we are fighting so hard to deal with the health care project with the health care crisis in this country. costs are growing every single day. i want to spend some time talking about that. the price of health care is one of the most punishing costs for families and businesses and our government. [applause] it is forcing people to cut back or go without health insurance. it forces small businesses to choose between hiring or health care. it is plunging the federal government deeper and deeper into debt. the young people who are here, you have heard stories, some of you still have health care while you are in school. some of you may still be under parent's plan, some of the highest on insurance rates are among young people and it is getting harder and harder to

find a job that will provide you with health care. . . we cannot have a system that works better for the insurance company than the american people. [applause] we need to get families and businesses more control over their own health insurance, and

that is why we need to pass health care reform. not next year, not five years from now, not 10 years from now, but now. [applause] since we took this issue on one year ago, there have been plenty of folks in washington who said the politics are just too hard. they warned us, we may not win. they have argued now is not the time for reform. it is going to hurt your poll numbers. how will it affect democrats in november? do not do it now. my question to them is -- when is the right time? if not now, when? [applause]

it's not us, who? think about it. we have been talking about health care for nearly one century. i am reading a biography of teddy roosevelt right now. he was talking about it. teddy roosevelt. we have failed to meet this challenge during periods of prosperity, and also periods of decline. some people say do not do it now because the economy is weak. when the economy was strong, we did not do it. we talked about it during democratic administrations and republican administrations. i got all my republican colleagues saying a " no, no, no." we want to focus on things like cost. you had 10 years. what happened? what were you doing? [applause]

every year, the problem gets worse. every year, insurance companies deny more people coverage because they have pre-existing conditions. every year, they dropped more people when they get sick, right when they need it most. every year, they raise premiums higher and higher and higher. just last month, and from blue cross in california tried to jack up rates 40%. 40%. as anyone's paycheck gone up 40%? -- has anyone's paycheck gone up 40%? >> no. >> why do we think this is normal? in my home state of illinois, rates are going up by as much as

60%. you just heard one who was hit with more than 100% increase. 100%. one letter from her insurance company and your premiums doubled, just like that. because the markets are concentrated, it is not like you can go shopping. you are stock. you have a choice -- either no health insurance, or you are taking a chance of someone in your family getting sick and you will go bankrupt and lose your home and everything you've had, or you keep on ponying up money cannot afford. see, these insurance companies have made a calculation. listen to this. the other day, there was a conference call organized by goldman sachs. you know goldman sachs. they organize a conference call in which an insurance broker was

telling wall street investors how he expected things to be playing now over the next several years. this broker said insurance companies know they will lose customers if they keep on raising premiums, but because there is still little competition in the insurance industry, it is ok to have people priced out of the insurance market, because first of all, a lot of people will be stopped. they will still make more money by raising premiums on the customers they keep. and it will keep on doing this for as long as they can get away with it. -- and they will keep on doing this for as long as they can get away with it. it is no secret. they are telling their investors this. "we are in the money. we will keep on even though a lot of folks are put in hard chip."

-- are put in hard ship." how many more businesses have to lose coverage? all you people out here, as you graduate, you will be looking for a job -- think of the environment out there when a whole bunch of potential employers tell you that they cannot afford to. or we are going to take thousands of dollars out of your paycheck because the insurance companies just jack up our rates -- jacked up our rates. how many more years in the federal budget handle medicare and medicaid? that is the debt you will have to pay, young people. when is the time? is it a year from now or two years from now or five years from now? 10 years from now? i think it is right now. that is why you are here today. [applause]

there is a single mom -- just like my mom. she was trying to put her daughter through college. she knows that the time for reform is now. one woman, a self-employed cancer survivor from ohio. last year, her insurance company charterer $6,000 in premiums, paid for $900 worth of care, and now they want to jack up her rates 40% next year. she had to drop her insurance, even though it may cost her the house her parents lived in. she knows it is time for reform. a friend of mine, someone i'd met while i was campaigning in

wisconsin. green bay, wisconsin. young mother, the two kids. she thought she had beaten her breast cancer, but later discovered it had spread to refunds. she and her husband had insurance, but her medical bills still landed them with tens of thousands of dollars worth of debt. now she spends her time worrying about the debt when all she wants to do is spend time with her children. i just talked to laura this past weekend. let me tell you -- she knows the time for reform is right now. what should i tell these americans? that washington is not sure how it will play in november? that we should walk away from this fight? or do something like some on the other side of the aisle have suggested -- we will do it incrementally. we will take baby steps.

>> no. >> said they want me to pretend to do something that does not really help these folks? >> no. >> we have debated health care in washington for more than a year. every proposal has been put on the table. every argument has been made. i know a lot of people view this as a partisan issue, but both parties have found areas where we agree. what we have ended up with is a proposal that somewhere -- that is somewhere in the middle. one that incorporates the best of democrats and republicans. best ideas. think of it along at the spectrum of how we approach health care. there were those at the beginning of this process the one to scrap our system and replace it with a government-run health care system like they have in other countries. look, it works in places like

canada, but i did not think it was going to be practical to do it here. on the other side of the spectrum, there are those that believe the answer is just to loosen regulations on insurance companies. this is what we heard that the health care summit. they said "you know what? if we had fewer regulations on the health insurance co. -- >> no. ">> "some how market forces will make things better." we have tried that. i am concerned that would only give the insurance companies more leeway to raise premiums and an eye care. -- and deny care. [applause] the bottom line is, i do not think we should give government or insurance companies more control over health care in america. i think it is time to give you,

the american people, more control of your own health insurance. and that is why my proposal builds on the current system, where most americans get their health insurance from their employer. if you like your plan, you can keep your plan. if you like your doctor, you can keep your doctor. but i can tell you, as the father of two young girls, i do not want a plan that interferes with the relationship between a family and their doctor. we will preserve that. essentially, my proposal would change things about the current health-care system. listen up. first, it would end the worst practices of insurance companies. within the first year of designing health care reform, thousands of uninsured americans with pre-existing conditions would suddenly be able to purchase health insurance for the very first time in their lives. [applause]

or the first time in a long time. [applause] this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions. [applause] this year, they will be banned from dropping your coverage when you get sick. [applause] and they will no longer be able to arbitrarily and massively a hike your premiums, just like they did to leslie or millions of other americans. that practice will ind. [applause] -- a practice will end.

if this reform becomes law, all new insurance plans will be required to offer free preventive care to their customers starting this year. free checkups, so we can prevent diseases. [applause] starting this year, there'll be no more lifetime or restricted annual limits on the amount of care you can receive from your insurance companies. there's a lot of fine print in there that can cost people hundreds of thousands of dollars because they hit a limit. if you are a young adults, which many of you are, you will be able to stay on your parents' insurance policy until you're 26 years old. [cheers and applause]

and there will be a new independent appeals process for anyone who feels that were unfairly denied a claim by their insurance company. you will have recourse if you are being taken advantage of. [applause] so that is the first thing that will change. insurance companies would finally be held accountable to the american people. that is the first thing. second, the second thing that would change about the current system is this -- for the first time in their lives, were often times in a long time, uninsured individuals and small business owners will have the same kind of choice of private health insurance that members of congress get for themselves. [applause]

if it is good enough for congress, it should be good enough for the people paying congress's salary. that is you. [applause] now, the idea is simple here. >> [unintelligible] >> i am sorry. go ahead. let me explain how this works. it is an idea that a lot of republicans have embraced in the past. but my proposal says -- what my proposal says is if you are not part of a big group, if you do not work for a big company, you can be part of a pull which

gives you bargaining power -- pool the gives you party in power over the insurance company. it is very straightforward. you come as an individual or small business owner -- you, as an individual or small business owner, can negotiate for a better deal with insurance companies. right? now -- [applause] if you still cannot afford the insurance that is offered, even though it is a better deal you can get on your run, we will give you a tax credit to do so. and these tax credits add up to the largest middle class tax cut for health care in the history. -- in history. because the wealthiest among

us, they can already afford the best insurance there is. but we are covered through -- the weaker are covered through medicaid. it is the middle class we have to help. [applause] now i ought to be honest. let's be clear. this will cost money. it will cost about $100 billion per year. most of this comes from the nearly 2.5 -- $2.5 trillion we already spend. it is just right now a lot of that money is being wasted. with this plan, we will make sure the dollars we spend goes to making insurance more affordable and secure. i will give you an example. we will eliminate wasteful

taxpayer subsidies that go to insurance and pharmaceutical companies. they are getting billions of dollars a year from the government when they are making big profits. i would rather see that money go to people who need it. [applause] we will set in new -- we will set a new fee for insurance companies. they will have 30 million new customers. there is nothing wrong with them paying a little bit of the freight. we will make sure that the wealthiest americans pay their fair share. the bottom line is this -- our proposal is paid for. all the new money generated in this plan goes back to small business owners and individuals in the middle class to right now are having trouble getting insurance.

it would lower prescription drug prices. it would help train new doctors and nurses and physician's assistants and therapist. i know they have got great programs here. [cheering] i was hearing about the terrific programs you have at arcadia in the health-care field. you know what? you are going to need more health care professionals. we want to help you get that training. that is in this bill. [applause] so, i mentioned two things. insurance reform and making sure the people who do not have health insurance are able to get it. finally, my proposal would bring down the cost of health care for

millions. families, businesses, and the federal government. [applause] you keep hearing from critics and fellow republicans saying "we want to do more about cost." we have incorporated every single serious idea from across the political spectrum on how to deal with the rising cost of health care. ideas including programs like medicare. we do this while protecting medicare benefits and we extend the financial stability of the program by at least a decade. our cost cutting measures mesh -- measures mirror the cost- cutting in the senate bill which reduces our deficit by $1 trillion over the next decade.

[applause] those are not my numbers. those are the savings determined by the congressional budget office, which is the non- partisan referee for what things cost. that is our proposal. insurance reform. making sure you can have choices in the marketplace for health insurance, making it affordable for people, and reducing cost. [cheers and applause] i think about -- i think -- how many people would like a proposal to hold insurance companies and more accountable? >> yes!

