about what she -- what you will do once you're governor and it is another thing to actually accomplish it. on my watch, will reduce taxes by $4 billion. our schools will be the best. will of the strongest environmental laws. we will develop alternative energy. california created 1.9 million jobs. that is what we need today. .

it is an engine of new ideas and jobs for the future. we embark on a difficult but historic mission. we want to take back our state. we want to recapture the dream, the optimism and the sense of can-do that drew people to california for hundreds of

years from all over the world. they still come. today with some doubt, but not without the hope and determination to do what they can. let me say that to serve again as your governor would be a deep honor. this state has done so much for so many, particularly my own family. nothing that i could do would please me more than to be able to go back to sacramento and fix this thing and get it working again. california for all of us. thank you very much. [cheers and applause] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> we have a lot of work to do. we are up against billions or trillions, but people.

people power, the interpret, neighborhoods, person to person, we have a lot of people. and we are running this campaign not scapegoating anybody. not police, not fire, not nurses. we are not scapegoating immigrants. we are pulling all together, whatever color to pull this state back together again. thank you. on to victory. [cheers and applause] ♪

♪ >> now the other california governor's primary where meeting whitman beat state insurance commissioner steve poisner by winning 64% of the vote. she spoke to supporters in l.a. >> thank you, thank you. thank you. thank you so much. what a great night. [cheers and applause] this victory is your victory. [cheers and applause] now i just received a very gracious phone call from steve piosner conceding the race. [cheers and applause]

and i want to commend him and his supporters for the energy they brought to this campaign. it has been a tough campaign, i must say. but i am a stronger candidate tonight because of it. [cheers and applause] you know, i am battle-tested now, and i'm ready to give jerry brown the toughest election. [cheers and applause] now, let me take a moment to

congratulate our great republican senate nominee on her victory. [cheers and applause] you know, career politicians in sacramento and washington, d.c. be warned, because you now face your worst nightmare. [cheers and applause] two business women. [cheers and applause] who know how to create jobs, balance budgets and get things done. [cheers and applause] i have so many people to thank tonight and so many who made

tonight possible. first, let me thank my husband and our two sons. [cheers and applause] you cannot take on a challenge like this without the love and support of one's family. i also want to thank former governor pete wilson, the chairman of my campaign. [cheers and applause] i would also like to thank my campaign coceres, congressman kevin mccarthy, congresswoman mary bono mack, state senator tony strickland, assemblyman, nathan fletcher, former assemblywoman sharron runner, and bill simon. [cheers and applause]

now le met thank my incredible campaign team and the more than 20,000 volunteers in 58 counsel to worked so hard. -- in 58 counties who worked so hard. [cheers and applause] what an amazing effort. i am so proud of each and every one of you. and in particular i would like to say thank you to four of my senior leadership team who helped me run this campaign. [cheers and applause] but tonight's win would not have been possible without the trust of the voters. [cheers and applause] i am humbled by this victory, and i am so grateful for the support and the trust that you have shown in me tonight. [cheers and applause]

and i am deeply, deeply committed to running a campaign that gives you hope for a better tomorrow. [cheers and applause] we begin a new journey together tonight, don't we? >> yes! >> we have it in our power to build a new california. [cheers and applause] there is a clear choice in this election. california is in crisis, and we certainly cannot save california's future by repeating the failures of the past. [cheers and applause] jerry brown has spent a lifetime in politics, and the results have not been good. failure seems to follow jerry

brown everywhere he goes. it's a record of promising much and delivering ggets -- little, of saying one thing and doing quite another, with disastrous results. for jobs, during jerry brown's last term as governor, california's unemployment rate nearly doubled to a then-record of 11%. for spending, while jerry was joffer, state spending went up by 120%. he raised taxes and still left a $1 billion budget deficit. and for education, with jerry as mayor, oakland schools deteriorated to the point that the state had to intervene. overall, a record of higher and higher taxes, more and more spending, and near record unemployment. in other words, a 40-year record of politics as usual.

i say california can do better. [cheers and applause] because while politics is jerry brown's business, my business is creating good new jobs. [cheers and applause] it's time for a different style of leadership, a new beginning, not glitz, not glamour, not glibness, but guts. [cheers and applause] a governor with the guts to do the hard work that is required to turn california around. [cheers and applause]

so tonight i ask all californians, republicans, democrats, independents, asians, african-americans, latinos to all join my campaign. [cheers and applause] audience: we want meeting! we want meeting! we want meeting! we want meeting! we want meg! we want meg! >> thank you. >> you know what? we have a common purpose, don't we? to bring common sense back to sacramento. [cheers and applause] i am a big believer in the power of many. none of us -- what we can do

together, none of us can do alone. and field goal we can end sacramento's war on job creation and make california a great place to start and grow a small business. >> and a great education for our students. [cheers and applause] it will not be easy, will it? i will tell you this. i am putting my heart and soul into this campaign. [cheers and applause] this gal is on a mission.

[cheers and applause] and i am all in. audience: thank you, meg! thank you, meg! thank you, meg! thank you, meg! >> if you give me the honor of being your next governor, the special interests and the public employee unions won't stand a chance because i will owe my office to no one but you. [cheers and applause] here is the really good news. i don't owe anyone anything. [cheers and applause]

now, my opponent cannot say that, can he? audience: no! he >> he has aligned nearly ever special interest group against us. that means favors will be owed to every power broker with vested interests to keep our schools underperforming, and the state pension system spinning into insolveanls. we know what comes next. when challenged by reform, politicians will try to convince you that i am something that i am not. let them try. [cheers and applause]

>> californians have seen this before, and this time to won't work because the stakes are too high. people will not be fooled. and i want californians to dream big again. don't you? [cheers and applause] i want our state to be the very best place in the world to raise a family, grow a business, educate our children and pursue life's ambitions. [cheers and applause] we can make the golden state golden again. [cheers and applause] jerry brown and the rest of the sacramento politicians cannot make that dream come true. they will not save our state,

but you can. [cheers and applause] this is a fight me must win. this is a fight well win, and together will not let california fail. [cheers and applause] join me in this fight, and together we will build a new california. [cheers and applause] so thank you for your support, your encouragement, your friendship. god bless you, and god bless

california. [cheers and applause] ♪ ♪ california's other republican

primary won the right to face the imcouple bent senator barbara boxer in california. here is her victory speech. >> thank you. thank you so very much. my good friends, i have heard your message loud and clear. the people of california have had enough. [cheers and applause] in fact, i think they can hear you all the way to washington, d.c. from the moment i declared my candidacy, over 7,000 volunteers, over 20 coalitions,

12,000 donors and a tireless, hard-working staff have made this the greatest team effort i have ever had the privilege to be a part of. all of you worked together to make tonight a reality, and i owe you a debt of gratitude that it is very difficult for me to express. [cheers and applause] while i cannot thank all of you, there is one very special person who has been my running mate for over 25 years now. my husband, frank, the rock of my life. [cheers and applause] i want to begin tonight by acknowledging two committeded republicans who also have sacrificed and worked hard for the cause of victory in

november, chuck and tom. [cheers and applause] we all fought hard for the privilege of this office, and i salute them for their determined work to change the course of america, and i look very much forward to their help and support in the common cause we now share. [cheers and applause] and congratulations as well to my good friend and colleague, megwhitman. [cheers and applause] . california will now be offered two candidates at the top of the ticket who have created jobs and cut costs, and we look forward to taking on the two career politicians on the other side.

[cheers and applause] but the teamwork that has brought us here cannot end here tonight. and so as we celebrate, and it looks like you have been having a heck of a party here celebrating -- [cheers and applause] let us remember that beginning tomorrow and through november 2nd, we are going to run a tireless, fearless campaign all across california to finally unseat barbara boxer. [cheers and applause] in her 28 years as a career politician in washington, d.c., barbara boxer is a bitter partisan who has said much but accomplished little. she may get an a for politics,

but she gets an f for achievement. [cheers and applause] nevertheless, barbara boxer has actually said one thing that i agree with. she said recently that this election offers the clearest choice in the nation, and i could not agree more. [cheers and applause] her far-left views place her on the very fringe of american politics, and our differences could not be greater. quite simply, this election is about the future, not the past. for three decades in congress, boxer has personified the entrenched, stale, arrogance of someone who has long fore-- forgotten that here in america, the people rule, not the

government. [cheers and applause] when she dressed down that general in front of the cameras , she displayed all of the destructive elitism that is so disquieting to the people of california. and when she made a rare trip to california to fill her campaign coffers, she said the reason for her poor approval rating was because the voters of california were grumpy about the economy. i think that is the first time that barbara boxer may have been guilty of understatement. [laughter] nearly two and a half million californians are out of work, many of them for over six months. hundreds of thousands more have simply looking -- quit looking for work. there are boarded up store

fronts across california. there are food lines in our great san joaquin valley, and businesses are leaving this state at record rates. and do you remember, as i do, that barbara boxer voted for a so-called stimulus package that she promised would reduce unemployment to 8% or less? she has become so tone-deaf about reality that she has deluded herself into believing that the word grumpy actually describes the desperation and despair caused by big government folly, big government bailouts, and the build-up of $13 trillion of national debt. it is precisely this kind of old politics, the failure to listen, the failure to understand, that has caused tens of millions of americans

to feel betrayed. our fellow citizens feel betrayed by the distant and isolated politics of incumbency , entrenchment and incompetence. >> this election is also about big differences between the kind of people we are and what we believe. i believe that each person everywhere has enormous potential if they are given the freedom and the opportunity to fulfill it. barbara boxer believes that it is government that promotes potential, not the individual. i believe in lower taxes so that -- [cheers and applause] >> so that we the people can best decide how to spend and invest our hard-earned dollars.

she believes that government can best decide how to spend your income. audience: boo! >> all together now. audience: boo! >> i believe that small businesses and entrepreneurs are the lifeblood of our country and the engine to get our economy moving again, and she believes that massive government spending and massive deficits are the answer. i believe in the honor and the heroism that has distinguished our armed services. [cheers and applause] from the day she entered congress, barbara boxer has been a loud and cynical critic of america's military, voting to cut off or reduce the resources that our fighting men and women need to effectively

combat our enemies. she has stood silently by as israel is condemned and threatened and iran moves towards nuclear weapons. this campaign is also going to be about what works and what doesn't work, about action and results versus rhetoric and failure. 21st century issues and realities require the common sense, good judgment, new ideas and perspective that come from the real world experience that i bring to the table. barbara boxer thinks the real world reinvolves around a couple of square miles and a vast government bureaucracy in washington, d.c. listen, my fellow californians, i promise you this from day one. in the u.s. senate, i will be relentless in fighting for every job, and i will start by making it easier, not harder,

for small businesses, family businesses, innovators and entrepreneurs do what they do, which is to create private sector jobs and build the american dream. [cheers and applause] we must end the failure and the disgrace of california being responsible for one out of six unemployed americans. barbara boxer's answer of rhetoric over reality stops now. [cheers and applause] i bring a track record of problem-solving, transparency and decision-making. i am willing to ask tough questions. i am prepared to shake things up. and unlike barbara boxer, i am

also prepared to be held accountable. >> tomorrow we will be bringing you a senate hearing on the regulation of offshore oil drilling. interior secretary ken cal czar testifying. our coverage begins at 9:30 a.m. eastern time on c-span 3. now a senate hearing on legal liability issues associated with the oil drilling industry. well hear about efforts to left the cap in wake of the bp oil spill in the gulf, currently set at $75 million. this is two hours. million.

