers of today. that is equivalent of the doll 8 might economy as an excuse. -- the dog ate my economy.

you collect jobs numbers for our country. one is the household survey were you call people and ask them, and obviously if they are on vacation or home sick or prevented from working by bad weather, and they are not counted as an employee, they are just not working that day. the other way you collect information through the employment survey, you sit in your testimony, the only way they would be counted as unemployed is if they received not a dime during the month of their pay. -- pay period. they would have to be out of work for the whole pay period to be counted as unemployed during that time, is that correct pressure or cracks yes. >> would you say that the snowstorms distorted the jobs numbers you presented today?

-- is that correct? >> yes. whatever happened with the snowstorms this month will be gone by next month, so we will see a bounce back if there was an effect. there is really no way for us to precisely known. obviously we saw a decline in hours worked, but as you say with a payroll jobs, it is difficult. different establishments have different payroll periods. we really cannot even give you a good idea of how likely it is. >> i think it is important that we not be trying to spin these numbers in advance when we know they are headed the wrong direction. within the white house did not talk about was distortion caused by the hiring of temporary census workers.

my understanding is that the government will be hiring between 700,000 and 800,000 temporary workers, which will boost the jobs numbers out of the mainstream. in january and february, how many of those census workers were hired and are counted in these numbers today? >> for the job growth today, 15,000 jobs were added for the census. >> i am convinced our economic recovery is sluggish and subpar in comparison to how we respond to past recessions. how we responded to the reagan recovery. against competitors around the world, i am looking at the

unemployment rate from when the stimulus to the effect until today. our unemployment rate increase by 1.5 percentage points. australia has increased by a fraction during that time. canada is one-tenth of our increase. japan has increased by less than one-third of what the u.s. has increased in an employment. we are worse than the european union and falling behind countries like south korea. can you compare -- it appears we are falling behind our major competitors in an effort to come back to a sustained, vibrant economic recovery. can you compare our unemployment numbers and increases over the past year with our major competitors? >> i do not have that in front of me.

i would have to take a look at it. we do make those comparisons in one of our programs were reduced international labor comparisons. in general, our unemployment rate is comparable with a number of european union countries. at the moment, some are better and some are worse. >> i think they've increased 1.2 percentage points over are 1.5. >> thank you again for your work and the work of your staff. i was just going back to chairman casey's statements. it is so easy for us, and listen to my good friend mr. brady, so

easy for us to say that there has not been progress. there has been, and chairman casey pointed out that back in january of 2009, we are losing 729,000 jobs, and in january of this year we are talking about 26,000. is that significant? >> yes, that is significant moderation. >> that is what i thought. it is not about twisting numbers are trying to make them look better than they are. we want every single american who wants to be employed. the fact remains that we are seeing some progress. that me ask you this. going back to the temporary help services, that has been up. how much up was that? >> it was up 48,000 this month.

that is significant, and that is a fairly reliable indicator of a strengthening labor market. >> in other words, it sounds like -- as i understand it, when you have that temporary help, the logica tells you there is a probability that at some point, those jobs will increase in to permanent jobs. is that it? >> historically, when temporary help services start to add payroll -- start to add jobs, the overall payroll numbers increase. >> let me go to the african- american unemployment situation. with regard to african- americans, back in january, last month it was 16.5%, and this

month, 50.8%. i understand that is not a statistically significant figure, but it is a reduction. for african-american women, in january 2010 the rate was 13.3%. now is 12.1%, 1% less. is that significant? >> i am not sure of hand. i am guessing that is probably still not statistically significant, even though it is a fairly large change. gregg's but it is a reduction of a point, is that right? >> yes. >> let's go back to this whole snowstorms situation. i guess that could fall either way, could and it? -- couldn't it? it could have affected the

numbers negatively or positively, is that right? >> that is correct, but i would expect if it has had an effect overall, it would be a negative effect on the numbers. >> in other words, the unemployment rate would have been higher or lower? >> with the unemployment rate, i am not sure it is likely to have been affected much, but the payroll jobs numbers could have been affected. >> in what respect? >> let me give you some perspective. there were literally 1 million people who did not work during the referenced week at all. while we would tell them as employed for the unemployment rate, there is some question as to whether or not these people showed up on payroll when we

collected the establishment data. some of them have shown up and gotten paid. they may have worked at least part of the time, but some may not have worked at all. if they did not work at all, they would not show up in the payroll jobs numbers. so you are saying the numbers of people employed could have been higher. >> yes. >> this whole issue of 31,000 jobs lost in local government. i guess that is pretty significant? >> yes. >> so local governments are seeing their tax bases harm, and they just cannot have the funds? >> the numbers have been consistent with that. we have lost about 17,000 jobs a month over the last four months in local government and about 13,000 a month before that.

it is unusual for local government to lose jobs like that over such a long time, even during recessions. >> we had a discussion about the weather and its effect on your numbers not quite a year ago. your expeditious data are at similar to the ones you gave last year when we had some other weather event that occurred. because of the way you calculate things, it is unlikely that the snowstorms themselves would have had a significant effect, but have you looked back at the way the numbers were calculated back in the blizzard of 1996, and the recalculation of numbers that occurred after things to shoot out from that?

>> yes, actually. as i mentioned, we had a million people who did not report to work during the referenced week. this time in 1996 we had about 1.8 million people who did not report to work, so it was a more severe storm. during that time, there was a drop in payroll employment that saw recovery the next month. there may have been an effective payroll employment in 1996, but again, that was a larger event than this. we still do not know for sure. >> but we may see an adjustment in the figures next month, and likely that will be an adjustment in the direction that the numbers were not quite as bad as they appeared, or just do not know? >> we just do not know. >> on the household data -- let me just apologize if you have already given this number.

we talked about the chronically unemployed, the people who had just given up looking for work. where is our number with this month's report? >> the long-term unemployed, people who are still looking but have been unemployed for six months, that is 6.3 million people, a very high number. we have people who are marginally attached, another 2.5 million marginally attached to the labor force. >> talked-about 17% of people who are no longer looking for work. >> are broadest measure -- it includes the unemployed, people marginally attached, and people working part time for economic

reasons to want to work full time. that rate is 16.8% this month. >> that is higher than the previous couple of months? >> it is down a little bit from last month. i am sorry, it is up a little bit from last month, but down from the month before that. >> on the six months unemployment figures, we are all trying to figure out if we are seeing green shoots or weeds growing in the parking lot, as far as the economy is concerned. just looking at the numbers for february 2009, maybe going back to january 2009, we had 2.6 million people who had been unemployed for six months, but the unemployment number now is well over 6 million. am i reading that correctly?

that role in window of six months of unemployment has doubled over the past year. >> yes. >> comparing this to other recessions and other economic downturns, how is this looking for us? to meet, that looks disturbing, that people who have been looking for work for six months has doubled in the past year's time. >> the level of long-term unemployed is record levels that we have never seen before. the number of long-term and unemployed are extremely high still. >> is that doubling in spite of the things we have tried to do to boost the economy, and that's typically what he sees in a

recession, or is it unusual for this recession? >> the long-term unemployment usually goes up significantly during the recession. it is not unusual for that level to double. sometimes it might go up much more than that. i go back to the recession in the 1970's where it started out at 300,000 and ended up at 1.6 million. in percentage terms, dublin is not unusual. -- doubling is not unusual. we started at a higher rate and we are at a much higher level than we have ever been before. >> mr. cummings was talking about the increase of temporary help and updating the leading indicators. where does this number fit in

with previous recessions? is it getting better, worse, what can we say about the state of the recession? what is this number telling us? >> i am not sure it tells us a lot about current conditions. the long-term unemployed blacks. once the economy starts to recover and we start to grow jobs, this number in the past has continued to go up. >> we put $787 billion into the economy a year ago, or at least we thought we were. then there is talk about a second stimulus bill. people are asking, what good are we doing with pumping these dollars into the economy if we are not seeing any relief for people who have been looking for work for six months?

they are the very ones who were six months into this stimulus package six months ago. the rolling number of looking back for six months, six months ago was august, and we were down six months into pumping all that money into the economy and saving are creating all those jobs, but it did not work out for these folks. >> this number did rise over 2009. the last month or two it has not moved very much. over a longer time, and has continued to grow. >> i wanted to make a few points about the numbers. dr. hall, the total number of americans unemployed right now, according to your report, is

14.9 million. i think the record is clear, not only from your testimony but also from other data we have been seeing or recently, it is validated today that job loss has come down. according to the numbers you gave us for january and february 2009, 1.5 million jobs lost, in 2010, 62,000 jobs lost. i know those numbers will be adjusted, but that is a significant difference. the other reference point i wanted to put in the record, the bureau of economic analysis reported that real gross domestic product grew at an annual rate of 5.9% in the

fourth quarter of 2009, which is a 0.2 percentage points higher than initially estimated. we went from 8- a -- a negative -- i wanted to ask you a couple of specifics on some of these sub sectors. i asked about veterans and persons with disabilities. congressman cummings engine african-americans. i am not sure any of us asked about hispanics. with regard to african-american unemployment, that rate is 15.8, so substantially higher than the overall number. for hispanics, 12.4%?