>> how many people would like to give the american people the same insurance joyces members of congress get? -- the same insurance choices members of congress get? [cheering] and how many people would like a proposal that brings down health-care costs for everyone? [cheering] that is our proposal, and it is paid for, and it is the proposal. [applause] the united states congress owes the american people a final up or down vote on health care. [cheering] [applause] it is time to make a decision.

the time for talk is over. we need to see where people stand, and we need all of you to help us when that vote. i need you to knock on doors, not talk to your neighbors, pick up the phone. when you hear an argument by the water cooler and someone is saying this or that, say no, no, no." -- a " no, no, no -- hold on a second." we need you to make your voice isn't heard all the way in washington, d.c. day -- [applause] they need to hear your voice is because right now, the washington echo chamber is in full effect. it is as deafening as it has ever been. when we get to that final vote,

that echo chamber is telling members of congress -- think about the policies. instead of thinking about doing the right thing, that is what mitch mcconnell said this weekend. he said this would be really bad for democrats. first of all, i generally would not take advice about what is good for democrats. [laughter] but setting aside that, that is not the issue here. the issue is not the politics of it. but that is what members of congress are hearing right now on the table shows and sort of the gossip -- right now on the cable shows and sort of gossip -- remember what happened to clinton. it is just too hard. yes, it is hard.

it is hard. that is because health care is complicated. health care is a hard issue. it is easily misrepresented, misunderstood. so it is hard for some members of congress to make this vote. there is no doubt about that. but you know what else is hard? what american families are going through. that is hard. [applause] possibility that a family might lose their house because they're going to lose their health insurance. that is hard. or in green bay, having to worry about her cancer and her dead at the same time -- debt at the same time. trying to explain that to her kids. that is hard. what is hard is what millions of families and small businesses are going through because we

allow the insurance industry to run wild in this country. let me remind everybody. those of us in public office and were not sent to washington to do what is easy. we were not sent there because of the big fancy title. we were not sent there because of the big fancy office. we were not sent they're just so everybody can say how wonderful we are. we were sent there to do what was hard. we were sent there to take on the tough issues. we were sent there to solve the big challenges. and that is why we are there -- [applause] and at this moment, we are being called upon to fulfill our duty

for the citizens of this nation and for future generations. i will be honest with you. i do not know how passing health care will play politically, but i do know it is the right thing to do. it is right for families. it is right for our businesses. it is right for the united states of america. i want you to stand with me and fight with me. the opportunity is here. it is within our grasp. thank you very much everybody. -- thank you very much, everybody. ♪ [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2010]

>> coming up next, the homeland security secretary announces the head of the transportation security administration, which is followed by a hearing looking to the tsa budget request. and then a program about u.s. debt levels. taking a look now at the $787 billion economic stimulus program, which is now more than

a year-old, just over $345 billion has been committed to various projects. a quick reminder that we have a web site devoted to following the money -- c- span.org/stimulus, which also has links to watchdog groups which are tracking the spending. almost 40 years ago, as lead engineer at motorola, martin cooper led the team that developed the first hand-held mobile phone. a look at the history on "the communicator's." homeland security secretary janet napolitano announced president obama's nominee to head the transportation security agency. robert harding was previously director of operations at the central intelligence agency. the president's initial nominee

withdrew his name from consideration following republican objections. this is about five minutes. >> hey, guys, just a reminder. [unintelligible] >> there we are. good morning. i am here to announce president obama will nominate major- general bob harding to be the next secretary of fort transportation ministration. by nominating general harding for this very important job, the administration is calling on an individual with more than 35 years of experience as an army commander, a senior military intelligence officer, a high- level manager of intelligence operations, and a successful businessman and ceo in the security field. the general will need of these

talents. tsa's mandate is a broad one. they are not only responsible for aviation security, but rail, mass transit, and tracking systems. the general will be a tremendous asset. he will deploy additional airport law enforcement officials, air marshals, and explosives detection k-9 teams among other security measures and fix the gaps in our aviation systems as well. on friday, we announced airports have received the first advanced imaging technology, purchased with american recovery and reinvestment act dollars. we expect to deploy a total of 450 units by the end of 2010, and our fy 2011 budget calls for

200 more. we have accelerated the deployment of this enhanced technology and strengthen our other layers of aviation security -- partially in response to the attempted terrorist attack of september 25, which -- december 26 fifth, which served as our reminder. the international threat posed by radical extremists requires an international response. right now, dhs is working on the international effort to build consensus on strengthening national aviation security. i have met with my european counterparts in the north, south, and central caribbean parts to work on ways to

bolster international security measures and standards. these meetings have produced encouraging results, including a joint declarations to strengthen international city -- civil aviation systems, and between the united states, brazil, chile, mexico, and panama. on friday, my japanese counterpart and i announced we will joint book -- joined with our counterparts in the asia- pacific region in tokyo to continue building this international consensus. make no mistake. we are engaged in an aggressive effort to strengthen the international aviation system against terrorists who are constantly seeking ways to exploit gaps. general harding is precisely the kind of leader we need as we move forward in these efforts. his national security expertise, his work in the international

community, and his years of work in the unites states army will be a valuable addition in efforts to bolster security and insure the safety of the nation's transportation systems. as a retired u.s. army major general, bob also has another -- also adds another distinguished veteran to the ranks of the department of homeland security. let me close by saying this -- the tsa administrator is the most important unfilled post in the obama administration. the president and i both believe general harding has the experience and perspective to make a real difference in carrying out the mission of this agency. if there were ever a nominee who warranted expedited and detailed consideration in the senate, this is it. we hope that commerce and homeland security committees will be able to work expeditiously to complete their hearing process, so that his

nomination may move to the floor for confirmation. i applaud the president. this is a superb choice. i look forward to a swift confirmation and i look forward to having bob on board tsa. thank you, general. thank you, all. >> [unintelligible] >> and more about the transportation security administration. last week, the appropriations subcommittee heard about the president's fiscal year 2011 budget for the agency. david price of north carolina chairs this event. it is about 90 minutes. >> the afternoon.

we are pleased to welcome the acting secretary to per second budget hearing. at this point, she has been the acting assistant secretary for much longer than any of us anticipated. we look forward to having your long-term leadership in the agency. you have stepped up admirably. we appreciate your leadership. thank you for serving your country with distinction in what is sometimes a thankless job. in the wake of the attacks of september 11, the initial focus of the tsa was securing the aviation sector of this country. soon after, attacks in london, madrid, and mumbai pointed to other transportation on abilities. based on the threat in mind,

this subcommittee has worked diligently to bolster security at -- pull security and all transportation networks. we're working to give tsa screeners better equipment. we've appropriated $400 billion. additionally, congress has set an august 2010 deadline for screening all cargo on passenger aircraft. we retreated $68 million to accomplish this task. congress has provided $1.8 billion in grants to help local transit agencies and amtrak secure transit and rail networks. we've worked with the new ministration to place additional emphasis on -- with the new administration to place

additional emphasis transportation to carry. be a place emphasis on non- aviation transportation. we encourage research and development of technologies to thwart threats that have yet to materialize, well before the christmas day bomb plot. tsa had been working to field a solution to the nonmetallic explosive threat by evaluating advanced imaging technology which this subcommittee supported. on december 25, when the christmas day bomber attended to detonate an explosive device, our fears about this threat were realized. as a result, tsa ramped up its securement and deployment plan for the new screening capacity. for that, you should be commended. however, the failure of dutch

screeners to detect the explosives on christmas day was just one failure of our security systems that would have prevented the would-be bombers. president obama initiated a number of reforms, including enhanced screen for passengers flying into the u.s. from or flying through nations on our list of state sponsors of terrorism and other countries of interest. the deployment of original law enforcement explosive detections canine teams. ramped up deployment of passenger screening technology that can better detect explosives, and more important, improvements to the terrorist watch list system to place additional emphasis on the no fly it list. the suggestion for the fy 2011

budget bills on the solutions. the hyatt threat environment makes it plain we need to close critical gaps in the aviation sector. the 2011 request includes an additional an additional $946 million for increased measures to secure the nation's airports on the heels of christmas days botched attack. we will need to closely scrutinize your request today, bearing in mind the enemy is constantly watching and evolving and no single tool is a full solution to the threat. we will also be watching tsa to make sure the agency itself is a balding -- is evolving. we rely on your annual expenditure plan. this plan is our guidebook, indicating how funds will be allocated within various programs. it is routinely updated with

revised estimates for technology the belmont. without knowing what you plan to procure, we could not make complete sense of your 2011 budget request for such items as advanced imaging technology or portable explosive trace machines. we need to know what you are requesting is the best use of resources and not just a response to the latest incident. today, i look for to learning more about this cohesive strategy -- look forward to learning more about this cohesive strategy. we expect you to answer why a 9% increase in aviation security is a smart increase, but also if we are devoting the correct ratio of domestic compared to international security? we need to work across the globe to make sure threats are identified at their originating points, not just when a terrorist boards and aircraft into the united states. we want to hear about tsa

cooperating with -- tsa and the department clobbering with international authorities. i want to thank you for your service to the country. we want to make sure our transportation security officials are quick with the resources they need. please take five minutes to summarize your written statement. we will be happy to include the full statement in the record. before you began, i recognize our ranking member. >> thank you, mr. chairman. welcome, mrs. rossides for what is regrettably your last appearance before the committee.

there was a question about the agency's propensity become over reliant on manpower. today, some eight years later, in the wake of another terrorist attack, it feels like deja vu all over again, given the response to the christmas day plot. back in 2002, congress was presented a request for funds to support thousands upon thousands of screeners, rather than a clearly-articulated strategy for aviation security. my concern back then, as it is today, is that we are not thinking through the proposed security enhancements in terms of effectiveness and adaptability for the next threat. so, as i look at the fiscal 2011 budget request for 500

additional a whole body and the jurors -- imagers, i am apprehensive because it is unclear what -- whether such a costly and manpower-intensive approach is the best course of action, especially when the initial deployment appears to be an interim step toward the use of even more advanced technology. my position on enhancing aviation security is one of cautious urgency. far too often, the government overreacts in the wake of crisis, and a reactionary posture is one that habitually the thyssen to overspending on solutions that do not pan now. -- habitually and leads us to overspending on solutions that do not pan out. my concern is this cost the proposal appears to be a short-

term fix, not a long-term sustainable solution. it effectively balances legitimate travel and limited resources. unfortunately, these questions cannot be fully answered until we have a better understanding of direction. where tsa is heading in the current fiscal year, which is difficult to do until we have the tsa fiscal 10 spending plan. do not get me off on that subject. as this subcommittee continues its oversight, i intend to press dhs on the privatization of this budget. i admit it clear that i believe the fiscal 11 budget emphasizes aviation security and

administration costs at the expense of virtually every other operational security program across the department. i do not dispute the need to enhance aviation security. it's important to recall there were two al-qaeda plots. the christmas a tent and the zazi plot in new york city. -- the christmas day attempt and the zazi plot in new york city. we must remain vigilant. having said all that, i would be remiss if i did not take a moment to recognize the notable efforts of all the tsa personnel

who worked tirelessly to identify it solutions since the christmas day attack. finally, mr. chairman, i think we need to highlight, as you have, ms. rossides's effort. she is one of the six original employees at tsa, as young as she is. and she is able confront the challenges of security in the post-9/11 world. we want to thank you for your service to your country. to put it mildly, this -- this subcommittee and your nation owes you a debt of gratitude. >> thank you, very much.