patrick leahy of vermont chairs the judiciary committee. this is live coverage >> we have families who have gone through terrible tragedies, and trie tragedies and show the respect due for that. it's been now 50 days since bp's deep water horizon oil rig exploded and oil began gushing into the gulf of mexico. deadly contamination has reached the shores and wetlands of the gulf coast. our nation faces an environmental catastrophe. americans are angry. in the past week, when i was home in vermont, i don't know when so many people have come u to me on one issue as this saying what's happening.

american people want to know how and why this happened. attorney general holder and others investigate this disaster, i'm confident the facts will become known. and if criminal conduct occurred, it should be and it will be prosecuted to the fullest extent of the law. senators on both sides of the aisle believe those responsible for the disaster should be held fully accountable. we cannot let big oil companies play roulette with our economic and environmental resources. a region that has already suffered so much from natural disasters has yet another tragedy on their hands, this time at the hands of one of the largest oil companies in the world. much attention is being given to the unfolding environmental disaster. but i had hoped that americans would never forget the 11 men who lost their lives, men who left behind children and wives,

parents, brothers and sisters. christopher jones' brother gordon lost his life on the oil rig is with us here today to represent all these men and these families. mr. jones, i'm glad you're here. i know you're accompanied by your father, keith jones. and i understand mr. jones senior, from you that the president is having some of the families at the white house later this week. mr. jones, you and your family have our condolences. i know in the discussions i've had with the president, he feels very strongly about this. you should feel free to tell him exactly what you're thinking and any suggestions you have. he actually wants to hear what you have to say. you also have my commitment to work to achieve some fairness under the law for your brother's family and the families of all who lost their lives in this

disaster. you dezer v a measure of justice. today's hearing will examine how the applicable laws have shaped big oil's behavior. we have to find out whether our legal system itself gives some kind of incentive to big oil companies to cut corners. the supreme court's decision in the exxon valdez case and the current caps in the oil xlugs act of 1990 and the limitation liability ability incorporate misconduct. we'll ask whether current maritime statutes that compensate the families of those killed, we'll ask whether they're fair and whether the current legal structure temps corporations to devalue human lives in the calculus of profitabilities. no one's life should become an asterisk in somebody's cost benefit analysis. the death in the high seas act

is the exclusive remedy for those killed in international waters. but this law does not recognize all that is lost with the death of a loved one such as loss of consortium, care, companionship. it shouldn't be some kind of a difference with the loss as sea than what happens with the employees of the bp working on land. the disparate adds insult to the families that are victims of this tragedy. ten years ago congress ammed the death in the high seas act for those that parish in airline crashes over international waters. it's time we modernize this law again. later today i'll introduce t survivors equality act to make sure these families are treated fairly. another law that congress should consider updating is the limitation of liability act. it limits a vessel owner's total

liability to the post incident value of the vessel. that law was passed in 1851 for a different time and before the civil war. the company that toned deep water who vie son transocean wasted no time filing a motion to limit total liability to this law to the value of the sunken drilling rig. they want their liability limited to the value of what is now a piece of junk sitting a mile below the surface. that's perverse. i think congress should act to avoid this absurd result. and then, of course, there's the statutory liability cap of $75 million on consequential damages in addition to the cleanup for an oil spill and that needs reexamination. two years ago, activists sreme court in the decision exxon

versus baker created an arbitrary limit of punitive damage in maritime cases chaired a hearing and expressed my concern at the time that the supreme court's exxon valdez decision would encourage corporate misconduct. why? because it reduced the consequences of their misconduct to a discounted cost of doing business. that's almost like saying we're giving you a green light to do whatever you want to do. the fact is, i can't imagine why anybody would be surprised that the supreme court effectively capped damages to cap misconduct while oil companies cut corners and sacrifice safety. the exxon valdez decision was another in a supreme of business-friendly supreme court decisions in which a narrow majority has essentially written new law and disregarded laws enacted by congress. the impact of lives of americans

is enormous. two years ago we heard from alaskan fishermen. now we're worried about the livelihoods of slimmers and oyster men in the gulf, people who spent decades, generations obeying every single rule, building their businesses, having something they could leave to their children. they followed the rules, and because somebody else doesn't, they lose it all. i have joined the white house's effort to overturn the supreme court's exxon valdez decisions. looking at legislation to prevent korgss from deducting punitive damage awards from their taxes so they bear the cost of their full extreme misconduct. our laws should encourage safety and accountability. they do not create the right incentives, we have to change them. whether as a result of greed or incompetence or negligence, bp's conduct as devastated the lives and lily hoods of countless people and their communities and

they threaten the gulf coast's very way of life. it's been said by others that bp can spend millions and millions of dollars running adds saying how wonderful they are and how environmentally conscious they are. they can spend a lot more money helping the families that are suffering. the american people deserve better from all big oil companies who exploit our natural resources for enormous profit. in the months ahead t people of the gulf koeft will work to reclaim their coastline and livelihoods, wetlands and fisheries and many of us here will help them. fortunately the families of those who lost their lives on that tragic day will not be able to reclaim their loved ones. 11 men who were killed in the deep water horizon rig deserve better. we're going to try to make it better. i pledge that to their families. i renew that pledge today. my thanks under white house for

co-chairing this hearing, all the witnesses being here. i'm going to yield to senator sessions who actually does represent a gulf state. and then senator white house and we'll begin the hearing. >> thank you, mr. chairman. the deep water horizon disaster is now and remains a very serious threat to our coastal environment, our coastal economy and particularly our thoughts and prayers remain with those, who like christopher jones, lost family members on that rig. 11 wonderful americans lost their lives. i had a long meeting with governor riley and congressman bonner friday in mobile. we talked about the problems that the nax faces. we listened to the mayors of gulf shores and orange bch and people who representhe mobile

bay area and the threats that are being faced there. there's quite a bit of concern, frankly, a lot of intensity of feeling that things have not gone as well as they could, and we do need to do better. we must do better. i really want to thank governor riley for his personal leadership in leading the effort to coordinate the response with regard to the alabama area. today marks the 50th day that oil has been pouring into the gulf of mexico, and it looks like you'll be some time before we are fully able to comprehend the impact of this spill and the extent of the damage to our environment. stopping this leak, of course, is the top priority, because defensive measures, trying to stop what's flowed out will never be able as i have learned, to completely stop the flow into our estuariries and beaches and even small amounts can cause

serious damage. the coast guard, bp, mms, noaa, continue to evaluate subsurface efforts to stop the flow by closely monitoring its effect on the environment. i'm somewhat encouraged by yesterday's announcement where admiral thad allen confirmed that the capturing by bp of around 462,000 gallons of oil a day, which is a substantial increase from what was occurring friday, that is a positive step. if this procedure continues to work, i'm hopeful that the containment cap wl begin to successfully collect as much oil as the surface tankers can handle. that being said, this is only the first step in what could be a long process, and it's without question that the potential environmental and economic impact of the accident is unprecedented. bp is a multi billion dollar

international company. as i said shortly after this event occurred, they are the responsible party. they are liable for the damages up to the extent of their very financial existence, and they are not too big to fail. i believe that then and i believe that today. they made great profits. and so be it. but they assumed risk. they became and signed as the responsible party, and i believe that they are going to have to honor that commitment to be the responsible party. in fact, in the first quarter of this year, bp's profits averaged $93 million per day. bp is the one that under the law and under the procedures of our drilling is the responsible

party. so i've questioned those executives, those at transocean and halliburton at the energy committee of which i'm a member and the administration officials seeking explanations for the cause of this accident and confidence and assurance that the responsible parties will accept the full responsibility for the damages. official have repeatedly stated from bp that the company will pay all cleanup costs and that it will ignore the $75 million liability cap established by the oil pollution act of 1990. indeed, there is no cap on the cleanup costs. every dollar that's spent cleaning up any oil on the beaches and estuaries, there's no cap on that. in addition, there's no cap, as i understand it, and we'll perhaps ask our witnesses, on the individual lawsuits that can be brought against them under

state law. company spokesmen have said they will not seek reimbursement from the u.s. government from the oil spill liability trust fund. that remains to be seen how that will play out. but it's certainly available if need be. while those korpt entities responsible will be held liability for the actions, i think it is appropriate, mr. chairman, that we analyze precisely the legal causes of action that are available and whether or not they appropriately fit the circumstances of this case. and we also need to examine, did the government play an adequate role in responding to the disasters. according to coast guard logs released by congressman darrell ice her, ranking member of the house oversight and government reform committee, the administration knew that this was going to be a spill of,

quote, national significance. those logs showed discrepancies between the information they contained. while the title of the hearing assumes a level of irresponsible corporate behavior on behalf of entities like bp, we need to examine, also, how well the administration responded to this event. instead of allocating administrations it appears, we've had other actions that are less effective. i think an appropriate evaluation of possible criminal activity should be conducted, but it should be conducted in a fair and just way. we must be careful in implementing new policies to address this incident. in late may the president announced he is extending the moratorium on permits to drill

new deep water wells for six more months. i certainly think we need to be careful about that and examine very carefully whether or not and how we should go about further deep water drilling. while this moratorium can be necessary to review safety and environmental regulations, it will clearly have a negative impact on production, jobs and revenues to states and the federal government. the offshore industry is responsible for nearly 200,000 jobs around the gulf of mexico and over $13 billion a year in nontax revenues for the gulf coast producing states. total revenue collected by the general treasury from all federal offshore operations total $5.9 billion in 2009 alone, drimg on the outer continental shelf is an important issue not just for the gulf states but the entire

country. tlr several investigations into the cause of this rig explosion and the administration established an independent commission to submit a plan to the president within six months providing solutions to prevent and mitigate future spills from offshore drilling. i hope we can complete that reslew and it will be effective in identifying the dangers and risk involved, but i do hope that we will be able thoen move forwarded with energy into dense and self sufficiency by adopting the kind of plan that will allow us to be successful. in greater our dependence on foreign energy, the greater the threat to america's national security. offshore drilling in the gulf of mexico supplies 30% of america's domestic energy pruction. most people don't fully realize that. 80% of the gulf's oil, and i did not realize this, comes from

operation more than -- in more than 1,000 feet of water, 80%. for this reason, we must continue the safe and secure offshore drilling. it's important to our economy, jobs and national security. mr. president, our communities are hurting. we've got our seafood industry that is basically shut down. hundreds of low-wage workers have lost their jobs. we've got probably almost half of the rental capacity in our beach front properties has been lost -- are beginning to be lost. so it's a national issue. but also we have thousands and thousands of good americans who are working on those rigs every day whose lives are at risk and need to be assures that the production that's occurring is

safely done. thank you for allowing me to have these remarks. thank you, chairman leahy, for holding the hearing and inviting me to co-chair it. like you i believe congress must do whatever it can to prevent another family have having to hear that their loved one has perished on an oil rig. congress must also take every available measure to avoid the environmental destruction that we're seeing unfold day after day after the spill continues. gordon jones and ten other men died. the gulf has been devastated. something has to change. how did it come to this? we already know that bp, transocean and halliburton failed to meet important safety standards. they undertook risky drilling without a proper degree of care 5,000 feet below the surface of the gulf, 18,000 feet to the oil res vary among methane hydrate deposits that are highly dangerous when they get inside the drill column. they were irresponsible. the result was tragedy.