>> yes. >> i think the percentages are always helpful, but sometimes the numbers are more telling. i forgot to ask about veterans number, the total number -- for those who served post 2001, do you have that number? >> the number of unemployed are 212,000 veterans overall. >> you do not know how many of those -- >> those are post 2001. >> 212,000 unemployed veterans in those who have served since 2001. >> correct. >> and in terms of the african-

americans, we have talked about the african-american total and the hispanic total as opposed to just the percentage of unemployed. >> for african-americans, 2.8 million are unemployed. it is the same number for hispanic or a latino, 2.8 million. >> i think that is all i have for this round. >> i think we are looking for hopeful signs in these numbers. what we are not looking for is false hope, especially one that would a drive an agenda of more

spending. many sectors hold the key to job creation. i think it is important to remember that keeping perspective, we looked -- we actually lost your jobs during this recession than during the 2001 recession. in the first six months of 2001, lost more than 50 million jobs. in this one, 48 million. one reason the unemployment rate continues to be so high is not in the job losses, it is in the lack of job creation. we have almost 8 million jobs

gap right there. i believe the uncertainty throughout this country by businesses, many of whom spoke to the president in his roundtable, where they basically said we are holding on for capital. we are delaying key investment and hiring decisions because of this forcing through this health-care takeover, with all its mandates and taxes. cap and trade will have a devastating impact on our economy long term. just a debilitating debt and we are rapidly approaching levels where we will lose confidence among our investors in the united states. i question is, how do you measure, or are you able to measure the obstacles to an

economic recovery, those rational expectations where businesses look at this massive stimulus with little effect and look at the second stimulus, and are you able to measure the fact that in this environment, businesses are delaying those key hiring decisions? >> we really are not able -- what we can and do measure is the number of people they employ and the wages they pay. >> looking at productivity, it seems that we always look at that hour is that average workers have, knowing that businesses tend to make their workers more productive until

they began hiring back are bringing new people on board. it continues to be around 33 hours a week. the long run averages 35 hours before businesses start to consider adding on and the cost of hiring new employees. what range are we in right now? >> for the number of hours? it is still around 33. i am sure that is correct. i will look up the exact number for you. yes, the average weekly hours are 33.8. glaxo hiring temporary workers is a good sign and should be an indicator. we still have a lot of room to grow in hours per week. they are not quite near where we want them to be before businesses traditionally start to hire.

>> that is correct. we have had some strengthening in hours worked in the last number of months. like temporary help services, that is an indicator of a tightening labor market that in the past has signaled better job growth. >> but construction, manufacturing, the two areas we were told would see the most job gains in the stimulus, he said construction was down how much more? >> 64,000 this month. manufacturing was essentially unchanged. it was essentially flat. >> when we look at this whole issue, we are trying to figure out the unemployment rate and jobs lost, we are talking about net. it is not that jobs are not being created, it is that you are looking at an overall

picture, is that right? >> that is actually true. some of our data suggest that literally 1 million people are hired a week, even now, during a recession. but 1 million people lose their jobs as well, so the numbers we give you our net numbers. >> looking at the long-term unemployed, that is basically people who have been unemployed for at least six months. >> that is correct. >> 23.6% of those people have been unemployed for more than a year. . .

>> to use? >> i meant that. it is true that the job loss has moderated considerably. we are fairly close to neither gains nor losses. that is consistent with the idea of possibly stabilizing. >> sometimes i listened to my good friends on the republican side. it is not that anybody is trying to paint a rosy picture.

we are very realistic. we refuse to look nc a difference between 729,000 jobs lost in january 2009 and 26,000 lost in january of 2010 and said that is not significant. we want every single american working. or we talk about stimulus, and lots of people beat up on stimulus. i had when the most interesting experiences three weeks ago in my district. we hired 50 police officers for who would not have been hired if it were not for the stimulus. to see the show officers -- these are people that we desperately need. i think a lot of people have beat up on summer's and the

administration, saying he predicted this would happen. for trying to predict is not always easy. the fact still remains that we are -- i do believe -- moving in the right direction. i always say i believe in cheering for the home team. so often what happens is they spend so much time looking at the doom and gloom that we do not see the progress that we are making. i want to thank you again for your testimony. i want to thank your staff. hopefully, we will be able to have been even stronger report for the american people with regard to the employment

situation. thank you very much. >> i am reminded of the philosopher who said the future ain't what it used to be. the problem with these predictions, and is not easy to be in the prognosticating business. these predictions were part forward as a rationale for selling a policy or a group of policies that congress passed rather hastily last year. i think the only quarrel that i saw and said i wish to would it taking a little bit more time to get things right. we passed the "cash for clunkers" bill that may have been nothing but accelerate fourth quarter. we are not sure how that will pan out. i think there is someone in my neighborhood to good vantage of "cash for clunkers on " it was passed by congress.

it is available to take advantage of. every day when i walk on my front door, i see the automobile down the street. a cannot help but think my grandson is lent to paper that car every day for the rest of this lies. there are better ways of doing some of the things we have done. we may be blocking ourselves and to policies that may be difficult to unwind. just on the numbers themselves, for when this number hovers around her has been for the last several months -- when is the last time in our economic history that the numbers we are here? -- were here? >> yeah, he is going to look up the exact number. i am sure it is 1983, that recession. >> we talked a little bit about

the number of minorities that are unemployed. what about young people who are just getting out of college? >what is their unemployment rat? >> i may have to get back to you with that. >> where i am going with this -- i can characterize it for you. >> it is really high. >> it is very high. the use unemployment rate tech -- the youth and of plummet trade has gone up quite a bit. >> has anyone looked at it this situation in previous recessions? order the numbers of young people unemployed, college graduates?

for this is verses' times that may be regarded as more normal. does having the bad fortune to start up in your projected years when the countries in the midst of a serious recession -- i think fairly member of 1983. i do not remember 1972. it is hard to find a job. i went back to school because it was hard to find one. it does affected in a significant way. i remember in 1982 or 1983, the new start talking by and people getting out of college with no hope for employment. it is the worst economy that they have ever merged into. with all the statistics gathering, i just wondered if anyone had looked them now that we have the 25 years of

experience. how did they differ from some of their cohorts who might have graduated at times when things were perhaps immeasurably better? you have to ask yourself, a young person who aspires to go to college and once to go to a great college and amassed a lot of debt, is the really a good idea? the expectation of lifetime earnings may have adjusted downward. nolan those along the recession will continue. i think is a valid questions. we as policymakers do need to take the into account. just one last thing. we heard from the american enterprise institute.

he voiced a concern that the extension of unemployment benefits was -- the word is not encouraging, but we were facilitating people staying unemployed. if you all look into that, their 99 weeks of unemployment benefits which time of the six month rolling average. we have gone down to for three years of unemployment benefit. is there any correlation delaney to become aware of it? o>> i do know how to characterize it. the three unemployment rates go up. i do not know the cause and effect of that is. fowe could put together some

studies. >> a thing that will both helpful. -- i think that will be helpful birde, >> the one in to comment about some of the points that were made by my republican colleagues. and a constant refrain has been with regard to the recovery bill. and a they voted against it. i voted for it. a lot of democrats did. there is a real debate about what has been working in what has not been working. for when you look ahead in terms of the congressional budget office, they said the recovery

act added between men in the end to put 1 million jobs by the fourth fourth quarter. the cbo director house is not a partisan in this debate. he said "the policies that were enacted in the bill are increasing gdp and employment relative to what it otherwise would be, " fo." i am glad that congressman brady a couple of minutes ago was talking about history. history can be relevant. you mentioned the reagan era.

he also compared job loss in two different time periods the history is instructive in the number of ways. if you look at in terms of jobs gains, it gained 22 million jobs. under president bush, about 2 million. you look at in terms of deficit, one president clinton left office, the following things that happen, the surplus was to $36 billion. for president bush left office, it had changed to about a $1.30 trillion deficit. reno with the job numbers were in december of 08.

with one to talk history, we ought to put that on the table as part of this debate. president obama walked into 2010 facing a set of economic circumstances that no congress had faced since the 1930's. and when not declare our say the recovery bill has worked perfectly bur. we still have a year of john starting effects from the recovery bill. a dillon to get a question about manufacturing jobs. we did have some good news there in a sector that we seem to never have been is in. can you just walk through the for us? >> for manufacturing has had a real long-term decline in

unemployment. for the previous recession literally did not recover any jobs. they have now lost a couple million. the last couple of months, the job loss is moderate it. >> no job loss? >> over the last couple of months. the job loss is really moderated. >> 6000 manufacturing jobs lost over the last formant? >> in my opinion, that is good news. >> congress has the power of the purse strings. i'm trying to call who was in charge of congress. it is republicans, if i recall, in the major surplus.

i'm trying to member who led the persian and congress for two years. i do recall that we were promised if we pass that a hundred dollar trillion stimulus the we would predict unemployment will be no higher than 8%. it would creeate jobs. we are having a run since our unemployment. we have lost another 3 million jobs. only 6% of americans said they believe the stimulus created jobs. have americans not feel less financially secure today then they did when the stimulus past. i'm a fan of the cbo in a major way.

since the report, to different reports have showed the stimulus had little impact. one reported showed it to actually cost the economy 3 $10 billion because it is crowded out. it has created jobs in the government sector. it is wonderful. fojobs in the private sector are what drives the recovery. we want the jobs to be created. they see them sells under taxes -- themselves under taxes. our real-estate industry and hedge funds and medical devices -- it is no wonder they are not

hiring jobs. i think again of will together to find the economic policies that work best for america -- we are anxious to work together with the democrats th. >> fought for th>> the will loos 2020. there are lots and numbers above the recovery reinvestment act. our contribution to growth will turn negative during the latter part of 2010.

it would be nice to give it more time. i do not know the giving it more time is necessary. dr. hall, we appreciate you coming in and sharing for wisdom. i would appreciate if you could dig up those figures. for a vote for it to visiting with you. >> i fail to mention why i am in this committee. congress woman alone cannot be here. she has been ever faithful in attending these hearings. she is not able to be here. i want to thank our colleagues from making a long trek in the house to the senate. we are trying to have this hearing in both places. the debate will go on. thank you very much.