please proceed. >> [unintelligible] before you today, to ask on behalf of the transportation security administration to ask for your support of the president's fiscal year 2011 total budget request, an increase of $512 million of over fiscal year 2010. i thank you both for your kind words. having been with tsa since its first days, i appreciate our enduring work with your subcommittee. we have continued to meet important objectives it within our nation's transportation system. i also greatly appreciate the work we have done with all levels of government, industry representatives, the private sector, and the traveling

public. this year, we expect to fully implement our secure flight program, a key measure conducted before passengers ever arrive at the airport. gao has certified we have met all 10 requirements set by this committee. we will also screen 100% of all cargo on domestic flights by august. we will obligate all $100 billion provided under the recovery act, accelerating important baggage screening enhancements. we will further initiate over $1.3 billion in checkpoint an explosive detection systems provided in fiscal year 2010. we will have five at new vipir systems, andtsa operates in up

-- tsa operates in a high- threat environment. the christmas day attempt was a stark reminder there are still those who wish to do us harm. the men and women of tsa live with that reality every day. i appreciate the time that you, mr. chairman and ranking member rogers, spent in visiting our facility last week. for years, tsa has recognized the threat of improvised explosive devices and centered our efforts there. we began testing technology to detect metallic and nonmetallic threats hidden on the body. because of the nearly three years of work we put in to this,

we have 40 machines in 19 airports. our fy 2011 request doubles that capability. almost 1000 units will allow us to screen over 60% of all passengers. this requires 5000 tso's, you're also requested in our budget along with supporting cost. i want to emphasize tsa is the world leader for this technology and what we've done to date has paved the way for other countries to follow suit in the wake of the december 25 incident. tsa does not screen passengers in other countries, but we are committed to work with other countries and to screen out those coming into the united states. we have a high level of

cooperation. within five hours of tsa issuing the security directive, nine foreign partners were in compliance. our request also seeks to better equip our tso's to identify threats with operational intelligence by expanding our field officer program. we are requesting $60 million for additional explosives detection machines which have been proven to be very successful in detecting a wide array of explosives. we propose to add 350 behavior detection officers and with an additional $71 million, tsa requesting to add proprietary k- 9 teams. the president's budget also request $85 billion for sustained international flight coverage on high-risk flights.

in closing, our mission is one of counter-terrorism. we continue to work we began eight years ago to close a vulnerability is with new technology and processes in a complex security regime. as this will likely be my final appears before this committee as acting assistant secretary, in extremely grateful of your support of tsa and for the everyday heroes i have been honored to serve alongside with. i said -- i appreciate your support in our shared security goals and i am happy to respond to your questions. >> thank you very much. i will ask the first such question, having to do with advanced imaging technology. over the past two years, the tsa has worked to develop and test advanced imaging technology at airport screening checkpoints, replacing metal detectors at

primary checkpoints. this replacement effort has been well underway -- actually, well over a year before the christmas day bombing. because of your efforts, tsa was quickly able to develop plans to screen 100% of passengers with ait's after the christmas day incident. unlike pat downs or traditional metal detectors, is believed ait's could have detected the explosive powers smuggled inside the bombers underwear when he went through security in amsterdam. there are 1000 ait's purchased in 2010 and 2011 that would allow these to be placed in 75% of the country's airports. what remains unclear is how you

deploy these systems because they're much larger than metal detectors and a slower processing time. they take much longer to scan a single passenger than a metal detector. 1.3 seconds compared to 22 seconds. and tsa staff says they do not expect extra processing time. according to tsa this 20-second x-ray is about the same time it takes for a tia scan a passenger. i am wondering if you will help us figure this out? can you give us a little more detail there? and if wait times begin growing, how will you alleviate the lines of passengers backing up and the potential security threat as a way to be screened by an ait? what is your deployment plan

for a ait? do you plan on having all one- on-one replacement for metal detectors? how was this going to move forward? finally, let me just recall the situation we faced when we wanted quickly to be able to screen checked baggage after 9/11. you'll recall, tsa placed explosives machines in less than ideal locations in airports and a temporary basis, which created a series of problems and made the ultimate solutions more costly and time-consuming. i am sure that experiences on your mind as we look forward as to how we will be doing the ait project. how're you going to avoid the same problems? >> yes, sir. let me talk about the work that has been done to date.

. . k that's been done to date. we gained a tremendous amount of knowledge from the pilots that we ran over the last couple of years in terms of how to process the passengers through, how to measure the wait times. from the time the passenger enters the queue to the time they leave the checkpoints, there are pult pell processes going on, once is walking through the advanced imaging technology, but the other is the technology, but the other is the screening of their carry-on bags. it's the combination of those processes working in parallel for the passengers that go through that tells us that we don't -- do not believe that deploying this ait is going to significantly he increase the wait times for the passengers. we also believe that deploying the tsos in the right positions in the checkpoint to inform the passengers how to properly divest to go into the ait is going to contribute to keeping those wait times down.

the integration of the ait equipment into the checkpoint has been something that we have looked at as part of our piloting and as we're looking at this deployment. we have airports around the country now that have raised their hands and said they're ready to take this technology and put it in their existing checkpoints. we're confident that those that we're rolling outd this year can be done and put into the existing check pointses and not have to go through major construction issues, not have the kinds of things we had where we had the the checked baggage technologies in lobby areas, et cetera. we're also very much focused on how do we educate the traveling public so that when they show up at the checkpoint, they understand exactly what they can expect as they go through the ait machines. so it's the combination of looking at the entire process within the checkpoint, looking

at the public education element, making sure we have the tsos properly stationed in front of the equipment so they can make sure that the passengers are properly divested. this technology gives us such an improvement in the detection capability that we are -- we are looking to make sure that the processes, the technology, and the people are all well integrated so that is an effective he screening process as well as very efficient. >> the footprint of these machines, though, is greater than the metal detectors. >> yes, it is, sir. but what we've found is that in a lot of these airports, as the checkpoints were built, they actually had more room in them. you know, more room within the checkpoint footprint itself. so the initial deployment is to look at those checkpoints that are ready right now to handle this equipment. >> and the idea is that the

carry-on baggage will still go down the line and be screened, but that the time the individual spends in the ait machine will parallel or be concurrent with that time used for carry-on screening. so that's how you come up with the very little net increase in time spent? >> correct, correct. and it is something that we will be very, very focused on, frankly, as travel -- as passenger loads increase over the next couple of years. we will look to make sure we're properly managing both of the queue lines. as we set these machines up, we will also have the ability to direct the passengers either through the advanced imaging technology or through the wall-through metal detector and receive alternate screening. so we can manage the process that way as well. >> these pilot efforts that you've made in the last couple of years to check out this technology, has that also

included extensive work on what we're talking about right nows the deploying of the machines and passenger acceptance of the new technology in general? >> yes, yes. i am very, very pleased to be able to report to you that the passenger response to this technology has been overwhelmingly positive. that was part of our pilot. i believe that we had over 90% acceptance rate by the traveling public when they opted to go through the equipment. this has been a great piece of technology for persons with disabilities going through checkpoints. so during our pilots we looked at both the configuration, we looked at our officer training requirements, we looked at the passenger through-put and we look at passenger acceptance. >> and by passenger acceptance, you're also referring to the measures taken to protect privacy? >> yes, sir.

and we have signage up in the checkpoint area that informs the passengers that, first of all, this is optional. they do not have to go through -- the advanced imaging technology if they choose not to. it informs them that the officer guiding them through this technology will never see the image that the officer in a remote location is viewing for the detection purposes. we have made sure that those privacy -- those privacy concerns have been addressed with the public. we have had a privacy impact statement out during this deployment of the technology and pilot phase, and again, we have worked very hard with privacy groups as well as the traveling public to ensure that they accept and understand the private he see measures that are in place. >> thank you. mr. rogers. >> so continuing on the private see aspect, the machine makes an

image, which is telecast, if you will, to a room where just one person is located, correct? that's the only place where this image is shown? >> correct. >> to the one person in a closed room, an employee? >> that's right. >> and the face is blurred? >> correct. >> now, you say that this is optional to a passenger. suppose they say no, i don't want to do that. what do you do nen then? >> they're directed through the walk-through metal detector. they could have hand wandering and a full-body patdown so we ensure that an alternative and comparable form of screening is applied to that passenger if they choose not to go through the technology. >> so every person that refuses the full-body imageer scan would

be patted down? >> possibly. they could be patted down. they could have a review of their carry-on luggage, and there's a variety of alternative measures that we would have that would be applied depending upon, again, you know, the particular technology that's available in the checkpoint. >> now, is this new machine, is it as effective as a patdown? >> from an effectiveness stand appoint and an efficiency standpoint, it's better. it allows us to go -- view the images quickly. it identifies anomalies on the body, it identifies anomalies that maybe in sensitive parts of the body and it's a very -- it's much faster than doing a full-body pat-down on somebody. >> considering the christmas day

bomber, would this machine have detected the bomb on that person? >> without going into the specifics of that, because of the ongoing criminal investigation, i will tell you that the experience we have had both in the labs and in our pilots, our officers are identifying objects on the body that are comparable to what that threat was. >> every time? >> our officers are doing a very good job, and the -- >> every time? >> i'd have to get back to you, but, you know, we don't -- we have very, very good measures in place for evaluating our officers. >> well, contrary-wise, if you had patted this man down, would we have found the bomb?

>> today we do not do a full-body pat-down that goes into the sensitive parts of the body where that bomb was secreted. >> now, this machine is not fool-proof, correct? i mean, it's not 100%? >> it requires the experience of the operator as well, yes. >> and we may be getting into some confidential matters here. what i need to know as well you can state it in these circumstances, is this machine the end-all? >> this machine gives us an increased detection capability that is significantly greater than what we have at the checkpoint today. what we -- in working with industry and these manufacturers, we are driving these manufacturers to continue

to improve this technology. because of the demands we have for aviation security. >> if a bomb were secreted in an oracle of the body, the machine would not detect that, of course, would it? >> inside the body? >> yes. >> correct. >> correct? >> correct. >> now, on the footprint the machine would not replace the magnetometers, correct? >> right now we do not have plans to fully replace all the wall-through metal detectors, that's correct. >> so you would have the metal detectors as well as the full body imageer? >> correct, right now. >> why would you need both? >> well, part of it is so manage the flow of the passengers so that we would be able to have an alternative -- if a passenger says they don't want to go tloo the advanced imaging technology we have the walk-through metal detector and couple that with

other security measures, but also what we're looking at right now is as we're deploying these, maximize the use of the advanced imaging technology but also get passengers through the walk-through metal detectors in checkpoints so when a passenger shows up, the security advantage is when a passenger shows up in the kueue line they will be directed by the officer or the walk-through metal detector. they won't know. the advantage is they can't predict which line they'll go through. long term we provide us with the technology with the walk-through metal detector capabilities would be part of the advanced imaging technology equipment. >> so you would have a machine? >> that would be a great setup down the road.

