of the taliban. fourth, a major program of said national governments where we are putting a directly to the district level. fifth, a major effort in specific areas some of which were alluded to earlier such as electricity for kandahar. senator kerrey asked earlier about kandahar. one of the major issues is to bring electricity to the people as a benefit of the international presence. the whole range of activities we have is designed to support the country and general petraeus counterinsurgency effort. he and i, i was his counterpart until two weeks ago when he moved to kabul. we worked intimately in an effort to create a joint civilian military effort, and i am happy to provide you with every detail you wish in private

briefings on behalf of me and my team. point never -- number 22 on the industry and exit strategy. this is my personal view, senator, if we walk away from afghanistan, and again, as we did 21 years ago, the consequences will be similarly catastrophic because of the unique strategic position of afghanistan and the reaction that would have in pakistan, china, india and the country of afghanistan's west, iran as well as the larger region that includes russia, saudi arabia, india, and even extending to western europe which is concerned about terrorism from that region just as much as we are. so i hope when we talk of the interstate we talk about a sustainable in the state which

involves continued american economic and development assistance and we continue to fulfill our obligations to train the police and the military. this will not be cheap but it will be a fraction of the money that is now being authorized and appropriated for the military campaign. when we will be able to transition to that is impossible for me or anyone to say but they won't be on a single day. it will be a gradual process and that is what the review in december and the president's decision making will focus on. >> foreign policy generally speaking i know we had some rough times over the last several years it has been something that we have been able to address and a bipartisan way, and i think that the issues that you're dealing with and we are dealing with in afghanistan are an incredibly tough. i still don't -- i haven't understood what the administration was singing in

the beginning. that's not to be critical. i just don't understand. i still don't understand. i met with you and your staff over the state department. it's just incredibly vague to me, and i think what we are doing, we have partners which included the pakistanis and every one around it. they don't know what we are doing. they don't know when we are leaving. they think we are leaving shortly i think we just had colleagues have come from their we have a president planning both sides because he wants to survive because he doesn't know what our intentions are. the pakistanis don't know the intentions i don't think and they are making accommodations on both sides. i sent letters to parents and spouses, and what i feel because

of the lack of clarity is that we are in afghanistan because we are in afghanistan. and that we don't have the will to be successful, we don't have the will to leave because of some of the things you just outlined but i just don't hear any clarity, and again, i want to support the administration. i want to support you because that's what we need to do. the country would like to let the partisanship -- i have to tell you as a person who wants to do that, i still don't understand it, okay? and i have average intelligence so i would ask you to please, maybe let's have some witnesses that can shed more light or be more specific. but i don't understand and i'm very concerned, and i think we are sending a lot of mixed signals and i think there's a lot of distinguishing in the

administration as of and that has to end. i would ask you please you have a lot of experience. helpless understand. you haven't done that today. and i would ask the chair man to please have the witnesses come in and explain to us what the in the state is, what we can envision afghanistan being whenever this withdraw tax base because i still not understand. we changed it not it is a degraded country where they have a conflict but it's not out of control, and then the war continues to change, and i am just concerned as an individual and yet i want us to be if we can all on the same page as much as possible but i think to do that this has got to be much clearer than has been outlined. >> senator, i am sorry that my answers don't fully satisfied to but i want to be very clear on this because i understand that your comments and i respect

them. first of all, the core question, the one you're asked by your constituents and i am asked by everybody, why are we in afghanistan? the short simple answer is 9/11, direct threats to the security interest and the fact that while i were enemies against the homeland are on the pakistani side of the border this is a single struggle and we have to strengthen the afghan government and teach it to stand on its own feet over time so that we can move forward while we do other things that fall outside the scope of this hearing to dismantle khator and the ft al qaeda. now if you do not believe that it's a threat to the homeland then we have an honest difference of opinion. but i think the times where bombing incident shows clearly how dangerous the situation is. second on the civilian mission, and again, it's in support of a single civilian military counter

insurgency mission and we have benchmarks' requested and required by the congress and submitted to you and our overarching goal is always the same, to disrupt, dismantle and defeat al qaeda and prevent its ability to threaten the united states and we believe all of us and there is no division on this on the executive branch, that the situation we face is a direct threat. we believe before the times square situation occurred and i don't think any one thing could have proved more visibly, and to achieve this we have to degrade the taliban as well because they are part of the enemy structure, a different part of an interpol part that we face. the afghan government doesn't yet have the capacity to really deal with this on its own. how could they after 30 years of war so the civilian part of it the things i just mentioned to you, the police, government capacity, will fall, is of national government, training provincial officials, women's

empowerment and a series of other major issues are part of the civilian programs and we are happy to come back up to your office. we appreciate your visit to us and continue this dialogue. our civilians strategy is designed from keeping al qaeda at bay and to help afghan institutions established conditions for stable governments. the plan has the benchmarks which have been briefed to you and your colleagues and we are happy to discuss them in detail at any time. >> thank you, ambassador and senator cochran. saxby four. ambassador holbrooke, thank you very much for your extraordinary service. we appreciate 83 much. always appreciate your been appearing before the committee. i want to first ask a follow-up question of senator feingold. we talked a lot about the july july 2011 and as you put the beginning of the care for withdraw.

