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>> good morning. we would like to welcome each of you to our annual hearing on the budget of the food and drug administration. dr. hamburg, we thank you for being here today. we are pleased to have you testify in front of this committee for the first time, especially now that you have had a little while to get settled in your position. we also appreciate the participation of your colleagues, mr. patrick mcgeary and norris cochran. the f.d.a. has been on the

receiving end of substantial budget increases over the past several years. between 2007 and 2010, the f.d.a. budget went up by 50%. this funding was important. as we all know, the f.d.a. is responsible for oversight of a wide array of consumer goods used by every american. often multiple times each day. in fact, about 20 cents of every dollar spent is on a product regulated by the f.d.a. this includes, food, drugs, medical devices, dietary supplements, vaccines, animal drugs and foods, and most recently tobacco. the f.d.a.'s budget for a long time had not be representative of the task before the agency. this subcommittee in recent years has been working in a bipartisan manner to reverse that trend. this year's budget request again includes increased funding for the f.d.a., although about one half of the

increase provided in fiscal year 2010. while some believe this is a cause for alarm, it's a realistic reflection of the need for the government as a whole to slow down spending. as it is, even though the budget proposes a smaller increase for f.d.a. than the past few years, it is still a larger increase than nearly all of uska and most of dhhs. brief review of the budget shows three themes, which are food safety, protecting patients, and advancing regulatory science. there are proposals to save money through contract savings and the enactment of new user fees. in food safety, increases are proposed for activities, including the establishment of an integrated food safety system, a modern import safety system and smarter surveillance and enforcement. for patient safety, increases are proposed to improve the safety of imports and high risk

products, expand partnerships with public and private entities, and increase the f.d.a.'s capacity to review generic drug applications. the initiative includes proposed increases that will help strengthen the f.d.a.'s scientific leadership staff in emerging technologies, the increases are important, but we have concerns. we are concerned that without adequate funding levels to maintain f.d.a. 'tises, inspector and reviewers, the goals you list are not achievable. i want to repeat something said last week. i believe the goals for this subcommittee this year will be to produce a bill to protect the gains we have made over the last few years, ensure that programs vital to the health and safety of americans are quarterly funded, and it do so in a way that shows fiscal restraint and responsible

austerity. the f.d.a. obviously is vital to the safety and health of americans and will be quarterly funded this year. we won't allow the agency to lose the ground it has made up. we all need to do more with less, and no one is exempt. senator brownback and i will be looking at the budget in a bipartisan manner to make funding decisions. it will not be an easy job but one we must do right. i am sure you agree, doctor, and in that spirit we are looking forward to continuing our work together. let me turn now to senator brownback. >> thank you, mr. chairman. it is a pleasure to work with you. senator kohl and i like to talk about basketball, too. we have two top 10 teams in the increase increase basketball tournament, so we are hopeful we can move on forward as well. next to the wheat harvest, this is kind of the big season in kansas, is basketball. it is a pleasure to have you here, dr. hamburg.

it was good to visit with you in the office and i look forward to your presentation here. i want to follow up on the visit we had because i've got some suggestions i hope you are willing to look at. your staff has been willing to consider, about rare and neglected diseases in particular in the united states and around the world. to help jumpstart this effort in rare and neglected diseases, i worked with the chairman to include a provision in the current year's appropriation bill that included two grooms to review the agency's process for approving medical products for the treatment of rare and neglected diseases. when fulfilling the agency's requirements under this provision, i have some ideas i hope you will take into serious consideration, and i hope these teams will be meeting and reporting out soon. to date, approximately 7,000 rare diseases have been identified. these diseases affect more than 30 million americans, but there are only f.d.a. approved treatments for approximately 200 of these 7,000 rare

diseases. so if you happen to be fortunate enough to be one of the 200, have a disease that -- have one of the 7,000 diseases and you happen to be than above the 200 that has an f.d.a. treatment, you have something to work on. there are 6,800 other diseasing without treatment at all, and they are not benefiting from the progress. this is unacceptable. there are 30 million total americans in this category. in addition, there are billions of people worldwide suffering from diseases that are often ignored because there are no market incentives for engaging in the costly process of developing a products for f.d.a. approval. according to the world health organization, one in six people worldwide is affected by at least one neglected disease. one in six. this is particularly astonishing when you consider that only 1% of the drugs approved since 1975 were

developed to treat such diseases, that affect one in six people in the world. this, too, is unacceptable. solving these problems will involve many government agencies and the cooperation of the private sector. today i would like to talk about something the f.d.a. could do to substantialally impact this category. i believe, and a lot of people agree, that f.d.a. should simplify the process for treatment of deadly rare and neglected diseases. it is my expectation that the f.d.a. uses safety, but they must establish a secretary track for product approval that takes into consideration the unique nature of the product being approved, including the ability of manufacturers to find large enough populations for clinical trials, the willingness of patient groups to knowingly accept certain

risks and the global public health benefit. without to go these things, i think it is highly unlikely we find treatments for these 6,800 rare diseases. i don't see how it happens. i thick we are probably stuck on this 1% figure of work in these neglected diseases that affect one in six people globally. that is completely unacceptable, and it doesn't need to be this way, and you are the person most well positioned to address this. i hope you will be able to. i hope you can look at this category. you have a lot of other issues at f.d.a. i think this is among the top tier of most important. mr. chairman, thank you for holding the hear hearing. >> thank you, senator. wie turn to dr. hamburg for your statement. >> thank you very much, chairman and senator brownback. i am pleased to ent the president's fiscal year terrell

budget. the budget director for f.d.a., and norris cochran are with me this morning. my testimony outlines the fiscal year 2011 budget request. it also includes a summary of recent developments related to our new responsibilities to regulate tobacco product and other important f.d.a. initiatives. as you know, this is my first time before this subcommittee, and i look very much forward to working with you. i deeply appreciate the support that you have given to the f.d.a., and i know that you share my determination to make sure that we can count on as a nation a strong, fully functional f.d.a. and as you point out, f.d.a. is a unique and important agency responsible for programs and activities that affect every american every day. the fiscal year 2010 appropriation reflects your commitment to f.d.a. and the

health of the american public. those fubbeds will allow f.d.a. to make progress across a wide range of public health priorities which are essential to the health, quality of life, safety and security of all americans. so again, i thank you. the proposed fiscal year 2011 budget includes $4 billion for f.d.a. programs, which is an increase of $7575 manage, with $601 million in user fees and $154 million in budget authority. we are proposed three major initiatives in areas vital to our mission, transforming food safety, protecting patients and advancing regulatory science. these initiatives are crucial for the modernization of the agency to the challenges presented by the 21 st. century. the transforming food safety initiative reflects president obama's vision of a new food safety system to protect the

american people and is based on the principles of the president's food safety working group, prioritizing prevention, strengthening surveillance and enforcement, and improving response and recovery. f.d.a. proposes an increase of $326 million for transforming food safety, with $88 million in budget authority, and $238 million for noah user fees, including $200 million for food registration and inspection fee. the fiscal year 2011 resources would allow f.d.a. to establish a foundation for an integrated national food safety system focused on prevention. key elements include setting standards for safety, expanding laboratory capacity, piloting track and trace technology, strengthening import safety, imimproving data collection and risk analysis for foods and increasing inspections. this initiative will allow

f.d.a. to make the kind of changes needed to deliver the promise of improved food safety and reduce illnesses caused by contamination of the food supply in years to come. the protecting patients initiative reflects f.d.a.'s pressing need to modernize our approach to patient safety and the safety of medical products. this is a time when science and technology offers new promise to improve disease prevention, diagnosis and treatment, as well as new protections for safety. this is also a time when an increasing number of drugs, devices and bioligics are being manufactured abroad. f.d.a. must act as a regulator addressing product safety challenges in the years ahead. the budget proposes an increase of $101 million for this initiative, including $49 million for budget authority.

the balance includes, new user fees, drug inspection fees and inspecting facilities. the protecting patient initiative for example uses on four areas. import safety, high risk production, partnerships for patient safety and generic drug review. these activities will have a very significant impact on public health in the united states. this science-based strategy will build new and greater safety capabilities. the result will be fewer import safety merge says and fewer serious adverse events with drugs, devices and biologics. f.d.a. is proposing in our budget a new focus on advancing regulatory science, which is very important and exciting. it includes an increase of $25 million for this much needed initiative. regulatory science represents the knowledge and tools we need to assess and evaluate a

product's safety, efficacy, potency, quality and performance. it is fundamental to all of our work at f.d.a., from supporting the development of new food and medical technologies, to bringing new treatments to patient. in many ways, it represents the gateway between discovery, innovation and opportunity, and actual products that people need and can count on. building a strong, robust regulatory science capacity is vital to the health of our nation, to the health of people, our health care system, our economy and our global competitiveness. during the past two decades, research has dramatically expanded our understanding of boiling and disease. yet the development of new therapies has been in deadline, and the cost of bringing them to market have soared. new approaches in partnerships in the emerging field of regulatory science are urgently needed between bridge the gap between drug discovery and patient care. and i might add to address some

of the concerns that senator brownback raised. that will yield better tools, standards and path ways to evaluate products that offer promising opportunities to diagnose, treatment, cure and prevent disease. it will also improve product safety, quality and manufacturing more broadly, including new opportunities to better protect the food supply and support the development of healthy foods and food choices. on june 22, 2009, the president signed the family smoking prevention and tobacco control act into law. the act grants f.d.a. important new authority to regulate the manufacture, marketing and distribution of tobacco products. i'm pleased to report that so far, f.d.a. has met or competed the statutory deadlines in the tobacco control act. during fiscal 2011, we will continue to implement the act,

including overseeing and enforcing the re-issuance of the rule to prevent smobing and smokeless tobacco use among young people and promoting warning labels for cigarette packages and advertising. timely i would like to report on f.d.a.'s response to the 2009 h1n1 influenza pan definitelyic. during the past year, key accomplishments include the license sure of five vaccines in record time. they faced the same stringent manufacturing quality as seasonal vaccine, and now more than 70 million americans have been immunized. and they oked the use of drugs where they might save lives. these decisions were baseled on careful review of the scientific data for these products.

