what can the workers at united and continental expect if the combined workforce and route structure? while management has provided information that otherwise is publicly available, management has not been forthcoming about critical and future business plans. i call on this committee to compel united and continental management to provide the information on their plans for correct united, continental employee based and hub operations. in addition to the proposed merger, united is the architect of a new global alliance revenue sharing scheme. they have contract with aer lingus to operate an international route with them using their aircraft that employ eight flat antennas from a third-party operator. we call on this congress to stop this type of so-called joint venture scheme by enacting a provision. we call on you to not let united

and continental management use this merger as a vehicle to outsource more good, middle- class jobs. . >> we will not allow the negotiation process at united to be delayed as a result of this merger. the employees at united airlines make the sacrifices to keep the

company flying it is time for the companies to share in those rewards. while much will be made over the coming months about the impact of this merger on consumers and communities, i urge you to remember the hundreds of thousands of airline employees across this country. keep us in mind as you review this merger and the impact that it will have on our lives and our families. we are the ones that have the most to lose and we have the least protection . i think you for your time and i look forward to your questions. >> the chair now recognizes mr. roche. >> thank you, chairman costello. i am the general vice president of the largest airline union in america. we represent employees that

could be affected by this merger. we represents flight attendants, expressjet, a regional jet of continental and fleet and passenger services at united airlines. we echoed chairman oberstar statement when he wrote the department of justice stating that this merger will move the country far down the path of an airline system dominated by three mega carriers. if united and continental merge and another domino in a chain of mergers will fall and there will be a strong pressure for further consolidation. already, the president of u.s. airways has announced that if this merger goes through, that is airline will soon follow suit. we cannot looked -- the airline

has been in turmoil. we argue against deregulation. deregulation has had disastrous effects. in 2007, a housing meltdown was a result of corporate greed. looking at the news reports about this catastrophe in the louisiana and the gulf coast, ruining the lives of the people down there, we can tell the deregulated industries only operate in their own best interests and not in the interest of consumers or other employees. it is too vital and industry to lead to its own destructive devices. it is clear that the airline industry has failed to deliver

on promises of a stable, prosperous course and it will continue the downward spiral. albert einstein said at the insanity is to do the same thing over and over again and expecting same result. -- and expected results. -- and expect different results. the industry has demonstrated susceptibility and i along with others were prepared to concede. the industry is crying out for limited regulation. does anyone believe that only having a few airlines in operation, each with market control would benefit the country? if one of these carriers should fail, how would this impact the

country. there are serious concerns about the viability of a combined carrier, but the industry in general. although we have met both airlines, we still have many questions unanswered. we estimate that the united merger would start out with $13.8 billion in debt. what is the bill yet -- what is the plan to deal with that debt structure? closing hubs cascade of job losses and continues throughout the communities. will this destroy competition and harm consumers? as details about combining characters -- carriers emerges,

we ask congress to help determine if this transaction is good for employees. the carrier has admitted that homogenized pensions are a complex issue, and although they have given it much

>> my first recommendation, as foreshadowed by the gentleman from hawaii is that congress

ought to hold retrospective hearings on the merger. as an accomplished its objective? has competition been adequately protected as the american consumer looks as if it is better off or worse off. there is no question that the answer would be invaluable in our efforts to predict what the implications of the united continental and mayor richard and to be. it might make sense to the level of the consummation of this merger until it fully credible merger of -- study of the prior merger this is an industry in which there be a of expanding a large network may offset the

network. the industry is already concentrated on a national basis, but this generalization might under estimate the market power that is present at most hubs on most routes. a merger of this magnitude will, in all probability, lead to at least one more merger of similar size and that will leave the u.s. with three national network carriers, plus southwest. for, this merger will likely lead to rationalizing capacity by closing or scaling back hubs in the midwest which would harm a significant number of consumers. these considerations require us to ask whether the three national networks that will emerge from this process will be

sufficient to provide a satisfactory range of choice and service and sufficient competition to keep prices close to cost. standard antitrust analysis focuses on horizontal overlaps between airport fares. if an origin and destination route is served by only a few airlines and of a merger would leave the market more concentrated, then the boj will likely and properly require a divestiture or some other arrangement with respect to that route. this is necessary, but it is not sufficient. especially if we look at competition among the system and not within specific repairs. much has been made about low- cost carriers and preserving competition. southwest influences prices

wherever it competes and southwest is perceived as a potential competitor, but southwest and the other low-cost carriers have found success by competing in directly rather than directly with the networks. they are called low-cost carriers because they do not bear the cost of large networks. they do not offer the same type of one-stop shopping, frequent flyer benefits for airport amenities as network carriers. so, decisions about the future of domestic transportation should not rest on the concept that southwest will always play its current role. its strategies could change. its management could make mistakes. it could choose to relax under the price umbrella of a tight oligopoly of network carriers. the ultimate question is whether the public would be satisfied with three domestic and three

global air transportation systems. there is little if any empirical knowledge that says how many systems are needed to provide a workable degree of competition. there is substantial data that suggests that competitive problems increase as the market becomes highly concentrated. there is substantial experience with domestic air mergers that suggests how difficult they are to execute successfully. how few efficiencies have resulted from mergers and how minimal injury has been at the network level. to the extent that there is doubt about the united continental merger, it should be resolved as a public policy question. are we willing to interfere with private business decisions in order to preserve the few competing systems at the possible expense of what ever efficiencies might realistically be lost.

we suggest that the magnitude and certainty of these proclaimed the efficiencies should be analyzed with great skepticism and must be weighed against inefficiencies due to other economies of scale and scope, the costs of consummating the merger and the reduction of competition arising from the merger. from the public perspective, there should be no reason to rush to a decision on whether to allow united and continental to merge and it would make good sense. thank you, very much. >> thank you. >> mr. chairman, the united continental merger and the ongoing consolidation process creates for major problems for consumers and industry efficiency bearded i believe there is a common cause that needs to be addressed.

problem #one is documented in exhibit 1 in my testimony. it is the overwhelming evidence that it has already created consumer welfare losses in excess of $5 billion a year. these consumer welfare losses will be much worse in a few years. the second problem is that the well planned a three stage process would replace business so that a cartel of three alliances control 80% of the overall u.s. aviation market, including 100% of the trans- atlantic and trans-pacific. in the north atlantic phase one, the dot and exclusive control over the three companies. in phase two, it forced the

other airlines out of his mysterious face three began last year with the japan case that was designed to create the same type of multibillion-dollar consumer welfare lost that we have already seen on the north atlantic. continental/united is an integral part of all three faces a cannot be seen as an isolated event. problem three is the power threat. united continental will not cause immediate price increases in the local chicago and houston market, but consumers are at risk. carriers cannot survive without a strong, secure source of international traffic that is at the heart of their business model. when dot gave the company's control over this traffic, the dot issued a death warrant. the delta and noothwest merger eliminated no. 4 and is

designed to cripple or kill u.s. airways who has no hope of independence survival, even though it is the most efficient of all the carriers. the destruction of competitors are market power of uses every bit as serious as the cartel pricing you see in international markets. consumers face the threat of oligopoly of service reduction in hundreds of smaller cities once this control of the market shrinks from 6% -- up six carriers to three carriers. problem #4 is that this cannot be decided on the grounds because they are motivated by market power. no previous merger between large airlines has ever been -- ever produced lower operating costs.

no previous merger has ever produced large enough synergies to justify the enormous implementation costs of these mergers and the vast majority of airline mergers have been financial failures. there is no evidence that the pr claims about the delta gas northwest merger is true. the single root cause of this is that the dot refuses to obey or enforce longstanding antitrust law. antitrust law is not a barrier to any consolidation that can demonstrate public benefits. it does not create or enhance artificial market power, but the evidence in every previous case has been either nonexistent or fraudulent. the dot refused to conduct the required power testing in any previous case.

at the dot has not only ignored the evidence of growing anticompetitive pricing but i have documented, but they failed to collect any evidence whatsoever. the dot made the false assertion that the north atlantic is a competitive market even though there has not been any entry in two years. this is based on fraudulent evidence violating the merger guidelines for verifiable case specific cases. each case relies on a completely false dot claims that eliminating competition actually reduces prices in certain markets and thus so automatically, regardless of market for competitive conditions. the committee in congress must

addressed this core problem of evidence based antitrust enforcement and that it means that airline competition is no longer being determined by investors and consumers in the marketplace in accordance with the airline deregulation act, it is designed by bureaucrats. the committee cannot allow this merger review to proceed without full assurance that there will be rigorous independent scrutiny of the course energy and market power claims and it cannot proceed until the dot notification of antitrust enforcement has been clearly rejected and the irreconcilable split that exists between the dot and boj approaches to the trust has been resolved. the committee must intervene in the current case where the dot has signaled that they and have no intention of enforcing the law and plans to rubber-stamp a massive reduction in

transpacific competition that will weaken u.s. competitiveness and use multibillion-dollar consumer price increases in order to protect inefficient foreign carriers such as japan air lines. thank you, mr. chairman. >> the chair will now recognize mr. mcgee. >> my name is william j. mcgee and i appear before you for consumers union. i think you for the opportunity to express our concern about the proposed merger between united airlines and continental airlines. just as we have seen with banking and other businesses, we see the airline turning into an oligopoly. in this environment, financial struggling characters reverse that argument, claiming that united and continental would be too big to fail and they would be right.

when the u.s. airline industry received a bailout in 2001, it was argued that airlines were essential to the economy and defense. what we have been witnessing is an incredibly shrinking airline industry. in less than 20 years, we will see the demise of seven major brands in the united states. while others can speak to the adverse effects on labor and travel industries, i will focus my comments on the adverse affects upon passengers. there have been potential threats to consumers. we cannot predict how the merger will affect consumers, but we can examine the historical record to see how passengers were affected by american's acquisition of twa is assets -- twa's assets.