the president made this announcement in late 2009. can you give an update whether we are on target as the administration had envisioned when the statements were made and 2009 as to the care for withdrawal of the trips or are we ahead of schedule? you see to be somewhat optimistic on the progress that has been made. but would you say that we are meeting the expectations the administration set out when the president addressed this issue on may 20 of the phone line? >> you're talking about the december 1st speech, the west point speech? >> correct. >> senator, i appreciate your personal comments and in regard to your question, i do not want to give an optimism pessimism report at this time. i'm about to go back up there again on my 15th trip. i would like to report back. i think there are significant

elements of movement forward in many areas. but i do not yet see a definitive turning point in either direction and we now have a new and tremendously dynamic commander on the ground, general petraeus and i'm looking forward to seeing him for the first time in his new capacity and i simply do not have a personal judgment on that issue now. >> i do think we are entitled to be informed as to how well we are meeting the expected schedule the president obviously had in mind when he gave his speech in december -- >> excuse me for interrupting. perhaps we had a miscommunication. we, as i mentioned to senator corker in my previous answer we put forth of the benchmarks which he requested. we briefed on those and those go through the specific criteria, point by point, and we can go back over them. i thought you were addressing a

kind of larger almost intuitive answer. >> well, what i'm trying to get is obviously the president have certain expectations in mind as to where we would be in july july 2011 when he made his speech in december, 29. i'm just trying to figure out whether we are on schedule to meet the expectations the administration had when the speech was given. >> i guess my simplest answer would be in some areas we are ahead of schedule and other areas we are on schedule and other areas there is much to be desired. and for example, the attrition rate for the army and the police has gone down. that is a really important factor. but i honestly don't know whether it is seasonal, anecdotal or sustained. we won't know for a while. that's why the president doesn't want to pull the triet by the roots of fremont and reexamined.

it has to nurture. general caldwell in charge of the training is in constant touch with us and he's reporting how they are moving forward. nothing is more important than getting the police and army up to sustainability. on the other hand, there is the colloquy with senator kerrey indicated marjah there are not enough judges, there are not enough local police and people are being assassinated and then as a general mcchrystal said marjah is not going forward in the estimation of isaf. you have to take these issue by issue. there is no single the answer yet to this extraordinarily complicated situation. the elements that i stressed in my opening statement, sir, involving the progress in pakistan should not be neglected. pakistan is at least as important to our national security. >> i understand and i understand that's not an easy issue i am

just trying to judge whether we can expect the careful withdraw that will begin in july whether we are on target to accomplishing that. let me go to the second point, and that is we all talk about the ability of afghanistan to control that is the security of its own people and to run a country with good government and respect for human rights. i've expressed previously by concern that the u.s. aid and international aid not be a source of funds for corruption and afghanistan but that there be accountability, and i know the administration set up certain accountabilities on the funds being made available. i would like to add to that the information afghanistan has mineral wealth and whether we are certain that these are not just fungible dollars and therefore the international assistance and u.s. assistance could be a source to fund the

corrupt regime which robs the country of good government which is absolutely essential. >> how can you assure me we are making progress on the fund is getting to the intended purpose and not being used for corruption? >> center, just one point of your previous question. i think i may have answered part of the question you asked prior to your arrival. as bennett was here from the beginning. it's been a okay. i apologize. but i want to underscore that the -- that the pace and scope of the drawdown will depend on the situation. >> i heard you say that. >> okay. on the accountability and mineral wealth problems, very, very important issues. on accountability, and this committee has been aggressive in pushing us on this and we share your concern. when we can into these jobs about 8.8% of all the money was

coming through the government. so 91% was by passing through the ngo and that was undermining the government we were trying to strengthen. debt to funneled through the government running the very serious risk of losing accountability. so we set out a plan, timetable year by year to increase the amount of money that goes through the government and we are now in the high teens and hope to increasing it to 30, 40, up to 50%. but the accountability issue is critical. we have accountability criteria for each ministry. some ministries have been certified and others have not. for example, agriculture, the ministry of the most important on security program, the ministry hasn't been certified yet because we don't feel the county will meet the gao standards, ceo standards, our own standards. so this is a very, very tough