t.d.a. also conducted an aggressive strategy to combat fraudulent h1n1 products. we issued 80 letters covering about 150 products, and we achieved a very high compliance rate in response to these actions. the fiscal year 2011 budget includes vital funding for priorities. transforming foot safety, protecting patients and advancing regulatory science as well as implementing the tobacco reform act and many other critical f.d.a. programs and activities. achieving all of this, and especially these identified priorities, is possible because of your support for the work of the food and drug administration. i thank you, and i am happy to answer any questions you may have. >> thank you for your fine statement, dr. hamburg. you have been at the f.d.a. for nearly a year now, and i assume

it has been fulfilling as well as challenging. after a year, what have you learned about the f.d., what is working? what would you change? what is your vision for the agency and where do you want it to be in five years and beyond? how does the performance management initiative you discussed in your opening statement play into this, dr. hamburg? >> there's a lot of questions, very, very important questions. i have found since being here -- it has been only about eight months, but who's counting -- that f.d.a. is an extraordinary agency with an array of professional scientists, lawyers, policy analysts and support staff that are dedicated to the mission of protecting and promoting health. i have been struck much more deeply since i have been in this role by how important and unique f.d.a. is, that we are responsible for a vast array of

regulated products, and products that affect every american every day as you noted in your opening statement. if we cannot do our job and do it well, there are not other parts of government or other sectors of society that can step in and backstop behind us, and that is why it is so important to have a strong, fully functional f.d.a. as the new f.d.a. commissioner, i feel a tremendous responsible to lead this agency fully into the 21st century. i must be a strong advocate, explaining to the public what we do and why. i must work to ensure trust and confidence in the work of the agency, and that includes being a responsible steward of the resources given to us and tracking to make sure that we are using them widely and for

the benefit of the american people. i believe that now is the time for us to act aggressively to strengthen science within the f.d.a. and partnerships with external partners to bring the best possible science to bear on our decision-making, and we have to respond to the globalized world we live in, and recognize that products regulated by the f.d.a. are coming in from all over the globe, and we have to effectively extend our foreign presence so that we can ensure safety. >> have you made any trips to any of these foreign countries? >> i have made one international trip so far, and we are planning additional -- i have made two international trips, and planning additional trims as well. i have met with many of my counterparts from other countries on their visits here as well and have really made this area of strengthening our

presence internationally a very high priority because the world we live in is so increasingly complex and globalized, and the supply chains, whether food products or medical products, go around the globe, and we know this potentialally entails serious safety concerns. >> dr. hamburg, as i said in my opening statement, and i'm sure you are fully aware, we have provided f.d.a. with very large funding increases over the past several years. your budget again this year includes one of the largest increases of our bill, but it is only about one half of the increase the department has been receiving recently. how would you respond to concerns that this reflects a decrease in the priority this administration places on modernizing and improving the f.d.a.? >> well, i think we all realize these are very difficult

economic times, and we have to operate in that environment. i do think it is very, very important that we continue sustained investments in the f.d.a. for the roned i cited earlier, that we have -- for the reasons i cited earlier, that we have a unique role to play, and it is one that matters deeply to every american. so we will continue to work in every way possible to perform the programs and activities that are on our plate in addressing emerging new priorities. we hope that we will have the opportunity in the fiscal year 2011 budget to continue to expand in some key areas as the budget reflects, and i'm eager to work with you and with others to ensure in the upcoming fiscal year and in the years beyond that we continue to support f.d.a. in its crucial mission.

>> thank you. senator brownback? >> thank you, mr. chairman. dr. hamburg, let me show you a chart. i think we have got one laid out in front of you for r, for what i was talking about in my opening statement about bifecation in the review process. we took the liberty to give a couple of examples. there are some 7,000 rare diseases affecting nearly 30 million americans, only 200 of which have any treatment at all. what i'm suggesting to you is that you use your standard process. it is well established and very expensive, might add. i saw a 2004 review of it, and it said by f.d.a.'s own report, it costs somewhere between $800 million to $1.7 billion to develop a new product. this is a 2004 f.d.a. report. zidses -- diseases like this

one affects approximately one in 112,000 live births. there are no treatments for it. it is a genetic lip and storage area. the child born with it usually dice before age 4. this one affects in -- 1 in 36,000 live births. individual usually live to the mid teens. no treatment whatsoever. systems are usually a loss of early head control, walking, talking, other problems such as irritability, loss of appetite, vomiting, seize yours, maybe periods of sharp deadline of some things. they may have heart, vision, breathing and kidney

complications. these are tough things when they grab a family. we all as members get people coming by our offices representing these rare and neglected diseases, and they are always like look, we want you to put more money into the process, and we all want to do it because you don't want to hear of anybody having to face any sort of struggle or circumstance like that. but then the truth of the matter is we develop very few products for them. and if we pump a bunch of money into it, because it is going to take $800 million to $1.7 billion to bring a new product to market. i would ask you to do something the f.d.a. has done on an ad hoc basis, but instead, let's make this a separate category instead of ad hoc. we like this one, or he about don't like that one. this one has political impetus

to us, and that one doesn't. just create a separate category. work with the disease population groups to see if they are willing as groups to consider going into this, do a thorough review of it, and set this truncated category up. and it is known going into it, look, this isn't the same review we are going to take on a heart disease, arthritis, diabetes, something where there is a large clear population to do. i think you would get a huge amount of support for doing something like this. i think you would get a lot of people behind it, and i think it would stretch our dollars out to a point where you would get action in 6,800 categories that have no action now. so i would ask how you would respond to that, please? >> well, thank you very much for this proposal, and we will certainly look at it very seriously. the issues you raise are ones

that are feengful to me personally and professionally -- are very meaningful to me personally and professionally. i shifted my career from one of academic medicine to one of public medicine. at that time we had no treatments to offer aids patients. and then new treatment options began to emerge, and i went to work at n.i.a., the national institute of infectious diseases, to be a part of that process and trying to get them to people who needed them. the opportunity we have right now in terms of advances in science combined with the growing public health need for both rare and neglected diseases i think demands that

we take action and that we be innovative and transformative in how we approach it. i am eager to work with you. i think the program you have already helped to establish within f.d.a. in response to past legislation, section 740, has already gotten us on track in terms of beginning to really in a focused way look at how do we develop new regulatory path ways, how do we leverage advances in science and technology to make our regulatory oversight as efficient as effective as possible? and how do we think creatively, building on activities already underway such as the orphan drug programs, to look at various incentives that exist or could be developed to try to catalyze activity in areas where there are limited

markets. it is something i know that is the highest priority within the white house as well. president obama spoke to this issue in his recent state of the union address briefly, but he did talk about the importance of developing new products to address unmet public health needs. so we will work with you with enthusiasm. we will make sure that the groups within f.d.a. working on implementing section 740 look very seriously at your proposal here and continue to work with you, your staff and others to make real, meaningful and sustainable progress in this important area. >> i can't think of anything you could do that would give more hope to a large group of people that don't have a whole lot of it right now. it affects a lot of people in this category. i've got several other questions i would like to ask, but chairman, that is the

primary issue, and i really hope -- this is my last year in the senate, and i really hope we can make some progress on this, and i think it is within your power to move this forward, yes. in developing this proposal and moving it forward, i think it would get a lot of support, and i would like to be there with you to give hope. >> i think there is a large opportunity to work with sister regulatory agencies around the world, thause these are issues that do cross-cut clearly. and if we can bring new innovative regulatory strategies and the best possible science to bear and fully define the markets that do exist and the incentives to bring pharmaceutical and bio technical industry into these areas, we can make additional progress with that approach.

>> thank you. mr. chairman? >> challenge you, senator brownback. senator mork pryor? >> thank you, mr. chairman, and thank you for being here today, dr. hamburg. i appreciated our visit on the phone last week. let me talk a little bit about nanotechnology. i know the f.d.a. has proposed a $7.3 million line item to build core capacity for nanotechnology. i actually have a bill here that would do a total of $25 million, and i guess my question for you is, on that $25 million, if we were able to get that bill passed and make that money available, could you all spend it wisely? >> well, i have not seen that piece of legislation, but clearly nanotechnology is an emerging technology that holds

great promise in terms of products, medical products as well as cosmetics and food-related issues. it is one where we want to fully explore the opportunity, but we also want to study it carefully to ensure that safety issues are quarterly surfaced and addressed -- are kuwaitly surfaced -- adequately surfaced and addressed. the national center for toxicology research in arkansas is a very important hub in our nanotechnology research activities. but it cuts across every aspect of f.d.a. work in terms of our product centers. so yes, it's a very, very important emerging technology. we need to deepen our

understanding, and it is key to many areas of f.d.a. activity, so we would welcome the to work with you more to see what we can do and how we should best do it. >> does f.d.a. currently have the infrastructure it needs, the fiscal labs -- the physical labs, building structure or whatever it may need to really study nanotechnology, or is that still a work in progress? >> we are having to evolve our cape acts as emerging technologies also evolve. we do have a solid technical capability for nanotechnology, but i would hit tate to try to address whether we have all the infrastructure we need for nanotechnology efforts. i could tell you that we certainly need to bring on board more expertise in the

nanotechnology area. we are also working with outside experts in this arena to strengthen our capacity, but i think it is probably fair to say that one also needs to be dynamic in these kinds of programs because the science itself is so dynamic. >> let me change subjects on you if i can. in the last few weeks there has been a salmonella outbreak, and apparently it was related to a hydrolizepb vegetable protein. my understanding is the administration adds money to identify such breakout breaks, but does f.d.a. -- do you feel like you have the right resources and the right capabilities in place to monitor things like salmonella and these other type of outbreaks that you see in the food system? >> strengthening safety is a huge priority for the f.d.a., for the administration and for

the nation. we have experienced the real world implications of gaps in food safety and a food safety system that is oriented towards addressing problems once they occur rather than presenting them in the first place. that is what we are dedicated to doing. >> not to interrupt, but i understand there is a president's food safety working group? >> yes. the food safety working group is very active. it was established by the president i think at the same time he announced my nomination. they have identified a number of critical activities and focus on prevention, strengthening surveillance, enforcement, and response and recovery. there is a piece of legislation that is pending on the senate side to strengthen food safety, which we are very supportive of because it would bring additional authorities and

resources for the f.d.a. to continue to develop our food safety programs and to truly transform our food safety system as it needs to be to address the challenges before us. but even without that legislation, we are moving forward in key ways to reorient the system towards prevention, to enhance inspection, to try to really get a better handle on how to track and trace food-borne outbreaks, and working in partnership with our counterparts at the local and state level and again working internationally because import safety is such a concern. but we do look forward to the consideration by the senate of the food safety bill because that would really dramatically enhance our position with respect to making the kinds of meaningful and enduring changes

we need for food safety. >> the last question i have is really about the national center for text collage cal research. i know -- for toxicological research. for some reason you couldn't make it. we certainly would love for you to come down and see that when it works in everybody's schedule. but is the f.d.a. doing everything possible to ensure that the high quality science at nctr is relied upon by other f.d.a. labs rather than duplicating the capabilities elsewhere? >> it represents a unique resource for f.d.a. and one that we rely on and one that i value. it has implications that cut across our various product centers and to do really cutting edge scientific work in key areas, whether it is the

establishment of a genomics lab that can deepen our understanding of jentics and genetic traits, to target therapies better, and to understand the interaction of lifestyle factors and jentics as we think about -- genetics as we think about products as we develop new kinds of markers to assess product effectiveness and to support activities across a range of programs at f.d.a., the activities that they are doing in terms of toxicology research per se and safety, especially as we are looking more deeply at a range of environmental exposure issues. and of course what we talked about with nanotechnology, they

represent a key hub in those efforts. so it really is a unique, highly valued resource. i'm looking forward to my visit down there. but in the meantime i have been working closely with members of the n.c.r. staff and it's director, and they are very much, while at a distance, integrated to our work at the f.d.a. >> thank you, mr. chairman. >> thank you. senator? >> mr. chairman, thank you very much. dr. hamburg, welcome. >> thank you. >> are -- doctor, i want to revisit with you the importation of drugs, which is not a surprise. i and 30 other co-sponsors were preparing to have a vote on the reimportation of only f.d.a. approved prescription drugs. the date before the vote you sent a letter, and in the