unfortunately, the record for consumers is not good. we have identified other key problems that have emerged. more details were available in my written testimony. historically, we have not seen a merger among major carriers that has not led to reductions in service. what we do know is that major airlines led to flight reductions. there was a reduction in total passenger traffic. america west has shrunk as well. this has already experienced setbacks. consumers are losing the opportunity to vote with their

feet where there is no effective competition. it seems apparent that the united/continental merger would cause cities to lose service. there is a high probability that other cities would lose service. a july 2008 report showed that mergers and acquisitions would cause fare increases. there is no guarantee that they will do so and in a low-cost carrier, prices fall only on selected routes, but not on all routes. airline mergers tend to be contentious. a clash of corporate cultures is guaranteed.

this means that two workforces will of jockey for position on seniority lists and it will lead to employee morale issues. greater concentration of market share has a negative affect where incumbent airlines cut others out. since deregulation in 1978, we saw how one airline would do a fare increase and others would match. this same principle applies to introducing airline fees and even some service initiatives. in a smaller industry, the likelihood of a rival carrier resisting a new fee will dissipate. with greater concentration, there is a greater threat of

travel disruptions. analysts estimate this would control a fifth of domestic airline fees. since the approval of the delta/northwest mergers, some proponents have argued that fair is fair. that is why executives from american airlines may soon appear before this very committee, seeking the same. this sudden leapfrogging in the airline ranks has not been due to genuine growth. it seems only fair to ask what the end game is. at what point will this subside. we are told that the domestic airline industry can only support three large airlines. further consolidation says that

there should be more discussion about the airline industry goal and how it affects consumers. thank you, and i look forward to your questions. question thank you, mr. mcgee. >> and would like -- we have heard and arguments about why and why not merger should take place. the balance of these arguments and the resulting policy impact of the market sets the cost of capital for the airline industry. to help you with your analysis, i will provide you with a perspective from the financial markets. so long as airlines source their funding from the capital markets, the boards of directors and management teams have responsibilities to their shareholders. while managing costs and delivering products is

important, making strategic decisions that permit their companies to adapt are also critical. the airline industry's need is to consolidate. the performance of the industry has been abysmal. the regularity of loss and failure and goes on rival in corporate america. for example, looking at the past decade, we can see that the industry has had an aggregate loss of $68 billion and there have been 130,000 jobs lost and benefit pension plans were offloaded to the pension benefit guaranty corporation. the average age of the fleet has increased by 11 years. the body of evidence supports the need for profound change.

the leadership at united and continental are trying to address this need. the poor financial performance can be attributed to a cost structure, high barriers to exit, fragmentation and fierce competition from low-cost carriers and well funded, international characters -- carriers treated -- carriers. over the past year, airline asset backed debt has garnered yields over 10% and one that transaction so united. every network carrier was diluted to shareholders. to this day, it remains well in the double digits because of the over leveraged balance sheets. this can only be created when

the return on capital exceeds its costs. this is a fundamental financial goal that the airline industry has never been able to achieve through a full cycle. consolidation is not a cure all, but it is self help. while the united/continental merger is far too small to significantly change the dynamics of the industry given that the to characters -- the two carriers and have route overlaps, and their focus on creating synergy is a step in the right direction towards financial stability. labor costs rise and the scale of the combined entities should enhance purchasing power for suppliers and the global network should be more attractive. in addition, although they may achieve more customers, it would be wrong to conclude that the

merger would stop the domestic yield deterioration that has been going on for the last 30 years. this is due to continued growth of low-cost carrier market share. over the last 10 years, market share has dropped by 33%. in conclusion, as you waive the policy objectives, you may have airlines and a better position to generate a return on investment capital in excess of their cost of capital. this will contribute to how the market handles the rate of return to justify growth. the ability to do generate more consistent return is the path to a longer term financial stability. only then will there be a solid foundation for increased capital expenditures, rising wages and

increased service. thank you. >> i would like to thank the witnesses for their testimony. we will now move on to questions and i will begin with the distinguished gentleman from minnesota, mr. oberstar. >> thank you, mr. chairman. i want to join the compliments to the panel for their splendid testimony. vice-president roche, your very personal witness, i remember your experience well. st. louis did in the out as well as kansas city and the result of the acquisition meant that the sale of their nonstop service between san louis and london heathrow, which mr. icahn sold to american airlines for $400

million. it should never have acquired value in that marketplace. this is given in the public interest. this is not for personal enrichment of the carrier. american made that money back in about a year. st. louis lost its connection to the world beyond. a lot of people lost their jobs in the process. ultimately, when twa was absorbers' by american, they now have to beg o'hare for service to the whole country. that is the or encapsulated view. too big to fail.

this would control one-fifth of the domestic market share, $115 billion available seat miles. that is enormous capacity. i asked several years ago and some of you may recall this, why anyone would spend $150 million on may 747 win for $50 million, you could buy a whole fleet? do you remember what i made reference to? they acquired nw for $50 million. they bought a whole fleet of 7476. -- 747's. there were $2 billion in debt

and less than 1 billion in equity and put it towards the brink of bankruptcy. this merger mania, they spent six months looking for other carriers to acquire until they realized they needed to manage an airline. all of you who have been captains and flight attendants for maintenance personnel have seen this happen in the industry. it leads to neglect and too difficult labor relations and to lower quality service. mr. fore, your testimony said that you predicted along with many others that a merger for delta and northwest would lead

to an merger between united and continental. i could just the opposite of your testimony. that is what you meant. that is what has happened. it isn't it more likely that the next shoe will drop if this is approved an american and u.s. airways and iberia and check airways and j. l., you have three mega carriers. right? >> right, on the national scene, we have three airlines operating under a variety of brand names. i have been told by someone in the position to know that in those alliances, once there is antitrust exemption, the multi

companies can operate as a single company. the reality is that we're down to three international global companies, supposedly competing against each other. to the extent possible, they avoid head-to-head competition domestically. >> they are carving up the international pie. >> with antitrust immunity, which they are sinking -- and they are seeking, and they will oncwant, ana want antitrust immunity for their alliance with united. there is no competition in an anti trust -- antitrust alliance.

you will see fares go up and service go down and there will be more traffic concentrated on the most profitable routes and the smaller sized hubs will give further downsize. that is what happens. -- will give further downsized. at that is what happens. -- will get further downsize. -- downsized. this has led to baggage fees. $3.8 billion in baggage fees, half of which are attributable to the gulf operation. the next episode will figure out how to charge us for printing out our boarding passes at home and charges for our own paper that they use. there are very good at this.

they are very good at this. they will learn to squeeze more money out of this turnip that they have in their hand. i am determined that that will not happen. stable and profitable does not mean ever bigger and fewer. who was it that said it airlines are looking for stability and profitability? that does not mean that there should be fewer of them. they're always talking about rationalizing capacity. rationalizing capacity, consolidating, too much capacity in the market. that was not the purpose of deregulation. we did not say that we were going to kick the government out of pricing so that the airlines to consolidate and have more power, we wanted more

competition in that marketplace. didn't you remember that you had more options and more choices in the previous era? have the machinists kenyan and the asa ever had to face each other in a consolidation? not yet. >> not yet. >> i am doing my darndest to make sure that that outcome does not happen. in a hearing in this room in 1990, and i was chair of that aviation subcommittee and mr.

petrie was on the committee and i asked the secretary of transportation about a hearing on campaign finances and mergers and acquisitions and i asked how many characters -- how many carriers really constitute the marketplace. the secretary said that he thought that it was too. then he said that maybe it was 3. that is where we are headed. that is not good. what i hear from united and continental and the rest of them is that there is plenty of competition. just look at what southwest does for the marketplace. they drive down prices. they do not fly there.

they're not in the world competition. you are all right. thank you. >> the chair will now recognize the gentleman from -- >> thank you 0 for your testimony. it is very helpful. i guess i have a couple questions. one is for mr. strand. i have heard of up entry into the aviation industry. you can just lease a plane and have access to an airport and get into business. what re the airlines you refer to? >> that refers to the chapter 11 process.

it was basically a failing business model. i think you have heard a lot about destructive competition. that law is something that keeps the company alive and keeps capacity in the market that was failing at capacity. that is what that is. when you analyzed the industry and its competitiveness, when you stand back and look at it, there is this very profitable industry for a lot of companies such as auto rental companies and the hotel business and all kinds of people. but the airlines do not.

for some reason, the center of law seems to be a figure that is generating profits for everyone else. what is different about that segment >> there are several factors that contribute toward their performance. the industry has a very high fixed costs structure. as we move through economic cycles, they cannot cover their costs with the revenue. if you look at the expenditures that required and are bait into these companies, the have over leveraged themselves and the

expense that they pay on the assets, it contributes to the high fixed costs structure. to finance a business, it is expensive. when you have a structure that is not generating enough revenue to cover the cost of capital, it goes up. that is the irony of all this. i think that everyone wants to see a stronger industry. the more financially stable the company is, it will provide a lower hurdle for growth. >> you would assume that if there had been a huge consolidation in industry and just a few global players, they would have more pricing power and ticket prices would go up and that would make money, but

prices seem to have been steady or even declining and appears to be a better buy for the public. what is wrong? if you listen to what the companies are arguing, they think it will get a better share of the corporate traveler which is a higher yielding customer. when you look at the competitive structure, from a financial stand for -- a standpoint, there are companies that come and go and internationally we have seen consolidation in europe and there has been a lot of consolidation with air france.

the company has to compete for international travelers against those four entities. i think that is something that we should not ignore. >> thank you mr. p trice. -- thank you mr. petrie. i raised the issue of what would happen with the employees and judging by the prior experience with airline mergers and what has happened to employees and

mr. roche rowers this experience that he has been through. i understand there is a lot of uncertainty about the future of the merged airline. i have also raised the point that i made that this their word -- that i may if there were agreements with the unions, it would make this a much to the merger being approved. i want to know, thus far, have you been at the table as far as the merger has been discussed?