>> why haven't we donna? >> we are pushing the industry to do that. the industry hasn't gotten to that point yet. >> i bet if you put out a spec, you would get bids pretty quick. >> i believe we're asking for that in the labs and we're working with the dhs science and technology lab to help push the industry towards that. >> that would save money in the acquisition and deployment? >> i'm not sure it would, sir. i'd have to get back to you. >> let me know. >> i will. >> now, there's the machine and then there's the separate room where the image is viewed by an operator, which has to be fairly close to the machine but not terribly close, right? >> uh-huh. >> nevertheless it requires some space that is not now required with magnetometers or the check-in procedure, right ? >> right. >> now, does your budget request cover the costs of installing

the machines and acquiring space for the room and all of that? >> what the budget requests includes, money for constructing a viewing room, you know, within the checkpoint area. what we're doing, for example, is in a lot of places we're taking a supervisor's office, we're using other, you know, pieces of the real estate there close by to the checkpoint to create that alternate viewing room. but the budget does have some money in it to request to cover some of the infrastructure costs to build out the viewing room. >> what about the airports? what will be their financial involvement with this change? >> the airport's financial involvement? >> yes. >> some of them are providing us the room, and you know in some cases we're providing them nominal amounts of money to pay for this infrastructure costs.

but i think for the most part if the investment is tsa's we're making in the checkpoint area. >> so will you pay the airports for taking more of their space? >> i don't believe we are. i'll get back to you on that, though. i not seen that cost factor as we're looking at these deployments, but i will get back to you and double check. >> thank you. mr. rodriguez. >> thank you very much. madam secretary, thank you for your service to our country and thank you very much for the great work you've been doing. we just had a recent incident that occurred in texas, in austin, the irs facility there, and it could have taken a lot more lives. it took the life of a wonderful individual veteran who served our country well. in 2008 tsa had proposed a plan to propose new rules for some other 15,000 planes including

requirements for jet operators to check passengers and watch lists and those kinds of things, and this proposal was met with a he great deal of opposition in the private pilot industry groups and others. when were the tsa's new proposal for regulating private aircraft be made available? number two, what changes, if any, will be taken into consideration as of the results of the incidents that occurred at austin at the irs facility? >> yes, mr. congressman. in answer to your question first, we have our -- we are going to go out with a supplemental or a second notice of proposed rule-making on the general aviation large aircraft security program, and we're hoping to have that through the administration and posted by the end of the year. we did receive a lot of comments on the first round, and we've

had a terrific collaboration with the industry and with ga pilots on comments and really looking at that. in the aftermath of the austin, texas crash and that incident, we actually went back to the homeland security institute that had done the engineering studies for us and asked them to take a look at the specifics of that crash and if it should formulate any changes in that proposed rule-making. we're waiting for the results of that staudy, and that may help s and inform us as to any changes we may need to make in the rule. >> what kind of security do we have, if any, in some of the small airports that we have in terms of any kind of assessments that we might make at the present time? >> right now in most very small

ga airports, we don't really have any. >> we don't have any at all? >> no, sir. >> do we have some kind of assessment of the number of -- i guess we have the number of flights that go out of there. we don't have any way of checking to see who flies out there and who doesn't and those kind of things? >> mostly the faa knows who is flying. they know the registration of the small planes and they would know generally who the pilots are. the pilots have to be certified by the faa. so most of the regulation to date has been via the faa's programs. >> so we've not even once a year or twice a year do we check it it or any spot-check on any of those? >> we have done on occasion for national security events, for example, with the inauguration last year of president obama, we actually went and visited every general aviation airport on the route from the train that he took from philadelphia to d.c.

when there are -- during the olympics the planning for the olympics that just ended we did working looking at the general aviation airports and we did that with state and local law enforcement in concert with our inspectors. so depending upon national events, significant activities in an area, we will go and look at the general aviation airports. if intel suggests something, we definitely then work in looking at them. >> if i can just follow-up on that one again. when you refer to intel, are you in direct contact, for example, on the border with border patrol and others? >> yes. yes, we have a very close working relationship. >> in terms of the number of flights coming over the canadian border also? >> yes. >> thank you very much. thank you. >> thank you. >> thank you. in the american recovery and reinvestment act, the committee provided tsa with $25 million

for airport screening machines that have been discussed rather thoroughly to be deployed at airports across the country. however, last tuesday it was reported that not one of these devices has yet to be deployed. i was really shocked to read that because we know the importance of quickly deploying this technology to our most traveled airports including kennedy, laguardia in new york. why did it take seven months just to purchase 150 advanced imaging technology machines? you mention a time frame for deploy heiing this technology i boston and chicago. what about new york? if you struggled to spend the 25 million, what assurances can you give this committee that you can quickly and effectively spend the more than 214 million being proposed by the president to deploy nearly 1,000 machines across the country?

>> thank you. yes, congresswoman, we bought 150 of the machines last september, and we are in the process now of receiving those and they will be this first group to go out to the airports. the reason that it took some time is we put in the order in september, and the manufacturer has been delivering those. we have made sure that they are ready and equipped the way we need them to be for deployment to the airports. we also have -- we're in the process of awarding a contract for what's called an integration contract, and that will be a contractor that will be their expertise is in deploying this kind of technology and rolling this out and supporting us to do that. so we have two qualified vendors with this technology today, and as we make these purchases, we will be able to use that vendor's list. in the meantime, our lab is

continuing to certify additional vendo vendors. that's why the industry is responding very quickly to this demand, and with our integration he contract we believe we will be able to deploy those. it's going to take all of our energy and commitment, but we're very, very committed to doing this. >> you mentioned boston and chicago. how about new york? >> i don't have the schedule in front of me, but i'll be happy to provide it. secretary napolitano tomorrow will be announcing the deployment to 11 airports and our team is working on the deployment of all 150 machines plus those that we will be receiving this year and hopefully next. >> i hope it will be the decisions are made according to threat. >> they are. >> just wanted to check that out. another issue. secretary napolitano testified last week before the authorizing committee that dhs did, in fact, have the authority to grant tsos

collective bargaining rights administratively. could you tell me what is holding up the department from taking this action when president obama stated many times over during the campaign that he supported it? i mean, it seems to me the threat to the traveling public is the terrorists, not the the unions and the fact that you can't even get someone to head up the agency because of this issue just doesn't make sense. could you respond? >> yes, madame congresswoman. the secretary has indicated that she wants to get a permanent t srstsa administrator in place. >> that's a good excuse. well, okay. >> i'll tell you what i have done in my tenure as the acting secretary. i have held meetings with ntu and afte in the last year where

the leadership of the unions brought in officers from around the country that they have -- that are members of their respective unions. we have sat down and had just great dialogue with those front line officers and the leadership of both unions on issues of mutual concern. and i will tell you that you put me in a room with a bunch of tsos and it is a great exchange. we have had -- i consider the tsa to have a good relationship with both unions. >> i thank you for the response but i see the chairman is going to crack the whip. i want to remind you customs, border protection, the pentagon force protection agency have collective bargaining rights. you're aware of that? >> yes. >> thank you. >> thank you.

mr. farr? >> thank you, mr. chairman. i probably fly more than anyone on this committee. i go home every weekend, so i have a lot of experience with tsa. frankly, i have been critical of the air marshalls wondering what the cost effectiveness of them. it would be like us having to have a marshall to take us from this room to the floor. after you have gotten into this building the building's secure. after you have gone through the airports, you should be secure. we have locked down cabins and armed cabins. i don't think in the christmas bombing it would have made a difference because the air marshalls sit in first class and that happened in the back. the committee asked for a report on essentially the cost effectiveness of the air marshall program. we have not received anything yet. in your request you want 85 million more dollars for air marshalls. i don't think our committee

ought to give it to you until we get that report back. i just wondered if you want to comment on what we're getting out of that program. i mean, this is a priority of issues and while i'm a fan of law enforcement, i don't think this is the best -- actually, from what i understand talking to the air marshalls, they have nothing to do with -- they're not flying, not reviewing rosters or helping with the no-fly list and things like that. they have no access to information of who's on the plane. they are always shocked to find out that i'm a congressmember. they find it out because they sit next to me and read my material and ask me afterwards why didn't anybody tell me. i said, well, there were five other members of congress here, too. you probably didn't know who they were either. i guess that's what led to the issue of wondering why we ought to keep beefing up this program.

>> so, congressman, i would be happy to come myself and bring the leadership of the federal air marshall service to give you a briefing including some of the issues you questioned there, but i don't want to talk about in an open setting. i will tell you that the air marshall service is an extremely well trained law enforcement professional -- >> i don't doubt it. >> when they are not in mission status they are doing things including training. they are supporting our operations in airports and they have -- they work closely with the fbi. they are assigned to the jttf in the interest of aviation security. we do have a number of deployments when they are not in the air. but they are -- >> why don't you submit the report we asked for and then we can have a meeting after that? >> we will do that. i will follow up on where that report is. >> the other -- wondered how the

tsa is addressing language barriers in the field personnel in the middle east and africa. what are you doing to train people in the native languages or hire those country nationals to work for you with field personnel in the risky areas of the world? >> so one of the things we look for is we deploy our tsa representatives around the globe is we look at whether or not they are fluent in the language to which they are being deployed. if they are not, then they are -- they go through the department of state languages that they are at least -- have some basic capability in language. >> who pays for the screening equipment in foreign countries? >> in the foreign countries, the foreign countries pay for that. >> host country pays? >> yes. >> what lessons did tsa learn in

cooperation with other agencies and other countries during the vancouver olympics? >> during the vancouver olympics, we're in the process of doing a lessons learned now. we had great cooperation from the general aviation and the commercial airports back and forth to vancouver. we had a great intergovernmental, interagency cooperative effort and the lessons learned are being reviewed now immediately in the aftermath of the olympics. >> can you report those to the committee? >> yes. >> lastly, private aviation. >> very, very quickly. we have a vote coming up. >> as i mentioned to congressman rodriguez, we are in the process of preparing the supplemental notice of proposed rulemaking for general aviation for later this year. >> thank you. >> thank you. >> thank you, mr. chairman.

we really appreciate your service. thank you for the job you have been doing. there is a lot of concern that the christmas day bomber was on a terror watch list and got on an airplane. how did that happen and how can we make sure if they are on the list they don't get on the plane? >> sir, he was not on a terrorist watch list. he was neither a no-fly nor a selectee. we didn't have visibility into him. >> he had a valid visa but it was my understanding he was on a terror watch list. that's not correct? >> no, sir. >> he was on a british watch list. are we looking at watch lists from other countries? >> right now i probably shouldn't answer that in open session. i will tell you that right now president obama did direct that the u.s. government, both the department of homerand security and the intelligence community look at the process. we are in the process -- that review right now is ongoing to see how we can do that.