issue but we have made accountability our hallmark while also trying to build a government capacity because sometimes there is tension between those two. on the mineral wealth issue reported in "the new york times," perhaps a little misleading, it's not a new discovery that afghanistan is a wealthy mineral area. what is, however, new with modern techniques the industry's can reach areas that were quite remote. afghanistan's mineral wealth according to the u.s. geological survey is very substantial. i'm not going to throw the numbers around that you read about in "the new york times" because i have no independent corroboration of those but there's no question about copper, lithium and some very critical strategically important we're earth elements, and the defense department has a group under paul brinkley, deputy undersecretary defense that has

been working on this. he has been working with us to work with a.i.d. and the tda to make sure that we help the afghan people, number one, develop those resources for the benefit of the people, strengthen their own economies through doing it, avoid the resources curse that has plagued so many oil-producing and copper producing nations and finally, make sure that the united states has a level playing field in the case of the famous copper mine china dominated. there's been all sorts of questions about how they got that contract. they paid a lot more for it than any western country would have paid, so it was a strategic investment for them. they had the ability to do that in a way that we don't and we are working hard on that. i would be happy to brief you further on this but i do want to say one last thing about it.

secretary clinton has personally engaged on this issue and if i'm not mistaken he probably talk to you about it, mr. chairman and as well, because it is a very important issue. >> i just urge we have complete transparency. the government insists on the mineral issues in the country. >> absolutely we will insist on it. >> and, senator, i think the afghans are seriously considering joining up to the extractive eitc -- eiti. i apologize. >> i have to go to an dee dee committee on the start now. senator demint is recognized. i will try to get back if i can. >> thank you, mr. chairman. ambassador holbrooke, thank you and your whole team behind you for your service to our country. i recognize probably the most difficult diplomatic situation

anyone could work in. i would like to ask just a couple of questions related to the civilian political side of the equation of afghanistan. my question comes from a perspective of some folks who've been on the ground in afghanistan over the last couple of years, well, three or four years as part of religious groups working through the ngo and i have a good friend who's been a part of that a year and a half ago he came back after a long stay and one of his colleagues who had been killed by the taliban there wasn't a lot of security with the enemy was clearly the taliban and the people were at that time looking to the u.s. for protection and the folks working for the ngo were afraid of the taliban. he just returned and i had a good conversation with him last week after another long stay of

working on the ground. but the situation is changed and deteriorated in his mind to the point of a fear the government now more than they do the taliban. the government leaders are increasingly speaking out against non-muslims in the country. and the bottom line from his perspective is the deadline is defeating last. the people know we are leaving even if we make it somewhat flexible we've made it clear our commitment is not to finish the job but to lead and this is not my own opinion but when i'm getting from people working on the ground the people are developing alliances with the taliban for protection and other insurgents in the country, government figures are developing stronger relationships with the taliban which is making them increasingly antagonistic to them on muslims.

miers' an expectation of america being donner, the government is moving more that way, and we have a situation now where we've got soldiers fighting and dying for a government that is left to their own devices, right for them in jail or even kill them from being on muslim, so after just listening to the conversation first of all, it comes back to what you said before and i was glad to hear you say the deadline the you don't agree with the deadline but the president even though his equivocated to some degree still left that of their that is the goal to get out and i agree somewhat with senator corker we have not said here is what we are going to achieve before we leave we're talking about a situation on the ground but what are we going to achieve before we leave? i know that's more of a question a perspective than a real

question of privilege to hear your comment what appears to be a deterioriating situation brought on by the presumption that the u.s. will be gone in a year and a sometime period after that i have no doubt a report of your friends and associates is accurate perception on the part because i've heard the same thing. you hear many different things about policy for many different people and the president's position has been misrepresented whether intentionally or unintentionally by a lot of people, journalists, columnists, leading public figures but i think it is quite clear he did not say we are withdrawing july 2011. he said we are beginning withdraw and you heard one of your colleagues on the other

side question that has been insufficient now your question is being too far. this is an issue on which there is a legitimate grounds for disagreement, but i did not say i disagree with the deadline. what i said is this is what the deadline means and the u.s. military command supported and accepted this deadline and has endorsed it publicly. now, the deadline applies to combat troops and it's not a deadline it is the beginning of the departure and the size and scope the in the state of the departure will be determined by the situation on the ground but it will begin and that is to incentivize the local authorities in kabul to take on their own and responsibility for solving this problem so it is not an open-ended situation. in that regard the president will make specific decisions down the road after, during or

after the policy review and he will deal with that based on what he hears from general petraeus on the command and ambassador eikenberry on the embassy and other people advising him. in terms of the reaction on the ground, senator, i have a slightly different perception. but again, it's hard to come by the firm of data. there have been many public opinion polls and despite the conditions. they are all face-to-face because telephones obviously won't do eight. less than 10% of the people support the taliban. ard, b.c., the group which briefed us the day before yesterday in washington they all come up with the same number.