what have you learned? what are the answers that you are waiting for? we will start with capt. morrison. i want to know where -- what has happened so far and what you want to see happen. >> i would begin by saying that we started the process. we have negotiated and expense reimbursements commission. we do not think employees should have to pay for the expenses of the merger. it is the ceos that wanted to merge, not the employees. it was a step in the right direction, but a very small step. we see indications that the management is in this -- interested in doing the right thing, but until we actually see what they propose, we are working on a transition agreement and that would be more

ave type of agreement. whether we will get to that quickly or not is the indication of how will this merger will go. if we do not get too quickly, and to " capt. peers, if management does not learn the word yes, then the merger will be unsuccessful. as we proceed down the path, we see great opportunity here to lead, but we cannot lead by ourselves. we must lead with the management of the company to make it a successful merger. we see the right steps, but time will tell whether those steps are really taken. >> i would agree with capt.

morris, so far, since may 3, when the announcement was made, we have seen steps by management that would lead to cautious optimism in terms of the information sharing and in terms of transition agreements. i would say that the t w o pilot groups are working. we would do our due diligence and create an environment for success. it has to be consequential order. it has to be a certain order things that occurred that we have agreed upon. once that is complete, we will move to the joint collective bargaining agreement and once that is complete, the job those

steps will be tough for our management groups to ensure that they are participating didn't -- in good faith. if they do not participate in good faith, then things will not progress and if things do not progress, then they do not hit their synergy. it is very much in the hands of labor. >> i am afraid that we have no optimism at all. we have been at the bargaining table with this management team on an open and amendable agreement that was reached in bankruptcy for well over a year. we have made no progress. the company has not moved on their opening proposals.

they have been unwilling to discuss with us the expense reimbursement. they have been unwilling to talk with us about what we refer to as an agreement that allows for separate operations as we work through these issues through the they have been unwilling to talk to us all about the merger, other than to provide us with information that is probably available and we could read in the newspaper. a very difficult relationship. it has not improved. nor have the executives of united airlines given us any indication that they would like to improve it. so, in the synergies that they hope to get from may combined flight attendant work force are

very far on the horizon and will not happen unless there is a change in attitude. >> mr. roach, i know that you were shaking your head immediately when i started asking questions. i'm afraid you'll have a similar response. >> we have a unique bargaining relationships. we met separately with both management teams and we as a lot of questions. they do not have any answers. they have been willing to meet and they continue to say that they will give us the answers. we are concerned about pensions. we worked very hard to maintain pensions during the bankruptcy. we work very hard to maintain a single employer plan. there is a lot of work. they have expressed that there is a lot of work.

they said that they have thought about it but have not provided answers. we're concerned about the regional partners. they operate there. we are concerned of the overall business plan. we created this monster. northwest delta are not together. they are a big problem. the morale is down and employees are not happy and air has been no integration although it is for trade in the public that there is, it that is not the case. we want to see the business plan. we want to see that this can survive. we have asked for that information and we look forward to it, but beyond the collective bargaining agreement, we want to make sure that the carrier can survive and be successful, having a good contract with no

job means nothing. we want to see this survive. >> i cannot emphasize enough how important it is that this is worked out. i will now recognize the german from ohio. >> i just have a quick question for the two gentleman who seem to be on opposing sides with respect to the testimony. if you could balance this out with your comments, in your conclusion, you said that the ability to create more

consistency in longer-term financial stability, there was a very different picture or world view that it would produce modest gains. can you balance those two comments out, please? >> when you look at returns for a company, you have to start with revenue. what is clear to us all is that the revenue has not been sufficient to cover the operating costs of the business. there have been losses and the earnings have been negative. to keep going, they have

borrowed more and more money over the years to rid as the balance sheet because more laden with debt, the cost of borrowing and the cost of equity prices. that constrains growth. >> i do not want to get into a theoretical debate, but please explain to me how reducing the number of competitors increases competition. >> i am not arguing that it does. >> ok. >> i think you have summarized my argument quite well. there was the claim that these companies say that this is good for the public and for the long- term health of the industry because it will create measurable economic benefits in terms of network synergies.

i believe that both of those planes are fundamentally false. i believe that if you look at the historical record, there is no evidence of anyone else having found this. if you look at the historical record of how networks were, you can create network synergies where you build up a large hub. you can create networks synergies in an environment where the merged carrier creates a new ability to expand and grow into new markets. i used to run these networks. i know where to look. there is no evidence in this case or from any public statement that they are going to do any of those things. on the cost side, the cost of putting these companies

together runs into the billions. we have already had plenty of testimony on the collective bargaining issue that need to be resolved. those are expensive. equally important is the integration of the maintenance systems and the safety concerns. . . .

me first introduced our

panelists and then i will say a few more words. starting from my left, john yton, a longtime litigator in the civil rights field and now director and counsel of the naacp legal defense fund. there is nobody who knows more about civil-rights and the consequences of the sreme court's civil-rights decisions than he does. next, we have ronald cass, former dean of a law school, former member of the administrative conference of united states and many other public bodies. that is his expertise. congressman jerrold nadler, who i have known for many years, a democrat from the upper west

side of manhattan. he is chair of the constitution subcommittee of the house judiciary committee and a very active player i constitutional issues. to my right, judgelemon, now retired chief judge of the u.s. district court of the northern district of alabama. he is now practicing law in birmingham. john hiatt -- jonathan hiatt is the executive director of the afl-cio, so there is nobody who is more aware of labor law issues. the supreme court has had quite a lot to say, for better or worse, about the state of labor laws in the united states. pamela karlan, who everybody knows and is indebted to for her wit and wisdom. she is a professor at stanford, where she helps direct the supreme court clinic and is a

very astute and wonderful observer of the u.s. supreme court. i thought i would start by having us talk about a case that has been kind of iconic for what it tells us about the court's approach to statutory interpretations in terms of the press disconnect between congressional intent and the way the court reads statutes. i should just say, as part of framing ouriscussion here, it is an excellent time to sort of do two things -- share two themes that will run throughout our conversation. we will take the temperature of the roberts court. it is undergoing change, obviously, but we have seen enough to draw some conclusions

in our various areas. the other thing -- theme that his panel embodies and will emphasize is the role of the judge's -- that this panel embodies and will emphasize is the role of the judges. we're talking about the primary aim of the acs, which is to push for the nomination and confirmation of progressive judges who are not going to stand in the way of the intent of the pple as manifested through congressional legislation. let me begin with that. judge clemon has been involved with this iconic case from some years back -- the case of ledbetter lilly ledbetter. he was a district judge in that case -- lily ledbetter -- lilly

ledbetter. he was a district judge in that case about a woman's right+ to equal pay. we will talk about what happened as the case made its way to the supreme court. >> my role was fairly simple. the plaintiff, when she filed the charge with the eeoc, had learned of the disparity of wages between herself and her male area supervisors during that six-month period of time. when a magistrate judge recommended that the case be dismissed as untimely, it occurred to me that this was a jury question of whether the plaintiff filed the charge within 180 days of the time that

she reasonably should have known of the disparate wages. the issue went to the jury. and the jury was instructed on my view of the law in that respect. the jury implicitly found that she did file the charge within that requisite period. >> she had not learned of the disparity until she retired. >> she had not learned of the disparity and ther is nothing remarkable about that, because the company had a policy of confidentiality with respect to salaried employees. one would not ordinarily expect that kind of knowledge to be free-blowing in the workplace -- free-flowing in the workplace. the jury was convinced that she acted timely.

was awarded all of the back pay that she asked for -- she was awarded all of the back pay that she asked for and they awarded her $6 million in punitive damages. i had to reduce that, $300,000.ely, actre to it was on remarkable to me that the 11th circuit reversed tt. it requires for the plaintiff to prove -- requires a plaintiff to prove that his or her qualifications are so far superior to the competitor that they leap off the page and slap you in the face. [laughter] so, when the circuit reversed the decision, i thought that would be the end of it, but it does -- but the supremes decided they wanted to make it a lot

of the country. the supreme court does not always have the last word. when it is interpreting the intent of congress, ultimately, congress decides whether the supreme court got it right. the congress, i think, probably decided that the court did not get it right. that is how we ended up with the lilly ledbetter act. >> that was the first bill that president obama's signed into law when he came into office. it was a majority opiniony justice alito. there was a very strong dissenting onion by justice ginsburg. you point that the private sector could retire -- the

employees pay was confidential. i worked for 40 years where nobody knew anybody else's salary and that is very common in the private sector. the majority seemed completely unaware. the reality of the workplace -- >> it is rather interesting that the present court, both the rehnquist court and the robert court, -- roberts court, seemed unaware of the concept of statutory construction, when you are interpreting remedial legislation, you did it a broad meaning, a broad liberal construction -- give it a broad meaning, a broad liberal construction, so that the objective of the legislation can be achieved. you see that in the 1960's and

1970's. now, you only see reference to that language in dissents. that is a cardinal principle that has been around for more than 100 years. >> let me turn to john hiatt. the court's recent record on labor law cases is somewhat mixed. am i right in thinking that the push back against the ledbetter decision and congress is very surprisingly rapid overturning of that -- congress's very surprisingly rapid overturning of that sent some kind of signal to the court? what is your take on the way this court has been interpreting these cases? >> i wish i could say that i thought the reactioto the ledbetter case had been a wake- up call to the supreme court that actually cause an ideological shift. i think there may be a temptation to see it that way

because of some of the anti- retaliation cases tha the court has decided. they have decided several in connection with a number of discrimination statutes. those have been coming out favorably from the point of view of the employee. >> am i right, john, that retaliation claims are the most robust and ridly growing claims in scrimination? >> there certainly have been a number of them. 88, 1981, 1982 -- ada, 1981, 1982. title ix. there have been a number of those decisions. the court has been reading anti- retaliation provisions into the anti-discrimination provisions of those statutes. the tendency to see those as the court showing a pro-employee or

pro-worker bias of any kind or reading the statute in that way is probably not as correct as it is to see the court reading a pro-law enforcement bias into those decisions. i tnk back to the first season of "the wire." that is not the season that has the glowing portrayals of the longshoren unions. that is later. [laughter] the first season dealt with drug dealing on the street. you may recall, it was only when somebody reported to the local judge that there had been witness tampering that the judge called the police chief. you then started having a real investigation of the drug- related murders. it is only when the court started seeing a threat -- seeing its own power of law enforcement challenged that it

became protective of employees. we are the fortunate been a fishery -- beneficiary of those cases. it is not so much who is being protected as it is the desire that the statutes themselves are being protected and the court's role is not being challenged. if you look at other areas where the court has ruled in the past few years on worker and labor issues, you really do not see that worker-protective bias at all. indeed, you see a number of -- quite a number of cases where the court has been willing to interpret a statute in a manner that deviates from the central purpose of the statute, in a way that projects corporations, much more than being true to the statutes court intend -- statute's core intent.