letter you indicated some concern about the legislation. you indicated, however, that the administration supports a program to allow americans to buy safe and effective drugs from other countries, and you began working with shareholders to accomplish that. this has been a long and tortured trail, probably 10 years in which the pharmaceutical industry has prevented american people from accesses f.d.a. approved drugs for a fraction of the price. this is an issue for the american people. they don't want to buy tainted drugs, but if lipitor is made in ireland, put in a sealed container and sent all over the world, why should the american people not have access to that drug? the first question is you indicate you support a program to allow americans to buy safe

and effective drugs. are you working to make that happen? and if so, what kind of work is underway at f.d.a. to ensure that is the case? >> we do very much care about helping americans get access to important drugs for their health, and we also care very much about ensuring safety. with you we want to work towards finding better strategies. as i think you know, in fiscal year 2010 and again in the proposed fiscal year 2011 budget, money has been put aside, $5 million each time, for developing strategies and exanling and analyzings the safety issues with a broaden -- examming safety issues with a broadened capacity. there are safety concerns, and that is what we are trying to address. many of the drugs that we are

talking about in terms of importation are not drugs that are identical. >> let's just talk about identical drugs. >> lipitor is one example where it really is the same product as i understand it. but many of the drugs are not necessarily bio of equivalent. they may have the same name and be the same product class, but the formulation may not be bio of equivalent, the dosing formulation may be different. there are labeling issues. there are issues about our being able to really assure proper manufacturing practices. all of those things really matter, and so we need to have a program that is doable, that will enable us to be able to assure those kinds of issues

for the american people. >> dr. hamburg, but in the second paragraph of your letter last december, you talked about importing nonf.d.a. approved drugs represents four risks. no one is talking about importing nonf.d.a. approved drugs. the things you talked about, labeling, our staffs met with the f.d.a. staff and said identify any concerns and technical issues you have had. we have dramatically changed our bill to address all of those issues. full just bear with me for a moment, let's take the drug that is identical. let's reintroduce the bill with only an identical drug made in this case by an american manufacturer in an irish plant and sent around the world. the american consumer has the opportunity to spend double or triple the price in order to access it. is there a way in our

legislation -- we have batch lots and things that don't exist even in today's environment. you are familiar with heparin made in big farms in china that no inspector haser visited. i understand the scare stuff. but i'm talking about an identical drug made in an f.d.a.-approved plant with bash lot and pedigree attached. couldn't we agree at least in those circumstances that we could at least do a pretty -- well, not a pretty good job, but a job that would assure the american consumer that what they are buying is exactly what everyone else is purchasing for a fraction of the price? >> we share your concerns. we want to work to try to establish programs that can assure safety of drugs and medical products that are imported into this country. it is a hugely important issue

and a high priority. there are real logistical concerns, very resource-intensive strategies that are outlined in the legislation that would be very, very difficult for the f.d.a. to implement. but i think that there are ways that we can approach these issues, and i think we need to work with you and others in order to really -- as we pursue this planning effort -- >> is there an end date on this effort? do you have a time by which you want to accomplish the goal, the administration's goal of allowing americans to buy safe and effective drugs in other countries? >> well, i think we are moving forward in terms of the work that we are doing, the analysis

and the development of different types of strategies, and modeling those options for how much they would ensure safety, trying to get a better sense of what are the issues in terms of drugs that are being -- while the drug may be approved for use in the united states, the drug that is coming into people ordering these drugs on the website are not those drugs that are necessarily the f.d.a. approved drugs. that is one of the huge concerns that we have. i was recently up at the border offices at j.f.k. and saw the products coming in from all over the world, some of them with a canadian maple leaf to

suggest they were coming from canadian pharmacies, but they were not, and the quality cannot be assured. it's a big issue. it's complicated. we ultimately want -- our mission is to be able to provide americans with access to safe and effective drugs in this timely -- as timely and low cost way as possible. >> mr. chairman, let me ask if the committee eye request of the doctor that she submit to us what they are doing with respect to this planning and what the time lines might be. and let me say this. i supported your nomination. i am glad you are where you are. i think you are a terrific public servant, and offering yourself to serve this country is an important thing. but i was upset in december, and even in the last answer, you definitely changed the

subject. we are not talking about medicine coming in that might or might not be counterfeit. we are talking about whether or not a company producing lipitor in ireland with a bash lot and the safety that should exist now for american consumers, whether those consumers should have access to the same drug sent to three places, except the american consumer pays triple the price. this is not rocket science. europe has been doing it. if they can do it, we can do it. how do we accomplish this with complete safety, which i think exists in our bill for the american people? i am very anxious to engage with you and your staff, and senator brownback and anybody else who has questions about this so that we can support the american consumer to be able to access f.d.a. approved drugs that are being sold around the world, in some cases for one

sixth the price, to a half or third of the price. it is an important issue. thanks for indulging this discussion. you do a lot of other important things, and i appreciate the chairman's work and the subcommittee's work with the f.d.a. we want to get you the funding you need. we want you to succeed. thank you. >> well, i appreciate that, and i do look forward to working with you and others on this important issue of safety and access. >> just to pursue that, are there powerful political interests and lobbying interests involved here that prevent us from bringing these drugs to the american public at prices that are being paid around the world much less than what we are paying here? as you know, i'm sure, and as senator.org ann has said -- dorgan has said, we are paying double, triple and quadruple the price for some of the most

popular drugs here in the united states than people are paying all-around the world. now i'm sure that causes you great concern and arouses your strong interest. as head of the f.d.a., you can play a pivotal role in helping us bring these drugs to the american consumers for an equivalent price people are paying around the world. is that one of your missions? >> you know, very much front and center is a mission to be able to assure access to safe and effective medicines for the american people. this is a very, very challenging area, though, in terms of being able to assure safety. and for the f.d.a., that is, honestly, the issue that motivates our actions and concerns. i am not the first f.d.a. commissioner to raise these issues. f.d.a. commissioners, regardless of administration

over many years now have echoed these same concerned, and it does reflect the complexity of trying to assure, especially in the world of internet sales, that the products that are being purchased are what they purr port to be, and being able to assure that while a product may be f.d.a. approved for use in the united states, when that same product is actually manufactured elsewhere, it is not manufactured with the exact same specifications that is manufactured for use in the united states, and that can have very important implications for patients. if it is a different formulation, different bio of quifflepts. it may require a different dosing schedule.

it may be formulated even with other components. and of course the labeling for use may be different from what f.d.a. reviews and approves. so we need to have a program that can really get into that level of analysis to assure that patients get what they need, that their health care providers as well as the patient understand what may be different about these drugs even though they have the same name so that they are used properly. and then l is the problem of outright counterfeit drugs, which is an enormous problem, and it is growing. so i think that this whole arena of import safety could not be more important and pressing to the work of the f.d.a. and the safety and security of the american people, and i hope we can work on all of this together because

it is such a huge and urgent challenge. >> dr. hamburg, i was happy last august that you were able to come to wisconsin and visit with folks in my own state about food safety efforts, including people in wisconsin government as well as academia. i believe it was a day that was well spent by you. a major theme of that day was, as you know, collaboration. states inspect millions of food establishments each year and investigate thousands of food-born illness out breaks. and they are really our first line of defense. you talk about collaboration in your statement, specifically mentioning state lays ons and working to help do that. what role do you see them in the integrated national food safety system?

>> thank you for the question and for the opportunity to say how much i enjoyed that visit. i have never eaten so much cheese and ice cream in one day before. it was a wonderful day, and i was told if i stayed for another, i would have had an equal amount of beer and sausage. but the partnership with states and localities is absolutely key to achieving our success in food safety, and i feel that very personally having served for six years as new york city's health commissioner. it is the states and localities on the ground from the time the first case of food-borne illness curse until the last case goes away, and the burden is many ways is borne at that level, and the opportunities to extend the reach of government and these important programs is so enhanced through

collaboration. we see working with the states as key. we see strengthening training as an important part of that. we see strengthening laboratory capacity as an important part of that. we need to really improve the i.t. infrastructure for better communication of information, outbreak results, et cetera. and i really do think that, going back to some of your early questions and remarks, especially at this time of economic constraints, the need for partnership, the need to make sure we are really utilizing resources as best we can and that we are sort of mutually supporting things, and especially to put a focus on prevention is absolutely a key.

this is a priority. we work well with the states on our food-borne outbreaks, but l is -- there is, i think room to grow in terms of strengthening those working relationships. and of course we work with our part nest, the centers for disease control and the department of agriculture as we address food safety issues. so it is a very important state and federal local partnership. >> if you go to wisconsin, you have to come to kansas. we will feed you bread and stakes, really good. one thing i would like to invite you to see is the university of kansas' farm's school. it is rated as one of the top two or three in the country. they have developed a through-put model. they are starting to work more and more in second and third world disease categories as well. i think it would be interesting

to you to see how they are doing this now on trying to review these at a much faster pace, the process that they are using. they are also at a point of being able to get a national cancer institute designation with the pharmacy school being one of the key aspects of it. so it is drug delivery on cancers they are working on, and i think that would be an interesting thing for you to look at and see as you think of ways to get more drugs to market safely and efficaciously, but trying to get the cost down, which is so important for us to be able to get some more of these categories covered. i hope you can come out and take a look at that. >> i would love to. what you are describing i think fits very much with our strong new focus on advancing regulatory science, and that critically involves partnership with academia. we want to bring the best and brightest plinds to addressing these important issues of how can we make the -- minds to

addressing these important issues of how can we make this more efficient? how can we use the best science to help us rapidly identify products with promise and those that will fail so that we can really focus our efforts on moving products through the pipeline to people who need them. so i would be delighted to come out there. a few other people in the department of health and human sources that care about kansas, too. .

>> a quick response to any foodborne and this is the best way to prevent its spread. we added funding to create a rapid response teams around the country. i understand you have increased the number of these teams. hopefully, that is because you believe they have been successful. can you talk more about these teams and other collaborative efforts used to respond to foodborne outbreaks in this country? >> the rapid response teams have been an important success, and thank you for your leadership in making those happen. we have nine rapid response teams at present. they have demonstrated their value, in terms of being able to

rapidly identify a problem and respond. even beyond these nine teams, they provide a useful model as a strategy for how to achieve a more integrated approach to respond to outbreaks of foodborne illness and the need to have at team that reflects a range of different disciplines and expertise, so that you can understand, in a systematic way, the outbreak and what is needed to respond. in addition, we have been able to put in place a network of laboratories to enhance our emergency response, because you need to identify the food source and confirm it, in order to

really pursue the investigation and appropriate response. that has been very important as well. the elements of an integrated system are really starting to be put in place. part of what i hope to be able to achieve is to continue to extend those important elements of our system, to institutionalize them, because one of the things i have seen since i have been in this role is that the fda has a sort of unfortunate history as during up after there has been some kind of crisis -- gearing up after there has been some kind of crisis and then we receide. i would like to see sustained support for things like this that make a difference and matter to us all. >> @ dr. hamburg, i have been a strong supporter of this generic

drug program for many years. we have consistently provided funds to the office of generic drugs, but due to the number of applications rising quickly, we cannot keep up with the backlog. as you know, generic drugs provide an important opportunity to lower health care costs, as senator dorgan was referring to and for which he is very dedicated, getting these drugs to market as quickly as possible is important to respond to the high-priced drugs that we have on the market today. the budget includes a proposal for user fees for generic drugs that would result in new hiring nearly 80 new reviewers and inspectors of generic drug applications. have you been talking with the industry about these fees which they have opposed in the past and can you give an update on this?