>[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> president obama said the new jobs report was better than expected. he added to many families are struggling. he urged lawmakers to expand unemployment benefits. the president made the marks in virginia while visiting employees of a small business's top of his initiative for clean energy jobs. >> good morning, everybody. it is great to be here at opower. and just looking around, this looks like a fun place to work. the work you do here, as we just heard, is making homes more energy efficient, it's saving

people money, it's generating jobs and it's putting america on the path to a clean energy future. and i understand last year that you doubled your workforce thanks to bonnie [applause] -- you're hoping to hire another hundred workers this year. and so this is a model of what we want to be seeing all across the country. our goal for the economy is to show similar job growth in the months ahead. this morning we learned that in february our economy lost an additional 36,000 jobs. now, this is actually better than expected, considering the severe storms all along the east coast are estimated to have had a depressing effect on the numbers. and it shows that the measures that we're taking to turn our economy around are having some impact. but even though it's better than expected, it's more than we

should tolerate. far too many americans remain out of work. far too many families are still struggling in these difficult economic times. and that's why i'm not going to rest, and my administration is not going to rest, in our efforts to help people who are looking to find a job; to help business owners who want to expand feel comfortable hiring again. and we're not going to rest until our economy is working again for the middle class, and for all americans. and that's why my immediate priority is not only providing relief to people who are out of work, but also to help the private sector create jobs and put america back to work. earlier this week, after

breaking through a political logjam that some of you probably saw if you were watching tv, congress passed and i signed into law a bill that extends unemployment insurance to help people who've been laid off get through these hard times. it also extended cobra so that folks who've lost their jobs don't lose their health insurance, and it extended financing for small businesses, and makes it possible for 2,000 furloughed transportation workers to go back to work. so signing this bill and getting relief out the door swiftly is absolutely essential. but it's only a temporary step. the relief i signed into law will last about a month. and that's why i'm calling [on] congress to extend this relief through the end of the year. and because the best form of economic relief is a quality job, i'm also calling on congress to pass jobs measures that cut taxes, increase lending, incentivize expansion for businesses both large and small. now, both the house and the senate have passed a bill that would give businesses a payroll tax refund for every person hired this year. and for companies that are considering expanding, this credit could help them decide

to bring an extra employee or two this year. so for companies like opower that are doing pretty well and already expanding, the tax credit may help them decide to hire even more workers more quickly. so instead of a hundred, maybe we get 110, 115. we'll see. this bill would also encourage small companies to expand by permitting them to write off expenses for new equipment. and while it's by no means enough, this legislation is an important step on the road to recovery, and i look forward to signing it into law. now, even as we fight to help the private sector create more jobs, and even as we fight to bring about a full economic recovery, we know that there have been success stories all across america. opower is one of those success stories. this is a company that works with utilities to help folks understand their energy costs and how they can save money on their energy bills. and for the press, if you weren't able to hear, this board testifies to the number of kilowatt hours that have been saved, the amount of money

that's gone back into consumers' pockets, and the amount of carbon that has been taken out of the atmosphere as a consequence of the great work that these people at opower are doing. now, part of the reason i suspect you're growing is that you're doing your jobs well. but i also know that a big part of the reason is that you're seizing the opportunities of the future. the jobs of tomorrow will be jobs in the clean energy sector, and this company is a great emblem for that. that's why my administration is taking steps to support a thriving clean energy industry across this country -- an industry that's making solar panels, and building wind turbines, producing cutting-edge batteries for fuel-efficient cars and trucks, and helping consumers get more control over their energy bills. and that's also why earlier this week i urged congress to enact a new initiative we're calling homestar that would offer homeowners rebates for making their homes more energy- efficient -- rebates worth up to $1,500 for individual home

upgrades and up to $3,000 for retrofitting their entire home. so if they're getting this good information from opower and they see that, boy, that drafty window is costing me a couple of hundred bucks a year, they're now going to have an incentive to go to home depots or go to lowes to hire a certified contractor and make the changes that will ultimately pay for themselves, improve our environment, and improve our economy. i want to thank, by the way, your home state senator, mark warner, for his great work on homestar in the senate. think about the way that the rebates we're talking about could help spur private sector job growth. it could not only help businesses like opower to help consumers make their homes more energy efficient, it's also going to create business for the local contractors and the

companies hired to upgrade homes. these companies then, in turn, have to purchase supplies and that creates business for retailers. these retailers would need to restock their shelves, and that creates business for manufacturers. and almost all the goods that are required to make homes more energy efficient are actually produced right here in the united states of america. it's very hard to ship an energy-efficient window across an ocean. so, yes, people who are out of work right now need some immediate relief. yes, we need to extend unemployment insurance and cobra to help americans weather these tough times. and, yes, we've got to do everything we can to help the private sector create jobs right now. but even as we do, we also need to replicate the success of clean energy companies like opower. we need to invest in the jobs of the future and in the industries of the future, because the country that leads in clean energy and energy

efficiency today, i'm absolutely convinced, is going to lead the global economy tomorrow. i want that country to be the united states of america. i want companies like opower to be expanding and thriving all across america. it's good for consumers. it's good for our economy. it's good for our environment. it's wonderfully exciting to be here. and i think when you look at this group that's gathered here, you can see the future in this company. so thanks for the great work you guys are doing. let's see if we can replicate your success all across the country. thank you very much, everybody.

>> and assigned into law one year ago this month. over three and a $43 billion has been committed to states by the federal government to spend an stimulus projects that is up $5

billion from last week. $190 billion has been paid out for the project but giv. will find other events including congressional hearings. there are links to government and watchdog groups. that is c-span.org all. -- that is all at c-span.org/ stimulus. >> up next, barney frank talks about home ownership and senator christopher dodd talks fell efforts to create a consumer protection agency. then remarks by mitt romney. after that, mission in -- michigan congressman john dingell talked about it.

>> tomorrow on "washington journal" the editor of "fiscal times." michael shifter reviews secretary of state clinton's trip to latin american this week. >> we are in the business of trying to help our students, predominantly young women to understand that you should focus on the duke >> patricia mcguire on c-span. >> none barney frank talks about

the housing regulation during a conference[applause] >> thank you. let us get started. unfortunately, we really need to get started. i was asked to come until 930, and i have a habit of trying to stick to a schedule. i have events that i have to stick to that depend upon my reading at the agreed upon time. i am pleased to be here. i say that more often than i mean it, in my line of work. [laughter] we also must often tell people how much we regret not being

somewhere. you have heard people say, "i cannot be with you in person, but i am with you in spirit." in my line of work, it is often the opposite. it is very time-consuming. [laughter] i say that because you are people in the business of selling houses. one of the things we have to rabat, and you do it more effectively than anybody else because of what you do, is the notion that sensible regulation somehow is an attack on the business being regulated. in fact, the absence of regulation is the worst thing for the economy. we are in a terrible economic situation now, the worst since the great depression, because of the absence of sensible regulation, because in some cases the regulations are on the books and people refuse to use them. alan greenspan was given by the

congress in 1994 the ability to regulate mortgages in and out of the banking system because more of the problems came outside the banking system than inside. he refused to do it for the ideological reasons. if he had used that authority, we would not be in the same problems we are today. in other cases, new forms came up -- derivatives, credit defaults swaps. the problem was not the regulation but non-regulation. when the economy evolves as it does, the new parts reach a point where new regulation is needed because there are new phenomenon. theodore roosevelt recognized that. franklin roosevelt recognized that. the people in power until recently did not understand the

need for that. we are trying to put together regulations for the financial community that will do what theodore roosevelt and franklin roosevelt did -- not attack private business, but set up fair rules. you understand that. let us give an example -- the community reinvestment act. it is a right wing argument to blame the community reinvestment act for the fact that they would not regulate some prime mortgages. -- regulate sub-prime mortgages. i support broadening the community reinvestment act. the thing to underline is that, disproportionately, the bad

loans that should not have been made were made by institutions outside the scope of the community reinvestment act. if only depository institutions had made loans, we would not have the crisis of today. blaming the community reinvestment act for this problem makes no sense. to the credit of appointees of the bush administration, almost any appointee it involved in the administration of these regulations has joined us in saying you cannot blame the community reinvestment act. i welcome your support for a consumer financial protection agency. there is an odd argument we are getting. it is that you cannot have a consumer financial protection agency unless it is subordinate to bank regulators because it would be damaging to the safety and soundness of banks to have an independent consumer regulator. in other words, there are people who believe that if banks are not able to treat consumers unfairly, they cannot survive. [applause] banks have increasingly gotten more of their funding from overdraft fees, credit cards, and other fees. there are two problems with that.