sadly, key regulatory agencies also appear to have been asleep at the switch, sherking their responsibilities to protect our oceans and american workers at sea. i am convinced that something was fundamentally amiss at the minerals management service at the department of interior. i stronglily suspect that mms had long since been captured by the oil industry and had ceased to serve the public interest. regulatory agencies even when functioning properly never have been america's sole line of defense against disasters. we also should make sure it is in a corporation's clear economic interests to adhere scrupulously to the law. meaningful, civil and cal fines and damages are one crucial tool for ensuring that a corporation takes proper precautions to avoid tragic errors. in contrast, a corporation that does not have to pay for its mistakes does not have to worry about making them.

unfortunately many of our current laws whether by statute or court decision cap the liability of big oil corporations, both for worker injuries an deaths and for harms to the environment. rather than making responsible parties pay for harm done, they fois this burden on to the families of the lost and on to the american taxpayers. as a result, corporations lang proper market incentives to act responsibly. that must not continue. congress must act. these restrictions on liability are unfortunately consistent with attacks upon the institution of the jury by powerful corporate interests. the founders put the jury and the constitution and bill of rights three times, and for a reason, to ensure that in at least one form of government, the powerful and the powerless have equal standing. not for nothing did detoekful

describe the jury as a mode for the sovereignty of the people. that is as true today as it was at our nation's founding. the tide of corporate money ha influences politics stops at the hard square corners of the jury box. and that is why corporations fight so hard to attack the institution of the jury. you know this as well as anyone, mr. chairman, and i'm proud to co-sponsor the legislation you're introducing today. it will eliminate the strange quirks in american law that, left unchanged, would result in the survive vorps of the 11 men killed on the deep water horizon being treated unfairly. the senate should pass that legislation promptly. i also urge my colleagues to support two bills that i have introduced. the first would raise penalties for workers safety and environmental vilthss under the outer continental shelf lands act. the second would overturn the supreme court's regrettable exxon v baker decision, that capped maritime punitive damages

at the level of compensatory damages. the exxon court believed that predictability for corporations was more important than deterring corporate misconduct. i disagree. the people of my home state, rhode island, the ocean state, would put our environmental and our safety ahead of profits for irresponsible corporations. in fact, that is exactly what road islanders have done. john torgan the bay keep ner rhode island has submitted a letter which i'll introduce for the record cataloguing the regulatory reforms put in place after the 1996 north cape scanned yeah oil spill off south kings town. rhode islanders know what an oil spill can do to an ecosystem. we know how important penalties and fines are keeping sea farers safe and marine ecosystems healthy. i insist in the future oil companies do everything they can do prevent needless deaths and

catastrophic harm whether in the gulf, off the coast of new england or anywhere in our great country. today's hearing is an important step toward that goal and i applaud you for holding it, mr. chairman. thank you very up. >> thank you very much, senator whitehouse. our first witness is christopher jones, currently the partner at keough, cox and wilson in baton rouge, louisiana. more important than his professional background, he's the brother of gordon jones, one of the 11 rig workers who lost their lives the day of the explosion. gordon jones is survived by his wife michelle, young sons stafford maxwell. one of the sons i understand was born very shortly after the accident. is that correct? >> yes. >> mr. jones, please go aled. the floor is yours.

>> chairman leahy, ranking member sessions and other members of the committee, thank you for the opportunity to appear before you today. my name is chris jones, seated behind me is my father, keith jones. gordon is my only brother. he is survived by his wife and two sons, stafford is two and max was born three weeks ago. gordon is survived by a mother, sister, in-laws and other family members and friends who miss him very much. words cannot describe what gordon meant to this family. i appear before you as a representative of only one family affected by this accident. unfortunately, there are many more. i stood with those other family members at a recent memorial event, a service no one should ever have to experience. although we never met before this disaster, i want those other family members to know that we grieve for them and are committed to telling our story so we can try and correct the

inequities in the law and so no one else will find themselves in that situation in the future. of course, you aware that gordon died aboard the transition deep water horizon oil drilling rig, he was employed by ms swabbing co-a contractor aboard the rig. he worked aboard that rig for the past two years and was excelling in his profession. as many rig workers do, gordon expected to gain experience on this rig and continue to advance with his company. he never got that opportunity. this is a picture of the back yard fort gordon built with stafford's help for stafford and max. although you may not be able to tell, it is not finished. gordon planned to finish it when he returned home. he will never get that chance.

certainly others will step in to make sure it is finished and try to fill the tremendous void left by gordon's death. this is another example of an incomplete life and what has been lost. i am at least comforted that it will be finished and stafford and max will enjoy it for years to come and know their father built it for them. the next picture is taken shortly after max's birth. notably absent is gordon whose presence in the delivery room was limited to a single family photograph. lastly, i show you possibly the last picture taken of gordon before his death. it is taken just after gordon gave stafford his first golf lesson, an experience gordon thoroughly enjoyed. you can see the joy in their faces. i'm saddened that neither will

experience the same joy again. i want to take this opportunity to address the recent remarks made by tony hayward, ceo of bp. in particular, he publicly stated he wants his life back. mr. hayward, i want my brother's life back. and i know the families of the other ten men want their lives back. we wl never get gordon's life back, and his wife will live a life without a husband and her two children, a life without a father. at the top of the united states supreme court building is the phrase "equal justice under law." as a united states citizen and as a lawyer i agree with that principle. unfortunately it does not exist in the cases of deaths occurring

in federal waters. this is not a phrase that applies to michelle, stafford and max in this instance. this is not right and i make this request for change for my family, the families of the other ten men and others who may find themselves in our same position and who will quickly learn there are that our current laws don't protect don't protect those who need it most. i want to be very specific. we're asking you to amend the death in the high seas ability to allow for the recovery of nonpecuniary damages. currently michelle and max and stafford can only recover pecuniary damages. stafford and max will never play in the father-son golf tournament at the local golf course with their dad or experience the thrill of their first saturday night in tiger stadium with their father at their side. likewise, michelle will never again experience a quiet dinner at home after a hard day with

her true love. she will not celebrate another wedding anniversary, the last one would have occurred only three days after this accident. most recently, michelle did not have gordon there to comfort her in the delivery room and tell her how much he loves her and the beautiful baby we now call maxwell gordon. these are all experiences among many, many others for which there is no compensation under the current law for maritime victims. the overwhelming impression i've gotten from the parties responsible for gordon's death, besides that no one wants to take responsibility for it, is that they're immunized by the current law. under the yent law there's a finite maximum amount that michelle and her boys can recover and nothing more. think of it as a liability cap. while some, but certainly not all, of these same parties express their similar thinks and claim to want to do the right thing, they can also hide behind the law and say they're protected from doing more.

there is, of courses, an exception for the recovery of nonpecuniary damages. in response to that event this congress passed a retroactive amendment to allow for the recovery of nonpecuniary damages. currently while victims of airline accidents are allowed the recovery of nonpecuniary damages, victims of all other accidents occurring in federal waters are not, including aboard cruise ships, ferry boats and, in this instance, oil rigs where hard working men make their living to supposed their families. during this past month and a half i've gained tremendous perspective on things, certain things that i thought were important before april 20th are just not important anymore. this is important. this is important to michelle, stafford and max and all the other families affected by this tragic event. you an opportunity to make this right and create equal justice

under law for these families. thank you. my father and i are more than happy to answer any questions you may have. >> our next witness -- i'll go through all three witnesses and go to questions. jafk coleman, mr. coleman is a managing partner for the energy consulting firm energy north america. he has served as counsel for the house committee on natural resources, the former senior attorney for royalty and offshore minerals, for mms, minerals management service under presidents george h.w. bush and bill clinton. mr. coleman, please go ahead, sir. >> thank you, chairman leahy, ranking member sessions and members of the committee. it's a pleasure to be here. i retired about a year ago after

27 years working for the federal government, the last six years in the house of representatives. during that time, most of my work has been in the area of offshore oil and gas. but here on the hill, it was also more energy and minerals generally. prior to working as senior attorney for royalty and offshore minerals, i also served for 3 1/2 years as the senior attorney for environmental protection for the department of interior. prior to that i was special assistant to the associate administrator of noaa for 3 1/2 years. and i served four years on active duty in the army, active duty as a judge advocate general corps officer. native of mississippi. went to ole miss, undergraduate in law school. the focus of the hearing is, of course, on a variety of liability issues related to offshore oil and gas production. if on going tragic oil spill in

the gulf of mexico and tragic for the families of those killed and injured including the jones family represented here today, all of whom i extend my deep condolences. but also tragic for the environment and the energy security aspirations of the american people. this is unequalled in size in our nation's history and has resulted in numerous legislative proposals to amend the oil pollution act of 1990 and other applicable laws and in actions by the administration related to offshore oil an gas operations. i will focus my testimony primarily on the breach of contract case law for federal offshore oil and gas leases and the potential liability of the united states for breach of contract as a result of a few of these legislative proposals and executive branch actions. first, i'd like to g over a few facts. senator sessions has mentioned some of them, about the importance of offshore energy to the nation. currently the united states consumes about 20 million

barrels a day, 20 million. about 60% of that or 12 million barrels of oil come from foreign sources, our largest source is canada, but the majority of the rest come from overseas. so our yearly amount of imported oil totals about 4.2 billion barrels. many times i've heard statements that the united states doesn't have much oil, doesn't have much natural resources. this really needs to be put into context of our use, and the context of what is available to us to produce. certainly we don't have the resources that saudi arabia has, but we don't need to have the resources that saudi arabia has to make a very important contribution to our energy security. as of the time of the last department of interior offshore oil and gas natural assessment in 2006, over 14 billion barrels