house again we hope to decrease or eliminate this backlog -- how soon can we hope to decrease or eliminate this backlog? >> generic drugs are very important in getting the work- priced, say, and effective drugs to people who need them. -- lower-priced, safe, and effective drugs to people need them. getting those generic user fees will make an enormous difference. just a few weeks ago, i addressed the generic pharmaceutical association's annual meeting and have the opportunity to meet and speak with the leadership. i am optimistic that this time we're going to be able to sit down and work something out in terms of the generic drug user fees. i certainly hope so. this is one of the arenas where industry and fda both recognize

that the present situation is unacceptable and not serving the american people well. together, we have to find a meaningful and real solution. we are starting to roll our sleeves and we're working hard on that. as i said, i am optimistic. >> what is your level of priority on this issue? >> this is a very high priority issue. one challenge of this job is that i am always juggling a lot of high priority concerns. this is very fundamental to what we're trying to achieve with the president's goals through health care reform and other activities, what the secretary wants to achieve, and very fundamental to the mission of the fda. >> could you talk a little bit about some of the foreign office's you have opened? i understand you have one in jordan.

what do they accomplish and how do they increase the level of food safety for american consumers? are you intending to pursue that by opening additional foreign offices? >> we do have a number of foreign offices thaat the present time. jordan is slated to open in the coming year. this is very important to extending our foreign presence and our ability to really ensure the safety of imports, both food and medical products. we have offices in china and india now. we have offices in mexico, costa rica, she lay -- chile. we have a presence in brussels to work with our counterparts in the european union.

we are planning an office and jordan, as indicated. -- an office in jordan, as indicated, and also one in italy. these offices are very important in working to extend our reach in terms of international presence, working with sister regulatory agencies in those countries and regions, providing technical assistance to national regulatory authorities to try to boost regulatory capacity in other nations that have less- sophisticated systems than we do. therefore, we can have greater confidence that products developed there are being developed in accordance with international standards and with the standards that we would apply. as we think about extending our global reach, we need to have a

very new approach where our job is not simply to inspect things at the border as they come over, but to push back and try to assure safety. it is a preventive approach, to have standards and systems that are institutionalized, whenever country is producing the product -- whatever country is producing the product, to enhance the safety of these products. in many areas, we can provide an additional benefit by working with other countries to help them strengthen their regulatory capacity that will improve to the people of all nations. >> thank you. could you talk about the medical device registry you are working with? >> this is an effort to try to achieve a unique identifier

system for medical devices and a system that will allow us to link information about medical devices to electronic health records and to an overarching system where we can better monitor how medical devices are working in the real world, better track adverse events that may occur in relation to medical devices in the marketplace, and, if problems do emerge, to more swiftly and effectively respond. >> all right. thank you so much for being here this morning. multiple votes are starting on the floor. we have to wrap this up. we will keep the record open till next tuesday for any questions that i hope you will respond to by april 13th.

we thank you for being here today. this hearing is now adjourn. >> thank you so much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> the house gavels in today at 12:30 eastern before returning at 2:00 for legislative business. today there is a debate on several bills, including one that remembers the victims of last week's earthquake in chile, and a vote later in the afternoon. there is also a war powers resolution later this week and a resolution to impeach a louisiana judge who is accused of accepting gifts in exchange for official actions and falsifying information in a bankruptcy case. the house is live on c-span. we continue work that extends tax breaks and they are voting this morning, planning to limit debate at about 2:30 eastern.

senator reed has expressed hope that they can complete the bill sometime this week. there is legislation to extend faa programs. you can follow the senate live on c-span 2. also, this afternoon, comments on u.s. jobs at the national press club here in washington. that is at 1:00 eastern here on c-span. >> this weekend, but tv is heading west with live coverage from the tucson festival of books. you can hear from authors on their experiences -- living on the mexican border, the last presidential election, teddy roosevelt's legacy. thasunday, panels on history, te war in afghanistan, world war ii, military and leadership. that is this weekend on the c-

span 2's book tv's "." -- "booktv." >> the obama administration announced new efforts to help homeowners in mortgage problems. we spoke with john taylor, president and ceo of the national community reinvestment coalition, about the efficacy of foreclosure prevention measures taken by the obama administration. it runs about 45 minutes. the u.s. house gavels in for morning our speeches at 12:30 eastern and we will have that live. they come in for legislative business at 2:00.

host: this is john taylor, president and ceo of the national community reinvestment coalition. he is here to talk about foreclosure prevention measures. let's put some statistics on the screen before we start talking. foreclosure rates for january 2010. looking at home affordable modification programs, what congress and the obama administration supports.

what needs to happen next in order for the obama administration and congress to reach that goal? guest: the most important thing is that they need to remove the volunteering nature of participation by the banks to modify these loans. the program they have, the program the bush administration had, was to get the banks and services to voluntarily participate in the government program to modify loans. unfortunately, there are low levels of participation. we showed of the figures. with 300,000 foreclosures per month -- that used to be what we have for year. it is not working. of the modifications they are making, only one out of 10, or 90% are failing.

they have to get serious and take off the gloves. they have to say no more voluntary participation. you have got to work with us to stop these foreclosures because it continues to drive down the economy, drive down property values, and we have to stop this crisis. host: "the new york times" on sunday morning had a piece on this new approach. they will pay some home owners to leave. it will allow homeowners to sell for less than the zero and give them a little cash to see them on their way. how would this work? guest: the government is continuing to nibble at the edges of this program. they're trying to entice people to sell their homes for less money than the mortgage. they would give them a small

fee, $1,500, to do that. the bank would have to take a loss on that, and then somebody else would buy this house at a significantly reduced price. if someone is unemployed and have no options, that might be the option for them. for most homeowners, the property values have simply crashed because of the economy and because of the mouthpiece and lending practices that drove down this economy. -- and because of the malfeasanct lending practices that drove down this economy. we did not want to drive down prices by forcing a short sale. let's reduce it enough for people who want to remain in their homes, and continue to remain in their homes, and continue to watch the economy hopefully improve, and the property values will start to go up. i do not think short sales are

the answer. host: do you think banks would participate in a short sale? guest: i do think it would be in their interest to do short sales in certain circumstances, especially people who have lost their jobs and have no income. this may be the only avenue available for them. host: what about fraud in a short sale situation? is it easy? guest: i do think a short sale lends itself to fraud. four people were looking to just reduce their mortgage -- for people looking to just reduce their mortgage and sell it cheaply to a friend and then buy it back, but i think there are reasonways to show that the borr has tried everything, that they have depleted their savings,

that they have lost their income. there are ways of verifying if it is an honest short sale. host: what impact with a short still have on a person's credit rating? guest: under the president's program, i think they're trying to do in agreement with the bank that it would not have a negative impact. it would be treated as if the house was sold for almost their market value. theoretically, it would not hurt the credit score. host: you sound skeptical. you do not think the short sale is the way to go. you want the administration to be working more closely with those who want to stay in their homes. specifically, how should the administration go about doing that? guest: the same thing we said to secretary paulson and now secretary geithner. they need to purchase these homes. the best thing is to do is to no longer believe it to the banks

or the investment companies, or the government sponsored agencies, to decide to do something or not. go in and take these loans out. you get them at a reduced value. they are no longer worth what they were. just forced the modification, the refinancing of these loans. -- just force the modification. at least then we are no longer waiting for this voluntary participation from the lenders. you are going in and making sure that there are as many as possible. loans that are just morphed into these predatory loans -- you could immediately take all those of the table by refinancing those loans. the other piece of this is for

people who are looking at their home and they are saying my home is nowhere near the value of what i pay off my mortgage. i guess i should just get out from under this mortgage and leave this house. that's a big problem for the government. going in and taking these mortgages away from the banks using eminent domain -- they use eminent domain all the time to take people's homes for highways and other purposes. why not use it for the purpose of keeping people in their homes? take these mortgages, reduce the amount of the mortgage to be more in mind with the appraised value. give the borrower more incentive to stay in the home. host: we are talking with john taylor, president and ceo of the national community reinvestment coalition, about foreclosure prevention messagmeasures. we have a tweet from a viewer

that says this. mr. taylor? guest: the statistics are not good. i would not say they have not fix anything. they have obviously helped some people. if we were grading both administrations for what they have done, the bush administration would get a f. the obama administration would get a d. the numbers continue to escalate. 300,000 foreclosures in january. that is how many we used to get in one year several years ago. what we are looking at now, depending on whose statistics you want to believe, there are at least another 5 million to 7 million more foreclosures. if we're ever going to turn around its economy and get back

on track to creating jobs and having a sustainable economy, we have got to stop the foreclosures. foreclosures are what have gotten us here. they tilled the building industry. who will be building houses when we have a huge inventory of empty houses? -- they killed the building industry. we have got to stop the foreclosures. they're looking at too many on the horizon because of the kind of loans that were put out there that were allowed to be made in the early part of this decade. host: first phone call for mr. taylor. pat on the democratic line. good morning. caller: my partner and i sold off all our income properties and have no mortgage left. we would be lucky if we broke even in the sale of our

house. pittsburgh is an extraordinarily stable market, by the way. when i look at what is going on, especially on wall street, with bankers walking away with our money, and china is investing less in the military industrial complex than we are. they are investing 1.6. we are investing four. how do you think this will go on when you have an endemic prices across the board? -- endemic crisis across the board? the united states is ignoring its people. it is not a sustainable situation. host: john taylor? caller: i think he is absolutely correct. -- guest: i think he is

absolutely correct. he is raising an issue that all americans are concerned with. we have a congress, and their first job is to get reelected. most people think they are mindful and thoughtful about what to do to solve the nation's problems. when you look at the legislation that did not get passed, and you just had a very good show on health care -- we just do not have the kind of thoughtful, committed congress that is going to do fundamental things to make sure the interests of consumers firstcome first. we learned from the financial crisis that because we did not have protection measures in place, you had unscrupulous lenders who were able to do the kind of lending that toppled this nation economically.

to this day, we do not have a consumer finance protection agency. we do not have a national federal law that outlaws predatory lending to we have a credit card bill. the industry already made changes to go around the that credit card bill. the biggest change in the bill is that now credit card companies have to inform you before they're going to stick it to you. we have a congress, unfortunately, that is not willing to be honest and open with the people and say here's what it cost to build our infrastructure for the country. here's what we need to do to make sure we do not have these kind of predatory lending practices. here's what we need to do to have adequate and quality health care for all americans. here's what we need to do for education. instead, it is -- what do i need to say to the people to

show that i'm looking out for them and i should vote for him in the next election? they get up and say i'm for cutting taxes. ronald reagan with the eight worst words from the government is open " i am from the government and i'm here to help ." a long way from john kennedy who said, "asked not you can do for your country we have got to believe in this country again and believe in our leaders. we have to ask tough questions and hold people accountable. i think the caller is right. if we do not change the situation and create jobs and rein in financial services to get that sector to start lending to small businesses and individuals, and do it responsibly, i think we're going to be in for a long, difficult period.