>> this age discrimination case exemplifies what you were saying about the actual impact -- however person could litigate are real case against the rule that the court -- litigate a real case against the rule that the court set out. >> in one case, the court, in a number ofisingenuous ways, ruled in a five to 4 decision, offered by justice thomas, in a way that very much deviated from the core purpose of the adea. this was a case where the court relied very heavily on hyper- liralism. -- literalistm. hyper-teralism.

-- hyper-literalism. they substantially limit the protection against age discrimination given by the adea. itveurned decades of case law and congressional intent. the law shifted the burden to employers after a plaintiff showed that age was a factor, to show that the decision would have been made regardless of the plaintiffs age. under the new ruling, the workers carry an extremely difficult burden when it comes internalyers ' decisions. they have to prove that age and all other factor would have motivated this isn't -- motivated the decision -- and no other factor would have motivated the decision.

the court is intent on making new law. the cot had no need in this gross case to reach the question of burden-shifting and eliminating mixed motive. the actual issue before the court was, what kind of evidence plaintiff needs to present in an age discrimination case? this was transferred -- that issue was transferred to a sweeping opinion that rearranges the fundamental rules on proving age discrimination. what justice stevens called an unabashed display of judicial lawmaking. we see that in a number of cases. obviously, citizens unite being a very good example of one where the court goes well beyond the issue that was presented. it does not need to reach that.

>> the gross case is a statutory interpretation analogous to what the court did in its constitutional attack on the campaign finance law in citizens united, which was grabbing an issue that the parties had not presented and running with it. >> not just mccain fine gold, but the 1907 law. -- mccain feingold, but the 1907 law. >> it is clear on the face of the opinion that it does not take a lot to realize what the court gave to the pork -- corporate sector. it was a fine grained statutory interpretation. it is not very accessible to the public. it is kind of an insider's game. it really takes the uncking of it, in explaining what it is th the plaintiff employee is

being asked to approve, and what kind of evidence they can realistically present to avoid dismissal of their claim before it even gets to a jury, which is how the game is played a lotf these statutory cases. it is worth paying attention to these statutory cases for that reason. >> can i make another point about this which shows the disingenuous of the court's decision making approach? when you compare what it did in grows and the anti-retaliation cases -- in gross andhe anti- retaliation cases, it refused to acknowledge burden shifting. the ada was comete parallel in meaning and language. they refused to attach significance to that. in these anti-retaliation cases,

the court relied very heavily on that parallelism. they presumed in t other case that ada prohibition of discrimination does cover retaliation, basing that on large part on their earlier interpretation of that same language in 1982. the same thing happened in the jackson versus board of birmingham education ccse. it happened in this section 1981 case on the basis of that same parallel language, which the court refused to give significance dto in gross. >> anti-retaliation cases are usually easier to prove, because there is some sort of smoking gun. you can show that, as opposed to a failure to hide or to promote whe the mixed motive issues come in.

it is a giveaway on the retaliation cases. it does not make up for the losses on these kind of core questions. emmy turned to jonathan dayton -- let me turn to john payton and the issue of discrimination cases, both statutory and constitutional, and ask you, what kind of concerns keep you up at ninth these days when you think about the supreme court? -- at nighthese days when you think about the supreme court? what about that decision in the section 5 of voting rights case -- section 5 voting rights case? that sll has me scratching my head. >> there are two different kinds of tensions here that have been mentioned. what does the court do with

respect to wha statute -- what congress has said in a statute? does it give proper deference to what congress has said ought to be the law? what is their role in interpreting that? does it give appropriate gravitas to congress's role? who is the final say, asudge clemon said. in the ledbetter case, it is clear that congress can have the final say. in some title vii cases, one issue can be that the court says it has the final say. in a disparate impact claim, justice scalia's concurrence is read as saying, we can choose to have the final say here and overrule congress because we think there is an overriding constitutional issue. in the voting rights act case, that tensions ever-present.

we do not have permanent victories in the voting rights act cases. we never have. they keep coming back. there is always tension between what did congress say and what difference is it owed. -- deference is it owed. even if it is owed some deference, should the court exercise its power even where it is clear what congress intended? there were two pieces last year. one was the title seven -- title vii disparate impact case. the other was the voting rights act case. they both have that tension and they are right on the surface. the votingights act case has to bb read this way. there were not 5 votes to find section roman 5 unconstitutional. if there had been, i do not --

section x unconstitutional. if there had been, there are some who were concerned about the voting rights act. where is that now? what do i worry about? we have no permanent victories. we have other voting rights act case there is one in shelby county, alabama, challenging the section. it is before a judge in the district of columbia. it will be litigated again. we will go back over this ground again. one of the things that commentators said last year at this time -- it might have been right here at this panel and in this room. it might have been pam or me. we talked about this last year. there was some concern that, evident in the opinion, maybe congresshould do something to

better shore up the voting rights act. here is my reflection on that. four years ago, we had a very important piece of legislation -- the reauthorization voting rights act -- passed almost unanimously by congress, with a really extraordinary record of findings. unbelievable hearings and findings. 98-zip in the senate. >> for 25 yrs. >> the argument last year was openly hostile to what that meant. there was a ridiculing of 9zip really means nothing in the oral argument. the idea that congress should then weighed in and fix that was what some of the commentators -- wade in and fix that was what

some of the commentators said. it causes it to sound like fantasyland. no disrespect to congressman nadler, but i do not think there is a chance that congress could take any action on the voting rights act or any other major piece of civil rights legislation in today's poisoned atmosphere. that is just not a possibility. to the extent that they thought that was a possibility, no one really credibly things that. we do not really know where that goes. i want to make one more point about the title vii cases. last year, we had a case -- the firefighters' case -- this was a disparate impact cases. the short version is that, if you have an employment practice that has a disparate impact on african americans, that is not job-related, then title vii says that is a violation of title vii.

in this case, they used an employment practice -- a test -- that look like it had a clear disparate impact, whether it was -- a disparate impact. whether it was job-related was never litigated. the fact that they took action without litigating that caused extraordinary distrust to come out of the justices in their oral argument here there were openly distrustful of what motivated newaven. in their oral -- in their oral argument. they we openly distrustful of what motivated new haven. in the chicago case, the bonafides were litigated. the test was determined to be not only racially discriminatory, with a disparate impact, but that was -- that it was arbitrary and unrelated to job selection or job

performance. unrelated in any way. that finding was not appealed or contested after therial court by chicago. we have a circumstance where the court is faced with a conceited concededly discriminatory practice. is it a violation every time it is used? in that circumstance, there was not the stame hostility. i do not want to overplay what that meant. we got unanimo opinion that i think is pretty good. the hostility that was present in the distrust of new haven acting in an area of sort of unknown behavior really ate up what happened there. the threat last year from justice scalia and his concurrents is that he threatened to set a disparate impact was itself unconstitutional -- to say that disparate impact was itself

unconstutional and to give congress no role in fixing that. those concerns are not present this year at all. the backdrop of ledbetter played a clear role. we have a poisoned congressional atmosphere. i am not sure congress would step in and change things. these are battles we will continue to have. ngress versus the courts. who has the final say? how'd we litigate these things? how do we make them -- how do we litigate these things? how do we make them work out? i worry that congresss close to passing a bill on crack cocaine that is being heralded as a great advance, instead of a 100 to one disparity, we will have 18.5 to one disparity where the record says that there is one chemical that has the same effect.

one is called crack. one is called cocaine. most of the people charged on the crack side are african- american. one iwho is charged on the cocaine de is caucasian. this is on the face of the discriminatory statute. we will have to reverse sides. i will say that i do not think congress is entitled to any difference when they pass something that is only last discriminatory -- not good enough. >> i want to back up for a minute on the new haven firefighters' case. i think people may not be fully aware of how outrageous the courts -- or at least justice scalia is a reaction to the claim that -- justice scalia's reaction to the claim that disparate impact was based on

congress itself. it was congress itself, in response to earlier supreme court decisions, that codified what had been the early title vii cases that made disparate impact a claim under title vii. justice scalia's analysis in that case lies in the face of, not something congress had implicitly allowed to happen or in the face of case law that had developed accidentally, but this was what congress directly responded to in a series of supreme court decisions. they said, this is what we mean. >> one earlier, it was about what really happens in the world -- one early comment was about what really happens in the real world. take police and firefighters. it would be surprising to some people to hear that policemen

and firefighters are trained to be police and firefighters on the job. there is no prior knowledge of being a police officer or a firefighter that you bring to the job. in fact, whatever the selection methods are, they are not designed to select whether or not you are a good police officer or a good fire fighter. you will be trained on the job, in the academy. you'll be trained that way. selection mechanism is different and on related to that. -- the selection mechanism is different and unrelated to that. there is a view that disparate impact is fading as a mechanism. that is backwards. we care more about things that seem to be neutral. they used a cutoff score that was inappropriate, given the design of the test in that chicago case. we have a selection mechanism

where we use it to select people to be police officers and men are firefig departments. -- man our fire department. if the chicago case comes out a different way, the new york case is in jeopardy. weave to care about things that seem facially neutral, but en the are applied they select out all of the wom. they are not job-related -- but when they are applied is let out all the women or the -- they select out all the women, the latinos, or the african- americans, and they are not job- related. we want to make sure we rid our work force of anything that is not job-related and has a disparate impact. it is a very important, real

wod reality check -- real- world reality check the congress has become a tuned - becomed in to.ned this will keep coming back and coming back. >> let me turn to congressman nadler. do not think you offended him when you said you had no confidence that today's congress would repass the voting rights act as it did four years ago. he vigorously shook his head and agreed with you. [laughter] from your point of view, what would congress do to insulate -- could congress do to insulate its collective will from the kind of undermining interpretation we have seen in these recent cases? let's start there. >> it is very frustrating.