has been produced from the federal offshore. another 15 billion barrels had already been discovered and were reserves available for production. furth further, there are were another 86 billion barrels of oil believed to be economically and technically recoverable in the offshore that have not yet been drilled. that's just for the oil. so a total of 101 billion barrels in the offshore if these are made reasonably available to the american people for production. one of the things i'd like to emphasize is this oil belongs to the american people. the bounty and the value of this oil cannot be made and accessed for the benefit of the american people if it's not made available. and that alone is sufficient, just in the offshore, sufficient to take care of all the imported oil needs at the current rates of the united states for about 25 years. so that's not an inconsequential

amount of oil. it would take care of all of us, like i said, including displacing all the canadian oil. similarly we have similar numbers for natural gas. enough natural gas in the outer continental shelf to at least take care of all the natural gas needs for the nation at the current rate for more than 20 years. one might ask, somewhat the value of these reserves and resources for the american people, and, frankly, if you use standard pricing, based on just the reserves and resources that we have, without any other benefits, economic benefits, just the royalties and the corporate taxes would bring in about $4.5 trillion from production of that, more than enough to pay off about a third of the national debt without any tax increases. when you add in the ability to produce methane hydrates which now international research has

shown in likely, that would be another $7.5 trillion. all of those methane hydrates, by the way, 99% of them are in the deep water, certainly deeper than 2500 feet. so if we don't allow deep water drilling, that whole value of that will be unavailable for the american people, and that's $7.5 trillion in corporate income tax and royalties. so those two together, about $12 trillion. getting to the liability question, i had the honor of being the lead attorney for the interior department on a case which became mobile veus decided in the year 2000, this was decided, a rider, the outer banks protection act was added which prohibited the secretary of interior from granting any permits to drill off of north

carolina for more than 13 months. the supreme court, justice brier writing the opinion decided that was a material breach of the leases. that the lessees had a right to rely on the law as it existed at the time the leases were issued and, therefore, the lessees recovered all of their expenses. so this is an important matter, and i would encourage the committee to consider that when making changes for the oil pollution act liability damages. >> and i should note to all witnesses, of course, your full statements will be made part of the record. if you have -- following the questions of the panel, if there are additional things you feel you should have been added, we'll keep the record open for that. >> thank you. >> professor tom gal ga is the current president of colby sawyer college in london, new hampshire, a neighbor of sorts.

i've been many times to kobe sawyer and new london, of course, a beautiful community. prior to joining kobe sawyer college he served as dean of the law school at university of tennessee. as i recall you taught admiralty law. is that correct? >> correct. professor, please go ahead, sir. >> chairman leahy, ranking members sessions, senator whitehouse and other members of the committee, thank you for inviting me to appear here today. my name is tom galligan and i'm the president of colby sawyer college in new london, new hampshire. the staggering consequences of the oil spill in the gulf of mexico force us to ask whether our laws are fair, consistent and up to date. do they provide adequate compensation? do they provide proper incentives to ensure efficient investments in safety? sadly, an analysis of the relevant laws reveals a climate of limited liability, undercompensation and the possibility of increased risk.

let me begin with a discussion of wrongful death recovery for see men under the jones act and anyone killed on the high seas under the death on the high seas act. both of those statutes were passed in 1920, another era. as you said, and as chris jones said, neither of them as interpreted allows recovery for loss of society damages to the survivors of those killed in maritime disasters. loss of society or damages for companionship for the loss of care, comfort and companionship caused by the death of a loved one. the ma jort of american jurisdictions today do recognize some right to recover for loss of society damages in wrongful death, but not the jones acted and not dosa. a spouse, child, parent or sibling who loses a loved one suffers a very real loss and the law should recognize that loss. as chris jones also noted, there

is one exception to the rule barring recovery of loss of society damages under dosa. in 2000 ach the korean airline and twa air disasters you retroactively amended dosa to provide recovery of loss of society damages to the survivors of those killed in high seas commercial aviation disasters. but for anyone else killed on the high seas, on a cruise ship, on a ferry, on a semi submersible floating rig or helicopter, the survivors do not recover loss of society. the law should be the same for all. and you can make the law the same for all by amendmenting the relevant statutes to provide recovery for loss of society. as i understand, senator leahy, your proposed survivors equality act o of 2010 would remedy that inequi inequity. in fact, the climate of limitation fos centered by the .

because some ports have extended the no recovery rules to other marry time contexts and other types of damages. and their relatives for very real losses and they as versely impact. amending the jones act would reverse that trend. tort law is concerned with corrective justice with fairness, consistency and compensation. but it is also concerned with deterring unsafe behavior to people, property, and environment. tort law can encourage efficient investments in safety so that it faess an optimal level.

if tort law under compensates it under detersment when deciding what to do and how to do it, people will consider the real anticipated costs of their actions. he or she may well underinvest in safety and therefore increase risk to people, to property, to businesses and to natural resources. under compensation and under deterrence by the ship owners limitation liability ablgt originally passed in 1851. the act was passed before the modern development and before the evolution of bankruptcy law. and it's operation today can lead to drastic

undercompensation for the victims of disasters. recognized the right to recover punitive damages. however, the court has limited the recovery of punitive damages to a one to one ratio between the punitive damages awarded and the kpens tory damages awarded. the ratio cap deprives a judge or a jury of the traditionally available ability to taylor a punitive award within constitutional due process limits to the particular facts of the case the harm suffered, harm threatened and more.

traditional ability to a punitive award. i am happy to answer any questions. >> thank you very much professor. let me begin with you i thank you for your testimony. you say you are representing one family but you are standing up for all the families that were affected by the disaster. we talk about the death on the high seas act, one of the few remedies for the families who lost their lives in the deep water rising. if this had been an accident on land, if it had been at a

refinery. >> the way the current law is now, if it were to remain in effect, is that these companies responsible for the death, they want to go out and get an economist, calculate what his earnings would be, subtract out the income taxes during his work life expectancy. subtract out what he would have consumed himself. and they want t write a check and walk away. aside from the fact that that may not be enough to support michelle, max, and staff ford, it does not allow for recovery like many other laws for united

states citizens to recover for life experiences for the comfort and care that gordon would have provided his sons and the support he would have provided to his wife over the years. >> that's something that they could have sought had it been on exxon land. can you tell me any logical reason why it should be different whether it was on the open sea or on land? >> absolutely not. i believe the bp paid $1.6 billion to the families of the victims from that explosion. i don't want to speculate what could be recovered by the families but it's certainly not that amown.

>> go back to what the professor talked about sit a direct corollary. my words basically. a direct corollary of the two would you agree with that. you thought you are really going have to pay for any screw up you do, are you going be a lot more careful? >> of course. and i will know -- i know this. having had discussions with some of the attorneys that they want to pair what they are obligated to pay under the law. they want to pay it and move on. a family of another victim in this accident he had no dependents. no children, no spouse.

they could write a check for 1,000 dollars and right away. >> they want to use the limitation liability act and say we are only limited to the value of our rig. >> they represented to the court. so they want to limit their liability. not just the families of these victims but all the economic damages. and realistically, the impact on

the coast and businesses is going dwraf anything by the family. >> nobody can call that fair. >> absolutely not. >> we hear the arguments about the increased lablt or increased regulation is going make production let's be serious about this. do you have any doubt in your mind that bp should have done a lot more to insure the safety of the people on the rig? >> what i am shocked at is their profits. we are talking about billions of dollars here. billions of dollars of profit. for something like this to happen and cause such a dramatic

impact on the lives of so many people including the families of the victims and all the people who have been impacted along the gulf coast, it's mind boggling how they can throw up their hands and say that they could not have anticipated this to prevent it. we will come back to this. just speaking personally, we sometimes forget we let the profit motive youtweigh the livs of people. they played by the rules. we expect them to play by the rule rules somebody didn't do what they were supposed to do.

>> thank you, mr. chairman. i agree with you. the size and financial scope of this industry that drilling presents to me that the companies fail -- this company particularly. i don't know about the others. but i am worried about it. fail to invest sufficiently in insuring the safety something that must change out of this whole experience.

mr. jones says you are limited only to kpens tocompensatory da. they limited that to the economic loss, one to one ratio. >> not just the economic loss but the compensatory damages. the punitives could not exceed the award of those compensatory damages. traditionally peentive damages have not been available on the death on the high seas act. in the cases, punitive damages

may not be available at all so the one to one cap may not apply there. but in other cases, yes, sir, one to one there. >> i have offered legislation. that would have raised $75 million cap retro actively. congressional research service says that's constitutional. the deputy attorney testified when i asked him about it that he thought it wud constitutional although the department of justice had not recommended a retro active legal policy. i have to say that some of my staff doubts that. some of my staff think it is

unconstitutional to do that. i am a little concerned about it. that's why i asked about that. what your view about the ability of congress to alter the liability. >> i would note that bp has insistently said they will not be bound by and will pay whatever the liability is. >> yes. with regard to the constitutional questions, they are more i think more difficult than the contractual issues. there was more liability potential for the government in the contractual base than on the constitutional issues. i would agree with your staff that there is more risk than the

testimony you have had before the congress to date. however, i am very concerned that on the breach of contract issue ises which would come into play that any kind of material change to the open 90 damages, 75 million limitation would be a material breach of the lease and would open it up to the united states to enormous damages. >> it's just something we need to wrestle with. i have always believed we shouldn't offer legislation that we have reason to believe is not constitutional even though it might sound good at the time. i will continue to review that.

professor, it's generally easier, is it t, on the question of initial liability turned jones act for plaintiff to get into is court where as if you have an action on the shore, that your proof of negligence is very real and can be a complete bar to the plaintiff going forward. having been on the gulf coast like i have for most of my legal career, i have been aware that it's easier to make out a case and avoid dismissal of the case.

is that a compensating reason for some lack of equality to go forward with the lawsuit. >> there was some kid proquo with other recovery damages. first you have to establish the seamen to have the aavailable you have to establish that you are a seaman. the jones act incorporates

caused in whole or in partment first that status has to be established. that same rule does not apply in a general marry time case nor does it apply when a seaman seek s. >> sir, i don't have any comment that would disagree with professorallagher said. >> thank you, mr. chairman. >> senator whitehouse. >> thank you for holding this

hearing. you indicated he worked for a contractor. contractor to bp? >> correct. >> if you could answer that in the context to the limit on economic damages bhmpb r bp has been so noisy about saying that it would not be bound by that it would go beyond the $75 million in economic damage s damages th been a corporate statement. what do they see?

>> they will pay all legitimate claims. we sat through a meeting where they repeated the saying where they will pay all legitimate claims. i have never spoken to somebody from bp. >> i am not asking them to take responsibility but they made it to the memorial event a couple of weeks ago. i heard they were there but we haven't heard from them.

>> i am not a marry time attorney. i have learned a lot. it is my understanding there is an agreement between the contractor and bp where by there is some type of indemnity. gordon's family -- >> meaning bp has agreed to indemnify -- >> they agree to indemnify bp. that is just what i have heard.