we have 5 million foreclosures that we should take care of right away. we should go in and get those modified to at least take care of that problem and then continue to deal with all the other challenges ahead of us. host: here is an e-mail from one of our viewers. why do you think property should keep of value that is not supported by the market? does this not artificially raise property taxes? this is stealing to make artificial volume. -- artificial value. guest: they must believe that property markets are going down because of the markets. we had a free market that was read to cajole and sheet and commit fraud -- free to cajole and cheat and commit fraud. 9 at the 10 americans continue to pay their mortgages, continue to work, and yet property value

is going down. is that the free market? or is that a fraudulent market that was allowed to prosper in the early part of this decade and issue the kinds of loans that were unsustainable or so expensive with hidden fees and terms and conditions that it drove the market into the doldrums? remember, adam smith himself, the god of the free market, he felt it was the most important thing for a democracy, but he also felt that there needed to be ruled law. that is the part that gets thrown out the window with senator gramm and successive congresses, where they were not willing to hold the banks accountable, they all took a walk and left consumers to their

peril and to the abuses that the industry created four great profit, regardless of the bar was ability to pay. host: do you have any numbers about the impact of a neighbor who has a house that he is paying for, is paying the mortgage, fiscally ok, next to a neighbor that could either foreclose or get his loan modified or do a short sale and sell his property for less than it is worth. what is the impact? guest: if your next-door neighbor goes into foreclosure, your house will drop in value, on average, about $7,000. when multiple homes go down, you have multiple impacts.

we have somewhere between 35% to 40% of value lost in the country. significant property reductions without that homeowner having done anything themselves to lessen the value. pretty significant. host: john, republican line. good morning. caller: you are talking to someone that had to put 50% down in 1986 to purchase his home. i do not know what the community reinvestment act did, all i know is that we had something called mortgage-backed securities and it seems like it did not matter if the person buying a home was worth less, it did not make any difference if they lied, as long as they got the material to bring to wall street to feed

this appetite for -- i have no idea what these investments were going to be, but if you ask me they were taken into the mainstream market and the mixing sawdust with hamburger. this is a crime to me and i do not see anything being done. it is like organized crime. host: mr. taylor? any thoughts? guest: republicans in massachusetts, you're absolutely right. i hate to say at, but we tried. this guy headed on the head. -- hit it on the head. we charge -- we tried our darndest, but in particular the republicans in control of the senate, tried to pass a legislation that would prohibit these practices.

the caller is right. this was a ponzi scheme on the highest level. investment bankers, many of them very young guys, whose salary and bonuses depended on them moving money in in and out of these mortgage-backed securities. they got $10 million per year, $15 million per year by moving these funds around. once you have exhausted these irresponsible loans, where do you put them? what wall street did was they said look, make any loan that you one. any conditions, we will purchase them. they went to the ratings agencies and said look, the folks that are making a fee on

moving this money into the mortgage-backed securities, they actually paid a fee of the ratings agency. so, they go to these agencies and say look, rate these mortgages. be sure to rake them good, we want people to invest in them, we want aaa ratings. that is literally what happened. people would be surprised to learn that these high-cost loans, 80 percent -- 87% of them had aaa reapratings. you are buying securities looking at these thinking they are terrific, but the underlying premise, no documentation, nothing down, premiums with prepayment penalties, it made these loans unsustainable. the problem was that the broker

or the lender got their feet up from. as long as the bar were paid for three months, they got their feet. the appraiser got their feet. being influenced by financial institutions, it was appraised at what it needed to be appraised at. they were highly influenced. the ones being taken advantage of in in his investors and owners who thought they were getting a loan that was sustainable because they did not think anyone would make a loan for them that was not sustainable. investors saw the rating and thought that they were getting a good investment. the gentleman is right. the republicans in massachusetts are right, we need to go after these people and put them in jail.

host: john taylor is the president and ceo of the national community reinvestment coalition. your annual conference is this week, what will you be doing? guest: we have about 600 organizations, they are community development organizations of people that build affordable houses, anyone trying to find a way to build wealth in their communities to make sure that the financial service sector addresses their building of wealth. if we do not find a way to get responsible lending back into these neighborhoods, there will not be much hope in america of reclaiming the community. but the smart people come to train a lot of smart people.

from march 11 of the 14th, on our website, for interested people, please register. we will be all over capitol hill trying to get members of the administration to appreciate that we have got to stop the foreclosures and pass laws, particularly the consumer finance protection agency. people do not realize that we still do not have in place a system of protection that will make place -- make sure the consumers never get abused, and never have to run the gauntlet of on safe -- unsafe lending practices. looking at what happened in this country, if we are willing to pass a law that says that in the same way that we protect banks,

making sure they are safe, sound, and stable, that we have monetary policies that help the nation as a whole, we need to make sure the average taxpayer does not have to worry that the loan officer is a step removed from being a loan shark. there has been such confusion about what all of this is. every civilized nation has protections to make sure that they do not allow for this kind of predatory lending practice. that is one of the important things that need happen. unfortunately, this congress is more concerned with being reelected in working out for the interests of the average person. people have got to get active on this. what is wrong with the notion of an agency making sure there are no malfeasance practices?

>> quickly, the talk is to put this -- host: the talk is to put this in the federal or will preserve. you are opposed to this? why? guest: ben bernanke has all but admitted that they really dropped ball, and forcing whenever laws they had on the books -- dropped the ball on in forcing what ever laws they had on the books. 1994, they did not pass any rules that would prohibit many of these practices. july of 2008, long after the horse had escaped the barn. they were so late in trying to protect consumers. i could go on about the bailout

of aig and allowing the mergers of bank of america and countrywide, world savings and all of these others, without having conditions to make sure that the delphis loans were modified. literally putting trillions of dollars into the market, bailing them out without making sure that the kind of malfeasance and bad loans that were made, that those things got cleaned up. the leverage that they should have had on the the bush administration and this administration was nonexistent. putting it at the fed is putting it with an agency that has historically had consumers as a secondary thought. i served in the federal reserve system. they were for the banks as their clients. not taxpayers, not you and die.

that is who they look out for, that is who they should look out for, making sure that the banks are not operating unsafely. but you need to manage the consumer protection agency with consumers. host: mr. taylor, we have people lining up to talk to you, we will go to wait twitter, then the phone calls. "why are we not holding the borrower and buyer responsible for buying property that they knew they could not afford? >> a very good -- guest: a very good question, there are a couple of assumptions in their. we actually have more financial literacy programs than ever in our history, but all of this bad lending occurred. it was not the bar wars were ignorant, it was that lenders were allowed to do things they never would have done 10 years

ago, the agency would have stopped it. they would have done something about it. this notion that bar workers went in and should have known better, that is ok to say, but we will always have folks who are not as educated. first-time home buyers, no one to guide them. we need to make sure that on the side of the equation where loans are being issued, that those folks are not allowed to practice on savory or predatory lending practices. caller: good morning. you explain a lot of stuff that i did not realize before. what i still nodo not understand is how the bailout money -- where does that go? if it was because of bad

mortgages, did they not pay for those when they were billed out? -- bailed out? guest: unfortunately, no. when we first greeted this bailout program under bush and paulson -- the money really was intended to stabilize the financial services sector. i agree that we had to step in. people say, let them fail. let them go down. if that had occurred, we would not be going through what people now call "the great recession." we would be in a depression and there would be even less confidence in america. hindsight is always 20/20.

the people in the bush administration who made the decision to let lehman brothers fall, i think they would think twice about that decision if they had it to do again because it began a domino effect of lost investments in america. of them from failing, it told people that your investments are still safe, america is still a strong economy. but there was not any connection to bailing out the mortgages. keeping enough capital in the institutions to survive long enough for the economy to turn around. we are beginning to see results. host: baltimore, democratic line. caller: this all gets me so

angry. no one will ever go to jail, but this is not a violation of the public trust? what is your take on people that make payments? we can afford this, but a lot of people that can afford their mortgages are walking away because they're under water. our home is worth $100,000 less than what we purchased it for. we can make the payments, but everyone gets away with doing wrong things. for the first time in my life it seems like no one cares about what goes on with regular folks that are really trying. we had jobs, we could make the payments, what is the point? there will be a bigger trend of people walking away. what are your thoughts on that?

guest: the caller is right, there are people that can pay that are looking at walking away. i would be careful that, as it will impact your credits for, but those are the bar words that should be talking to their institutions about whether or not the mortgage is too high and whether or not the bank is willing to refinance that mortgage at a lesser rate so that there is more incentive for the bar were to stay in the home. i would recommend that this person continue to pay and i would also recommend that those, if you can find a bank is willing to work with you on your mortgage, it is in their interest and your interest. they do not want to have to try to sell this on a down market. the bank will lose more than if they just reduce the mortgage

some. maybe not for the current appraised value, but at least the amount above the appraised value. yes, it is worth it to stay in because the property value will eventually rise to the amounts where it is currently above the appraised value. on the horizon we can see it going beyond it. it is a real concern, she raises a very good point. i do not think that there are a lot of -- the average person with a mortgage is not sitting there with a calculator, thinking of their mortgages to much given the value and that they should walk away. they are struggling with how to pay the monthly amount. that is the major problem for most people. rising unemployment is driving a

lot of people into these situations where they go belly up on their mortgage. citibank has a new program that i hope a lot of the other lenders follow, allowing six months where the bar work and pay a percentage of their unemployment insurance towards their mortgage while they stay for the sale of the house, rather than the bar were immediately going into foreclosure. there are things that lenders are doing to work with homeowners to keep them in the house, reducing the pain and suffering for all involved. there is much interest in working gathered. the government would be most helpful here to force lenders

and consumers to the table. one of the things we have not mentioned on the program, there was a lot of debate around bankruptcy for reform. hot -- bankruptcy reform. ironically, congress took this away a couple of decades ago, you cannot protect your home. if this protection existed, you would force everyone at the table to renegotiate to a more responsible level where the bar were is still on the hook, but at least it narrows the deficit that the bar were is suffering from, keeping them in their home, stopping foreclosures. host: carol, auburn, massachusets. caller: first of all, i am irate over this situation.

you have used the word malfeasance so many times this morning. all the talk about being inventive, using the programs they could to get the loans through, redlines and the threats made to the banks, but you have not brought up the idea that foreclosures take a long time to get through. these people are living in homes rent free, not paying utilities at the expense of everyone else that is. you have not mentioned the fact that there are people in multiple dwellings, not second mortgages. explain why these people have had adjustments in their mortgages, getting bonus tax credits after the adjustment?

sorry i am upset about this, but this -- every american in young couple that is paying on time, it is not fair. >> she brings up a lot of things -- guest: she brings up a lot of things, but her outrage is in the wrong direction. she should be upset of these a lot -- these kinds of loans were allowed to be made in the first place. we needed a government agency that said that these were predatory. in two years these bar wars will not be able to afford them. one of the things conservatives like to say in this country is that this is the government pushing people into home ownership. the caller mentioned the community investment act. the problem is that there is no factual support for that.

you point your finger at something else and say it was the fault of that law. let me give the example the that lady just said. the community reinvestment act was a simple law that out lot of red lining back in the 1970's, basically saying that banks have an affirmative obligation to loan to working class people, not just the wealthy. at one time, banks would rather make loans with the millionaires. the law also said that this had to be done safely and sound late. when you look -- safely and soundly. when you look at these laws, studies find that less than 6% of these bad loans came from

banks regulated by the reinvestment act. these bad loans came from independent mortgage companies, brokers, and other folks that were not part of the community reinvestment act. they had no obligation and were free to do what they wanted. the federal banking commission, which had all these people to manage the mortgage division, had no capacity to look at this , they allowed these practices to continue, the incentivizing of these mortgage companies to do these loans, this is what happened. no one, not obama, not bush, wanted people to get into an unsustainable home. that does not help anyone.