>> it does seem like -- and i'm glad you're doing it, but common sense if they are on a watch list it's automatic pilot. you shouldn't let them on an airplane with my wife and kids, anybody's wife and kids. >> one of the things tsa will have implemented by the end of the year is the secure flight program which will ensure no-flies and sleblgt selectees aren't permitted to fly. >> i hear about it and my colleagues do, just common sense. it is frustrating to see the tsa apply these restrictions to all of us. frisking and searching, you know, 70, 80-year-old woman. there was a case of a medal of honor winner, a gentleman who served his country and was searched and harassed, yet young muslim men particularly like this guy traveling to pakistan are not treated any differently.

what statute, what federal regulation prevents you from singling out young muslim men and giving them more attention than an 80-year-old medal of honor winner? >> well, sir, when i hear of circumstances like that, as you described, it troubles us. we want to make sure that our officers are respectful of passengers. in reality we are required to screen all passengers. tsa does not profile and therefore we do not -- >> right. >> -- single out different categories of individuals. >> that's what i was asking. is there a federal statute that prohibits you from singling out a group of people or particular characteristics or is there an internal regulation? is it a federal regulation or statute that prohibits you from profiling? >> i would have to get back to you. i know as a matter of policy we

do not profile. >> it is disturbing. i mean, it's something that needs to change. i got here in 2001 and was on the transportation authorizing committee before i joined this wonderful committee. right after 9/11 we brought in the head of -- i think you were there with me, mark. we brought in the head of the israeli security. it was terrific. remember that? [ inaudible ] >> yeah. we heard terrific input from the head of israeli security. they just don't have this problem. if you're an 80-year-old grandmother, they don't bother you. they obviously will screen you and check you, but as i recall they have a security professional that actually talks to them and if you're -- yeah. you fit certain characteristics, you're going to have a conversation with officer lewis here. you will have a special visit. it just defies common sense. what do we need to do to make that happen? we do not have a problem with

baptists, hindus or buddhists blowing up airplanes. it's just common sense. what needs to happen so you can let your officers use their own common sense and good judgment and zero in on the population that's the problem? >> so let me answer that a in a couple of ways. first of all, we have consulted with the israelis frequently on the security measures that they have there and what we can do here. we have also -- we have a behavior detection officer program that hats officers looking for behaviors that would warrant us to give somebody additional screening. in terms of what legislative remedy would we need for this, i would have to get back to you. >> please do, real specifically. where's the problem? and let mr. kirk because he's knowledgeable and this is a naval intelligence answer. >> mr. kirk, we'll try to get your question in before we vote. >> i have to ask since the

second busiest airport in the world is in my state. we had the head of security at o'hare jim maurer say it was the least secure airport in america. this was on the front page of the chicago sun times today. can you comment on his charges? he's got some pretty specific complaints. >> yes, congressman. i'm familiar with the statements that he made. i will tell you that o'hare has an airport security plan. tsa inspects for that plan. they are in compliance with that plan. any time that we have something reported to us or we notice that there are inspections that they are not in compliance with we would take it up with the airport authority. >> one specific thing i want to raise with you is he says, quote, o'hare is the only armt in the country that allows private vehicles to park on the secure side of the airfield. >> i'm aware of the parking

set-up there. basically right now they have a security plan that they are in compliance with. >> do you have regular liaison with your european counterparts? >> yes, sir. >> one thing i would hope we do and it would be the initiative of this country is if you're on a british no-fly list at a minimum you should be on the selectee list for the united states. >> and i believe that that is part of what we are looking at in terms of how do we share information across governments and how do we make sure that information gets to the united states that we could work with. >> this may take money, foreign liaison and some work, but i think -- especially the no-fly lists of nato allies should immediately trigger membership on the selectee list of the united states. >> thank you. i will take it back.

>> we ought to take that up. it would be expensive in liaison, but think the public would support it. >> the recommendation the gentleman is making doesn't depend on this, but i'm told as a matter of fact abdulmutallab wasn't on the british no-fly list. >> he was even worse. he was denied a visa. >> he was denied a visa because of a related problem. >> that even means that the foreign office had its act together. >> he was on our tied list but it didn't turn into the no-fly list. we'll straighten that out. >> basic point is you ought to have the resources to -- when they update their list they immediately go on the selectee list for us. >> and tsa actually does not nominate and maintain that list. but it is something that i will take back to the committee. >> thank you. >> i apologize for having to

take a break. we'll make it as brief as possible. we'll come back for one final round after two votes.a7

>> a one up a look on the manpower aspects of that request. we do have this request for five screeners for each machine, and we want to see how hard and fast that estimate is. perhaps it could be a less manpower intensive operation. we also want to ask about the explosive trace machines. in this hearing, i want to ask you about the goal that we all share and we trust will be achieved, although there are significant challenges -- the goal of 1% screening of cargo

transport -- transported. the 9/11 act requires that you screen at least 50% of cargo by february 2009, and 100% by february 2010. it will be significantly more difficult to achieve 100%. the difficulty lies mainly in two areas -- international cargo and cargo on these large pallets. let's talk about the nature of both challenges. and what you are doing to overcome them. i think that you had estimated last year, ms. rossides, that it may reach 75% by august of this year. you have been working on the problem for over a year now, and actually the year before that,

so do you still stand by that estimate, and if not, why not? what is the screening estimate for international corp. and now? any possibility that you can do better than that 75%? and the other problem is the pallets. there are no machines qualified to scan cargo and oversize containers. we've been working on this problem for multiple years but it appears that we do not have a solution, at least in the near term, and well after the mandate has expired. screening air cargo will be for person-dependent and canine- dependent in the near term. can you help us understood the challenge we are facing and the lack of timeline for that? >> yes, mr. chairman. with respect to air cargo

domestically, let's talk about that first, part of the requirement by august. we're confident that we will meet domestic requirements to screen 100%, which means that all passenger airplanes leaving the united states, lifting off from domestic airports, that that cargo and those passenger flights will be screened. the challenge and the significant challenge is the international inbound. there are 98 countries that we need to gain compliance with that requirement. right now we're working with those countries -- for example, the u.k., their procedures and screening methods meet the standards that we have said. but we're looking at those countries that are going to be -- that we have literally have to look at their methods, how are they screening, are they using the supply chain approach, and are we comfortable with those methods?

i do not believe that we will get to that one under% by august. the 75% testified to last year might have been optimistic, it may be more like 65% by august. we are aggressively looking at every country and working with ikae, and we're working with other governments and the air carriers to address this, but it is going to be quite a challenge. we have about 20 countries that account for about 84% of the volume coming in, and those are obviously where we are focusing our attention the most, to get the biggest bang for our buck in those countries. we've been asked before, what is our time line, how much longer would it take, and our estimate is that it will be a couple of more years that we would have 100% compliance from some of

those countries. >> before we turn to the palate question, what is the nature of the history with the most difficult cases? is it mainly that technological capability that these countries possess, the resources with which to do this? are there more intractable problems of the diplomatic nature? and it does lead one to wonder if the latter is the case, what will it take to overcome this? >> most of the challenges are either their basic capability to do it. we have actually gotten great cooperation and the places where we have visited and in talking to host governments and the foreign carriers. most simply lack the resources

and the built-in capability. we're going to have to look at alternative measures if it comes down to that and how do we enable these foreign governments to meet the challenge. the right now, we're working with the support for our supply chain approach, we hope that the systems will locate. the issue with the pilots -- pallets, there's just not enough big enough screens, so we're looking at technology in our labs, and how we first try to break down the commodities into smaller packages that we can use to address the compliance requirement. we look at the smaller packages versus the larger size.

>> let me quickly and finally returned to -- referred to one that will not surprise you considering last year's hearings. we had two hearings last year from the tsa and fema on solutions to improve the timeliness. 93% of the 2006 monies remained unspent and 90% from 2007. it took 285 peace -- days for the projects to be approved in 2008. and aspirin, tsa and fema announced that all to your --

all tier i would be funded as soon as they were announced. this was a significant change. and despite this non-incremental change, it appears in the process for this funding come up at the disbursement of these funds has improved dramatically. the 67% of the 2007 grants on spent compared to 90% a year ago. they are marginal improvements at best for 2007 with 93% of grants unspent compared to 99%. these changes, certainly on paper they cheered to be major changes to exit by -- expedite these grants, why have they not produce the results that we anticipated? we have intense interest in this. we had a second hearing and

asked you to report on the progress by august 2009. we know you worked hard trying to solve this problem, and we saw some improvement but we have not seen a report yet. it's over six months late. the main concern is this, and it is hard for us to get a handle on the problem when we do not have the information we deem necessary. >> yes, mr. chairman, let me read -- let me apologize that the report is not to the committee yet. we are working to get that through and to you. what we have done, though, is look at the recipients of these grant funds, because what we know is that regardless of the process of tsa and fema, we wanted to focus locally on the recipients on these funds and how they are spending does. tsa has actually met with the recipients of 80% of these funds, and what we are seeing is

that at the local level these bonds are being spent well. the challenge is that they do not necessarily in voice and so the drawdown right to do not actually reflect the progress being made with each of these individual projects. we are attempting to work with them so that they do actually invoice us in a way that would show higher percentages of the drawdown rate. what most of the recipients and agencies do is that they wait for the project to be completely over and then they submit their invoices for payment. it looks like projects are not moving along in due course when in fact in our visits with them and our work locally, they are actually making progress. we will get that report to you and i apologize it is not to the committee. >> what you have said really underscores the need for an accounting of this.