it is not good for consumers, but it is bad for the economy in a broader way. it reduces their need to lend to make money. a bank would make money by lending people money and getting interest on those loans. as they find other ways to make money, there need to lend is diminished, and that is part of the problem. we are going to be pushing for more literacy. there are various things that are going to be difficult to do. mandatory anything is difficult in this country. we are a country of people that are fairly independent. mandatory education is going to be difficult. i am not yet convinced there is a problem of who pays for it. clearly, we want to at least agree to make it far more available than it is. i want to touch on a couple of other things. on modification, i want to outlay this thinking. we have worked a lot on this. trying to deal with the

foreclosures situation is important to stabilize in housing prices. people say housing prices were too high. isn't it a good thing they went down? yes, but not at the speed with which they have gone down. i have lost weight. i would like to lose another 15 or 20 pounds. but not by sunday. that would not be healthy. [laughter] there is both the need to reduce but also the pace at which you do it. i met with the obama administration people. we have investors who own these mortgages, ready to write them down. we are talking about principle reduction. a big obstacle is the holders of the second mortgages. there are people who hold second mortgages which are not worth anything. for a variety of reasons involving accounting rules, a number of people say -- many of

them owned by the largest banks. i have written to them to ask how we can deal with the second mortgage issue. one of them is to give them shared equity potential for the future. we are continuing to find new ways to try to deal with this. the point i want to make is this. i think the people here best know this. we have had this false choice between home ownership and knocked -- and not. what we are looking for is responsible home ownership. you do know what a favor when you induce him or her to buy a home that he or she cannot afford or can't afford only if everything goes perfectly. -- or can afford only if everything goes perfectly, if you need no repairs, if no one loses a month of work, if no one in the family gets sick. you can look at things on paper that will only go if there is

nothing to stop it. this is what education is important, and counseling. i am a double renter. i rent apartments here and in massachusetts. i have, in the past, on the condominiums. given my personality and work demands, i should not be a home owner. i do not want to be in the middle of a committee session and be told that the pipes broke or the work is -- or the roof is leaking. i need to be able to call somebody and say, "please fix it." home ownership is not something you can do on autopilot. your home needs to be well

organized so that you can -- your life needs to be well organized so that you can deal with these things. the flip side of that is that we had people in power for too long who did not appreciate rental housing. that included the clinton administration as well as the bush administration. one prominent member of the clinton economic team used to say, "no one has ever watched a rented car," as if that meant you could not rely on renters to take care of their homes. most people do not live in cars. they treat a car they rent for a weekend differently from their home. also, people do wash leased cars. a rental apartment is more analogous to a car leased over many years. i had this debate with a sector of hud. i was asked if i would support reducing the section 8 program so that no one could be on a section 8 rental vouchers for more than five years.

i said can you arrange for them not to be poor for more than five years? if you can get them not to be poor, then i will agree. he said, "what is your objection?" i said, "if you cut people off after five years, where will they live?" he said, "we will help them become homeowners." that was the damaging idea. rental is important. home ownership is sufficiently important to be treated more seriously than we have treated it. we have put them into those homes to quickly and too easily. there was the point that was documented recently, relevant to the group that is here. racial discrimination continues. i think i am fairly sensitive on the subject of race.

but i was reminded recently how living day-to-day is different than just looking at it. i was making a point i have made before. in the security minded world, one of the things you get our trunks sales. -- are trunk chekcs. has anybody who did the trunk checks at a security point been subjected to a search? everybody i mention that to said know until i talked to an african american man yesterday. he said he gets it all the time. race is still there. we were reminded by that done in massachusetts -- we were reminded by a survey done in massachusetts.

non-white borrowers were much more likely to be given some prime loans than white borrowers with less income. that is something we have to deal with. you are obviously people who can help us fight that. i want to leave some time for questions. we are going to continue to promote responsible home ownership with your help. one last point. we were supposed to have a hearing yesterday. i had to cancel it because of a conflict in my schedule. we are going to begin hearings on the subject of housing finance. it is not just any mae and freddie mac. it is the fha. we have a number of institutions involved in housing finance. we have a number of functions, the deep subsidy.

i want to do that for rental housing. we have a shallow subsidy for home ownership. that specifically works through the fha. we have the function of replying -- the function of applying liquidity. a mixed function turns out not to work. with fannie mae and freddie mac, a privately owned corporation with a public commission did not work well. warren buffett has a great quote. when the tide goes out, you see who has been swimming naked. that is what we found out. we are going to close them, moving forward. let me throw this open to any questions and comments. i would be glad to respond. >> [inaudible] right now, the disaster policy [inaudible]

the time. is just too long. it is keeping us from getting people houses while credit deteriorates. >> this is a taxation issue. >> this is the fha rules. we need a disaster policy. it eliminated the flip rule. it allows us to get the housing stock back on the market. >> gail lester, who was the council at high debt, is now part of the housing service for the committee.

give that to gail and she will take it back to look at it. we will talk to the fha about it. yes, sir. go ahead. >> [inaudible] you made mention that second loans are a big issue. what efforts are you making to deal with investors? >> we were worried about the investors. we now believe that the investors -- we have servicers, investors. we were looking at them. we now believe many of the investors are ready to accept the fact that they are going to get something instead of nothing. that cannot be easily worked out unless the second lienholder agrees. they are probably going to get something. the second lienholders are probably going to get nothing. people have more of an incentive

to get something done to get nothing. -- to get something than to get nothing. bank of america are a major presence in my district, and we have worked together. citicorp, j.p. morgan/chase, and wells fargo -- i have written to the four ceos saying we need to talk about this. it is an accounting issue. the second lands are not working, but by accounting rules they may not have had to acknowledge that. at the point when they acknowledge that, the banks' capital could be negatively affected. we had a meeting yesterday. we have met on this with people from hud. we are trying to figure out a way to deal with that accounting issue. there is a group of people who

are talking about trying to do a shared equity situation to get the modifications down. if that happens, then the second lienholders would have to be given a piece of any equity appreciation. it is accounting. i have written to the four big banks that hold the second liens. i have said we cannot get this resolved -- what can we do that will help you? that is where we are. i have time for one more question. >> [inaudible] the problem -- >> that will not happen. >> the main thing is we need

them to stay consistent. right now, our problem in community is that the only available loan is fha. we have been there before. >> we are not going to change -- the status quo is going to remain until we know what is going to replace it. we have the fha. fannie mae and freddie mac are no longer private corporations but a public utility that is being used to help finance housing. what we will start with on the functions -- there are subsidies for rental housing. we may want to do a show lower subsidy for home ownership. there is general liquidity on the secondary mortgage market. there is back stock if the market freezes up, so you have a liquidity short-term problem. we are big -- we are going to begin by looking at all of those and figuring out what institution should do that. we are talking about -- given these functions, what is the best way to deal with them institutionally? do we need to have the

government start them up or not? until we know what the new system is, no one is going to interfere with what is going on. no one is going to say fannie mae is now under fha. we are talking about a new set of institutions doing various functions. until we get those in place, we are not going to disturb existing arrangements. thank you all. the >> on the senate floor, christopher dodd talked about efforts to create a new federal consumer protection agency. his remarks are about 20 minutes. >> i'm going to take a few minutes to sort of lay out where we are on the efforts to reform the financial structures of our country. it has been a long undertaking. won't go into great detail, but

i thought it might be helpful for our colleagues and others to get some sense and a feel for how things are progressing. so i'll share some thoughts on the major issues that we're grappling with. and i want to begin by thanking the 22 other members of the banking committee. one-quarter of the senate is seated at that table in our banking committee hearing room. and i want to thank every member for the work. we've been deeply involved now for well over a year -- more than a year, a year and a half -- on the issue of how should we shape the regulatory structure? reform it. we've had just this year alone i thinking is 80 hearings just on the subject matter listening to a broad range of experts and others who have brought their thoughts an ideas, not to mention the informal meetings that occurred outside of the normal hearing process. it's been a long undertaking and a worthwhile one, trying to

examine the causes of that problems that have been devastating to this country and outside of the country, the economic collapse or near collapse and then from that experience try to shape senate policies that will fill in the gaps that led us to this problem on the one hand and, secondly, try to take the steps so that we're prepared to deal, as we will at some point in the future, with another economic crisis as it comes along. to have what i call an architecture or structure that will allow for our system to be able to respond far more prudently than it was able to in the last couple of years. i should add as well, a third goal, and that is to make sure we make a structure that not only grapples with the crisis but be a source of innovation, creativity or wealth creation, job creation that our financial sector had to accomplish over the years. those are not inconsistent

goals. they're a challenge to balance them. and it's never perfectly right. but our responsibility, both as legislators in this chamber, and the other body, as well as the role of regulators and obviously those in the private sector and public sector is to try and strike that balance. -- that balance between protecting the public and consumers who use financial services as well as to be able to provide a level of confidence to those who use them that the system is going to be fair. it doesn't mean you're going to get a guaranteed return when you buy a stock, but you ought to feel confident when you deposit your paycheck that the institution will be there or you'll be protected from losing those resources. mr. president, i wanted to take a few minutes to share the thoughts on where this is. i want to pay particular thanks to the members of the committee. as many people are aware, senator shelby and i, the ranking member, have been