you should be angry. people should be held accountable, but do not blame the people that walked into a loan officer thinking that they were getting a sustainable loan. you would be surprised how many of them are white and educated. they were being told -- why are you buying this small house? we can give you a big house. little did the bar were realized that the person across the table did not care if you paid the loan back, they cared about whether or not you've got a big loan, the terms and conditions, prepayment penalties. they got a bigger fee if they talk you into those terms and

conditions. they had incentive to do these practices that were not sustainable. sold to wall street, they were gone. no one was sitting in government hoping that the industry would be doing the kinds of loans that are not sustainable. that lenders, that brokers. whenever you want to call let, it was deceptive lending practices. there was little or no oversight. host: our guest, john taylor,

this e-mails for you -- was no one talking about the effect of energy prices on the economy and how much they affected the people close to what? guest: these things are all connected. energy costs, health care. reconnecting highways and bridges, and job creation. the problem is that people in congress may not like my language -- let me use the language of the senator from illinois, dick durbin. "this is the best congress that money can buy." the cheap money folks are very upset with the current administration and the irony is that 95% of americans got a tax reduction. what they're not getting is a

healthy economy, health care, quality education, roads and bridges that are safe and sound , they're not getting a financial services sector that is treating them fairly. we should be lacking people who are the best and brightest, trying to make sure that we pass rules and regulations that can continue the free-market, making sure that the regulations do not sure that the regulations do not have a disparate impact those regulations should ensure that things are being done fairly, democratically, and equitably. we need laws that address creating more sustainable energy, so that we spend less at the gas pump.

we need laws that make sure that people are not finding out -- people who love their insurance plan are finding out that once they get really sick how bad it really is. our whole food supply system -- this caller is stepping in a different direction. let me just say, why are we allowing the kind of -- we have obesity difficulties in this country with the health of our nation where our congress is not standing up to say, look, we should make it clear to people, not just on the labels -- we should lead the nation to understand that healthy eating, exercise, quality education -- we are 24th in the world in terms of high school education. it is ridiculous. all these other nations are passing as. the quality of so many things is going down. people are wary of the future and jobs. we are having a so-called recovery where it is wall street

and the very wealthy -- when are people going to get smart and start to really look closely to the people running for higher office in state or congress and a let people who are looking out for the average person, not just a large corporations? .

>> "washington journal" continues. host: peter eavis is joining us from new york this morning. let me show our viewers what the greek prime minister had to say and then we will talk about it. gues>> billing without traffic

lights would slow down the cars. let's make the market work for us. greece, you're up, we have confidence, trusting in each other as partners. there was a debate about whether the european union would work, and then if it was better for it to be big or strong. even now there are debates or is it a nonentity disappearing off the map? up by view is of the world needs more europe today. host: the prime minister will be meeting with president obama today, as well as timothy geithner. peter eavis, what is he saying

in have do you expect the u.s. to respond bella guest: i expect he will try to find out whether or not there is any real evidence that greece has been made a target. use of the inquiry into the hedge funds that may be were colluding against the euro. look, we do not want anything that should be going on happening that could affect us negatively, it would make us -- make it more difficult. i do not know if he will get feedback on what is actually happening. i doubt he will come away empty-

handed. host: is greece seeking financial help from the united states? many people are aware of that situation in the country. guest: they are not even asking for that, not even from europe. at this stage they are not getting anything from the u.s. host: what does the prime minister want? why would he come to the united states at this point? guest: i do not know if this trip was timed to happen now anyway is, but it is coming soon after stories we saw in newspapers for currency speculation, investors targeting greece as a country. i think that he feels under siege because of that.

if he goes to timothy geithner to say that this is to my -- too much, he may get a sympathetic ear. he just wants to let his grievances be known. greece is in the spotlight, making a very difficult for that country to manage this crisis, which is not to say they have not put themselves in this situation, he is probably trying to get any help that he can. host: what is the united states proposing compared europe's proposals? host: with regard to what? host: financial regulations across the board. guest: a good question, we are supposed to be in this together.

the problem with that approach is that it can take forever. what you see in the u.s. and the obama administration is them moving forward on certain things that they want to be done. at the same time you have what is going on in congress. overall we are supposed to have something that takes place across two continents. that may very well happen over time. in terms of what they are supposed to do, they are trying to make the banks safer, making the markets safer and more transparent. how strong a reform? quite mediocre, but i do not think that they want to talk about that. host: you are talking about what the united states is proposing. is your of proposing something

stronger? -- is your route -- you're up -- europe proposing something stronger? guest: on the contrary, if you look at what they want to do, it is not that radical. they are not going that far. the reason for that is partly because they believe that the banks are necessary to get the economy going, feeling that if you do too much you could sacrifice operations. philosophically i think they are against that. host: taking a step back, what is the situation in greece? what have they proposed to fix it? how has the european union responded? guest: it is one of those interesting situations where you have a very unhealthy fiscal situation that existed for a number of years.

the budget deficit was growing, budget spending was going up, and no one cared when everything was fine in the world. you could borrow very cheaply in europe in most of the 2000's. and then we had the credit crisis. it caused the economy of the world to slow down. all of a sudden, people started to focus on the government policy efforts across the world. they always looked at the weakest. greece is the weakest in europe. that country naturally became the focus. people wanted to look at what was going on and said it was unsustainable. europe had to stitch together some kind of solution.

with all of this opposition to a bailout from strong companies -- countries, they have made greece to do all of the work themselves. telling them to cut as much spending as they could, collect more taxes, and get your house in order quickly. it will be particularly difficult for that country. there is an unfair factor, greece is not the only country with fiscal problems. as i said, markets tend to pick out the weakest. we saw that back then during the credit crisis. the weakest, the first to go, the same thing is happening with countries, schering a lot of people in europe. host: the greek president spoke at brookings, you can go to our

website to watch the entire speech. he said he had plans to shrink public-sector salaries, raise the retirement age. he said that fewer than 5000 greeks declare annual income of 100,000 euros or more. he called for increased transparency. how does the situation in greece and how the union plans to respond, how does it affect the united states? if at all. guest: let me say that that adjustment that he laid out is extremely difficult, there is a lot of opposition in greece. it could get done. the history of fiscal crises is that they take forever. the greece situation has not

been taking care of. to answer your question, the problems here will flare up again in europe. it will cause of the people to look at that imbalances in other countries. of course, they are already doing that. there has been plenty of debate that i am sure that you covered on your program. what happens, when you see one country with real problems, everyone starts to look for the next victim. they always look to the weakest and the strongest in the market. at some point there will be trouble for the u.s., bond issues will be hard to sell. there will be some attempt to cut spending. i do not know when that happened, but look at the numbers. look at how they can out over

the next five years. unless something is done to rein in spending or raise taxes, every country is going to suffer something similar to what greece is going through. maybe not as similar, but there will be reining in in significant proportions in every western country. host: this is from "the wall street journal." "plans for an imf-style lobby in the works at a time when this turmoil is spurning political integration. the european monetary fund was called a medium-term solution by some." "the financial times" said that angela merkel was said to have said "a new treaty would be needed." what is the likelihood of this?

guest: various likely. they're basically saying that you can dress it up, using jargon and a name, but it is basically a very large bailout fund. i do not think that there will be much support in a country like germany for that. if germany does not want its to happen, it will not happen. when push comes to shove, the countries that fund will not have the support. as you probably know, when you have a new treaty, you usually have to have a vote on it. without getting past these regular electorates, the other thing is that with this military fund it goes against the spirit of the original treaty set up,

very much based on this idea that you do not let countries overspend. on the one hand, you have the master treaty basically resting on fiscal rectitude. on the other hand you have this other thing designed around a bailout. they will wind up bailing some of the country's out, but not in something like this. host: fairfield, new jersey. go ahead. college health paying attention to what you are saying, i would like to know why you people have the staying over the victims of the fraud that was perpetuated by the people did you admire so much? the same people that raided our retire@@@@@ @ @ mh@

i think you ought to be ashamed of yourself. host: he is talking about goldman sachs who is being investigated with their relationship with greece, correct? guest: yes, they are. and quite rightly so. you can believe in financial markets and free markets and still want to see goldman sachs be investigated for what they did for greece. that bank and alex was, you know, if it was involved in any kind of an attempt to mask the true level of greek debt it certainly wasn't, you know, doing what it should have done. you know, financial markets thrive when things are transparent. goldman knows that. if it was doing anything to hide the greek that, definitely they should be singled out -- greet deatbt, they should be singled

out. did is all what is going on in greece, but the fact is that they put themselves in the situation where they need the bond market. no country should put itself in a situation where it relies on the kindness of strangers, affectively. if they want to fund a deficit that with themselves at the mercy of markets, just like that. host: on that point, "the new york times" wrote this morning that while greece successfully sold bonds this morning, it has more maturing. quincy, massachusets. you are next. caller: i would not look to the european union for any kind of

recovery. a classic mistake, there should have been a large investment factor. you will not get anywhere with europe. we need a global glass-stiegel. it was repealed in united states 11 years ago. it has led to a total collapse in any kind of regulation or protection for the population. last tuesday in texas it was the democratic primary. he sure rogers won the primary with 57% of the vote.

her campaign was about the needs of protecting the consumer. if you have no investments outside of monetary systems, like the british, they will go bankrupt. host: what do you think about the international bill they keep talking about on that level? guest: that would have been the wisest thing to do after the credit crisis. looking at the problems that occurred in investment banking, it was very heavily reliant on short-term funding@@@@@@ when they got into trouble nearly all of those, except for lehman, of course, was bailed out. they said, because the government bailed you out you

now have to separate those very volatile investment banking uses from your traditional banks because we don't want to give any more government backing ever again. it's bad for democracy overall. that, if you want to call it glass-steagall, it was the rule that came in after the depression, the great depression, which separated traditional banking option from other banks. you had it for decades and it didn't stop in the 1950's, 1960's, and even into the 1980's. it stopt investment banks from becoming, you know, too big. and to go back to that, people say you can't go back to the past but in some ways i think you'd actually make the system healthier because you wouldn't have any government backing for, you know, the investment

banking part of jpmorgan chase. it would have to survive on its own feet. host: virginia, independent line. caller: yes. to ask ourself, who is the greek government? we know the greek government was cooking the books. goldman sachs was pushing for greece to borrow more and more money. and some of it was -- the greek government -- someone was giving advice to the greek government. i wonder if we could see some email from the top advisors. another issue is was that greece was -- everything became so expensive. the thing like in the argentina crisis about 10 years ago, the glass of wine in greece was more expensive than in germany. right now i think i.m.f. and the global financial institutions are pushing for the drastic cuts, privatized

water, self-capital greek islands, duty reductions with the health care costs and many other things. but who caused the problem? we have to investigate because the thing that happened in portugal, spain and ireland. thank you very much. host: before you respond to that i just want to show our viewer the headline in "the financial times" about portugal. go ahead. guest: yeah. i think there is a role to be looked at. what role did the investor banks play in advising these governments. i would hope that's being looked at because if a bank -- and this goes back to the goldsman transactions with greece -- it made it more in debt than it really was, that is obviously wrong. and that should be, you know, probed to see what was