we have no way of assessing what you just said in terms of -- maybe it's an accounting method. on the face of it, i would wonder how much of the problem that really explains. but to the extent some other way of accounting for this would help us understand what the real rate looks like, we of course would like to see that. we do need an accounting, and we're still very concerned about the underlying problem. these are funds that are not getting at to our communities for production. we will look for that report very shortly. >> let me get back to the imaging. tell me -- i read your statement schedule.

summarize for us. >> you're asking about the ability to export the technology and install them at checkpoints. tsa has designs for all the checkpoints across the u.s. airports. what we're looking at right now -- we know what the two current manufacturer technology requirements are, and we're looking at the airport configurations that we know and where we can deploy this technology said it has minimal impact on the configurations of these checkpoints. that is ongoing between the tsa technology staff and at the airports. we're very confident that we can deploy it very effectively and in a fairly accelerated manner

because we know what those checkpoints are like today. we have had airports volunteer, because they know as well that they can take this checkpoint -- take the technology as the checkpoint is configured. as we look ahead in as we continue to press the industry, we are not going to just stop with this technology in the advancement that this technology promises. we want to see the industry get us to a higher technology that has a metal detector capability as well as other capabilities. we're very confident right now, based on our planning and what we know about these checkpoints and based upon the cooperation from the airports, that we can deploy these and a very effective fashion. >> on the schedule, you say in your statement on page 5 that 40

machines have been deployed at 19 airports already. by september, he bought 150 additional units and this year you expect to deploy those and at least 300 additional. that would be 450 additional. the first units are set to arrive at boston logan and chicago o hare next week. and then as you point out, the budget request, to $0.4 billion -- $2.4 billion. you're asking on top of the money to acquire the machines and additional 314 million for

5000 positions to run these machines at their accelerated deployment pace. now if these machines are working out as well, you will increase the number even further, correct? >> that is part of the estimate we're doing right now, what would be the optimum for capabilities across the airports beyond the 1000, but we have not come to a final number on that. >> your initial guessitmate is 5355 people for these machines. is there any hope that we can get that down? >> while we are looking at it is that requirement for this

initial 1000 machines. as we continue to deploy additional machines, we will have to requirements for the large airports purses the smaller. and as we go forward, we will look at the maximum effectiveness at of both the resources of our people and the technology. it really represents all little over 1.25 to 1.5 fte's. it is an average across the whole system that that represents. as we continue to move toward more and more airports, we will be looking at with that right combination and efficacy would be, once we read the full capability.

>> you are asking for 12% increase in the money for the fte's in one year. now, as you recollect, we first part of this organization -- this department never existed [inaudible] recapped a number of employee fte's -- what is it now? >> in that checked baggage, we have about 38,000 working in those areas. >> but for a total screening? >> about 45,000. >> which would pump up with these to about 50,000.

i noticed that there is some comment with the odd-detect function -- the auto-detect function. >> that is where the machine actually identifies on the image the anomaly. the operator does not have to study the image, the machine basically tells the operator that there is an anomaly here that requires further examination. >> does that exist now? >> no, it is in our labs right now, that kind of technology. >> with that help us reduce the fte's per machine? >> no, sir, it really does not. the configuration of staff right now is to -- that staff would actually be in the checkpoint system process, and the anomaly

process, so it would not necessarily save with the audit detection capability. >> you have people at the checkpoints plus the full body imaging. the five fte's, with that cover the other work? >> we look at all of it requiring staffing 3 so the additional resources that we are asking for would accommodate the checkpoints with the advanced imaging technology as well as if we had the walk through medical detectors -- metal detectors. it does not take into account getting rid of the metal detectors. >> so the metal detectors -- with or without the full body

imaging machines -- well, without what is the requirement for checkpoint? >> i believe that the checkpoint configuration is 9.5 fte's, and it can be normalized across the system, and so the request that you are seeing is for the increase, which is 1.25 to 1.5 fte's per machine, and then you multiplied that by the shift and the 24/7 operations and the major rim -- airports. >> you are asking up to five fte's per machine. it looks to me like it is going to be conservative. >> we have looked at what we can do with our read it -- are resisting resources and technology is and put an estimate on what our modeling shows.

>> i hope that at some point in time we can talk about withholding some money and the latter part of the year until we see a practical application justifying these five fte's per day. it may work out that they may find [unintelligible] but if they go ahead and hire these people, we're stuck. i hope we would talk about changing the manpower requirements. >> and we would be happy to keep the committee informed as we deploy these in terms of operations. .

>> what standards do you have for your tsa people? do they have to have education and experience -- any experience at all? what are your hiring standards? >> the standards for tsa officers are spelled out in the law. they require a high-school degree or equivalency. there are requirements, once they are hired, for extensive training. they must have a minimum of 80

hours of training. it is -- it runs the gamut from how to operate the technology in the checkpoint to how to deal with passengers properly -- how to resolve alarms, how to conduct physical body back down. it is a variety of training. they are required to be certified annually. they have to demonstrate their proficiency to conduct those duties. if they are not, they are subject to dismissal. we have another group of officers called peter detection officers. -- behavior detection officers. they are trained to look for an almost behavior's of passengers as they come through the checkpoints -- or anomalous 0 -- for anomalous behavior of

passengers as they come through the checkpoints. >> we wanted to repetition because we have always done it. are we wasting time when we focus on these areas? is there other areas -- are there other areas that may be better uses of our time? i set off everything when i go through the metal detectors. i stand in line and let them know that. every time, you go in and do the whole -- you wait for somebody to come. you have one or two people there. eventually, there has to be judgment on whether it is somebody on a regular basis doing this type of thing. i wonder if the people who are working on me because of my artificial body parts -- if they would be looking at -- there is also an issue with manifest. we look at manifest.

we look at port of embarkation. if we're going to have airlines involved in the process, we have to be more open and get a more information and intelligence. if you look from israel's system, it works. they are more exposed than any other country in the world right now. whether you would consider in evaluating the standards of the people you hire -- do we need more law enforcement? if you hire -- i am not complaining about who is being hired. i do not know their performance records. they need be trained. are we doing the same thing over and over, wasting time with certain individuals? are we putting ourselves in a better position by re- evaluation and doing what really might work better? >> you have actually described part of the reasons why we are moving in the direction we are

moving with the advanced technology. one great advantage of the advanced imaging technology is that person like yourself who have metal implants will now go through the machine and avoid the total patdown. we have had tremendous positive response from veterans, persons with disabilities going through that technology. >> i am not talking about somebody like me. i am talking about the system and whether the person now that is spending their time -- the personnel that is spending time with me could be doing something to make the system more safe, not just something that looks good. >> what we do is, in addition to our behavior detection officers, we utilize them in other areas to look for and do random and unpredictable screenings

procedures. that is what we have learned from the israeli model -- a multiple layers of security. we have worked closely with the israelis and a number of our programs. we consulted with them after the christmas day attack to talk about what that might have done in their system, versus how it was carried out across the globe through the amsterdam processes that the suspect went through. our approach to multiple layers of security and utilizing our officers in those multiple layers is exactly what we are trying to do similar ra -- similarly to the israelis. >> i represent dwi -- bwi

airport. i have seen a lot of advancement in your personnel. i think some of the systems seem to be somewhat repetitive and redundant. i think a lot of that is the technology. excuse me. [laughter] thank you. ms. rossides, ross is for a very useful afternoon a testimony -- thank you for a very useful afternoon of testimony. >> i tremendously appreciate what you and the committee do. we are very appreciative of this. >> in that vein, we started out together. before the department was created, we have been laboring

over this for a while. we will miss your expertise. you have been a very competent manager. you have demonstrated today and knowledge of these subjects. we will miss you and want to say thank you again for your long service. where are you going? >> i am waiting for the administration to appoint a permanent administrator, sir. >> are you holding your breath? [laughter] i think we had better adjourn this hearing. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> coming up, the head of the congressional budget office talks about u.s. debt levels. at 8:00, president obama traveled to pennsylvania today to talk about all the insurance. doc -- he traveled to pennsylvania today to talk about health insurance. >> tomorrow on "washington journal," john taylor joins us to talk about the efficacy of foreclosure prevention measures. peter eavis discussed the state of global financial markets. maria carrillo be onset to take

your phone calls. that starts at live -- that starts like at 7:00 a.m. eastern here on c-span. >> almost 40 years ago, as lead engineer at motorola, he led the team that developed the first panel mobile phone. tonight, we look at the history and future of that industry on the "communicators" on c-span 2. >> remarks now by congressional budget office are director douglas elmendorf. he will talk about government debt. he spoke earlier today at the national association for business economics. this is about 45 minutes. >> good morning. on behalf of us here, i am delighted to be here to introduce mr. elmendorf. douglas elmendorf is the eighth director of the congressional

budget office. it is a distinguished list and he augments that. before he came to the cbo, he was senior fellow and economic studies program at the brookings institution. he was co-editor of the brookings papers on economic activity and director of the hamilton project. over the course of his career, he has been assistant professor of economics at harvard university, principal analyst of the cbo, senior economist at the council of economic advisers, deputy assistant secretary for economic policy at the treasury, and then at the federal reserve board, assistant director of the research and statistics division. he earned his b.a. summa cum laude at princeton in his master's and ph.d. at harvard.

i first met him when he was a graduate student working on his dissertation. his decision committee included larry summers. all top rate economists and good friends. it is a distinct pleasure to present him to you. the topic today is fiscal policy changes. the timing is prodigious -- propitious. under the president's budget, that would grow from $7.50 trillion at the end of 2009 to $20.30 trillion by the end of 2020. difficult choices lie ahead. there is no one better to navigate as through this then douglas elmendorf. -- ban douglas elmendorf -- than

douglas elmendorf. [applause] >> thank you very much. it is great to be here. i appreciate the invitation to talk with all of you. i am going to talk about fiscal policy choices. i will try to go to the beginning. as you know, the cbo does not make policy recommendations. we do not make political predictions. i will not tell you what policy choices i would make personally, nor will i predict what policy choices i think the policy makers will make. we a finished an interesting session on that topic. i will try to frame the policy choices that policy makers will be confronting. i will try to leave time at the end to take your questions. cbo projects that the budget deficit will shrink rapidly in the next two years under current law.