working together since i have been chair on this committee, and i am grateful to him for his efforts. he's been involved with this the debate significantly. i want to thank bob corker, the senator from tennessee, a new member of this chamber, but has performed a tremendous task of trying to sit down and work out the differences and they are complex and they are difficult, but nonetheless, he has rolled up his sleeves and demonstrated a level of maturity and interest far beyond his years of service here. all of us, and i certainly want to thank him publicly as well for his efforts and the efforts of his staff to get there. jack reed of rhode island, chuck schumer, mark warner, have taken on particular heavy lifts, and i'll talk about them in a minute as i discuss what's going on, along with judd gregg, mike crapo of idaho as well. there are a lot of people involved in this, mr. president, as we go forward and i would be remiss if i didn't acknowledge

their hard work and that of their staffs over the many months. we're still not there yet. i'm not here to announce an agreement or it tell you that we've reached a consensus. we're trying to get there, but we're not there yes we're making an effort to see if we can develop a set of proposals here that would enjoy broad support in this institution as we go forward. so, mr. president, we've all seen, of course, the devastating consequences, and i hardly need to spend much time enumerating, i hear people are living them every day. they don't necessarily need to hear them outlined, but i'll just share again what all of us are painfully aware of, 8.4 million jobs have been lost since december of 2007. the unemployment rate currently at 9.7% has been obviously far too high. i think all of us know, i think that the presiding officer does, there are pockets that 9.7% is half the unemployment rate in certain areas, in rural america,

urban america. 6.1 million americans have been without a job for half a year or more in our nation. millions of fellow citizens who did nothing wrong have nonetheless lost homes, their retirement security, their jobs, their health care. small businesses unable to access credit have been forced to lay off workers, reduce production or even to shut their doors as many have. working class families in our country have seen their wealth decline significantly. and, worse of all, today we remain entirely vulnerable to another crisis. we haven't finished this work and if something were to happen again tomorrow, as much as we've been working on this issue, we haven't passed the necessary legislation that would minimize a crisis bringing us close to the brink of financial collapse as the one we're presently in did. so obviously the status quo, remember that word, kind of getting tired of those words, business as usual, whatever you want to describe it as cannot

persist. congress and i in my view, particularly this body, must pass comprehensive, meaningful reform of our financial system. and my intention is to do everything i can in the waning days of my service after 30 years here to achieve that goal. we've got to correct the failure that's allowed us to get into this mess that we're in. but we also also develop a regulatory system that is prepared for the next one and ones that going to invite as well the kind of creativity and innovation that allowed for job creation, wealth creation that our system has in the past provided. over a year ago the banking committee, as i pointed out earlier, set out to investigate the causes of the financial crisis and the vulnerabilities that lie in our financial regulatory -- regulatory structure. over the last year or more we've had dozens and dozens of gatherings, hearings, informal, formal meetings. we've listened to hundreds of experts in a wide variety of fields that have been either

affected by or offered some ideas as to how we can create this architecture that i talked about. we have examined and reexamined all sets of proposals sent to us by the white house, the treasury, the federal reserve, the fdic and others. in november of last year i offered my colleagues a discussion draft -- at least where i was. i didn't suggest it had cosponsors or backers, but i thought people ought to know where the chairman of the committee was. so i laid out a broad proposal in these areas. well, it certainly produced a discussion, mr. president, i can tell you. not always a welcomed one for certain quarters. i thought people ought to know where i stood on these issues. if i were going to write this alone and didn't need anyone to offer their ideas and suggestions, i had some pretty strong -- i think sound as well, but sound ideas as to where we ought to be. i asked my fellow committee members, democrats and republicans, to work on major parts of the bill. it is so complex and big and

broad the subject matter that i didn't any one member, even a chamber and a ranking member could necessarily put our arms around all of this. and so i asked various members who expressed an interest in various subject matters if they'd take on the responsibility, a democrat and a republican, working together, to see if they could come up with some ideas that would be sound, intelligent reforms in the financial system. it has b >> > i believe we are well on their way to producing a strong bill. the problems in our economy ran systemwide. what there is a temptation to address only one or two in claim victory, we are working our committee on a bill to attack these problems of vulnerability. we believe it will make a difference.

the bill is designed to achieve for a major accomplishment. one -- and i would argue if i had to prioritize it -- ending too big to fail bailouts. for that to me is the most important thing we can achieve. never, ever, ever again to the american taxpayers need to write a check because there is an implicit guarantee that the federal government will bailout company that threatens the stability of the economy. to make it so undesirable for a company to get to bicker too complex -- we will make it undesirable for a company to get too big or too complex. large complex companies can be shut down for bankruptcy or regulation in a way that does

not hurt the economy or expose the american taxpayer. it is a bankruptcy. it is a receivership. it is painful. we are very close to achieving that. i want to thank spmark warner of virginia. . . tennessee who dealt with this issue, this and the systemic risk, which i'll mention in a minute, and they have worked i don't know how many hours sitting down, trying to fashion this resolution mechanism. but the idea that we'd watch the american taxpayer write out a check for $700 billion, knowing the reaction of the american public. and by the way, in the absence of what we're trying to do here, i think we did the right thing. had we not done it, i think the financial problem would have been a lot worse. but we never again ought to be put in that position where that's the only alternative we have.

this bill will address that issue, mr. president. this bill will address that issue, mr. president. se warning system in the economy so that somebody is looking out for the next big problem. the bill would create what we call a systemic risk counsel -- that's our goal -- that will have the job of looking across the economy to identify unsafe products, activities, institutions that could threaten the economy as a whole in the future. we cannot afford to be caught off guard again by obvious weaknesses in our system, because no one is responsible for taking a broad view. again, not going to stop everything but we didn't have that ability in the past. and, again, mark warner and bob corker have worked very, very hard on resolution mechanism and systemic risk and all of us owe them a debt of gratitude for their efforts. third, mr. president, we bring transparency and accountability to the exotic instruments such as derivatives, credit default swaps, things that are rather arcane to most americans, to put it mildly, but who have been

lurking too long in the dark and we're able to -- were able to cause untold damage to our economy here because they lacked transparency and regulation. we change that in this bill. that's our hope, anyway, when we get to the conclusion of it. we've got to regulate these activities that left investors and our economy open to the tremendous risk that they didn't even know existed. billions of dollars, literally billions, being traded and, frankly, gambled behind closed doors drove our economy to the verge of collapse. senator jack reed of rhode island, judd gregg of new hampshire, and their staffs have been working on this issue over many, many weeks, mr. president, to try and come up with an intelligent, thoughtful, well-drafted set of proposals on -- on these exotic instruments, particularly derivativesment -- derivatives. i want to thank them for the job that they've done and i'm confident when our colleagues have a chance to be briefed about their efforts, there will

be broad-based support for what's included in our bill. we've got to rein in these crazy compensation packages that have outraged the public and hurt companies by rewarding short-term profits and wild risk taking. senators chuck schumer, mike crapo -- chuck schumer of new york, mike crapo of idaho and their staffs, have been work on governance issue. and more work needs to be done on this but i want to thank both of our colleagues, again, a democrat and a republican, trying to come up with some ideas on governance issues that will avoid some of the problems that we've all -- we're all too familiar with. and we create and one that's attracted probably the most attention because of the issues involved, we create a strong and independent consumer protection watchdog, one that's never existed when it's come to financial services. it's somewhat ironic, i suppose, that we have a consumer product safety commission so if we buy a toy for our children or a product or an acompliance and it doesn't work -- or an appliance and it doesn't work or it causes

us great harm or danger, there's a place called the consumer product safety commission that will protect us from these hazardous -- hazardous appliances. and yet when it comes to financial services, we've had no place really to go to get the similar kind of protection. that analogy has been drawn by others in the past and i think an appropriate one. we have undertaken this effort. it is controversial, mr. president, because i think there's a lot of -- of fears people have about what we're trying to achieve with all of this and yet if you look back and you watch what's unfolded over the last couple of years, and particularly where you watch and you see some of these barons of the financial services sector reaping millions of dollars in bonuses after their companies have been shored up through taxpayer efforts and yet the very people who had their homes, their jobs, their retirement, their health care, their life savings put at risk, what do they get? having come up with the tax dollars to protect these

industries? and so we want to see to it that we never have again the consumer of financial products be unprotected when we start examining these issues. and so we're working at this issue here to put together what i have set out as some principles that should be included in a consumer protection watchdog. failure to protect consumers, as i think most people know, led to some of the dangerous practices that saw -- that we saw and put our economy at so much risk. people were given mortgages they didn't understand and couldn't afford and to ensure strong consumer protections. the real question is, will this office have the independence and the authority that it needs to get the job done to take care of consumers. mr. president, i've focused on four principles from the very beginning of this debate. involving this consumer protection idea that we hope to produce. one, it have an independent head

appointed by the president of the united states and confirmed by this body, the united states senate. secondly, it have an independent budget so that the office will have the resources it needs to do the job. thirdly, that it have the autonomy to craft rules and protect consumers. and, fourth, an ability to enforce those rules as well. with these features, the office i think can act to protect consumers from the kinds of abuses we've seen, such as skyrocketing credit card interest rates, an explosion in checking account fees or predatory lending by mortgage industry. where rent space is less important -- not unimportant but less important -- what power and authority 2 has is -- it has is the more important question. and obviously you want to do this in a way that does not in any way jeopardize the safety and soundness of institutions. and i don't believe there necessarily is any conflict here, although some suggest there may be. so we're trying to provide as well a mechanism to resolve when, in fact, you may have some conflict between safety and soundness and consumer protection. i understand that concern. we're trying to accommodate that

while simultaneously maintaining the independence and autonomy of this agency. our goal here is to end the status quo, as i said earlier, words i'm getting tired of using but obviously doing nothing is unacceptable. and to create a system where honest businesses, large and small, can thrive on a level playing field, where middle-class families can afford work, invest with confidence, and achieve the dreams they have for themselves and their children. so today, mr. president, i'm pleased to report that good work has been done by democrats and republicans both on the banking committee and they've put in -- to put financial reform in a strong position. and while we do not have a bipartisanship agreement yet at all, we're getting there, we're trying to. i don't know if it will happen or not. i'm optimistic it can happen but i've been around here long enough to know that these things can fall apart very easily. it's fragile. it's complex issues that you think you've resolved can both produce unweeken unintended con. and trying to get this, most importantly, getting it right.