happening there, of course. now, i can kind of agree that there is definitely, you know, a need to look at the banking -- the bank's role in this. but, again, greece put itself in the situation with unsustainable spending. and that is the main problem here on the table. and it is when you go to europe and go to kahn like portugal or italy or greece and do you, like you say, you buy a glass of wine and in your head you convert it into dollars, it's incredibly expensive. the reason for that is the euro. these countries, if they prbt in the euro would have devalued over time. so when you go to greece -- and like before you would have converted dollars into track ma. you buy -- drackma. you buy a glass of wine, you -- it was incorrect. what happened in the euros is the prices in, you know, it's kept high than they ordinarily

would have been because they are in the single currency zone. and that's another problem, you see, because what happened in argentina, the previous caller talked about argentina and they ended up devaluing. it made the currency cheaper and that makes your economic recovery faster. they have other problems, devaluation doesn't solve anything in the long run. but it does give you a break during which you can help your economy recover and so greece can't do that. that's why they're in a really difficult situation because if they weren't in the euro they would have been devaluing right now and they can't. that means they have to do everything through fiscal cuts. getting people off the government payrolls. go after people who aren't paying their taxes. and that's something difficult to carry out. host: two headlines from the newspapers yesterday. "the financial times," why the euro will continue to weaken. and then in their opinion pieces. and then the second one. "the euro has been a smashing

success." what is the status of the euro? guest: i think the euro is at the weakest point that it has been in its history. i think the euro survives but i think what happens is it sursleeves at a pretty big cost to its -- to the budget deficits of europe. and, therefore, the euro will probably remain a weak currency. now, currency valuations are always sort of relative. is it weak against the chinese yuan or weak against the dollar? the u.s. has problems. so if the u.s. fiscal house has problems then the dollar will weaken. at this point the politicians in europe across the line said, of course, we're not -- we are going to effectively stand behind the country that's in trouble. yes, they're making greece do a lot of hard work. if push comes to shove we will bail them out. by doing that they weaken the credibility. euro because it never was

supposed to be like that and they basically told the market that it was going to happen. host: richard on the republican line. go ahead. caller: what's the difference between the greece situation where they're blackmailing greece to pay this out and the switzerland situation saying, no, they're not going to pay back the fraudulent debt? i watch c-span a lot. i get a lot of information from ron paul who was on the house show. and bernanke said flat out that he's not going to tell people where the money went. i used to listen to "n.p.r." where i read the world bank forgave 180 nations in debt as long as they give up the natural resources. you got david rockefeller and soros trying to bank rupt america, to bring everybody down and the rest of the world

up. it's -- ron paul was winner of the cpac -- guest: i think it's iceland and not switzerland that doesn't want to pay back the debt. yeah, i think -- a lot of -- yeah. i think the greek situation and iceland situation are quite a different because greece has a much larger economy and it has a thriving tourism industry. probably over the long run can get itself back into a healthier state. iceland is a lot more serious. they have a very small economy and a very large debt. i would imagine they wouldn't pay it off and i think the british would probably back off at some point. host: next phone call, garland, texas. addie on the independent line. caller: good morning, peter. thanks for taking my call. i'm just an average person, and

i'm calling because this is a big -- it's all intertwined and everybody is for -- the people who caused all of this, they're still getting money in bailouts. and i want to know what's going to happen, when are we going to stand up and really stop this. right now it was greece and then iceland. who's next? host: peter, who's next? what country? guest: i think we are going to have a lull in the market for a while but then what's going to happen is somebody is going to have trouble borrowing money in the markets. and then the e.i. will have to come to the rescue for somebody else. i said quite a lot today, these fiscal adjustments are almost impossible to do quickly. from a political point of view very wrenching for a country. and so they probably won't get done which means the markets

will once again mark it harder for these countries to borrow. i think the caller was asking a question more about, you know, everybody -- all these people in the banks are profiting from this while all these other countries are suffering. you know, that's definitely a case to be made that the banks should have -- they were rescued in 19 -- i'm sorry, in 2008. they should have been -- there should have been more radical restructuring of the financial structure. again, it's the countries that have borrowed bond their means that this vut themselves in the situation they are in. if you don't want to rely on the markets then don't put yourself in a position that you need to borrow in the markets. it's a very simple situation. you don't want to have to borrow, you know, from a bank that -- you need to borrow from the bank. you see, that's where we're at in this situation. it's an awful situation you are in but that's where the

countries are in. host: opinion section in monday's newspaper that the only lever the greeks have to counter the as you taret pressure, that is to cut spending and increase taxes is to threaten to lower the euro or in other words commit suicide. the euro zone would never miss greece, which accounts for only 2% of its total g.d.p., but greece would surmiss the euro zone. the euro exchange rate for a revised drachma would look very unpalattable to athenians shopping for german -- "washington journal" live every day from 7:00 to 10:00 a.m. eastern. morning hour general speeches. legislative business at 2:00. the chair lays before the house a communication from the speaker.

the clerk: the speaker's rooms, washington, d.c. march 9, 2010. i hereby appoint the honorable donna f. edwards to act as speaker pro tempore on this day. signed, nancy pelosi, speaker of the house of representatives. the speaker pro tempore: pursuant to the order of the house of january 6, 2009, the chair will now recognizes members from lists submitted by the majority and minority leaders for morning hour debate. the chair will alternate recognition between the parties with each party limited to 30 minutes and each member other than the majority and minority leaders and minority whip limited to five minutes. the chair recognizes the the gentlewoman from florida, ms. ros-lehtinen, for five minutes. ms. ros-lehtinen: thank you, madam speaker. thank you, madam speaker. i rise today to recognize a wonderful organization, the women of tomorrow mentor and scholarship program. as a former educator and

florida certified teacher with a doctorate in education from the university of miami, i know firsthand the importance of providing our children every opportunity to succeed. the women of tomorrow program is a local life line for at-risk young women. this pioneering program pairs extremely accomplished, professional women with small groups of at-risk teenage girls in public high schools for a four-year mentoring program. these mentoring women who could be judges, doctors, lawyers, indeed from all walks of life, they are all volunteers who are dedicated to showing teenage girls the possibilities that exist if they stay on the right track. the women of tomorrow program gives students the hope and inspiration needed to be successful, productive, active adults. the volunteers build self-confidence. they assist the girls in

achieving academic success and help students give back to their community in both a constructive and positive manner. founded in 1997 by veteran tv journalist jennifer volapie and telemundo president, it is an unrifled positive and growing force within our south florida community. dozens of public high schools throughout south florida have implemented the women of tomorrow program. these schools allow over 2,000 young women to be helped by this program. and the high school graduation rate of students in the program is nearly 90%. wow. the women of tomorrow program is inspiring at-risk young women to achieve their fullest potential through a strong education. and since the year 2000, the women of tomorrow project has presented $2.3 million in

scholarship value to over 800 graduates of their program for college. the support offered by the volunteers of women of tomorrow give these young women the confidence to pursue a college degree, to realize that they can achieve their goals. the incredible impact of this program that it's had on our south florida community has helped countless troubled youth achieve success and it's truly phenomenal. it is because of the commitment of dedicated volunteers, mentors, and staff at women of tomorrow that this innovative program has been such an immense success. as a proud grandmother of a beautiful baby girl, i know our young girls deserve a program like women of tomorrow. i look forward to hearing more about all of the future successes of each young woman that is involved in women of tomorrow and congratulate everyone involved for their everyday victory for our children and i'd like to submit for the record the wonderful board of directors that guide

the women of tomorrow program. thank you, madam speaker, for the time. the speaker pro tempore: without objection. the chair recognizes the gentleman from virginia, mr. connolly, for five minutes. mr. connolly: thank you, madam speaker. madam speaker, since it began in 2007, the great recession has cost tremendous hardships throughout the nation. millions of americans lost their jobs. increasingly larger numbers every month, including 741,000 in january, 2009, alone. our economy contracted an astounding 5.4% in the fourth quarter of 2008 and an unbelievable 6.4% as this congress and the obama administration took office. in the first quarter of 2009. foreclosures were skyrocketing up 81% in 2008, with more than 2.3 million homes in default or

seized. our economy was on the brink. nowhere was that more evident than in the precipitous drop of american households network. i brought a visual aid today because words alone cannot do this loss justice. from december of 2007 to march of 2009, americans lost $17.5 trillion in net worth. that's trillion with a t. that's larger than the entire economy of the united states. if we dedicated the entire output of this u.s. economy, every penny spent by every single person, it still would not equal that loss. it represented a loss of $56,000 for every single person in our country. i'm not talking about the value of business or corporate profit. the net worth of american households is their 401-k and retirement accounts and the value of their children's college education fund. it's their emergency savings and nest eggs. it's the equity in their homes. the single largest asset most americans have. in fact, foreclosed homes have

decreased the equity of existing homeowners by $502 billion alone. american homeowners who always have remained current on their mortgage payments nonetheless lost more than a half trillion dollars in equity simply because of those foreclosures and the broader housing market troubles have only exacerbated that loss. this long red line represents that loss. it represents $17.5 trillion of lost college payments, $17.5 trillion of delayed retirement, $17.5 trillion lost from the american dream. this blue line represents the return to growth of that net worth. one of the very first acts this congress undertook was pass the recovery act. the economy was a free fall and americans were literally losing trillions of dollars and it worked. the first quarter after we passed the recovery act, the economy slipped only 0.7%. and by the end of last year had

recovered and grown by 5.9%. the largest increase in six years. housing prices had an unprecedented 22 state months of decline starting in 2007. leaving more than 20% of all homeowners under water with negative equity. not only are these homeowners unable to access home equity, they cannot sell their homes without risking bankruptcy if they need to relocate for their jobs. as a result of our actions through the recovery act and extension of the first time home buyers tax credit, housing prices stabilized. and in december, 2009, they grew for the seventh consecutive month. while their value has not fully recovered, the average home sale price increased $45,000 from january of 2009 through january of this year. restoring tens of thousands of dollars in equity to each homeowner. the stock market representing the retirement funds 401-k is a lifesaving in so many americans has grown almost 60% since this

march, 2009 alone. although there is still a way to go to fully restore the value the increases have been steady. the results of these improvements to the american people is the blue line. it's $5 trillion of value restored to the american household. i ask to look at that red line again. the decline was continuous until our intervention. since our actions the growth has been continuous. we are not out of the woods yet. household lost value every month for the longest recession since world war ii. but we have turned the corner. americans today have $5 trillion more in net worth because of our actions. that's why it's vital to stay the course so that we can continue to help every homeowner recover life savings and restore prosperity to every household. i yield back. the speaker pro tempore: the gentleman yields. the chair recognizes the gentlewoman from north carolina, ms. foxx, for five minutes. ms. foxx: thank you, madam speaker. i came to talk about health reform, but the gentleman from virginia fails to mention that