>> limited recovery only to the formula that you describe. >> of course. ultimately determine down the road. there may be some claims from one party to the next but there is that and they can pay that and go home. >> somebody killed in an air travel accident would not face that cap? somebody -- this is a cap that is narrow ly. >> the event is what precip talts this legislation.

that is why the specific exception was made and passed in 2000 after the tragic ehaven't much like this one. there is no cap. that cap is determined by the jury. >> do you have any reaction to mr. coleman's suggestion that efforts to make things right for gordon's family would amount to a substantial impairment that bp has with the united states government and we should not address it for that reason? >> well, like i said,

conservation research and mitigation research. they are more than willing to pay to the families. they want to pay what they are obligated to pay under the law. it's almost like they are restrained from doing any more and they are hiding behind that. >> i appreciate that. >> thank you for holding this hearing. i want to thank all the witnesses for joining us. i want to express my sincere condolences to you. now the biggest suggests updated laws. we need to insure that oil

companies can be liable for their actions. one way to deter wrong doing and encourage careful responsible drilling that we need is increase the low caps for damages caused by oil spills. i appreciate the additional valuable suggestions. it is not enough to hold big oil accountability. we have to end the cozy relationship between the federal government and is oil companies. that means getting rid of too often the federal government listens more to the industries that are supposed to be regulating than to the consumers it is supposed to be protecting.

and restoring the clean water act and which is the main statute. attorney general holder announced that the department of justice is undertaking a criminal investigation and the clean water act is the main law. given the oil company's sizable annual profit s profits you hav at the whole package that are in place. so you have to look at criminal

law laws and you have to look at civil liability. i am not an expert in administrative law however $25,000 a day does not sound like a lot of money in light of the terrible things we have seen. the oil pollution act contains a provision that seems to give the authority to modify the $75 million damages cap without abusing constitutional concerns. nothing shall be construed to impose additional requirements related to the discharge of oil. to you agree this is a significant provision? what's your response?

>> i do agree that it's a significant provision. i am not an expert on energy law contracts so i cannot express an opinion on contractual issues. and you ask yourself then would anything be rational and where do you look? at the policy reasons that underlie the decisions to apply retro actively. here to make the law modern, to make it fully kpens tory and make it consistent would seem to be rational basis. >> i agree with that. let me ask that a may 12 memorandum on this question be entered into the record. >> without objection. >> double approval there.

>> you have made several suggestions. do you think changes should apply to all vessels? >> i personally think that they should apply to all vessels on the high seas because that would encourage consistency. god forbid there should be disaster regarding a cruise ship. that would be tragic if another group of people were before you explaining why cruise ship victims were treated less fair ly. >> i have been on this committee for 12 year we have considered this issue, capping the damages. issues of medical malpractice.

there has been a strong sentiment that there should be a limit to the amount a jury can award. the appearance of your father and yourself did more to make the case than i have ever made in 12 years. showing those photos of your brother and his family and your brother. photos that would be shown to a jury i hope will start to convince some in congress who believe we should cap the amount of money that could be awarded to a family like that for the loss of your brother's life. i thank you for coming today. i think you have had a profound impact on all of us. i sincerely regret your loss we

know that money won't buy your brother back. i am troubled. you have got a tough responsibility here arguing the position which is not that popular. so i respect you for coming here and giving it your best professional effort. i would say there is one sentence in your testimony that particularly troubles me. you say you hope our political leaders will not implement reckless policies that would imperil such an enormous source of jobs and revenue. i heard the leaders of major oil companies are telling members of congress and this administration privately that what bp did in this circumstance was to materially misrepresent their capacity to stop this type of blow-out in the permits filed

with the federal government. and further to engage in what i consider to be reckless misconduct in establishing a blow-out prevenn tore that was not redundant, clearly failed and now contaminated one of the most magnificent bodies of water today. i would like you to balance for a moment that reckless misconduct on the part of bp with what you characterize as the possibility that we will enact reckless policies. reckless policies like offering to ms. jones' family the loss of companionship as this father and husband is gone for the rest of their lives. can you really put these on the

same level? >> i am also a native of the gulf cost, the state of mississippi. and have enjoyed the gulf coast my entire life. certainly my comments in my testimony were not directed towards the jones act issues. they were dealing with the pollution act question of lifting the $75 million damages limitation i was dealing with it from a contract law point of view and is damage to the industry that would come about from a $10 billion capper or unlimited cap on damages in addition to the full restitution, full response cost.

>> let me ask you this question. if we followed your logic here and did not increase the cap on liability and what you characterize as a small or medium sized drilling operation engaged in the same type of activity as bp resulting in the same level of damages, who do you think should pick up the cost of that? >> senator, as you know and actually i was involved in reviewing the various drafts of the oil pollution act and helping the department of interior determine what his position should be, i was part of the team evaluating the impact of the exxon spill and looking at the opportunities for the government to go after exxon. this is not a matter that is new to me. but i do have to say that, and i do believe that the caps potentially set in 1990, which the congress gave the executive branch the ability to increase over time by regulation which

they failed to do, they probably should be raised some. but gk-- >> but who will make up the difference? are you saying taxpayers have to pay for it? >> under the oil pollution act, above the damages limitation the excess go to the oil spill liability trust fund. >> what is the current balance? >> i understand is 1.6 billion. >> once we have exhausted, who pays for that? >> under the law, that's the end of it. >> no, that is the taxpayer's responsibility.

this is likely larger than the federal law. >> mr. chairman, thank you for giving me an additional minute here. i happen to believe if you were engaged in drilling and can create this level of damage, it carries with it a responsibility that you accept liability for the damage. if you cannot accept that liability, stay the hell out of the business. thank you, mr. chairman. >> especially in a business where you may end up with billions of dollars of profits. >> i wanted to follow up with these points about going forward and how the liability caps would work.

>> you can do it but you can't do it without paying for it. this is similar to what the supreme court said in the mobile case. congress changed the law after the fact which they had the right to do, but there were contract repercussions. >> others must disagree with that but i wanted to clarify along the lines that if, in fact, if in fact we don't change this or are not able to do this retro actively, who is going pay for the 8, $10 billion of damages? one of them has been to offer to

change their liability limits on this contract so congress could enact a law which accepts that offer. another one is, of course, the oil spill liability trust fund. >> isn't this the one that has the $1.67 billion in it? and we are looking at almost $10 billion for this right now? >> you could adjust that and make it retro active and claims could be paid out of that and provide additional fees or taxes to support that fund. >> let me give you other facts that concern us. i fam familiar with this case because the fimpl that represent -- the law firm that represented the fishermen was in minnesota. bp said it is pay all legitimate economic claims but exxon made the same statement in alaska.

it proceeded the litigate the claims brought against it for nearly two decades. what can we do to ensure swift resolution against legitimate claims? because exxon was saying the kpat same thing. >> i did happen to see the testimony at the house judiciary committee. that's basically what i understand is that these claims are filed with bp if they pay them then they pay them. if they don't then they are rejected and sent to the coast guard for payment under the oil spill liability trust fund. i am not sure what else you might be asking. >> people make claims but we

cannot insure that the claims will be upheld. i am turmoiled by the fact that transocean has already filed a motion seeking to limit its liability under the limitation of liability act. that 1851 law that would limit transocean's liability to $26 million has been discussed. is there any good reason to keep this on the books. should we repeal it? >> let me start by saying what i said before which is that i really can't respond what i said about the breach of contract claims. i don't think anybody has said this yet. open 90 does not apply that would be marry time law and marry time tort law solely.

as to the limb tax of liability act, i mentioned in my statement it was passed in a very, very different historical context. it was passed to encourage shipping and commerce. you ask yourself is that law still sailing from a policy perspective. what happens is the ship owner starts to concur this proceeding in a federal court somewhere and everybody who has a claim has to then file that claim in that federal court. what then happens is they say we want to go back to state court for some issues and they epter into stimulations and they go back to state court and come back to federal court. it is expensive, time-consumer and slow proses. >> i am sure that is not good to

hear. i want to assure you that we will do everything we can to help your family. i was struck by the questions. they were at the memorial service. how had your brother worked for them? >> he had worked for his particular employer for about five years. he worked on that particular rig which was operated by pb for about two years. and for that time he had helped bp make a lot of money. the only reason i heard they were at the event, i didn't see them until after when they were running out the back door to avoid the media. >> so you never got anything in writing or a phone call. did any of the other people killed on that day get any communication? >> really since -- i came face to face with several of the

families. it was very awkward uncomfortable situations. >> i am so sorry for your loss. >> thank you. senator frank? >> thank you mr. jones. all of us appreciate you being here. you are saying if we change our liability laws it will place an unacceptable proehibtive cost on oil companies?

you are saying the cost should be borne by mr. jones and his family by the fishermen, by the oysturemen, homeowners along the coast. don't you think that the oil companies who make such huge profits should be the ones bearing these costs? >> senator, i appreciate the question. the question of the loss and the claim of the family are not involved in the issue that i was addressing which is that damages liability cap under the oil pollution act. however, of course, lost income from fishermen and other economic activities is involved

in that. i am extremely concerned about the loss of income not only for the individual. >> you write to all sorts of damages and is say that if those were allowed, loss of comfort and those kind of things that would impose a burden on the oil companies, on mom and pop companies, that's what i get from your testimony. >> i did not address that issue at all in my testimony, senator. >> well in your written testimony you question whether offshore drilling really poses an unacceptable threat under current conditions that would justify moratorium. are you saying that the bp rig was operated in such an irresponsible and reckless fashion that it was run so negligent manner that it would be irrational to put on a six

month moratorium on new deep sea drilling? >> once again, thank you for the question. my statement with regard to that had nothing to do with the faks of the bp case. i am not the investigator of it. those will be determined. >> here you write, further a blanket drilling moratorium because current condition an unacceptable threat of damage to wildlife and the environment is highly questionable. what current conditions are referenced here that causes deep water drilling to pose an unacceptable threat? is the fact that many thousands of deep water wells have been drilled -- you are speaking exactly to that. what i am asking you is.

>> that is exactly what i was discussing. >> you just said you tid not discuss that. >> it is an on ration. >> an aberration? if eight weeks ago someone had said we should put a moratorium on deep water drilling would you have said yes? >> absolutely no and i still say no. >> have you been looking at what's happening in your beloved coast? >> i absolutely have. >> so in retro spect you would not have stopped that drilling? >> the decision had has to be bound.