so while i'd like to get it done soon, i want to make sure we do it correctly and properly. and it's one of the hardest tasks i've ever been asked to undertake in my years here to try and fashion these proposals in a way that can bring broad support in this institution. so we don't have an agreement yet but because i've got colleagues like the ones i've mentioned on the democratic side, like jack reed, like mark warner, like chuck schumer, like tim johnson -- i could go down the list here -- that have worked on this these issues, i also have colleagues like bob corker and dick shelby and others on that side to see if we can't reach those agreements. and i know in the face of everything you're hearing about congress these days, that nothing seems to be working here, we are making an effort, mr. president, to come up with a proposal here that will achieve those goals. a good, strong bill and one that will enjoy good, strong support in this institution. so with that, mr. president, i -- i hope i haven't talked too

long but i wanted to give you at least a flavor of where things are today, and as i said, we're not done yet but i think we're in a pretty strong position to achieve a good, strong bill, one we can be proud of in this institution. and with that, mr. president, i yield the floor >> up next, remarks by mitt romney. after that, john dingell talks about his career in congress. then the joint economic committee reviews february employment figures. this week on america & the courts , the australian chief justice discusses -- the chief justice discusses the four lot in domestic courts issue.

that is tomorrow at 7:00 p.m. eastern on c-span. >> the next to journalism must be one that is open to blog and e-mails that are hammering slight fists on the door to be let into the conversation to add new information, to raise new questions, to suggest new context. >> winners of this year's national press foundation awards talk about the role of journalism in a changing society saturday night at 8:00 eastern on c-span. >> former massachusetts governor in 2008 gop presidential candidate mitt romney discusses a range of issues including health care and the economy, government debt, and national security, and talks about the obama administration's handling of the issues. this event lasts about one hour.

>> we are committed to our club. you can visit our web site at www.press.org, or visit at www.press.org/library to donate. i would like to welcome our speakers and guests. i would also like to welcome our c-span and public radio audience. after the speech concludes, i will ask as many audience questions as time permits. i would like to introduce our head guest. from your right, the publisher of the roads cook letter, a reporter for bloomberg news,

congressional correspondent for nbc news, washington columnist, senior vice president, skipping over our podium, an associate editor of the national press club's speakers' committee, skipping over our speaker to a senior associate editor and former president of the national press club, washington national committeeman, and a reporter and a press secretary for legislative affairs of the national resources defense council, and a washington bureau reporter for the "detroit news." [applause]

sunday night, the u.s. winter olympic team ended the vancouver games with an all-time winter record for medals won. it is fitting for us to feature at champion of the olympics. mitt romney took over the scandal-plagued soul city -- salt lake city games and turned it into a triumph. he cut the cost, line of sponsors, and lifted the games from a budget shortfall back into the black. at the accomplish nothing else, the success of the salt lake city games alone could qualify him to make the case for american greatness. he did not stop there. the investment banker and son of former michigan gov. george romney had made a name for himself by challenging massachusetts senator ted kennedy and losing by a landslide. [laughter] after the games, he returned home to massachusetts and launched a successful gubernatorial run.

he converted a $3 billion massachusetts budget deficit into a surplus and enacted a plan to provide affordable health care. he declined to run for a second term and saw the republican nomination for president, being the second most delegates before leaving the race. whatever his next up is, and there is some curiosity about that, it is clear that he is not finished with public service. ladies gentlemen, please welcome to the national press club, the honorable mitt romney. [applause] >> thank you. thank you. thank you for welcoming me here today. you tugged at my heartstrings as you talked about the olympics. it was a thrill to be part of that experience in salt lake city. i was not a great athlete in high school or college. the fact that i was asked to

take on the olympic job was somewhat ironic and my sons were quick to point that out to me. i have five of them. we have a lot of competitive sports and our family and i typically come in last among the six boys altogether. when my boys actually read the story about my new job in the paper, they gave me a call. my oldest son said, "dad, we saw the paper this morning. i have talked my brothers. we want you to know there is not a circumstance we could have conceived of that would put you on the front page of the sports section." [laughter] my life has not actually been a very clear, smooth pathway into politics. i spent most of my life in the private sector. i have always had a great deal of interest in seeing how private enterprise grows, thrives, and how it does not do so well. at christmas time, i was shopping at walmart four tips

for my grandchildren. i was in a long line at the checkout counter and i looked around the store and i chuckled to myself. the store reflects the founder of the company, sam walton. i did not know him personally, but i had read some stories about his interest in character. he wanted very low prices on everything anybody could want. if you look around that store, that is what you see -- low prices, all sorts of things kind of helter-skelter around the store, the big, yellow smiley faces -- it is a culture that embodies what sam walton was. as i consider different enterprise is a different guise, i looked at how much they reflected the founders and people who built them -- the washington post and the boston globe. disneyland is let the physical

embodiment of walt disney himself -- whimsical, filled with fantasy, and childlike. microsoft -- in a ligot of respects, it is like bill gates. apple is like steve jobs. virgin airlines is edgy and forever it just like its founder richard branson -- and the rev. -- and irreverent just like its founder richard branson. what is true of those enterprises is that -- is also true of countries to a certain degree. america of reflects the vision and character and culture of the people who founded it. they took extraordinary risks to come to our shores, make this their home, put at risk their lives to be about to come across

the ocean. those who were the founders themselves said, "we are born to make a difficult decision. should we continue to be led by at king and the government? or will we light out entirely afresh? and of course, they took the latter course, not just in terms of their politics did they break ties with the king and government of the great britain. but also in regards to their economic life. instead of being guided by a strong central government, we will instead pursue the path with lined by adam smith, allowing each individual to choose their own past and realize their dreams as they would desire. as they say, that has made all the difference. by virtue of that decision and their vision for america, which attracted pioneers and innovators from all over the

world, anyone truly seeking opportunity to come to america. those of us, by and large, in this audience today and audiences around the country, have in our dna that very sense of entrepreneurialism and innovativeness and pioneering. it is part of the american spirit and who we are. i am convinced that what is happening in washington over the last decade is slowly, but surely, stripping away that spirit of enterprise and innovation and creativity and personal freedom. if we're not careful, we could smother the very source of what makes america so unique in the world and what has propelled us to be, not only an economic powerhouse, but a champion for liberty that the world has come to respect and admire. in my travels as a businessman, i learned how important the

culture of a nation can be. i was always struck by the big differences between different countries. the fact that you could have to conditions right next to each other with very similar physical characteristics, in some cases, but that had achieved very different levels of education, economic prosperity -- i thought of having been to israel the first time and remarking at the extraordinary technology that they had built in their society. and yet in the palestinian areas, there was not that same level of technology and innovation. i was -- i look at america and mexico. how could there be such a gap between two nations so close to each other? how good argentina and chile have such dramatically different prospects for their future, despite their proximity? i did some reading to get an assessment of that.

1 but i thought of was called -- one book i thought of was called "gun, germs, and steel." iron ore could be mmind and they could become more powerful and compelling next to their neighbor. he looked at germans and found that in some places there were such disadvantages -- germs and found that in some places there were such disadvantages that kept people from growing and thriving. some portion of what distinguished people from and when another add to do with geographical location. i do not think the book explains everything you had to see it in different nations. then i read a book by a professor at ameritrust -- at harvard university, called "the

wealth and poverty of nations." he chronicles the various nations and civilizations that have grown in declined over the earth's history. after 500 pages of scholarly analysis he said, "if you can learn anything from that economic development of the world, it is that culture makes all the different." "culture makes all the difference." what people believe, what they will sacrifice for. i thought about america's culture, which i believe has made all the difference. this culture of pioneering and innovativeness, the respect we have for one another, our willingness to serve the nation, the patriotism we feel, a very extraordinary part of america's culture, the family- orientation of our society, our willingness to have children and sacrifice for future

generations. i believe that faith in god is part of our culture. many people do not believe in god, but even those that do not believe in something bigger and more important than themselves and they will sacrifice for it. education is part of our culture. we've got you and seek education. hard work is part of the american culture. i believe these things help for what we are. at a time like this, given the challenges that we face around the world, i recognize that this is a time for us to be strengthening those elements of our culture -- are independence and love of country and willingness to sacrifice. it is time to strengthen and restore those things, rather than criticize them and make them more difficult to thrive and grow. i had hoped that the president -- the new president would be successful in restoring those elements of our national strengths. but i have to admit to have been

disappointed with the year to date. i was disappointed that, from the very beginning, he set out on a tour around the world and apologized for what he viewed was america's dismissive mness, our divisiveness, our arrogance. he spoke of america's unwillingness to listen to the concerns of others and even said america has dictated to other nations. i do not think that is an accurate portrayal of our past. i think america has freed other nations from dictators. that is characteristic of our past. i am afraid that his apology tour, as some have called it, including myself, has been intended to appease and gratify those who are among the "blamed america" crowd. that has not underscored the confidence and conviction that america's values -- that the