the economy began its nose dive when democrats took control of the congress in january of 2007. for 54 months before that we had a republican president and republican control of congress, the economy was doing very well and growing. madam speaker, the american people have spoken loud and clear, they do not like government takeover of health care. they want sensible step by step health care reform that works. but the white house is not listening. instead they are proposing expensive new entitlements that will only worsen the federal government's finances and north carolina family budgets. at least there is one thing we agree on, we need to have a bill that will lower the cost of health care in america. but you don't lower the cost of health care in america by creating expensive new government-run programs. the best way to lower the cost of health care is by empowering patients. putting patients in charge of their health care, not insurance companies, and certainly not the government, is the solution. while i agree with president

obama that we need to lower the cost of health care, the problem is that his proposals, which are simply retreads of the house and senate bills, won't really lower costs. they are simply $1 thrill expansion -- $1 trillion expansion of government roll. people can make health care decisions by helft savings account and making sure the trial lawyers who are driving up the cost of health care with the frafleous lawsuits reined in. we should start over. starting over is the best way to produce bipartisan legislation. we should focus by working step by step to enact commonsense health care reform that will lower costs and expand access to affordable high quality care. republicans have been talking about a step by step approach for months. this approach would allow individuals to buy health care across state lines, cover people with pre-existing conditions, improve access to health savings accounts, as well as enact medical liability

reform. the nonpartisan congressional budget office estimates that such a commonsense plan would reduce deficits by $68 billion and reduce private insurance premiums by up to 10%. this is a plan that doesn't grow the government. and it's a plan that reduces cost without a government takeover and without breaking the budget or soaking taxpayers. madam speaker, it's a plan that will work for the american people. i yield back. the speaker pro tempore: the gentlewoman yields. the chair recognizes the gentlewoman from arizona, mrs. kirkpatrick, for five minutes. mrs. kirkpatrick: thank you, madam speaker. for too many years the mexican drug cartels have taken advantage of our unsecured borders. smuggling drugs and people into our country in exchange for the illegal weapons and cash they use to keep their supply routes opened. for too many years failed policies from the federal government allowed these

violent gangs to grow and thrive. politicians in washington fought each other rather than dealing with the problem. as a result, crime is spilling over into arizona and throughout the entire southwest. while our state, local, and tribal law enforcement do a great job with the resources they have, they cannot do this job alone. securing our borders is the responsibility of the federal government and the federal government has to live up to that responsibility. this government has begun to give this danger the attention it deserves, but there is so much more that has to be done to make up for years of neglect . i am fighting for the folks in my district who have to live with the consequences of washington's mistakes and i'm continuing to push for the support that our border agents need. i will not let up. as a part of my efforts, i am

happy to announce i will be touring the arizona-mexico border later this week. i will be visiting with our border agents on duty, accompanying them on the job and hearing directly from them about how i can help to address the challenges they face. i am ready and eager for this opportunity to make sure that the voice of our law enforcement on the frontlines is heard and not the voice of politicians playing games in washington. i yield back. the speaker pro tempore: the gentlewoman yields. pursuant to clause 12-a of rule 1, the chair declares the house in recess until 2:00 p.m. in recess until 2:00 p.m. today. later this week, dong kongman c020 c020's war powers resolution which questions

whether the -- whether to continue the war in afghanistan. the house is in at 2:00 p.m. eastern. also, live coverage coming up in about 15 minutes. remarks from ron kirk talking about u.s. jobs and global leadership. will be speaking here at the national press club. again, that's live in about 15 minutes, 1:00 p.m. eastern. >> which four presidents lived past 90 years old? they were -- find these and other presidential facts in c-span's newly updated book "who's buried in grant's tomb?" >> it's a guide book to travel on, if you will, but it's also kind of a minihistory work of biography of each of these presidents and let's face it, you can tell a lot about people at the end of their lives. >> a resource guide to every presidential gravesite.

the story of their final moments and insights about their lives. "who's buried in grant's tomb?" now available at your favorite book seller. or go to publicaffairsbooks.com. type in grantstomb at checkout. >> 15 minutes or so we'll take you live to the national press club with u.s. international trade representative ron kirk. we'll look at caller's opinions in today's "washington journal." : president obama yesterday, talking about health care, once a bill passed by march 18. that is next week. here is the front page of "the new york times" this morning. i want to show you from "the new york times" this morning, bob herbert's opinion@@@@@@@@@ @ 8

the economy shed 36,000 jobs last month and that was trumpeted in the press as good news. well, after the house has burned down i suppose it's good news that the may finally be flickering out. but once you realize that it will take 11 million or more jobs to get us back to where we were when the recession began, you begin to understand that we're not really making any headway at all. saying president obama and democrats need to focus on jobs and the economy. we want to get your opinion this morning. health care and/or jobs. first call, cedar hill, texas. republican line. good morning. caller: good morning. host: what do you think, henry? caller: well, as far as jobs and the economy, i think one of the things that needs to happen is there needs to be a -- well,

guess as far as people in everyday lives if there's a hold put on the rise in gas prices that that would help as far as the economy moving forward. but if gas prices continue to rise, especially coming into the summer season, you're going to -- in fact, stagnate that economy. i think if there aren't any, you know, movement, if there's any movement in the economy right now, then it will be in fact -- it will be erased if gas prices continue to rise. host: henry, you and others may be looking at "usa today" saying gas could go likely

above $3 a gallon this summer but might not stay there. fort worth, texas, republican line. we are talking about jobs or health care. caller: yes. i have a comment. my comment is with well, we need to have health care reform for a simple reason that health costs are going through the roof. these large pharmaceutical companies are making billions after billions. if we can get this health care according to american people then we will find we can lower those big businesses. now, on the jobs situation that we need focus on, we have -- we had in the 1990's with bill clinton and the republican legislature in the house of representatives and the senate, we passed a bill that seemed to be constitutional to the american people.

it has taken away from american people and it's not supposed to be -- passed by the senate or the house of representatives. or the president of the united states to -- that will harm the american people in any kind of way. now, what we can -- what we can get a lot of this money back that we're getting -- that we're sending out of our country as we put -- on those properties overseas. the package that we signed in the 1990's lowered the taxes on the common imports. and then they're not tax -- these imports like they're supposed to be. host: on the front page of "the hill" newspaper it says "undecided chairman adds pressure on the health care vote. five panels in doubt." davenport, iowa, independent

line. health care and/or jobs. caller: health care. i think health care is an important issue, probably the most important issue for over a century from the standpoint we have 45,000 americans dying every year. now, you imagine that. if you project that over the last 100 years that we have been trying to pass this law, we've had over four million americans die. this is the modern holocaust that we've had in america. all these people dying. what i'd like to do is review this task, have it improve so it's affordable for everyone, that everyone can get good quality health care. then after that i'd like to see someone set up the holocaust museum. i heard stories who have had good health and because they couldn't get a doctor to see them sit back and watch it take over their body. host: j.b. on the republican

line. you're next. caller: i'd like to point out before i get to my main point to the idiot from iowa, 50,000 people a year die in traffic accidents. i don't even know what his point was. but i am just beginning to wonder, when is this bonehead barack obama going to realize that he won the election? why is he still campaigning, you know, about health care? nobody wants this health care bill. it should be quite obvious that anybody that's got half a brain the american people do not want this health care fiasco that they're trying to put spon us. -- put upon us. host: the talk inside the beltway, president obama and the democrats have massachusettsaging or public relations problem. mr. obama and the democrats are

being told that their narrative is not getting through. in other words, the wonderfulness of all that they've done is somehow not being recognized by the slow-to -catch-on people. they're losing faith that their elected representatives are not looking out for their best interests. hollywood, florida, lucine on the democratic line. good morning. caller: hello. host: good morning. caller: good morning. how are you? host: doing well. what are your thoughts, health care and/or jobs. caller: well, both of them. you cannot go to the hospital. and, also, about the jobs, we need the jobs because people losing their power. and like me. and i'm losing my money. [inaudible] because of the situation. we need health care and the jobs.

host: do you think it's realistic that congress and the president can do both? caller: yes. host: why? caller: why? because people need it. people need that. if you don't have a -- the insurance is so high. you cannot pay insurance. if you don't have insurance, how are you going to go to the hospital? host: ok. front page of "the washington post," obama launches attack on insurers. new strategy late in debate. says health secretary in a stern letter to chief executives in a speech in which the president castigated insurance companies 22 times. democratic congressional leaders, especially those in the house, are struggling to

secure enough votes within their party. republicans are calling for the proposal to be abandoned saying that most americans oppose it. newark, new jersey, seth on the independent line. good morning. caller: yes. and i will say that we need both health care and jobs but jobs is the number one thing. now, jobs will be the number one thing because right now our economy is going down. we need small businesses to continue to build the jobs up. right now people are focusing on bringing things more so to a government control state and we need things to be focused on micro economics instead of macroeconomics. health care is something right now that doesn't work. and if we do get health care we need to get the same exact health care that the politicses have because right now the way they have it set up will completely cross-too much. host: ok.

deborah is joining us on the republican line. caller: oh, good morning. host: good morning, deborah. caller: i am definitely for jobs first. and nothing as far as health care. i don't believe that anything the government runs is good. therefore, i feel this -- there is a need for change in health care but not for government control. host: all right. getting a little bit of a echo there. let me remind you and our viewers to turn off that television when you call in this morning. also, front page of "the washington post," below the fold is the story, "unemployment benefits." in it for the long term is what they pose here. payments are extended. may no longer be temporary. cost of $10 billion a month. half of them have been received payments for more than six months. the usual insurance limit. but under multiple extensions enacted by the federal government in response to the

downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates, the longest period since the program's inception. on the junk page of that story inside "the washington post" it goes on to say this -- "millions of people are out of work for longer and longer periods. the average in february was 29.7 weeks and in january 30.2 weeks. unemployment benefits, which vary from state to state but average 36% of the average weekly wage are costing $10 billion a month." and more, michigan, dan on the democratic line. good morning. caller: good morning. ma'am, the number one thing that congress needs to do right now is need to concentrate on jobs. forget about the health care thing for now and concentrate on jobs. they need to have a tax holiday, for one thing. they need to get a fair tax going and stop taking money out of everybody's check.

they need to create a demand and that's the only way they're going to create a demand is to stop doing that. it needs to be done immediately. the economy would turn around overnight if they would do that. host: all right. more on jobs. this is "usa today's" money section this morning. it says, "investors anticipates a jobs recovery. investors are upbeat on the notion that the job market will soon be creating more money-paying jobs to unemployed americans. on friday, the government said 36,000 jobs were lost in february, but that was fewer than expected. many analysts contend that if not for winter storms the data would have joan jobs were being created. there is a belief that nonfarm payrolls will turn positive in march, a shift that could put the economic recovery on a sustainable path." north carolina on the independent line. good morning, caller. caller: hi, good morning. i was calling about the jobs and the health care. host: right.

what do you think? caller: i think that -- i think obama is doing a great job with the health care because it's like where i live, i live in north carolina. i'm 21. i am not eligible for any type of medicaid assistant. every time i go to the doctor i have to pay out of pocket which is hard if i'm working at a job for $7.25 an hour, you know what i'm saying? i think he's doing a real good job trying to get the health care reform because it's hard for a lot of people to get to -- to get certain health care being that they're not -- either disable or pregnant and they're trying to -- they're trying to cut back on teen pregnancy. a lot of teens are going out there getting pregnant is because depending on their parent's situation is, they can't get taken care of or they're getting kicked out and they don't get it unless they have kids or something and i think that's just stupid. on the other hand, we do