>> i want to hear the rest of that. >> the -- what matters from a contractual point of view and this was an issue. if you take away contractual rights based on a regulation that you site and says it means one thing and it doesn't mean that, then you have not followed the law. they sited an unreasonable threat and risk of damages. if that is what the statute meant, the provision that they are siting to in that regulation, then we could never have any wells drilled at all because there is always a risk of a blow-out.

there have been 3 thousand or 4,000 wells at this depth without a blow-out. is that an unreasonable risk? from my legal judgment it is not an unreasonable risk to allow more drilling. >> i interrupted. please allow. >> we have so little time in these questions. >> i have just given you more time. >> i understand. mr. jones if eight weeks ago you were asked should we put a mor tore rum on drilling and in retrospect what would you say now? >> eight weeks ago before the explosion, of course, my brother would still be here. >> a very different perspective, isn't there? i don't understand your reaction.

there are other bp deep wells. what i am asking you is is the conduct or the way this rig was run so different from all the others that it doesn't warrant a look at a moratorium on this kind of drilling so we learn our lessons on this and prevent it from happening again or are you willing to let this happen again? >> senator what i was saying is that we have had thousands of thessimilar types of wells drilled. there obviously is something very unusual ha happened on this one case. obviously it needs to be fully investigated. but we have through our experience shown that this type of drill something a -- in the

scope of, you know, comparable things, is a very safe way of producing energy. >> thank you. >> just to follow up on that thought, i think if you had 3,000 wells out there and a well went down it would be one in 3,000. but your testimony is quite elegant in talking about incentives. it seems to me that the one thing that i have noticed about the way things could happen in our present society is we just don't have disincentives for bad behavior. and i think what senator durbin said earlier is one of the things many of us are concerned about is how do we disincentive the bad behavior?

we sent a message after this example. bmp p has been getting away with this thing. are you concerned about a corporate board room at some time. i am not talking about bad people. mbas are concerned about the fact that crow have got look out for the shareholders' money. if you are sitting there looking at what's going to happen, if you don't do the proper safety and don't put in the proper things, and you don't take the chance which bp has been accused of on a number of occasions. does that concern you at all in

terms of present liability structure? i am a strong believer. i do have is questions as to whether inspections were handled properly. one of the things that can be done is to send out inspectors. certainly civil penalties are available for a failure to perform at airports with the regulations. >> what about the private sector. i am a private sector guy. what about an approach that says the government is going do all that.

>> i found that the bar is very adept at taking on that role. they do it aggressively and i don't have a criticism of lawyer s to see that others implement the law. >> there is an idea out there that maybe the there is not an idea that the private sector could operate against punitive damages or not? just the idea that there is a disincentive if they know the pay-off is is going be greater? isn't that important in terms of this bp case? important that we send a clear message that taken your approach which is the oil wells, probably 3,000, no problem. but we have this one and it's really bad. if you are in the oil business

and you are drilling the gulf and you drill a well and you don't do the proper things, you don't do the things that have been raised here that you will have to pay a major price for that. isn't there a straight up economic problem? >> i agree from a public policy point of view. >> i would submit to you that there is a major price. not only has their share value gone down tremendously. they are projecting -- i have seen projections of up to $30 some odd billion that may have to be paid under current law for -- by bp for what's happened here. i do think the idea that there is not enough or there is not a significant price to pay is not

accurate. >> but there should be a price to pay when you make a mistake like this. incentives are an important part. >> mr. jones, with all due respect, i am sorry about your loss and i think it does bring home much of what we are talking about. it comes down people. your testimony is very important. do you have any anecdotes you can say of how they thought safety was handled on that rig? >> well, i haven't had really much of an occasion to speak to a lot of them and those that would have known about that are no longer here. we have had some discussions about some of the survivors, some of the folks who were

resc rescued. i haven't had a whole lot of time in the last month and a half to have a lot of the discussions. i have a lot of e-mails and comments that have been made by a lot of different sources as to what happened. there is a lot of stuff that went wrong well before that ever happened. there is a lot that is is is going play out in the months and years before before we have results here. and michelle and her boys and other families can move on. >> there is one kind of common theme that weaves its way through these things. you know it was washington's fault. we didn't have the proper rules or regulators. we didn't do the rest of that.

it's almost like we did not have regulators. you hit it right on the nail. sometimes it was like cops on the beach. there is not a cop on the street corner, but that doesn't mean you can steal. the idea that there is not regulators, i am big that you have to regulate importance. we didn't need to do that. it does bother me. i am not accusing you of making the argument. we can go in there and do whatever we wanted. i think it is important. i think corporate america did not have the ability to go in and do what they did because there were not regulators on the beet. thank you mr. chairman.

>> is it reason tobl assume that corporations acted in a way to maximize their own economic self-interest. >> i think that is what they exist for. they are concerned with society's interest but the definition is to make a profit and there is a duty to the shareholders to do so it is a misgovernment. but it triggers penalties and restitution. is there anything that prevents the criminal restitution?

the resolution in the criminal case from supplementing areas in which there is in r inp appropriate cap. >> i am not aware of limits but i am not aware of case cut favorably towards the oil industry by limiting punitive damages. did that affect existing agreement

agreements. >> let's hypothesize that we hy were here putting a restriction on liability. that we were reducing, saying $75 million applied not just to economic damages but to other damages as well. if that were the argument being made here. considering a piece of legislation to reduce liability, would you be here arguing that that was a material impairment of the contractual relationship and that the govnment was in a position to renegotiate with all the corporations affected by the change? >> if the congress were to have reduced the $75 million down to $35 million or something like that, theb the $75 million remains the contractual deal. from the legal perspective, they would not have to pay more than $35 million.

so it would not -- >> you're suggesting juan-way ra ratchet. >> while there would be some exceptio exceptions, this would require lengthy briefs. >> but generally, you would create a one-way ratchet. >> it's a question of two parties to a contract, senator, if one makes a unilateral change, same would be the -- if the private sector party to the contract said they were going to make a change and they could repudiate the contract as the government does, the government would be entitled to damages. it's not juan-way street. >> it works only one way from the congress' perspective under

your theory. mr. jones, you mentioned the blowout preventer. we're told in norway and brazil, there's a device called an acoustic switch that is required, a safety device that might have been helpful in this particular case. and that the industry argued against it because it cost $500,000 for that piece of equipment. i want to put that in the context of bp's first quarter earn thgs year. they earned $5.6 billion in the first quarter of 2010. for that, they could have bought 11,000 of these devices that are required in other states. instead, they argued against being required to buy one. how do you feel that the --

incentives and the exhibition work in terms of how this affected the safety out on the deep water horizon? >> from a economic perspective, i feel that if you're going to play and you're going make billions and billions and billions of dollars, then you need to pay to avoid the threat that mr. coleman mentioned. even though this is an aberration, it's not an aberration in my life. in michelle and the boys' lives. any threat is too much. i know that other people think differently about that. i don't. sitting here today for the reason that i'm here. i don't think that way. i think that $500,000 is nothing compared to the loss that we have experienced and all the other families have experienced. >> thank you, mr. jones. thank you, mr. chairman.

>> do you have any further questions? >> i do. thank you again. i was going back to my last questions. they were more on specifics of how the law works. i was thinking about the $75 million cap. we're going to try to lift it retro actively. the question i keep going back to is whether or not bp would have acted so recklessly if it knew there wasn't a $75 million limit. if they could have foreseen the damages. and that maybe they were in a comfort zone. they knew that their maximum liability would only be for so much. would they have put in a backup blowout preventer? considered other safety measures? i'm looking at this as how to we best insecentiviz nerks a free market. we want them to do their work but we want them to do the right

thing. if you have a free market, they pay for the damages. do you want to start with that? >> i will. yes. the whole law and economics theory of tort law is based on what you said. in order for an optimal deterrence scheme, you have to face the full costs of your activities. because when you decide what to do and how to do it if you don't have to pay a cost, if you see a cap, if you see a liability limitation, it is rational as an economic actor to not consider that cap. that's the basis of judge calabrese's work and judge pozner's theory. >> i attended university of chicago law school. >> you do, indeed, know that

then. >> i took a class from professor easterbrook. i keep going back to that. i'm also thinking being from the midwest with the ethanol industry. they have to get insurance. i'm not ware that they have a major law put in place that in a plant blew up in the middle of the corn field that they would have the federal government coming in and protecting them with a liability limit. i want to look at it. i know they have to get insurance. i haven't heard that they have the protection of the liability caps. it seems like we're picking one industry over another. are there other industries with the liability caps? >> none that i am ware of to this extent. i'm really an expert in maritime tort law. i think one thing you see here is an accident of time. statutes passed in 1851, 1920,

that have not been re-examined and reconsidered except in limited contexts. now is a chance to look at them comprehensively. >> and then the issue of smaller oil and gas producers. we don't have everyone be big. we want smaller once as well. mr. coleman said they couldn't make the liability. i can't help but think, sometime ifs you have the a smaller company, nay have a different role to play. maybe they're doing things less risky. in the end it seems inconsistent to allow companies to extern tliz risk of an oil spill and pass it off to society. do you want to comment on the size issue? >> i think you're right. i think the key issue is not size but safety. whether large or small, the entity is unable to adequately and efficiently invest in

safety, we want to deter those operations. because we want to have a sufficient safe world. we have expectations about risk. and we want those expectations to be consistent with fairness. i think the size issue goes hand in hand with the safety issue. >> mr. coleman, do you want to respond? >> yes, i would, senator. thank you. you know, with all due respect, all these things, the world is filled with risk. if we just stop doing things that have risk to them, then we won't do much. there are many industries and many activities in the commercial world that have limitations on liability. certainly the nuclear industry. shippingindustries. if -- it's all a matter of balancing. i understand the difficult role. >> ethanol, solar, wind, do they

have these limits? >> well -- i don't -- not sure whether the ethanol. i don't think that the solar and wind folks do. they're not in a particularly highly risky endeavor. >> that's probably true. >> even what the wind people, what the impacts of the wind are serious to many people considering the amount of birds that are killed every year by wi windmills. everything has its own -- if you don't have this oil production off the shoers, you'll have more tankers bringing it in. that's a flat-out matter. the way it will be for decades. the fact is the national academy of sciences says that's a more dangerous way to have the oil brought to the country. >> i don't think we should stop doing things that are new and

take risks. i think we have to protect the tax pairs from taking those risks. it wasn't their decision to go down 5,000 feet and take this risk. i think we need to protect mr. jones' family from that. it's a free market decision. i'm not saying you should ban oil drilling. i'm saying we have to assess what the potential damages are. and make sure that the people who are taking those risks pay them. and there may be other places to drill. in north dakota, i don't know, that would come with less risks that the smaller businesses can do. finally, comparing the birds and the windmills to the damage we're seeing, not just the wild life but to mr. jones apsz family, i don't think it's an equal comparison. >> we're supposed to wrap this by 12:00. senator franken, go ahead. >> thank you. >> you will have the last question. >> i take up amy's point.

i have never seen a solar panel or a wind turbine kill 11 people, 12 people. i have never seen a 50-day ethanol spill. and i think that we have to rethink our entire energy portfolio and how and what we're doing to drive the demand for oil. i think that this is a wakeup call. you say that the american people, in your testimony, this is from your written testimony, that the american people continue to strongly support offshore oil and gas drilling. there's a cbs poll that says 51% oppose it. you say a rasmussen poll that 58% of the american public supported offshore drilling as of june 1st.