as someone once said, the supreme court i omnipotent, because -- >> not necessarily. >> within limits. in some cases, it is clear what we can do. we can rewrite statutes to recourse -- reverse a court decision when it is statutory, not constitutional. the ledbetter act was simply a question of getting the votes, which we were able to do, and then getting the president, which took an election -- which we were also able to do. it was the first bill that the president signed. the gross decision was a deliberate misreading of the age discrimination law. we are working on that now. we have a bill to protect older workers against discrimination and to restore the mixed motive

claims. we have explained what that is already. we hopefully will be able to get the votes to do that. >> what is the status of that legislatn? >> we have held a hearing. we will bring it up for a vote at some poiont. -- point. we have t iqbal question. the supreme court, as part of its attempt to shut the door on litigants, essentially changed the law on pleadings, and greatly upped the bar. i introduced a bill to try to bring back the status quo. senator specter and senator delay introduced a similar

bill in the senate. i do not know if we can bring that to a vote this year. in an election year, there is a lot of nervousness in the democratic caucus against voting on anything they do not have to vote on where interest might be on the other side. hopefully that will dislve after the election, but we do not know. >> iqbal is another example of what we were talking about pure the court changed the pleading standard -- talking about. the court changed the pleading standard. that was not part of the issue. it could have been -- the court could have reversed, had it cared to, and very narrow grounds -- on gary miller grounds the immunity claim -- on very narrow grounds, the immunity claim.

>> the citizens united is a perfect example of where they could have decided on a very narrow grounds. they asked for a real argument on questions that have not been refiled. the justices did not like a lot. they could not wait for a case to present it. they reached out because they wanted to change lathe law. we of scarce time and resources to correct the courts in cases -- we have scarce time and resources to correct the courts. it is frustrating, but it is doable. somebody suggested that we have to start putting a freeze and a lot to say, this time we mean it -- the phrase in the law to say, this time we mean it. [laughter]

obviously, we would then have to say what we mean. [laughter] drafting the legislation to achieve -- it may be more difficult for us to draft legislation that achieve the results that are intended, without reading-, uniended consequences -- without creating negative, unintended consequences. a court has made it impossible for congress to depend on a constant definition of statutory service. the accord included the words " because of" to mean -- the court iluded the words "because of" to mean something very different. it removes a critical backdrop against which congress drafts. the premise is that they know what certain words mean. the court interpreted those words to mean something else. we could not put those words somewhere else and what they

mean any more -- and know what they mean any more. it all depends on what the court wants to achieve, not what congress wants to achieve. they have boxed as in by a refusal to create broad rules and they have demanded that we identify with great specificity every law we seek to address with a specific change. they created an negative inference -- a negative inferenc so that if we fail to name one, we obviously did not mean etit. that is a great danger. i think that was hamiltons objection to the bill of rights, that if you delineate certain rights and you do not name one, someone will come along and say, we do not have that right

becae you did not name it. luckily, the framers came along and did not agree with that position. it is easy to disagree with basic positions. they have adhered to other established -- they have stopped adhering to established standards. >> a bunch of them are refusing to look at legislative history at all. >> justice scalia has done that. in the voting rights act case, in some of these cases, going back to the religious freedom restoration act -- the court has said this, and i think it is improper, congress did not establish a sufficient record. if congress decides that we want to do a or b, it should not be up to the court to decide that we did not have a good enough

record. we may be right or wrong. it could be an intelligent or an intelligent decision, but that is for the voters to decide. -- o unintelligent decision, but that is for the voters to decide. the court says, you did not establish enough of a president. -- precedent. jim sensenbrenner and i chaired the hearing after hearing after hearing to establish a broad record for renewing section five of the voting rights act so they could not say that. i am not sure -- i think justice isalia said 98 to nothing just political pressure. there is a contempt for congress. >> it it would have been 51 to 49, he would have said, there is no consensus.

>> this court is a very activist court. it goes where it wants to go. it substitutes its judgment for congress. that is the definition of an activist court. how willing is it to us precedent? the warn court was an activist court in that respect. in that respect, this is a very activist court. how willing is it to upset legislative determinations? this is an incredibly activist court. there is no umpire judging balls and strikes. it takes a lot of time and energy. once you achieve a legislated end, that ought to be achieved until someone else gets a decision the other way. we have to replay the game. >> it is an increase in polarizingongress -- an

increasingly polarized congress. >> that is reflected in the country. as a general observation, i think it is fair to say that, our two political parties today are more ideologically opposed than at any time in history of the republic, except for two times. i can only think of two times when they were more opposed ideologically. one was in the 19 -- one was in the 17 nineties. the other was the decade before the civil war. -- one was in the 1790's. the other was the decade before the civil war. it is very dibble to legislate. it is very polarized -- very difficult to legislate. it is very polarize. it is very difficult to get a super majority -- it is very

polarized. it is very difficult to get a super majority in the senate. >> let's talk for a minute, before wturn to others, about the citizens united fixes that are moving down the pike to get around the constitutional holding of citizens united. there was a major development that threw one of those off the track. can you talk a bit aut that? those of us in this hotel -- it has been hard to keep track of what is happening. >> it is very frustrating. i am very much in the middle of this. sometimes, it is very frustrating twatch purists commit suicide and take a lot of others with them. [laughter]

this act is an attempt to do several things. supreme court, in citizens united, says that corporations can drown the political process in money. they can do it secretly. there is nothing anybody can do about it. if that continues, at i another great step in the destruction of the democratic system in the united states. i have said for a long time that the campaign finance system is a metastasizedancer on the political system. if we do not fix it, like in the roman republic, they developed into an oligarchy or plutarchian or something else. we are going that way. we cannot fix it that much. we can do certain things. if you cannot prevent british

petroleum, for example, from spending $20 million on ads saying that's joe blow is a son of a bitch, at least you can make them safe, "this message is brougtht to you by bp." [laughter] nancy pelosientioned an example of this from the california election two weeks ago. but t the gas and electric, which is apparently as popular in california -- pacific gas and electric, which is apparently as popular in california as bp is in the south, that they could only do so by a referendum, in other words, they eliminated the majority rule. they spent $46 million in corporate funds on that

campaign. the opponent spent virtually nothing. california has an enologist statute -- and analogous statute -- an analogous statute. this ad brought to you by pg &e. the referendum failed. e first part of thiact is that you have to announce -- if you are doing any ad, you have to say who is sponsoring it. it does not help if you find out that it is the committee for better environment for the chamber of commerce, and it is really bp. the front organizations have to announce the largest contributor is british petroleum, or something like that, so that they cannot hide or veil it.

it does add a couple of other things. companies who have certain kinds of contracts with the government cannot spend money this way. if they are foreign-owned, they cannot spend money this y. the nra comes along and says, wait minute. the nra owns congress, in the sense that, there is more than a majority of members who will simply not vote for anything the nra says vote against. you see this in things like the gun amendments to the d.c. voting act, which has nothing to do with guns. you can kl anything by putting a gun in it. >> you saw it last summer. >> yes, you see it in a lot of places. the nra says it does not want to beubject to revealing their donors. no one sponsoring the bill cares about the nra revealing its donors. the nra is upfront.

people like them or hate them. we have no interest in the nra having to say the largest single share of this ad was paid for by so and so. ditto for the other groups. in order to stop that, we rode an -- wrote an exemption. we did not wanted to be only for the nra -- want it to be written only for the nra. when it was written for $1 million, no one thought that was the nra only. -- for 1 million members, no one thought it was only the nra.

[laughter] when the pvision was written, we thought it applied to a lot of groups, but it did not. there was nothing about 1 million. make it half a million or 3/4. we want corporations to be able to be forced to say who is behind thed. as i said, up front organizations -- upfront organizations like the nra or the sierra club -- so what? it is wrong to single out the special interest group. sometimes, you pay a price. it is wrong to go to war, but you had to do it in 1941. there are certain things you have to do. we're going ahead with that argument right now. the enemy -- to say that

legislation -- in the meeting yesterday, i said, the corporations are what in here with a gun to your head -- are walking in here with a gun to your head, supplied by the supreme court. here is a shield. do not object because you want a pink one, not blue. [laughter] in my mind, that is the nature of the objection. some say that is wrong. it is very important. compared to what is at stake, it is absurd. longtime blue dogs do not wt to vote against anythin that the chamber of commerce tells them to vote against -- a vote for anything that the chamber of commerce tells them to vote against, because they are afraid. they are being absurd. a moment the chamber of commerc gets its way, they are going to come after them.