principles that have long formed the basis of our success as a society are values that other nations would be wise to emulate. i also have a concern about the agenda he has adopted as the president. one rule you learn as a businessman is that when you have an enterprise that is in trouble, the number one rule is this -- focus, focus, focus. make sure you concentrate on the very most important elements first with all of your energy and passion. when the president came into office, there was no question what the first priority had to be. the first had to be to get the economy back on track and create jobs. closely thereafter would be to make sure we were successful in pushing back the forces of radical violent jihadist being sets cecil -- jihadists in

places where they were rearing of their heads. health care is an important topic, but given the priorities we faced at the time of his inauguration, i probably would not have suggested spending all that time -- 15 months? devoted to discussions of health care. as a result of his agenda, the opposite of what he had hoped for is what has occurred. he says of been that i thought was right on at the jobs summit, which occurred one year into his administration. he said, "government does not create jobs. the private sector creates jobs. government's role is to create the conditions whereby the private sector will be active in creating jobs." if that was his intent, his actions have done just the opposite. when you announce that you're going to raise taxes next year,

particularly capital gains taxes, that does not make it more likely that businesses will decide to invest more this year. when you decide to announce that you will pursue carjac check, -- card check, it does not make it more likely for small business people to start small businesses, and certain of the costs for their labor. when you indicate you will pursue cap and trade which will have an uncertain impact on the cost of energy, that makes it difficult for any business person thinking about establishing a business or growing a business that uses a lot of energy to do so in this country. if you have cap and trade here, but not in places like brazil and indonesia and china and india, you might think about building in those locations rather than doing so here. when you communicate that you have a plan to have government

take over roughly one-fifth of the economy, any on corner of the health care sector is going to find it more difficult to -- any entrepreneur of the health care sector is going to find it more difficult to find capital. perhaps most troubling of all would be the threat of seeing larger and larger deficits. anybody anticipating making a large investment with their life savings as to ask themselves, "what will happen 10 years from now? how much will the dollar be worth when i get a return on my investment?" we will have high rates of inflation and perhaps a serious attack on arkansas -- serious attack on our currency and economy. should i invest now or hold on or buy gold? these kinds of things have led to a reaction in the private sector that says this is a

frightening time. rather than encouraging the private sector to grow, thrive, and add jobs, it has had the opposite effect. it has been the most anti- investment, anti-entrepreneur, anti-employment, anti-job agenda since jimmy carter. if it is prolonged -- i am afraid it has prolonged the recession and made it more difficult to create the jobs that are so badly needed. we need to recommit ourselves to foreign policy of not apologizing for america, but promoting the values that made a such a great nation, standing with people around the world who are fighting for democracy and human rights, and to desire freedom. i personally was surprised when the honduran supreme court said that the president of that nation, an anti-american, pro- job as leader, had violated the

constitution. he was removed from office. our president insisted on him being put back. i was surprised when voices of dissent to the street and run and our president -- in iran and our president had nothing to say. i cannot imagine bill clinton or ronald reagan having nothing to say in that circumstance. [applause] i was surprised when some of our very best friends and the world -- the poles, the checks -- czechs, those who had gone to explain the importance of establishing a missile defense system, i was surprised that we pulled back from that commitment. by the way, we got nothing from russia in terms of their support of top sanctions in iran in

return. i was concerned when the president went united nations and address that body and took to task our best friend in the middle east -- israel -- and said they should not be building settlements in the west bank, while having nothing whatsoever to say about how moss launching over 7000 rockets from the gaza strip into israel. we stand by our friends and we oppose their bows and arrows with every ounce of our energy -- their foes and our foes with every ounce of our energy. we have to be serious and communicating to the american people and the world that we will end the level of deficit spending that we're seeing. we will bring a balance to our spending. we will not keep spending more than we take in. it is almost as if china is giving us a credit card and they are smiling as we keep

borrowing and borrowing and borrowing massively more than we have any right to be spending. we have to deal with our debt -- not just the deficit and the public debt, but the debt which is unsustainable. we have to make its sustainable. we have to tell people the truth and make sure we adjust programs so they are sustainable. we have to get ourselves energy independence, not just talk about it as we have been doing forever. we have to take on health care and i am not just talking about getting people in short, i am talking about the extraordinary burden we have of obsess -- access -- excess health care cost relative to the world. it is a six. -- it is a 6 point gap between

us and them. 6 points is the gap, and how disappointing it was to see the president take on the insurance companies, as if the reason health care is expensive is because of the insurance companies. i am sure there are some who deserve blame and we can find them, but this issue is broader than punishing a scapegoat. it is about the nature of our health care system and the cost of delivering that care which we're going to have to take on if we want to get america back into a position of strength. finally, i mentioned education. it is unsustainable for a great nation to have schools that are failing its children year in and year out, where our children will be less competitive globally. we face extraordinary challenges and we have not really dealt with them over these last months or these last multiple years. it is time for us to do that.

there is a great energy in this country insisting that public leaders take on the challenges we face. i am encouraged by the passion and enthusiasm i am seeing around the country. my party used to talk about too much spending and too much borrowing. not a lot of people got excited about that, other than the people who heard the linesman the time for at the republican meetings -- who heard the lines many times before at republican meetings. you are seeing a lot of people who say that the government is too large, spending is too great, the deficit are too overwhelming. i am happy to see that kind of passion. i am convinced that the american people will do what they always have -- rise to the chant -- rise to the challenges before us. we have seen the sacrifices of other generations and how they rose to the occasion of the threats we face in world wars, to bring to a security, and to

lay the foundations of our current prosperity. if we do not change our course, we could become america's worst generation, the nation that put in place entitlements and obligations and spent so much for ourselves that we give to our kids in america -- an america where the american dream is impossible to bill. i think our generation recognize the challenges we face and says that we will not leave them that legacy. we will preserve the culture of pioneering and innovativeness and created this -- creativity. this is our charge. this is the work we have to do. i appreciate the work that you hear in the media do. i know some of you delight and certain stories where certain publications are having a hard time. i liked the fact that we have a

stronger and ample mainstream media that checks multiple sources and will write the names of the sources, generally. it is a good thing. i like to have a paper of record in various communities so that we can test some of the things being spoken of. it is a critical responsibility. we need the media to get the real facts out there and have the american people understand the alternatives ahead of us. i appreciate the work you are doing and i hope we can collectively assured that we will go down as another one of america's great generations, not one of the worst, and that we can keep america the will of the earth. thank you very much. it is good to be with you this morning. [applause] thank you.

>> thank you very much for your words. we have many questions being asked here today. please keep them coming from the audience. our first question -- you have been making a lot of appearances likely to promote your book -- "no apologies -- the case for american greatness." when the book is focused on current events like it is -- in your book you criticize president obama's lack of visiting with the dali lama. -- pappardelle llama -- dalai lama. he gave a statement in oslo which was widely praised. i wonder if there are any opinions in your book that you may say a little differently now after its publication. do you feel that president obama

has been improving in his performance or what have you like about his first year in office? >> the book was written between january and july of last year -- that is the nature of publication. i note that there is a car company that has a record of subvert -- excellence and quality named toyota? i probably would have adjusted that somewhat. i wonder whether the fact that i made it very clear that i was writing a book called "no apology" figured into the speech writers in washington could decided it was time for the president to say he would not apologize for america. i will be glad when he speaks out in a more forceful way for our values. words need to be matched with action. on the friends i have described, i have not seen the kind of adjustment i would hope for. i have not seen action on iran or north korea.

i have not seen us decide that colombia, one of our best allies in the effort to dissuade chavez from his ambitions throughout latin america -- i have not seen as get closer to them and say, we will tell afl-cio to stand down on this. we're going to give them favored nation standing and build stronger relations with them. on the other hand, positive developments -- he extended the patriot act. i'm glad he did that. his decision to provide additional troops to afghanistan was one that i support. he did it in a way that has made it more difficult to assure the success of our troops there. what do i mean? it took a long time to make the decision, but position -- the decision did get made. if the military had said are

minimum number of troops was 40,000, i would not have thought about giving them 30,000. counterinsurgency -- it is essential that the public you are trying to encourage to support their government have confidence in the government being duly elected. we had all the troops there with the presidential election going on, but it was not deemed to be fair and uncorrupted and that made it more difficult. there were things the president did that i would have taken a different direction. he cannot be right 100 percent of the time and he will make mistakes. i am very concerned that the policies he has adopted on the national stage achave prevented -- have presented a picture of american weakness, not resolved, timidity, not strength. i think the president will have an opportunity -- a vice president said he would be tested in his first days. he was. it was not a test which resulted in people around the world seen

this nation as being committed the principles of the past. i hope he is able to be more forceful not just in words, but in actions in the coming years. >> a question from the audience -- i request for clarification. did you misspeak when he said the united states did not support past dictatorships? argentina, chile, paraguay, the apartheid, the shot of iran -- the shah of iran. >> if i had said that, i would have misspoken, but that is not what i said. i do not believe america dictates to other nations. i believe america has freed other nations from dictators. >> we have numerous questions about your perspective on the current health care debate. had he been president in 2009,

not knowing if you have contemplated that scenario, with your experience as governor of massachusetts, how would you have handled the health care issue? does government health care work in massachusetts? >> a lot the questions in that. let me take you through them. two big problems in health care at least. one is that problem of tens of millions of people without health insurance. the other is the problem of our health care costs being way out of line with that of other nations. let's deal with the first one. by the way, it is the easier one, getting people ensured that do not have insurance. we took that on in massachusetts and were relatively successful. some parts are going well and others not. i believe, as i indicated in my campaign, the best way to deal with getting people insured is to do so on a state-by-state basis, with the federal government giving more flexibility to states in the monies that go from the federal government to the states to deal with the care of the port.