did the survey ask if they supported deep offshore drilling? >> i'm not certain. >> the one you cited? >> i think the question was do you support continued offshore oil and gas drilling. >> and do you hear the president saying we should suspend all offshore drilling. >> he's suspended everything except in 900 feet of oil. most of the oil we have yet to get is beyond that. he's saying he's putting 92% offlimits as of the current time. >> the survey you cited, you don't know. you don't know what the questions were on the sur vie? >> i trade previous survey and this is a followon. i assumed it was the same question. just generally offshore oil and gas drilling. do you support that? >> the question was, do you

think offshore drilling should be allowed? >> well that's the question. >> and obviously, the president thinks so. he would be part of that 58%, right? >> i think the implication is that the american people they're talking about -- they're seeing in the context this accident in 5,000 feet of water. that, i think is the most reasonable interpretation that they're thinking about that kind of drilling. >> i don't necessarily buy that at all. um -- okay. do you -- there are some people that say that you say that most of the oil is in deep water, right? >> yes, sir. >> 92%. >> according to the government. >> we've been hearing from certain quarters that the

environme environmentallists caused the deep sea drilling. isn't it true that it's done because that's where the oil is? >> as i said, you need to be allowed to go where the oil is. >> i just want to speak to this. we have heard on certain quarters from william christol, from senator palin that the environmental ilists have force deep water drilling. are those statements true? >> i can say i don't know where they got their talking points from. they didn't get them from me. the reason we're in deep water is because the united states offshore oil and gas industry has driven the development of technology produce oil and gas.

as we have develops the technology, we're able to go further and further offshore. >> we're in agreement here. i want to end on that. >> that would be great. >> we're in agreement that those people who say that environment allists caused this spill, because they force the oil and gas industry to drill as far way from shore as possible, is maybe oh, poppycock, would you agree? >> i wouldn't agree with that completely. i would say that -- but i -- >> so you think environmentallists caused the spill? >> i don't agree with the poppycock comment. >> you don't think that's poppycock? >> no sir. >> maybe we don't end up agreeing. >> if it's not poppycock, what sit? >> i think the environmentalists

have had impact on offshore drilg. to say they have not had any impact would not be accurate. they have absolutely pushed to a degree getting further way from shore. there are many, i can tell you many -- >> but you say that 92% of the oil is off -- is deep, in deep water. and then you say that you have to drill where the oil is. but then you say it's environment environmentalistss' fault. this doesn't make sense to me. >> if i could, the -- >> i'm sorry. i know you need to go, mr. chairman. i apologize for -- i think i should wrap up here, please. >> i'm reminded on the question

that i whispered to senator whitehouse. when willie sutton was arrested, he said he robbed the banks because that's where the money is. why do you drill deep? because that's where the oil is. >> may i ask that two documents. one a letter to me from john torgon and another, a letter from a professor susan farraday at the marine affairs institute be made a part of this proceeding? >> without question. if anyone has further questions of if any of the three people

>> this was costing medicare over all about $18 billion, every year. that is billion with a "b." part of the way we pay for improved benefits was to say we will take some of that money from insurance companies. they will still be able to make money. seniors who are under a medicare advantage plan that is doing a good job have nothing to worry about. if you are signed up with medicare coverage program that

is wasting money, we will tell those insurance companies to stop wasting money. that is something i think everybody expects us to do -- over seek a program so that it lasts over the long term. >> i think the president did a great job answering the question. let us take the next one from the audience. the man in the back. >> i have heart disease, high blood pressure, and prostate cancer. i have some other chronic conditions and concerns as a transgendered person. i am allergic to some of the drugs being used to treat my conditions. i into unwise things for myself. one of the big reasons for my sister -- i am doing wise things for myself. in addition to having a good

doctor, i believe more money can be saved in medicare by directing more resources to primary physicians for coordination and patient advocacy and less to the complex organizational programs that have the same purpose. instead of buying expensive football teams, we need more [unintelligible] >> i am not going to comment on football. [laughter] are most people around here redskins fans or what? i just wanted to make sure. i do not know. this is why i did not want to talk about football. we have a navy person here. this issue of primary-care

physicians is absolutely critical. it has the promise of making such a big difference in the overall health of everybody -- from children to seniors. it used to be that most of us have a family doctor. we would consult with that family doctor who new year

>> fans make sure that we are reimbursing through medicare not just for the provisional choices -- if you are in a nursing home. -- it made a difference for my grandmother. barber is nodding. she can relate to that. those are the kinds of innovation and flexibility that we want to introduce into the

system rea. we have ongoing improvements wanted instigate of the next several years. they will not all happen at once. >> thank you, mr. president. i want to mention some specific things that are part of the new law. one is that there is a provision called the class acts, which is going to allow workers in the current workforce to voluntarily have a payroll check off and put aside some money that they can draw on later to provide the kind of residential care that is being talked about. if somebody needs to come to the house and help with lunch or give a bath or go to the bush restore, those kind of features so that you have -- or go to the grocery store, those kinds of

features. people want more choices. released grants to the community that will help governors like governor o'malley and his senior volunteer program get the word out to families about what their options are. a lot of people, particularly if something happens -- if somebody gets steadily more sick than they were in need help, many families do not know what their options are. all they know about is a nursing home. part of choices knowing what is here in maryland and around the country. these will be counselors who can meet with family members and the talk about where the options are. there are a whole series of medical strategies in the bill that provided for wraparound care once a patient leaves the

hospital. home health teams where they do not need to be in a full-time residential care facility, but they need some follow up. did you fill your medicine? are you having any problems? are you experiencing any troubles? the bill has a lot of features that i think will make the kind of choices much easier for people. and the care giver acts -- there is a program now that the president and vice-president are moving forward that will provide for benefits for family members to get help providing for those care services. in this time, it is tough. people are running out of money. as they want to help their loved ones stay at home, but i am trying to raise kids and take care of an aging parent or uncle. or i need a day off. i need some help going to the grocery store.

there needs to be care giver money, knowing that 80% of long- term care services are provided in communities by loved ones. they need a little bit of help. the system is going to get stockard to give those choices across the board. i think that is good news for americans. yes. police say your name, that would be great. >> i am a senior citizen who lives in maryland, silver spring, maryland. >> nice to see you again. >> thanks for the opportunity to be here and ask this question. i am asking on behalf of my children who are in their late 50s and 60s and my grandchildren and great- grandchildren. i heard from some of my friends who spread the myth and are against the health care bill in

the matter what it says. they told me about the death panel which is now dead. [laughter] one of the things they bring up -- and i have heard this same argument in 1965. in providing medicare, we may not be concerned with this at our ages, but ever children will be with the program the way it is, medicare and social security will run out of money shortly. that concern is not so much for me but my children and grandchildren. >> it is a wonderful question. let me talk just about the finances of the health care bill, medicare, and i will groschen social security in this. we have a genuine, long term problem.

i can describe it very simply. the population is getting older. you will see a bolt in the number of people using medicare and medicaid. more recipients fuel workers to support those programs. we have more money going out and less money coming in. that is going to worsen over time. that has nothing to do with the health care bill. that has to do with health care inflation, the cost of health care each year it is calling up much faster than overall inflation and how best wages and taxes are growing. you have this gap between how much we are going to need for medicare and social security versus how much is actually coming in to the programs.

that has to be fixed. one way to fix it would be to say we are going to cut benefits. if there is going to be a gap between how much medicare is going to cost and how much we actually have, we say, we will have to eliminate some of benefits. you get a few of prescription drugs, pay higher copays, certain procedures will not be covered, or maybe some people will not be covered, or we will raise the eligibility. there are a bunch of adjustments that could be made that come down to cutting benefits. that is one way of dealing with the rising costs of medicare. another way, which we think is the smart way, is to say, where are we getting good value for

our money? where are we not getting good value for our money? how can we design medicare so that we are reducing the costs from skyrocketing and people are getting better care? are there ways that we can do that? can we have one test instead of a five tests. have that one test e-mail to everybody so that medicare is not paying for five of them. can we arrange that because we have a good primary-care physician, you make one visit to the doctor's office and all of the specialists come to that one office as opposed to you having to make five different visits? are there ways in which we can use best practices for certain diseases so that we are catching them sooner? it is cheaper to care for them when you have really gotten sick. what we have tried to do in this

health care bill is see how can we make the health care system as a whole smarter, more efficient for everybody, including young people, not just for seniors. the help you are when you are younker, odds are, the healthier you will be when you are older -- the healthier you are when you are younger, chances are, the healthier you will be when you're older. if we can do that, we can control the cost of medicare, and it will not go bankrupt as quick. a lot of those changes are what we introduced in our health care bill. in addition, the health-care bill overall, because of eliminating some of the subsidies from the insurance companies i mentioned, it will save $1 trillion out of our

deficit over the long term. that is a lot of money. so when you hear arguments out there that well, we cannot afford this health care bill, the people that are saying this -- according to the budget office, this will reduce the deficit, reduce costs by making the system smarter and more efficient. that means that medicare will be there longer. the one thing i want to say about medicare and medicaid is this health care bill alone does not solve all of our problems. i do not want to over-advertise. it is very hard to change a health-care system that involves millions of patients, tens of thousands of doctors, hospitals -- all of those systems across the country. trying to manage that from the

top is too hard. we tried to create new incentives, find out who is doing the best of treating what. advertise those best practices that others can start adapting them so that over time, it trickles through out the system, so that the system overall it's more efficient. that is going to take some time. it will not happen overnight. it will happen over the course of a decade. that is before we can solve this problem overall. please tell your friends that the long-term fiscal implications to medicare -- the only way to fix those is to bend the cost curve, make health care more efficient. the other alternative, which is often presented by our republican colleagues is to [unintelligible]

the system. that is the main system that was presented in the debate in terms of saving medicare. it means that we will give you a set amount -- hypothetically, $5,000. go buy your own health insurance in the private market instead of getting medicare. think about it. you get $5,000 and the cost curve is $10,000. that comes out of your pocket. the next year, the costs are $12,000. maybe they gave you an inflation adjustment and you get $5,500. the cost for the same quality care is different. there is an easy way to make it look like you are solving the problem. you just dump it on other people. what we are trying to do is actually solve the problem by making the health care system more efficient. that is going to be harder, but it is more fair, just, and keep

the commitment of the promise of medicare for years to come. >> thank you, mr. president. operator, we have time for one more. >> your next question comes from las vegas, nevada. >> mr. president, i am a retiree who is a member of the and a national member of seniors of allied troops and i was drawing my health insurance from cobra. the federal subsidy from my employer is in danger of being this continued. they may not offer coper if that happens. what am i supposed -- cobra if that happens. what am i supposed to do especially as my wife is dealing with serious health issues. >> you do not qualify for medicare?