>> we have to move on. thank you. that is a fabulous example of how difficult it is for congress to respond to a supreme court decisions that fundamentally misinterprets the will of congress. congress is disabled. >> this was a constitutional, not statuty decision. >> it will blunt the impact of a constitutional holding. at this point, i want to turn to pamela karlan to talk about the judiciary judges and how we got in this fix. tell us why judges matter. >> i want to start with the story that was told by joe mccarthy. [laughter] not the satanic senator.

the former manager of the new york yankees. he had a dream in which the devil found him -- took into a baseball game. joe mccarthy was in heaven. he said, i do not why you are challenging me. my team is going to be baby ruth, thomas wagner -- for those of you who re young, these are famous players of the joe mccarthy era. it could be a rod -- a-rod for you guys. [laughter] he said, i will have all of these players. what is the point? he said, you have the players, but i have the umpires [laughter] in a nutshell, that is my point today. if you look at the topic today, constitution, congress, and the courts - i want to talk about the linear relationship between these entities. the constitution is written in

very broad language about very broad principles that we intended toendure for -- to endure for a long time and to be applicable to a nation that the framers knew would emerge, but they did not know in what form. that is why the most important part of the constitution are written in broad and sweeping language. one thing we know is that, at the second framing, in the reconstruction era, when congress fundamentally remade the united states -- before the civil war, if you read supreme court decisions thatalked about united states, they used the plural. the united states are at war with britain in the war of 1812. after the civil war, that is where you get it being used as a single phrase. the united states is at war.

when the reconstruction and amendments were enacted, what they said was -- they gave congress special power to enforce, by appropriate a decision, the guarantees that go into the rights of citizenship, the guarantees of the privileges and immunities clause, the " protection clause, -- the equal protection clause. they distrusted the supreme court. the supreme court is living off of the fumes of brown against board of education. that is why they have such power in our country. at the middle of the reconstruction, they were living off of the fumes of dread scott -- dred scott. you went to the legislature to get equality, not the supreme court. th are given aeal-life meaning by congress. if you ask where we got a quality, it is from the civil

rights act of 1964. -- equality, it is from the civil rights act of 1964. more african americans were enfranchised after the passage of the voting rights act of 1965 than in the entire prior century through judicial enforcement alone. congress banned littery test -- literacy tests when the supreme urt would not. congress a people the right to register when the supreme court did not -- gave people the right to register when the supreme court did not. we have not been talking much about the courts. we have been talking about the court in the singular. this is not mostly about what the supreme court does. in the end, it is very important what the supreme court does. it is also important what the district courts and the courts of appeal are doing. no one is paying attention.

the administration is not moving judges on to those core to our proposed -- prepared to enforce - on to those courts twho are prepared to enforce these laws. let me say something about iqbal. bal says courts are supposed to determine whether the plaintiff's claims have been plausibly pleaded. it goes on to -- this was a case alleging unconstitutional ethnic and religious-based sweeps after 9/11. is it possible to think that after 9/11, high government officials are frightened by the invasion of american soil, and they might have used race as one of the bases for sweeping people up? they say, we do not think that

is plausible. [laughter] i have one thing to say -- i do not know what were you thought i would going -- was going to say. [laughter] do i believe in that? i have seen it. if we had judges like judge clemon being asked if it was possible to believe there was racial discrimination in a particular case, is it plausible to believe that the employee did something -- how that possibility is determined is very different than when people do not believe -- people who are on the bench who do not believe in discrimination because it has not happened to them. it is critical to having the constituon and forced and having respect for the congress that the judges to enforce the constitution understand what the

constitution means and are prepared to defer to congress when appropriate and to ovturn congress

. . . . .

can it is crow ating a career judiciary tract. regrutment is an issue. judicial pay is maybe an issue. u.s.a. today had an interesting story the other day crunching numbe numbers. it showed that the stall in the senate is on district court judges. not on courts of appeals these are nominated individuals who aren't getting hears or

appointed. we need eye few more sack official lamb-vs here and we need the obama administration to do what clinton didn't do to keep on nominating. this question is for anybody. what will it take to make the impact analysis valid. is it even possible?

it is in a safer spot 2 r it goes right through what congress did but these are permanent battles. it is saver now we have to fight

all of these as though they are permanent battles it is not that title 7 was passed in 1964 and the world changed. it will km come back to the

supreme court. >> what would this court do with birthright citizenship? >> you mean if congress were to pass the bill? i'm not sure i understand that question. >> some guy in texas is going to introduce a bill that says there is no such thing as birthright citizenship. >> i hate i think that one, even

if he gets the umpires, we win 9-0. tdz unconstitutional to deny people born inside the united states citizenship because of the reason their parents were here. that seems to be one of those none starters like arguing that income tax is unconstitutional because the 16 nl amendment was never properly ratifying and flour i hadation of the water vie lates the congress. that's not where my worries are.

we have to worry about the lack of public information. you have to worry about texas wanting to change most people

thought it was a communist farty weekend if wanted people to rye inspect rights. you want people to know when they are talking about that's part of the mission to get the word out through the public and website and meetings like this that the core meeting values are incorporated. thank you for your attention

>> up next on c-span, defense secretary robert gates testifying on next year's defense bunl et. and at 7:00 a.m. eastern washington journal. and more to begin on monday june 28th. this past wednesday, bp announced that $20 billion will be placed in an escrow account. they will not pay its share holders a dividend this year. on thursday, tony hayward testified. we'll show you that testimony today starting at 10:45 a.m.

eastern on c-span. both the house and senate are in session next week. later next week, possible work on a bill that extends tax breaks and jobless benefits. it could make its way to the floor once again. creating a $30 billion fund. folt senate live on c-span 2. the house returns on wednesday. later in the week, possible consideration of a measure aimed at rolling back the supreme court's 5-4 decision in the citizens united limiting

campaign and funding. expecting work on a 2010 spending bill aimed largely at funding operations. the house is live on c-span. fcc commissioner robert mcdo you el talks about reclassifying broadband communications. monday night on communicators on c-span 2.

>> last week, defense secretary robert gates testified on next year's defense budget for which he requested $708 million. held by a senate appropriate operation subcommittee, this is 1:45 minutes. >> this morning this of committee welcomes robert gates and secretary of defense at morrill mike mahlon the chairman of the trend chiefs of staff to testify on the administration budget for fiscal year 2011.

we welcome you and thank you for joining us. the administration has requested $540 billion for base budget of the dod for fiscal year 2011, an increase of 18 billion over the amount enacted last year. additionally, the administration has requested 159 billion in supplemental funding or receive contingency operations in the next fiscal year. roughly equal to the supplemental funding in the current fiscal year. the base budget for the dod has nearly doubled in the last ten years and since 2001 we have spent close to $1 trillion on both 9/11 combat operations. those are staggering numbers to say the least.

it some judicial scrutiny on both the war fighter and the taxpayer. mr. secretary, last year's about the pentagon budget and particularly by seeking greater balance in the structure between competing the climate's for a regular and conventional warfare. this year's budget request continues this effort. one tv news emphasized in recent months is the need to provide an institutional home in the department for the war fighter engaged in the current fight. we would agree with that but as you know, much of the force protection equipment used in the theater today has been funded outside the regular budget and is being managed by newly created and ad hoc organizations

we understood were to be temporary in nature. yet even after several years of the war, these forces still have not transitioned into regular defense department operations. the resistance predicted people taskforce. the intelligence surveillance and reconnaissance passports. the improvised explosive device organization and the helicopter survivability task force come to mind. last year you created a senior integration group to overseas efforts by the task force's. these organizations are not only largely funded with supplemental appropriations committee remain part of the regular acquisition process and enjoy considerable flexible authorities. some of which will be and

interpreted quite broadly to say the least. mr. secretary, when we met last year, you indicated to us that some of these task forces would disappear. so we would appreciate an update from you with respect to the transition plans. at the same time, threats to the national security remain. we need only look at words spoken and actions taken in recent weeks by north korea, iran and china to be reminded that our national security challenges go beyond those of your regular warfare. there is great concern in both the current emphasis on your regular or frear capabilities we could be losing sight of the conventional threats and degrading our ability.

finally mr. secretary, in light of our nation's fiscal challenges you recently stated military spending should expect to receive harsh scrutiny. you mentioned large and small weapons systems. the review of the defense department operations and also the challenge of providing health care for the soldiers and veterans. quoting president eisenhower's truism that, quote, the patriot today is the fellow can do the job with less money, and of quote. as you can imagine, those statements raise a few questions so we hope you will take this opportunity to elaborate a bit further about what you have in mind. but before proceeding mr. secretary, i would like to call upon the vice chairman for any comments he wishes to make.

>> mr. chairman, thank you. i am pleased to join you in welcoming a were distinguished panel at the hearing this morning. we are reviewing the defense department's 2011 budget request. mr. secretary, i hope he can give the committee your assessment of the timing of this activity when the fiscal year 2010 supplemental appropriations will be needed to support combat operations. when you brief the center's last month, you suggested the supplemental appropriations bill would be needed prior to memorial day. the senate passed the supplemental appropriations bill last month. the funding level approved by the senate was within the funding level requested by the administration. but we have seen no movement to enact this legislation by the other body and concern that will pass memorial day and any insight you can give now as to

what we face because the lack of supplemental funding might be helpful and help generate a little more emphasis on the time limits of the action by the congress. so we thank you and look forward to your testimony. >> thank you very much. the floor's yours mr. secretary. >> thank you, mr. chairman. senator cochran, members of the committee, thanks for the a opportunity to appear before you to discuss the president's budget requests for fiscal year 2011 for the department of defense. i first want to thank you as always for your support of the men and women of the u.s. military for these many years. i know they are uppermost in your thoughts as to deliberate on the budget requests. our troops are part of an extraordinary generation of young americans who answered the country's call. they fought the country's war,

per ticket interest and allies around the globe and have demonstrated, passion and dedication in the face of tragedy and loss. the budget request and presented today includes $549 billion for the base budget. 3.4% increase over the last year or 1.8% real growth after adjusting for inflation. reflecting the administration's commitment to a modest steady and sustainable growth and defense spending. the base budget request was accompanied and informed by the 2010 quadrennial defense review which establishes a strategic priority and identifies key areas for needed investment. the 2010 qdr and fy 2011 requests build upon the substantial changes the president made in the fy 2010 budget to allocate the defense dollars more wisely and reform the department's process. the base budget reflects these major institutional priorities. first reaffirming and strengthening the nation's

commitment to care for the all volunteer force, the greatest strategic asset. second, rebalancing america's defense posture by emphasizing both the capabilities needed to prevail and regular conflict and the capabilities that likely will be needed in the future. third continuing the department commitment to reform of the department does business especially the area of the acquisition. building on the reforms of last year's budget the fy 2011 request takes additional steps aimed at programs that work access or performing poorly. they include terminating the navy intelligence aircraft, ending the third generation infrared surveillance program, canceling the next generation cruiser, terminating be enabled control program, demand and control program, ending friday fincen tikrit military human resource system due to cost overruns and performance concerns, completing the c-17 pergamon closing the production line as multiple studies in