even though we expect that -- the economic rate to be slow. the key choice for near-term policy is whether to enact additional past cuts or spending increases to provide more stimulus to the economy or to allow stimulus to be withdrawn, quickly, as under current law. the second key starting point is that we project the deficit and debt are on a trajectory that pose significant economic risks. they will become unsustainable. the key choices for medium-term and long-term bonds will policy are how quickly and in what ways to restrain federal borrowing. i will conclude with the policy choices that will be needed to put the budget on the sustainable trajectory -- larger and fundamental changes that what has been made in response to the past concerns. let me begin with the cdo outlook for the economy in the next few years. -- the cbo outlook for the

economy in the next few years. we have been emerging from the recession. during a slump in economic activity, consumers delayed purchases and businesses postpone capital spending and try to cut inventory. once demand picks up, spending and employment can accelerate rapidly. cbo expects the current recovery will be driven in part by this dynamic. we expect the recovery will be dampened by several factors. the first is continuing fragility of some financial markets and institutions. the smaller and riskier businesses are obstacles to borrowing money. households with weak credit histories or less money to put down houses are facing obstacles and borrowing money. we expect to restrain increases in household spending, due to slow income growth, a tremendous

loss of wealth, and a large excess supply of houses. a third factor is declining support for monetary policy. let me spend more time on those. this chart shows the federal funds rate, adjusted for inflation. in the wake of the past two recessions, the real rate continued to fall for a couple of years. in 1981 and 1982, the real funds rate fell sharply. in contrast, the real funds rate climbed out partly through it, we essentially zero. we have unwound many emergency policies. there is less new monetary stimulus hitting the economy in the early stages of this recovery than has been the case in most previous recoveries.

the effect of last year's stimulus package is peaking now. we expect the net effect of the package on the deficit is about $400 billion in fiscal year 2010. it would be less than $150 billion in fiscal year 2011 and less than $50 billion in fiscal year 2012. the effects of the package on the deficit did not really tell you its effect on output. cbo can only discuss that while it was working its way through the congress and now we updated quarterly, as required by law. we applied different multipliers and compliments of the stimulus package. we assumed that the federal reserve would not try to offset the direct effects of the stimulus because it would try to

is a private -- try to provide as much support as it could. our estimates of the effects of a package like this, under different economic conditions, would be completely different. under these economic conditions, we expect the package did boost output and employment, relative what -- relative to what would otherwise have occurred. the lower line is the past output -- past output gap that we would have followed without the stimulus. the darker line is the course we seem to be following. the package to help to moderate the depth of the downturn in both output and employment. if we are correct then impact of the legislation will begin to wane later this year. it will be compounded under current law by the schedule of expiration of the 2001 and to thousand three tax cut at the end of this year.

-- 2001 and 2003 tax cuts at the end of this year. our baseline projection the budget deficit where you can see that under the premise of current law, the deficit will shift from roughly 9% of gdp in the current fiscal year -- almost at the bottom of that -- to about 4% of gdp for years from now. -- four years from now. it would be the sharpest two- year reduction in deficit since the vote second world war. most of that is changes and -- changes from legislation. it is a striking and not a fiscal tightening. it roughly amounts to $750 billion between 2010 and 2012.

if the underlying demand is not increase, output would fall rather than rise. that is not our forecast. we think the various factors will cause spending it, output, employment to increase in the next few years very slowly. the waning fiscal stimulus, from the stimulus package and other pieces of law, it is an important headwind in our government. we do look for payrolls to begin expanding soon. with employment about 11 million short of where it would have been an absence of the downturn, full recovery will take some time. we expect the unemployment rate will average around 10% in the first half of this year, fall below 8% in 2012, and returned to about 5% only in 2014. under this projection, more pain of unemployment lies ahead of us

and behind us. policy makers are considering changes to current law that would cut revenues or boost spending. since there are too good different but overlapping perspectives here, one perspective is that the tax rates currently are more appropriate than the tax rate that we will revert to an undercover law. the 2001 and 2003 tax cuts should be extended and adjusted for inflation. a different perspective is that a prolonged period of depressed output and elevated unemployment justifies further policy action. there is some overlap between perspectives because extending the 2001 extending 2003 tax cuts and indexing would provide additional stimulus next year. , and liwe have used evidence to

estimate the impact of a number of policies that have received public attention. i will not discuss opposite -- i will not discuss specific results unless you have questions. fiscal policy action, if properly designed, would promote economic growth and increased an employee -- and increase employment. despite potential economic benefits in the short run, such actions would add to the h already large pewter deficits and make future incomes lower than they would otherwise be. on the economic side, we're looking for a return to full employment and solid, but unspectacular, growth. for the budget, we expect the deficit under current law to run around 3% of gdp through 2020. policy makers may extend the

2001 and 2003 tax cuts and may no other changes, therefore deficits would run around 6% of gdp, twice the current project andion. -- twice the current policy. i will refer to this as current policy. the reason i focus on this scenario is because, in the pay go legislation meant to impede future deficit increase actions, extending the 2001 and 2003 tax cut is explicitly exempted from the procedural restrictions being built in. that law also exempts only partial amt relief, but exempts other policy continuations as well.

the things that are exempted is pretty similar to the impact of these changes. this change in tax law is merit in the president's budget. -- mirrored in the president's budget. we released our preliminary analysis on friday. for 2011 to 2020, we project a current deficit of about $6 billion. if one includes the debt service implications of changes from current law, the deficit could increase by about $3.70 trillion. the president has a large number of other proposals which amount to increasing spending and revenue. in terms of deficit impact of those changes, the net -- there is no net effect. the total would be 10 trillion

dollars -- $10 trillion over that period. we project that the debt held by the public would be enabled at 65% of gdp through 2020 -- the highest burden since the 1950's and a sharp increase from the burden of just a couple years ago. under the alternative, it reaches 90% of gdp and is on steep upward trajectory. tax revenue is used to pay interest, rather than pay current programs. we expect net interest to amount to more than $700 billion by 2020. that is twice the share of gdp that it is now. the crowding out of saving and investment lores future output and income relative to what would otherwise occur. the ability of the government to

respond to future needs, international crises or domestic demand, is reduced. the risk of a sharp jump in interest rates, perhaps related to flights from u.s. treasuries or u.s. assets, is heightened. people often ask me how much that we can have before it becomes a problem. -- how much debt we can have before it becomes a problem. for the first three points, there is no tipping point. for the fourth, there may be a tipping point. unfortunately, i do not think the analysts have much traction on the question about what that might be. i think it bears emphasizing that the united states is entering unfamiliar territory in the level of public debt. i are dimension that the debt would be larger in the next

decade -- i already mentioned that the debt would be larger in the next decade and it had been for the last half a century. if you look at the first dark bars, the united states is midway down that. this is the debt held by the public -- the share of gdp across countries a few years ago. few years ago, we were in the middle of the pack. if you add the debt we will add under current law baseline and go further and add the debt under current policy alternatives, you know that we would have a debt to gdp ratio that would be at the very high end. drawing firm conclusions from this sort of comparison is developer in -- from this sort of comparison is difficult. it is worrisome that our ratio of debt to gdp is entering

territory that is so unfamiliar to us and other countries. the problem with the federal budget deficit is not its level today, when the economy is weak, but its future path be on the next couple of years. i want to be clear -- as you know, forecasts of anything, including budget and economic outcomes, are highly uncertain -- they could be substantially smaller or larger than we project. we think our projection balances at risk. the outlook for the budget under current policy is bleak. that the choices are not whether to change course, but how quickly and in what way. thinking about the choices -- it is helpful to understand the evolution of different components of the budget over time. this picture shows effective federal tax rates, average tax rates.

these calculations impute and then expresses it relative to income. you get to the lowest quintile, and the middle quintile. the highest quintile -- the highest line -- bell in the early 1980's, trended up until 2000, and fell again after that. it is at the same level as it was in 1979. the tax rate of the top 1% of households displays a more exaggerated version. if you put those changes together with income growth at different quintiles, total revenue direct -- gyrates.

apart from the current economic downturn, this year shows no trend during the past 40 years. the current policy scenario i described -- the share and in 2020 @ long run average -- at its long-run average, the horizontal line. i will collect the same revenues as i did when i was 8 years old. let's talk about outlays. these are components of the federal budget in 1970 and 2007 before the recession -- and 2020 . our total output and income is the ultimate source of what could be used for government activity. the table shows correct offer

2020 -- shows revenue share for 2020. total outlays were about the same share of gdp in 2007 as the war in 1970, at 18.3%. -- 19.3%. you can see the armada -- they are on a trajectory to grow dramatically. let's look more closely at the composition of outlays over the past 40 years. we will talk about the future to. -- future, too. in 2007, those three programs absorbed 4.4% more of gdp. defense spending has got in the opposite direction. by an almost equal amount, in fact. between 1970 and 2007, defense

spending declined. all the other programs of the government absorb about the same share of gdp that they did 40 years ago -- 5.8% relative to 6%. it has risen and fallen over time and the composition has changed. as with revenue, it has ultimately even out, leaving the total burden relative to gdp about the same as it was several decades ago. i do not want to minimize the variation. looking across a whole. -- looking across the whole period, the story is simple. we paid for it with the reduction in defense spending.

that was not visible to most people. visible taxes did not increase relative to gdp and other forms did not go down relative to gdp. the increased cost of those three entitlement programs were absorbed in an area that most people do not observe. understand that is important, because the same pattern cannot be repeated. defense spending will not decline by another 4.2% of gdp. maybe it will fall another 1%. spending on social security, medicare, and medicaid will rise rapidly under current law, faster than his darkly. -- historicallly. -- historically. it provided a large number of

workers who pay taxes. that situation reverses. there are relatively fewer people to pay taxes. these trends get worse because the health programs are a larger share of the budget now than they were at any time of the past. there is a rapid rate of increase in those programs have a larger effect on the budget as a whole. as you know, under court law, the trajectory shown here 32020 continues beyond then. -- under current law, the trajectory shown here continues beyond 2020. we need a visible reduction in other programs or a visible reduction in the rate of growth of those three programs themselves. that tradeoff is fundamentally different from the way that we

have been able to finance p ast increases. under current law, that drop is not confronted. they cannot be paid for except by additional borrowing. this gives you a different perspective on the quantitative nature of the trade-off. you can see that taxes relative to gdp. you can see all is for social security, medicare, and medicaid, and net interest. you can see that by the end of the decade, revenues from that policy leave less than nothing left over for everything else the government does. another perspective on this is to look at numbers or 2020. to be sure, you do not need to balance the budget in 2020 to put this all policy on a sustainable forest. that is it that are small enough would allow the debt to decline relative to gdp -- deficits that

are small enough would allow the debt to decline relative dp -- relative to gdp. what might you do to close a $1.40 trillion gap? you could cut social security, medicare, and medicaid, by more than half. you could eliminate all other functions of the government and still not get there. you could increase in individual income tax revenues by more than half. you could do a combination of changes across those categories that would be less dramatic, but still quite viable. as i have said and other presentations, u.s. fiscal policy is on an unsustainable path that cannot be solved through minor changes.