you are getting cobra because your employer -- you are not on the job right now? >> correct. >> here is what happens. because of the terrible recession we are in, we knew a lot of people would be losing their jobs. when i took office, 750,000 people per month were losing their jobs. because of the recovery act and the great work that congress did, we of gaining jobs again every month. we still have an 8 million jobs hole created from the recession. that will take time to fill. you have a lot of people like this caller -- a lot of people who were laid off, who are not only struggling to pay their bills, but they are in danger of

losing health care because they lost their job. there has been a program called cobra. the idea is that by law, and you can keep your health insurance, even if you lose your job, but paying the premiums. if the premiums are $1,000 per month, now you have lost your job, so you have less money -- a lot of people could not afford a cobra. one of the most important things we did in the recovery act, and benny people do not realize is, but it is important to many americans is through the recovery act, we said, we are going to subsidize 65% of the costs of what your premiums were, so you can keep your health insurance, even as you are looking for a job in trying to get back on your feet. if your premium is were $1,000 a

month, now it is only $350 a month. we have sustained that for one year and a half. we think it is important to sustain it for another six months, because there are still a lot of people out of work. the economy is improving, but the unemployment rate is still high. this is being debated in congress right now. the answer is, what we need is to make sure that congress follows through on its commitments to go ahead and maintain cover until people are working at a higher rate again. that is not a long-term solution to his question. the problem is that for a lot of people like dennis, once cobra ran out before this crisis, they were out of luck. you did not have a job, you did

not have health insurance. it was expensive. if you are not part of a big pool that can negotiate with insurance companies, they increase your rates in you are paying 20 or 30 percent more than what you would be paying if you were working for a big company. in some cases, you have a pre- existing condition, you cannot get insurance at all. some of you have been through this. some are going through it right now. there are early retirees that are not yet qualified for medicare, but they lost their jobs and have enough savings to support themselves. they do not have enough savings to pay these huge medical bills. the entire idea behind the health reform bill is let you -- let us put you in naples to you get the same advantage as

someone else. -- the same pool so that you get the same advantage as someone else. or s another example, if you get a great deal -- the the way the health care bill is instructed is this. even after cobra -- if somebody like dennis could sign up to be part of a pool where they got the lowest rate possible -- kathleen sebelius would oversee these policies offered. you would have a choice of plans. it would not be one size fits all. if dennis had a bigger family and wanted to have a certain

kind of better insurance, he could pay a little bit more. if he was single and feeling healthy, he could have a cheaper version, but he could get the benefit of being a part of this big pull. that is the main concept behind -- pool. that is the main concept behind this health care reform bill. we will do our best to provide subsidies to help people pay for their insurance. all of this does not go into effect until 2013. how come it has taken so long? it is not just a question of money, but also setting it up right. we are talking about 30 million people getting insurance.

you have to set it up in a way that is efficient and not subject to fraud. we have to do it right over a certain number of years. by 2014, what you are going to see is a situation where somebody like dennis, our caller, even if his coverage has lapsed, he will have the confidence and security that he can look after himself and his wife when it comes to their health care needs. that is something that has existed in every industrialized country in the world except for the united states, up until this year. think about that. we are the wealthiest nation on earth. every other country has that basic security, except for us. we did not do anything radical.

this was not socialized medicine. we said, we will fill these gaps, so that everybody has some security. you have no apparent out of their who is thinking, i am not sure i can afford this. i cannot afford to take watch out to the doctor, even though she is not feeling well. we do not want people to think they have to go without health insurance because they lost a job. if they had a pre-existing condition, if france who has a friend stricken with breast cancer -- if she were working and tried to get insurance right now, she may be prohibited. she may not be able to get health insurance. that is not right.

that is not reflective of the values of our country. that is why we are going to fight a system that does not work for the american people. thank you so much, everybody. [applause] ♪

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[unintelligible] ♪ [applause] >> here is what is coming up this morning on c-span. questions from members of parliament. candidate speeches from last night's primary election winners. that is followed by the washington journal and live coverage of the u.s. house. >> we have three new c-span

books for you. abraham lincoln, the supreme court, and his burial in a tune. there is a prospective bob -- to order, go order c-span.org /books. each one is also a great gift idea for father's day. >> average coverage of politics around the world continues with the australian parliament question time. the prime minister defended plans to raise certain taxes and the foreign affairs minister was asked about the use of an australian task force by israeli officials. this is 20 minutes.

>> all following last week's announcements instead it has placed a couple of projects on hold with up to 30,000 jobs, we have the day's announcement from a real tent show a strong expansion plan has been put on hold -- rio tinto's expansion plan has been put on hold. i asked the prime minister, how much damage will the australian economy suffer before they back down on these attacks on mining?

>> the prime minister -- >> i thank him for the question. mr. speaker, can i say to the leaders' opposition that there were things around the nation about the impact on the offshore mining industry at that time. that was a tax on profits. every economic analysts is a more efficient tax than a tax on volume. [unintelligible] the product in question had been placed on hold. please note a few paragraphs in the austrian newspaper that

shows there was a delay of the project was labeled a political statement more than a genuine set back to the company's planned. it says that they had not -- that one project would be completed later this year. can i also draw attention to written statements that have been made concerning china? the opposition will know there will be many, many statements by many, many companies, all of, may have this in common. they do not want to pay more tax. mr. speaker, this government believes it should deliver a fair return for all australian and all those that depend on this text for improving our infrastructure. we want a fair return on this to trim down the taxation burden

for australian businesses. this reform has been projected to bring about an increase in mining activity by 5.5% as well as bringing about other safe reforms and incentives for the australian economy at large. [unintelligible] >> my question is to the treasurer. has the average tax paid by the mining company compare with that on our economy? >> i thank the member for that very important question. we were having a discussion about this through question time today. what the government has done is to outline a plan. the system repairs -- applies to -- applies to non renewable resources. there is the basic understanding

as to why this act should be replacing loyalty. -- that is there as a hard for eight non renewable mineral resources. -- a non-renewable mineral resources. once it is dug up, it is gone for ever. that is why mining companies must have high royalties. royalties do not give to the australian people the value they deserve. they have not been giving it to the australian people, the values they are due in recent years. even the mining industry to increase the charge for the underlying value of those resources that are 100% owned

by the australian people. even the most extreme elements are acknowledging it as a profit-based tax. the only people who do not acknowledge that are the liberals and national parties. the treasure came before and talked about effective right across various industries. he does not seem to understand that the only industry in the country that gets access to a non-renewable resource is the mining industry. none of the other industries get to this. >> order. order please. wha>> he does not understand thr needs to be a special-charge,

which is different from company tax, that is the austrian people the value that they own as 100%. they do not understand it. how can they run an economy or country? we know what a disrespect they have for their selves, because of how they treat the mining industry. >> the prime minister before was talking about acquiring certain things. a report was put out today. he said only the most naive investor could have imagined that [unintelligible]

-- >> order. >> an effective price that has to go. they want to continuously charge this, because they do not have the guts to stand up to mining companies and say that austrian people deserve fair value for their resources. that is where we get to the future. this reform is about economic reform for the future. we want economic prosperity for all australians -- australia's in small business and large business. -- australians in a small business and large business. that is what this reform is about. australia needs to go forward

and that is why we need reform. everybody in industry knows that the mining industry get access to generous concessions. the mining industry should not run around the country and produce tax rates as high as 58% -- it clearly does not. it is possible that companies will pay more, and many will pay less. we have a fair proposal that will deliver a fair budget to the austrian people.

they have demonstrated how they do not understand the national interest of australia. >> why has the government follows the convention of not commenting on this intelligent measure? are there risks to not following this approach? was the minutes of the foreign affairs has the call. >> thank you, mr. speaker. i think the member for his question. [unintelligible] >> order. the question and has been asked, and is in order. please respond to the question.

>> thank you, mr. speaker. it goes to the protection of our national security interests. governments do not comment on intelligence matters or speculate on operational matters. this has been the case for many years for obvious national security reasons. one does not comment or speak. they have had to adhere to this. they made a correct statement last night. as has his press -- predecessor. he respected this principle. he said, i followed the longstanding practice of not commenting on intelligence and security matters -- a very sound principle.

at about the same time, i will never walk away from this point, no responsible cabinet minister in our country is going to get into the game of talking publicly about the operational side of our intelligence agencies. it is a very clear risk to our security when this fundamental principle -- a very severe risk when this principle is breached. we have seen a very serious breach of this principle. in an interview, the person made a very interesting statement. it will not be the first time that another country and had 84 -- i would include in that austria.

about 12:30, one person from fairfax recorded an interview on camera. that was yesterday. in that interview, she said that australian intelligence agencies for the second time in monday, she broke a fundamental principle of another, or speculating about operational measures regarding security concerns. austria is not the only country in the world that is used forged passports for security operations. is this what -- australia is not the only country in the world that has it used forged passports for security operations. [unintelligible] i urge members to watch the video.

this was not in inadvertence. this was with a knowing smile that she was about to deliver something that was exclusive. i urge all members to watch the video to see the calculation they broke for the second time in one day the fundamental principle. i have been critical of the opposition always for the inappropriate response for the use of australian passports -- for the failure to stand up for the abuse of cover sovereignty and our national security risk. this, mr. speaker, is qualified as indifference. this is twice the delivered breaching of a fundamental principle for an national

security as far as this country is concerned. i said earlier that she is not a fit and proper person to sit around the national security committee of the cabinet. she is not a fit and proper person for this charge at all. this is a serious matter. there is now an obligation on the part of the opposition to state clearly and unequivocally that this is a fundamental principle to adhere to. he would carry this out as his predecessors have done. and there is only one way he can show his adherence to that principle. he must indicate publicly that the conduct of the leader is that her conduct was completely unacceptable. this is so serious a matter that

the leader of the opposition must acknowledge that her conduct was unacceptable. she was in serious breach of fundamental principles. it put our national security interest at risk. >> according to the prime minister, what do figures show about the australian economy? >> thank you, very much, mr. speaker. it deals with the strength of austria, including the northern territory which has been effectively represented in this chamber. mr. speaker, i believe there is nothing more fundamental than to keep the economy strong. if you have a strong economy, you can live up for the aspirations for working families and put in place the

measures you need to secure the future for austria. we have released -- for australia. the gdp has grown by .5% in the march quarter. the economy continues to be the envy of the developed world. and we should be mindful of the fact that many families in the australian community and businesses are still finding it very tough, given the nature of the global economic forces at work still on australia. the australian economy continues to be the envy of the developed world. the growth has been 2.7% over the year. this compares to .4% for new zealand, 2.5% for the united

states, and .5 % in the europe area. this becomes an even more stark comparison if we compare the economic growth performance since the crisis began two years ago. these figures are worth reflecting on. it has grown by 3.5 percentage points. gdp has fallen by 5.5 percentage points in the united kingdom. in the united states, .9 percentage points. does the leader of the opposition remember his model of new zealand? it has had five consecutive quarters of negative economic growth. from the man who said he could never make