but those moneys go with strings attached -- let those moneys go with strings attached. i think our system is working pretty well. there are some big adjustments i would make it our governor there today. some of them would be to make it more consistent with my original proposal when i put the legislation forward. the legislature made some changes, i beat of them, they put them back in. by and large it is a good model for what can go right or wrong with us state being responsible for getting their people insured. the other issue of how to get costs down -- not just for the people that are uninsured, which we have been successful at doing -- for individuals buying interest, premiums are lower in massachusetts and they get coverage at a more reasonable price. the great majority of americans -- how do you get the cost down in a level consistent with other nations? in that regard, there is a lot

of work to be done. it has not really been tested anywhere yet. i have my own ideas as to what we could do. i will make it simple. if you read a chapter in my boo on health care, he will understand where i would go. the idea is that -- we see health care costs rising. a lot of liberals and the president said, let's take over health care so we can impose cost control and keep costs down. cost controls do not work. they never have. that is not the right way to go. trying to get the health care system to look more like the post office or amtrak or fannie mae or freddie mac is not agoing to work. you have to apply the magic ingredient that applies to every other aspect of our economic life -- to see if it can act more like a market. you do not have the provisions of the market because the consumer of health services -- the sick patient -- has virtually no state in what the

cost is of their treatment. once you pay your deductible, it is free. if the hospital will charge $50,000 or $5,000, you could not care less because the insurance company will pay. there is no pricing mechanism or cost-benefit. i would change that and change the incentives for doctors and providers, such that instead of getting a fee-for-service reimbursement system, they get a different rate. you will see that in more detail in the book. i would think the president would say, let's take something like 1/5 of the u.s. economy and get some is rational -- and get some congressional staffers together and see if we can change it all. we're going to put it on the entire country and see how it works. let's work on these things and see what we can learn from other nations and our own states and see which things work and do not. let's look at the mistakes we

made in massachusetts, improve on them, and get other states to try them. when we can agree that something is working, let's apply that. this approach is not the kind of approach any reasonably run enterprise in the world would ever consider. >> would you term president obama's of your approach socialism? >> i tried to avoid highly incendiary words. [laughter] not always successfully. sometimes i succumb as everyone does. i think the intent of the president's plan and that of the legislative leaders who are pursuing obama-care, is based upon of view that the only way we are going to be able to control health care in america is by having the government control it. the government will set prices and set usage, tell people what they can and cannot have done. that if we can get that done, we can finally bring it in.

you look around the world where those features have been applied -- in socialist-type systems -- and the only place they have been affected is where they have rationed care or denied care, which will not be acceptable to the american people. a better alternative is to allow individuals to have a stake in their own health care. let market dynamics play. that is why health savings accounts have such potential. they're going to pay a portion of their bill as does account -- as those accounts get larger. they will ask how much things cost and look at providers to compare them. that will drive providers to be more cost-effective and quality-effective. that is how markets work. >> how is health care, as a sector, different from the social security system, postal system, other areas where there has been strong government

involvement with high satisfaction rates among the american people? >> i would take exception with "high satisfaction rates" with certain aspects of government- run entities, whether the post office or amtrak or fannie mae or freddie mac. [laughter] there are certain -- [applause] there are certain things that government alone can do, like defined the country and provide for the justice system -- like to defend a country and provide for the justice system. government has a clear role. we are perhaps carried away in our rhetoric. we're not anti-government. we recognize the important role of government. you have to have regulations and laws and rules so that the parties that want to participate in free economy know the guidelines and rules.

effective and efficient markets require that. where you have an opportunity to allow a function to be carried out in the private sector, it will overwhelmingly be more effective and more efficient and more satisfying to the public if you let market dynamics actually manage that portion of the economy. i remember that conversation i had with regard to prisons, for instance. i mentioned to some legislators that i thought we ought to take a look at having prisons and massachusetts managed by a for- profit prison company, because they could give us a lot of money. the response of the individuals i spoke with was, "they will be much higher costs than we are by having the state workers run the prison." i asked why they said that and they said it was because they had to earn a profit and we do not. i said that i did not think they

understood how markets work. the profit incentive is what encourages entrepreneurs and innovators all over america to find a way to do things better and come up with lower costs. that is the nature of our entire system. that is why they can make a profit and do the whole job better and at a lower cost than we can. that is lost on way too many people. it is something we need to communicate. as i look at health care and fixing health care, let's let the states try, not just to get all their people in short, but also to bring the cost down by moving toward something other than fee-for-service. it will take the federal government to play in this arena. the federal government buys half of all health care in america. we have creeping federal government control of health care. they buy half of all the health care -- medicare, medicaid, federal employees, and others.

add that up and they are half the market. some in congress are intent on keeping not up. they want to get more control of the system, with the idea of ultimately controlling it entirely. if you like the post office, you will love health care. [laughter] >> you have discussed rhetoric and incendiary rhetoric and inflammatory language. you have seen some very contentious town hall meetings on health care and other topics as well as public demonstrations. you recently told "the boston globe" that republicans must resist the temptations of populism. sarah palin did outdraw you on leno last week. that may show that the temptations of populism have a popular appeal. what is your response? >> i have to come up with better

material, i am afraid. [laughter] [applause] no, populism means different things to different people. populism, if you mean appealing to the public and to the voters, that is something we are all in favor of. we want to bring out the support of the great majority of our fellow citizens. by and large, the american people do the right thing. after they study something at some length and listened to the alternatives, they generally come to the right place. winston churchill said, you can always trust americans to do the right things after they have exhausted all of the alternatives. [laughter] that is close to what he said. i very much believe in listening to the american people and communicating to the american people -- that form of populism, if you define it that way, is fine and well. there is another branch of the

word populism which i am referring to when i say these words -- there are some people who are scapegoating, looking for someone to blame for the fundamental problems we have in society. it may be a politician or a wall street banker or immigrants or certain ethnic groups -- over the history of the world, there have been scapegoaters who have achieved great public support by going after certain groups. i admit, i watched the president go after the insurance companies. let's scapegoat them. our health care problems are a lot broader than insurance companies. it is not that their profit is driving health care costs in our states. likewise, you will see people take on immigrants and suggests that immigration is the source of america's challenges. our challenges are more significant than that.

i think that does not make sense and i would note that it exists -- it is coming from the white house and that concerns me when it is anti-business, anti-seale, anti-investor -- anti-ceo, anti- investor. do not attack the creator of jobs if you want to see jobs created. i welcome people with reduced. i am happy to hear perspectives. -- with reviews. i am happy to hear perspectives. i do not want to hear from people who are trying to scapegoat or demonize others. >> is the tea party movement a healthy force within the republican party? >> i wish i could say it was decidedly within the republican party, but it is an encouraging

development. the silent majority of america is silent no more. the individuals concerned with the scale and spending of government say, "enough already. we're going to meet, talk, and do so in a respectful way. we will do so in legal ways. we're going to make sure that people hear what we have to say." i know that the president is fond of talking about republicans responsible for gridlock in washington. you recognize, of course, that he did not need one single republican vote last year for any legislation he wanted. he could retire -- he could rely entirely on democrats. we could not filibuster to stop the bill. we could not stop a bill in the house. tea partiers an average americans were letting their voices be heard and telling the democrats what their voices

were and the democrats were listening and responding. i am delighted that the tea party movement has been successful and vital in our political discourse. we will let in our primary people who are committed to conservative principles, because i think they are right for america. [applause] >> one more question on political discourse and various forms of rhetoric. yesterday, someone who has repeatedly railed against the government shot and killed two people. when that type of violence plays out at a metro stop or irs the silly, is there a connection between some of those actions and some of the more extreme? >> certainly, by them. -- i do not -- they are

disturbed individuals who are detached from reality and do things that are inexplicable. i cannot imagine limiting free speech on the basis of such paranoia, on the part of the perpetrator of this crime for instance. i can tell you the rhetoric and discourse that is most alarming it around the globe today is that which comes from radical, violent jihadists. there is no question in my mind about whether it is on the internet or the networks that carry their voices, that the hate and bigotry all -- vitriol that comes from them leads to suicide bombings and death. i assure you it is essential for us to stand up against this kind of misinformation and disinformation and that america should make it very clear that we stand for principles which are lofty and good. while we will not cut off the ability of these people to

speak, we will cut out the ability of these people to attack our fellow countrymen. when they come here carrying bombs with the intent of attacking our citizens, the first words they should here are not, "you have the right to remain silent." [applause] >> is a domestic terrorism, ranging from fort hood to oklahoma city for example, a concern for you? >> there is no question. that is what i am speaking of. without question, across the globe, i listed in the book -- i will not try to recall from memory -- the number of countries that have been attacked by different types of jihadist organizations. they are not all the same, obviously. it comes from very different strains. some have local concerns, some broader international concerns, but almost