recent years including the outside study mandated by the congress in 2008 show the air force already has more of these aircraft than they need. and ending the second engine for the last 35 joint strike fighters, joint strike fighter as whatever benefits might accrue or more than offset by excess costs, complexity and associated risks. let me be very clear i will continue to strongly recommend that the president veto any legislation that sustains the continuation of the c-17 or f35 extra engine and given recent commentary let me be explicit. would be a very serious mistake to believe the president would accept these on needed programs simply because the authorization or appropriations legislation includes other provisions important to him and to this administration. these reforms require political will and willingness to make

hard choices. we are already beginning the next step in this process of reforming as we prepare the fiscal 2012 budget. last month i called on the pentagon to to be hard unsparing look how the department is staffed, organized and operated. this initiative is not designed to reduce the defense topline. i believe the current top line is the minimum needed to sustain a military at war and protect our interests in the years to come and an ever more unstable and dangerous world. rather michael list sycophant leave reduce our overhead costs in order to free up the resources needed to sustain our structure to modernize and to create future combat capabilities while living within the current top line. to this end, the department has recently set the goal to find more than $100 billion of overhead savings over the next five fiscal years starting in fy itself. no organization within the department including my own office will be excluded from

these efforts all of the savings will be applied to fund personnel and units, force structure and investment in future capabilities. as a matter of principle and political reality, the department of defense cannot come to america's elected representatives and ask for budget increases each year unless we have done a better job and indeed have done everything possible to make every dollar count. finally, in order to support ongoing operations we are also requesting $159 billion in fy 2112 support overseas contingency operations. primarily in afghanistan and iraq. plus $33 billion for the remainder of this fiscal year to support the added financial cost of the president's new approach in afghanistan. the commitments made in programs funded in the supplemental requests demonstrate this administration's determination to support the troops and commanders at the front so they

can accomplish the critical missions and return home safely. i discussed the defense department portion of the fy 2010 supplemental request before this committee in march and sought its approval by spurring to prevent costly and counterproductive disruption to the department operations. i am becoming increasingly concerned about the lack of progress on the supplemental and strongly urge the congress to complete its work on the request as quickly as possible. i appreciate the senate action on this request. but if the supplemental is not enacted by the july 4 congressional recess we will have to begin planning to curtail the defense authorization. such planning is disruptive, can be costly and a specially in time of war and i would ask your help in avoiding this action. in closing, mr. chairman, my thanks to you and members of this committee for all you've done to support our troops and their families especially in light of the unprecedented demand that have been placed

upon them. i believe the choice is made in fees' budget requests reflect america's commitment to see that our forces have the tools they need to prevail in the war we are in. and we are making the investment necessary to prepare for threats on or beyond the horizon. thank you. >> chairman inouye, senator cochran, distinguished members of the committee, thanks for the chance to discuss the scale of the military as well as the president's fiscal year 11 defense budget submission. as always, i greatly appreciate your eckert and our support of the men and women of the united states armed forces, their families and the communities that do so much to help them. in particular, thank you for your passing the fiscal year ten supplement request. our men and women in uniform are well equipped, well-trained, well paid and received the finest medical care in the world

due in no small part to your dedication and stewardship. i'm here today to continue support. secateurs gates walked you through the major components of the budget submission and i will not repeat them. let me leave you rather with three thoughts considering as you prepare to debate the details. first there is a sense of urgency here as we work to win the war we fight. we have more than 200,000 troops deployed in harm's way right now and another 150,000 or so deployed in support of other security commitments around the world. for the first time since two tawes three we have more troops in afghanistan dan and i tracked reed of where we remain on pace to draw down to roughly 50,000 troops by the end of august. the bulk of the 30,000 additional forces the president authorized for afghanistan are in country and the remainder, less than 10,000 will arrive in next two months.

these forces are now and will continue to be focused on operations in the central helmand valley. in marjah and kandahar specifically. we're keeping abreast what we are trying to achieve. but i think it's important here to just summarize. kandahar is the birthplace of the taliban insurgency. it is from there that they have tried to spread their influence across afghanistan. and it is from there that the desire to fool once again. i think that it is safe to say that they still believe in their cause. in and around kandahar the train, equip, plan and intimidate. just the other day in the village not far away these people went to a small boy claiming he was a spy for the coalition. ..

you saw president karzai down there just this past weekend, completing the effort of getting local backing. we turn now to the all important task of improving security. we will bolster a police presence and security outposts and check point in and around the city. we will establish freedom of movement along the ring road and build a bypass down to kandahar

and we will better patrol access to the city itself along its main arteries. none of this will be easy. none of this will be bloodless as events last week grimly attest that all that will depend heavily on the continued growth and development of confident and well led afghan national security forces as well as tangible and achievable political outcomes. securing kandahar or rather, securing the people of kandahar is not a military objective. it is a social, political and economic objective for which other agencies and other nations are needed and for which afghan leadership will be vital. i am comfortable with the progress to date in the sequencing that we are following. i am also mindful of the need to monitor our progress continually to stay flexible and to adjust accordingly. that leads me to the second thing i would like you to consider, proper balance. wending our current wars means

investment in the warfare expertise, a core competency that should be institutionalized and supported in coming years. we still face traditional threats from regional powers who possess robust regular and in some cases nuclear capabilities, so we must also maintain and sustain our conventional advantages. in the air, this means sufficient strike aircraft and munitions capable of assuring air superiority. at sea it means having enough ships than enough sailors to stay engaged globally and to keep the sea lanes open. on the ground that means accelerating the modernization of our combat brigades and regiments. on the whole that means never having to fight a fair fight. again it is about talent. the conventional and the unconventional, to challenges, one military. we are bound concerning our most

important resource, our people and that is my final point. this budget builds upon the superb support you in this department have provided our troops and their families. stretched in strange by nearly constant combat, many on their fifth, sixth in some seventh employment. our men and women are without question the most resilient and battle ready force in our history. we are turning away potential recruits so good our intention and career opportunities yet we keep seeing an alarming rise in suicide and marital problems, prescription drug addiction and mental health problems within our range. deborah and i meet regularly with the young troops and their spouses and though proud of the difference they know they are making, quite frankly many of them are worried about their future, their livelihood, their children. so you will see in this budget

increases for family supported advocacy programs and you will see used in warfighter and family services to include counseling, military spouse employment and care for our wounded, ill and injured. we are also pushing to dramatically increase the number of mental health nationals on staff and advance our research and dramatic rain injury and post-traumatic stress. we know the strain of frequent deployment causes many problems but we don't know yet fully nor understand fully how or to what extent. so even as we work hard to increase dwell time, time at home aided in part by the additional temporary and strength you approved last year for the army, we will work equally hard to decrease modern military service. indeed i believe over time, when these wars are behind us, we will need to look closely at the competing fiscal pressures that will dominate discussions of proper and strength and weapon

systems. a fourth well suited for long-term serb challenges are not necessarily married to any current course planning construct will remain vital to our national security. thank you mr. chairman and i look forward to your questions. >> thank you very much admiral mullen. i believe you are aware that the votes have started. that is why some of the members have left to vote, but they will be back. i would like to begin mr. secretary by asking a question on the joint strike fighter. your projection has been shown to have a few predictions that are not quite correct. for example the cost has increased by a believe $109 billion. your chief weapons buyer has indicated that there are many problems in the strike fighter testing programs. my question is, with these

errors, should we still go along with your insistence upon no alternatives? >> yes, sir. i believe that is the case. in fact i believe it very strongly. first of all, talking about two different subjects here, the fighter itself than and the alternative engine. we had an independent estimating team in 2008 that identified some difficulties in the development program. i added almost 500 lien dollars, or you added almost $500 million of my request to that program. we did another independent estimating effort last fall but made it clear this was more than a one-year problem, and we completely restructured the program and we fire the program

manager and replaced him with one of the most experienced acquisitions uniformed officers in the military. we withheld $600 million plus from a contractor. we extended the development program. we slowed the production rate in the early years by 122 aircraft over a three or four year. not so we will have more aircraft, fewer aircraft that are completed while the development program is continuing. we have added a three year draft to the development program so i think we have taken a number of steps that are consonant with a restructuring of the program. we believe we have, because of these outside estimating efforts, we think we have a much better fix on the nature of the problem that we have faced. i would tell you, it is not particularly a good news story but i would point out that both the c-17 and the f-22 also went through restructuring earlier in

the program because of problems but the good news i would say is that there hasn't been a single review that has discovered any fundamental technological or performance problems with the aircraft. it is meeting its performance parameters. what we think we have endured is primarily management and production problems, a lack of adequate execution on the part of the defense department itself. my favorite story here is the supplier, where the f-35 is part of their factory. they have a number of aircraft. the f-35 occupy 6% of the more than we pay 70% of the overhead for the factory so we need to be a lot smarter about the way we execute this program, so i think that we have a good, independent

assessment of where we are. i think part of the problem with this program frankly over the last several years has been too rosy an estimate from the production program itself about how things were going and i think we have a much more realistic approach now. with respect to the alternate engine, we have had this discussion. we believe that this program will cost at least another $2.9 billion to bring it to the point where it could e. competitive. we think that the current engine, that ge is offering, does not meet the performance standards that are required and the taxpayer would be required to pay for any enhancement that would ring it up to the performance standards that we require. and, we think a situation in which both competitors are guaranteed to win is not competition at all.

my view is competition is winner-take-all, and i think we have had the competition, and it is time to move on with the program. >> mr. secretary, if i may follow up. %- were under the impression that the testing program of the f-35 would be completed by 2012 and now we have been advised it will sit until 2016. >> the days that we have mr. chairman, the latest information that i have this first of all we are on track to have a training squadron at eglin air force base in 2011. the marine corps will begin to receive their first aircraft in 2012. the air force in 2013 and the navy and 2014. full operational capability for the air force and the navy will be in 2016, but those services will begin to receive aircraft earlier.