to conclude, the problem posed by the federal budget deficit is not its current levels, but trajectory. that trajectory would have a substantial cost, in terms of output, income, and represent a growing risk to the economy. the fiscal challenge we face is different from earlier ones. in the past several decades, the country pay for increases in social security, medicare, and medicaid through cuts in defense spending, relative to the size of the economy and the tax base. because defense spending is much smaller and other programs are much larger, that is not feasible in the future. instead, significant changes will be needed in taxes or spending, directly visible to many americans. as soon as those dangers -- the sooner those are put in place, a less destructive they will be. thank you very much. [applause]

>> if doug -- doug would be happy to take questions. please come to the microphone. >> i am 68 -years-old -- 68- years-old. i think about the next decade after that. can you put another column out there for 2030? my sense is the baby boomers will be in full bloom and on social security and medicare and the numbers will be even far worse for that decade and for the coming decade. have you done any projection work or published anything that goes beyond 2020, even just to

2030? >> yes, we have published a long-term budget outlook last june, where we take projections out to the 2080's. what happens as they continue to rise. additionally, unless one has raised taxes, the debt continues to build up. the situation becomes unsustainable very quickly and the deficit picture looks like this. you would need to invent higher scales on the charts to get the numbers and. you can see that on our web site. >> or you just repeal some laws. thank you very much. >> i found your rational discussion earlier about what is not going to happen in terms of the political process.

it is a disconnect between your rationale and their rationale. i have two questions. do you see any possible scenarios to ameliorate the problems you indicate, given that the debt is growing so fast? in a few years, we may be talking about -- people keep talking about 2018 and problems with social security. is something fundamentally flawed with the way we keep our accounting system? when you really talk about our scenario for existing law and that outstanding social security and mmedicare obligations and all the other obligations, it

seems there is something fundamentally flawed with the way we keep our accounting. zero interest bond due in 30 years, you might not say that was a problem. i do not agree with that approach. what do you think? >> to the first question -- it is a very important precepts underlying the cbo. we provide in permission to the congress to make choices that the members of congress want to make. -- information to the congress to make choices that they want to make. my conversations with members -- i talked about the numbers. it is not familiar to them. i think they are aware of it, but i cannot predict what they might do. i think it is a very important question of how we present these numbers. i view the budget as a tool for

communication of national priorities and conditions. it is not just a tool for people like me to use in totaling things up. whether the budget as it is currently constructed or presented is serving a purpose, i am not sure. there are populations that are done that take the present volume of the accumulated -- projections that are done at the present volume of the accumulated amount and take it into the unfunded liabilities, particularly for medicare. one complication is that those commitments do not have the same force as an actual government bonds. for most people, a government bond is a commitment that we will not default on. the current law would have certain amounts being paid out in the 2020's, but is not a

commitment on the same level of a 30-year bond. people are concerned about this. cdo and many other budgeting analysts focus on projections of a unified budget balance. there is a fair question of whether we have captured everything. >> i am a bean counter. you did not break out social security bursa's medicare vs medicaid. -- versus medicare versus medicate. -- medicaid. at what year did you see the social security surplus disappearing? what is your average age of

retirement? most baby boomers are planning to work longer and pay into the system logger. i'm not going to wait until age 70 to take social security. what is the average age? you mentioned that medicare will be taking a larger portion of the gdp. what percentage of that 11.1% is medicare? >> i, being honored, to -- i am a bean counter, too, but i have too many beans. you can look up the numbers on our website. so security is -- what you see as a turning point, so security

receives interest on the accumulated bonds in the trust fund -- social security receives interest on the accumulated bonds and the trust fund. those are interesting numbers and i cannot keep them in my head. i think the question of retirement age is important. we wrestled with that. we wonder about how some recent economic development would affect that. there is another study coming out about how we make projections. social security, depending on when you take benefits, there is an adjustment of how much you collect that is not quite actuarially there, but is close. i do not know exactly what projections we have made.

lots of people worked -- if lots of people worked a lot more, that could make a big difference. the breakdowns are different. you can look up our forecast of those. the forecast for social security as a greater degree of confidence. we like and narrow range. our rate of national health spending has risen in the economy as a whole. the health care costs have risen faster than other costs consistently for a long time. if you projected forward over the last five years the different -- you would have gotten very different answers. the further out you look, the more uncertain it becomes. >> i am from the university of cincinnati. you ended by talking about where you started.

this is not a sustainable trajectory. in terms of resolving the trajectory, it seems there is a balancing act between that and what you're talking about, because you talked about factors dampening the recovery. what do you see, as the policy choices -- what do you see as policy choices that are there, in terms of trying to sustain recovery, and set us on a sustainable trajectory at the same time? >> as i said early on, there are toys is for the near term as to whether to do -- choices for the near term as to whether to do more stimulus. we of analyzed different ways of providing additional stimulus. we have looked at payroll tax credit, transfers to people, state and local governments. when new aid was sent to local

governments after the recession, financial problems were still severe. we expect that to be true here as well. we looked at tax cut and infrastructure spending increases. we've done our best to try to quantify the broad range of what we think the effect on the economy would be. as an economic matter, there is no contradiction between people who would decide what more expansion policy in 2010 and 2011 and 2012 and less in the other years following. i think many experts would think that was called for. as a political matter, it is harder to do new things and then take them away. balancing those objectives is harder in the practical, political world, that it is in economics around a blackboard.

>> we have three minutes of questions. please be brief. >> you mention that the projections were provided based on multiple models. later, you also used multipliers and models. it is the impression of assuming -- is that treatment required by the role of congress? what would be the -- how would that be different if you compared the initial projection post baseline with the stimulus bill to the actual experience? >> our method of analysis of that is not required by congress. we try to be very clear. we do not think you can learn much from watching the evolution of a particular complement of

the gdp about the effects of the stimulus. we think it comes from more detailed studies often done several years later. we do not think you can learn much from that and we fall back on repeat analysis we have done before. we try to be explicit about that. it is essentially repeating the same exercise we did, rather than an independent check. we watch how the money flows out of the government budget and we opted that. we read new evidence. >> if the stimulus bill did not do what was forecast to do, it would not have been detected by subsequent analysis. >> that is right. in terms of what we would have thought otherwise, i do not remember all of our forecast. last march, our forecast took a

very large decline in employment. our january forecast of last january did not have that. our first estimates of the effects of the stimulus package were coming out in between those. it is hard to go back and disentangle those pieces entirely. >> thank you. >> you are welcome. >> we're in quite a pickle fiscally. one potential solution is growth. are you seeing any pro-growth policies or entitlement reform, privatizing in entitlements, closing the trade deficit, anything that might change the equation? >> one thing we provide in our annual outlook is estimates of the effect of an extra 10th of a

percentage point on it growth over a decade on the fiscal outcome. faster growth matters. it would take much, much, much faster growth to reserves -- reversed a fundamental conclusions here. the problem remains. in terms of policies, we are in the process of analyzing the effect of the president's budget on the economy, which we do once a year, using models that contrast with the models we use for short-term recession effects. we focus on incentives to try to capture marginal tax rate effects on things. we captured the factors that most economists think are important. when we analyze the president's budget and whether and exchanges and the tax rate or spending, we will release that analysis by

the end of this month. in terms of other proposals, there are certainly out there making very is a search all -- merry -- there are certainly ones out there making very substantial changes. paul ryan has made a proposal. we not focus on the tax side of it. on the spending side, we took a look at changes and talked about the effects of his proposal changes on the economy. there are pieces of that out there. i do not think the legislation -- his proposal is not on the cusp of being voted on. there is nothing that will have significant effects on economic growth that is being voted on. >> thank you. everybody knows there is an option to collect your retirement benefits in your 70's

instead of 65. obviously, the incentive is to get more money per month. is that skewed? is it actually early -- actually more beneficial to the government and the taxpayer? what demographics of people opt to do this? the people that continue to work past age 65 presumably pay into social security. have you done scenario analysis on those people and what that does to the situation with benefits and entitlements? >> we do not collect data, we look at it as collected by the social security administration. it was dying -- it was designed to be actuarially fair for the population as a whole. we look at the choices that people make that end up costing the government money.

people who would benefit more by way and will wait. people who would benefit more by going early will go early. i am not sure how much the benefit years. we do analyzed some areas. i do not know it are reports show that are not. we do a related support -- report about the long-term outlook of social security. i will look into that. we have a sophisticated model about income distribution with different earnings histories and so on that we can use for that exact purpose. i do not know if we have put it out there yet. get your member of congress to write an act and we will get it out there. >> thank you. please join me in a warm thank you to our speaker. >> thank you. thank you very much. [applause] >> we have a short break and the next session will be here at 10:45.

thank you very much. douglas elmendorf. >> i was happy to be here. >> c-span, our public affairs, that is available on television, radio, and online. you can connect with us on twitter, facebook, and youtube. sign up for our special alert e- mails @ c-span.org. >> the prime minister of greece is in washington this week for an official visit with president obama. george papandreou spoke at the brookings institution this morning. you can watch that night at 9:45 eastern here on c-span. in this portion, he discusses the economic and political challenges facing the international community and his country. >> as we best the triumph -- and that end of the cold war symbolized for the west, we

forgot three important elements. the world's problems were not over. history had not ended. new conflicts, new issues, and new complexities of globalized world rose. we underestimated our own dogmatism. we had created our own masters -- the free markets, and the masters are not be tampered with. they rule. we forget that in democratic politics, our master is the people. they are we are there to serve them -- we are there to serve them. we neglected our transatlantic relationship. we pay lip service to it as something matter of fact or irrelevant to the new challenges of the times. off we went with our respective

politics. the world was changing and the balance of power was shifting. that has undermined the extent to which our common values remained a dominant force in the shaping of this new globalizing economy and society. values such as democracy, the protection of human rights, the rule of law. the international community seems impotent to deal with the complexities of an interdependent market, or the new threat of global warming, or competition for energy resources, or the spread of violence, terrorism, and the proliferation of nuclear weapons. my conclusion is that cooperation between europe and

the u.s. must be revitalized to empower our country's, societies, and citizens, so that we can deal with these issues effectively and democratically. how does this relate to my country, greese? -- greece? you are aware of our financial crisis. after we took office, we discovered that the budget deficit was actually -double what our predecessors had told us, european authorities, and the greek people. our announcement of this discovery rocked investor confidence, not only regarding our finances, but also the soundness of the currency we share with our european neighbors. you understand that this crisis, like wall street's original prices in 2008, risks