>> thank you very much. i would have to-- like to ask the admiral about health care projections you have made and i'm pleased to hear those, but my time will be up soon. as you know, the ancient world war ii and conflict there cannot be compared. for example in my time, in my combat team, 4% were married and had dependence. 96% were single. today i note that the army is nearly 70% have dependence, and that produces a big problem. secondly, survivorship is sky high now because of the improvement in high technology and transport. do you think we are coping with these changes? >> sir, as i said to my opening statement i think we have got the best health care system in the country.

where i have tried to focus this is on, in addition to care and we still have some challenges, is really the cost and the cost is grown from 19 billion i think in 2012 over $50 billion in 2011 and it is going to continue over the next few years to grow. we have got to have a balance in terms of providing this high-quality care, and somehow containing the cost and costs continue to grow. and, as you indicated, very clearly, the requirements for our families have grown substantially over the many years. that said, i don't think there is any more important focus in our future than to make sure we get it right not just for our people but for our families. we still have some significant challenges in turn alter the department in providing care. the secretary and defense and i talk about this routinely when we are on the road.

we spend time with spouses and we know that in particular, spouses and deployed units that medical care continues to be at the top of their list to get as good as it is. we have, in this budget, we have in recent years, we have unsuccessfully recommended that the co-pay rates, which have not increased since 1995, the look dads to increase. i don't see how at $19 billion in 2001, $50 billion in 2011, $64 billion i think the number is in 2015. it is just simply not sustainable, so my emphasis these days and i know the secretary as well is how do we contain the cost? >> thank you very much admiral mullen. now i will call on senator bayh to bring questions he has to the

witnesses. >> thank you very much. mr. vice chairman, secretary gates, admiral mullen we appreciate your service. i thank you for first of all when you say you are looking for savings of 100 alien and five years, we would humbly suggest that you put more, less than the four structures of the guard, which is a bargain for our military defense and i thank you for your recent decision to move forward with the f-18 multiyear. @%is pragmatic decision will help address larger fighter -hortfalls in the navy, save the taxpayer over half a billion dollars. i believe strongly we take for granted our defense days will always be there maintaining capacity and innovation to keep the united states warfighters second to none. i agree with the chairman and our ability to respond to current and emerging threats is

dependent on preserving the ability to engineer, design and procure both counterinsurgency technologies that we are implying today and technologies to maintain our conventional military edge. in less than a decade, more than 50 major defense companies have been consolidating to only six m. six aircraft have been narrowed to only two. after 2013 we will be down to one. the latest qdr's wreck nice and has said how important the industrial bases but i would like to know if the department of defense and the administration are doing to ensure that we have the skilled workers, engineers and companies both to address the threats to our nation now and in the future. one of the challenges of sustaining a defense based comes from a reduction in the overall number of programs. there are fewer new start programs, less investment in research and development, and

increase costs for programs, especially like the jsf that resulted in fewer efforts being underway. i think a telling example is saying we shouldn't purchase anymore c-17's. the mobility capability study will not address the possibility that the nation may need to search its production of air lifters in response to a national emergency or humanitarian crisis like haiti, and they question the validity of a single study which doesn't take into consideration the need of an industrial base. the decision on the c-17 is particularly troubling, because there will not be a single facility in north america anywhere assembling large aircraft designed to military specifications and many of the

old c-5 a's are reaching the end of their service life. i question why it is in our nation's interest to close the only active production line for long-range air lifters when there is no replacement that is being developed, and my question is, what steps are being taken to protect the industrial base in heavy airlift, strategic airlift? >> first of all, senator, there have been three mobility studies done on the size of our strategic lift capability. won in 2005, one in 2008 sponsored and mandated by the congress in one and 2009. and, though studies have taken into account a stressed, strategic environment as well as increased and strength of the

military the ability to carry larger equipment such as mraps and so on. there is the capability in the united states for life by the aircraft and u.s. manufacturers make them all the time. the c-17 will have a very long lifespan. those those that are being built now will probably be flying in 35 to 40 years, so we have a substantial capability that takes into account really all of of the stressed environments and i think that we do have in the united states a capability, and industrial base that is capable of building life body aircraft in over the period of time that we are looking at, the ability to adapt to whatever is needed to meet military specifications but the c-17 is going to be with us for decades. the c-5 a's is reaching search surges life and we are going to

need replacements, aren't we? excuse me admiral mullen. >> as far as that is concerned, the studies which have been extensive look at both the c-5's and the c-17's, and the requirements i cannot find a requirement for additional c-17's. as hard as we have lookkd and quite frankly because this has been visited so many times we have looked at a time and time again, we just don't have a requirement beyond that 223 c-17 than there were some that would argue that that is actually too many. i certainly share your concern with respect to the industrial base, and there is no easy answer they are. across a broad set of capabilities for our country, and the only way that i have seen that successfully addressed in the past is a strategic relationship, which includes obviously the partnership if you

will between the hill, between the department of defense and those who build it to make sure that we look at meeting our requirements and our ability to sustain a very important industrial base at an affordable cost, and that gets into acquisition and how we do things. so, i certainly take your point senator about the industrial base. it is critical, but i don't think from the standpoint of retaining it or sustaining it, one against the requirement that doesn't exist anymore and secondly, and doesn't look like it will exist for an extended period of time and secondly add an affordability level that we just have not seen. that is the concern. i just think we have to address it strategically in ways we haven't in the past. >> thank you are a much and i will have questions i will submit to you in writing if you don't mind. thank you. >> senator hutchison, i think

you were here next and then senator specter. we are going to try to recognize folks in the order in which they came in. actually, senator murray. senator hutchison you may proceed. then i will call on senator hutchison. >> mr. chairman thank you and i want to thank all of you for being here. mr. secretary, we have talked about your omission to try to lower the defense budget and you are looking for places to cut. i am hoping that i can expand on this in the near future with you, but here are some of the concerns that i have seen as the ranking member and former chairman of the military construction subcommittee. we have had a strategy. after we saw the deployment problems that we had when we were going into iraq out of germany. and also, as we were looking at the training constraints in

germany and other parts of the world where we are. so, we have had a strategy and this gives you an idea of the chart on build up in the united states, starting in fy06. we built up heavily in 09 and 10 to try to bring our troops home from germany and some from korea , to be able to train and deploy where we had complete control. but, now i am looking at the 2011 budget request for germany, and it is $500 million, and a greater concern is-- this is the mill con in germany for the next five years, and we are looking at $3.5 billion in the next five years in germany. now, i am concerned that we are duplicating efforts, and let me just give you an example in

germany. the european command and the african command are headquartered in safeguard and yet the army is now coming into request $91 million for it facility, plus a new battle command center for $120 million, so the army is going to a separate location, when we are ready seem to have our resources consolidated and supercar. that german building requirements are higher, and get germany has only, over the past 13 years, contributed approximately 7%. the building requirements in germany, and then you look at the effort that is being made by germany and afghanistan right now, approximately 4000 troops

out of approximately 100,000 in afghanistan. i guess i am just looking at the potential for savings and consolidation and efficiencies in military constructions and i am asking you if that has been a factor in your decisions, if you have looked at this plan for $3.5 billion in germany and what is the thinking behind that ended necessary to do that much when we have had a strategy of building up an americana and applying where we wouldn't have deployment problems as we saw going into iraq? >> i will have to ask the army to come up and brief you on the details and the justification of their specific programs. i would say more broadly that the path that we have been on was the path on global posture

review that was established by the bush administration. one of the outgrowths of the quadrennial defense defense review was a request to revisit that issue by the obama administration and we are in the process of doing that this year in terms of our presence, not just in germany but elsewhere around the world. the conclusions of that study and whatever decisions the president makes on that will obviously significantly impact the kind of programs that you are describing. >> when you are looking at budgetary matters, and when the commanders in the field are making these requests, do you look at the effort made by the host country? i look for instance at the comparison to what germany has done to japan, which has been above 90% and effort to help offset our costs, and germany

has asked us to stay in many places. so, is that a focus that the department makes in general? >> it certainly is a consideration. >> i hope-- i mean there are also concerns in korea and i hope to be able to maybe give you some thoughts that i have been perhaps work with you to see if we can see-- be more efficient with the military construction site in the future. >> thank you senator. we are established under senator inouye's world that we recognize senators in order in which they came into the hearing and this is the list we have had. senator leahy was here early and had to leave but he is back now. senator murray is next, senator dorgan, senator feinstein, senator specter and senator bennett. that is the list in order mr. chairman.

>> mr. chairman, if we could have another engagement. i am happy to go after him on that list. >> i was going to recognize senator leahy. senator leahy. >> thank you. secretary, admiral mullen, always good to see you and incidentally i appreciate the fact that both of you have always been available for questions by myself and other members of the committee. let me ask you a little bit about afghanistan. we all want to see al qaeda and taliban defeated but i worry about our clear, achievable goals there. i supported 10 years ago now going into afghanistan. i did not support going into

iraq because i saw it is no threat to the united states. secretary, you said last january we weren't trying to make afghanistan and central asia's ohio love that right now we have top officials in kabul did not have the confidence or respect to the afghan people and they seem to be making common cause of a lot of people we are fighting. we have committed so much, so much money here, and we have neglected so many things inside the borders of the united states we see china and now others developing green tech allergy, creating jobs, exporting elsewhere. we see a number of other countries that don't have the burdens of afghanistan. iraq is using the money to develop economic juggernauts,

which could create huge problems for us in the future. we have 1000 brave members of the vermont national guard there and i want to thank you publicly admiral mullen for coming up in speaking to them. it was the highlight for them, the fact that you did. so, how do you see it? what is our endgame? >> well, first of all, i think one of the results of very detailed analytical effort and policy consideration effort of the administration last fall was in fact to clarify our goals, and our goal is to ensure that afghanistan is not a place from which attacks can be launched on the united states again, and in a nutshell, the strategy is to reverse the momentum of the

taliban, to deny them control of populated areas, to degrade their capabilities to the point where the afghan security forces can take care of them, and the afghans are ahead of pace in terms of building both the police and the army. we still are dealing with quality issues, but we are making headway. we are making progress on trainers. the percentage of trainers to trainees has gone from about one to 821230, and a lot of afghans -- i read a lot of the press about corruption and so on and so forth but the reality is there are ministers in kabul doing their jobs and their afghan soldiers and police out there who are dying in even greater numbers than we are fighting for their country. >> i met a number of those ministers and i have a e