nobody wants to return to the taliban. of the women especially suffered so much and they remember so vividly of the other hand the honorable satisfied for the services and support they get from the kabul government and kabul itself are the reasons that go back to the discussion i had with some of the colleagues earlier is not only capable of producing the right kind of human-resources infrastructure programs and corruption and will fall are huge problems if you get any indicator electricity cell phones, roads and, gdp of the country, agricultural production every one of these things has to the dramatic improvement last year afghanistan is a 22% growth in gdp. we are against a very small base. that is not a drug legitimated gdp by the way. so i think that the situation is

not quite as clear cut as you say it is. as i said earlier that elements of movement in many areas and if you go around afghanistan you see these extraordinary visions of when and cooperatives and former efforts to rebuild and undo 40 years of war we need to be able to continue to support those efforts as we go forward, even after the combat troops leave afghanistan. >> thank you. >> thank you for a much. senator casey? >> thank you, senator lugar. ambassador, we welcome you again and thank you for your service to the country. i wanted to raise an issue that reminds me that in washington we use a lot of acronyms describing programs in the agency's. unfortunately there's one acronym i think a lot of americans actually know what it

is and that is the ied. we talked about this a number of times and i appreciate your work on it. there are actually two. the acronym ied plus a.n. for ammonium nitrate for explosive devices. the question i have let me set forth the predicate. we've all been concerned about this issue and i know the administration of all levels have. we introduced a resolution a couple of days ago that passed a number of us were co-sponsors of that senator web along with me and several other colleagues and what we ask for or i should say what we set forth is the reason for the resolution was the following. number one, urging of a

government of pakistan and afghanistan and other central asian countries to fully come at to regulating the the transport in use of ammonium nitrate, the main destructive ingredient in the ali eda. second, calling on the secretary of state to continue to diplomatically engaged as she and your team has already done this. but more needs to be done. second, the work with the world customs organization and other bodies on an issue to improve controls on ied is and then offered urging the secretary of state to work with pakistan and afghanistan and central asia countries to encourage and support improvements in infrastructure. so the question i have is i realize that this resolution has been passed recently but the question i have is give us a status report as to how our government and especially the

state department has been already engaged in fulfilling those objectives and what you can tell about it because we have a basic problem where you have a legal prohibition on ammonium nitrate in afghanistan but a huge problem in pakistan that is but the problem of law but also a problem of figuring out ways to stop the inflow of ammonium nitrate into afghanistan from pakistan and the numbers are stunning. we know that the ied is are by far the job biggest killer. pennsylvania just since the beginning of the year lost six soldiers, four of them as a result of the ied. we are over 51 killed in action in pennsylvania and over to under 71 get. so just wanted to get your latest update and give the benefit of that. >> senator casey, i share your concern.

i share your astana ashgabat so little was done on this in the past and i want to commend you and senator web for continuing to push the privacy of this rule i would urge you to continue to do it because this is a really critical issue and your public pressure has solved those of us share the concern. the pentagon has a task force on a ied issue as you know headed by ashton carter and we are working with him. as far as ammonium nitrate goes, a.n., we are successful getting the afghan government to issue a presidential decree banning the import production of transportation use and sale and storage of a.n. fertilizer. however it is still illegal to bring it in for the mining and construction sectors as you well know the.

that is a legitimate use they are not adequate alternatives axe of something like dynamite that brings similar problems with it. we do not have enough action yet on the pakistani side of the border here is a perfect example of why the two countries cannot be desegregated for purposes of policies we got on one side of the border but we haven't gotten on the other yet and americans are being killed and wounded because of this. and i can assure you we will take this up again when i go to pakistan in a few days and other senior officials go as well. i don't know if we need to go any further with that answer now because you and i spent so much time on that but we can assure you that this administration has task forces and puts it as a

priority and we will continue to do so. >> i appreciate that. we continue to push on in our end as well and senator coffman was one of the co-sponsors. i wanted to go to the question of president karzai i don't have much time left but i do want to raise this question. page three of your testimony we expect and i put in we expect president karzai will express commitment made in the november, 2009 inaugural address. i have been critical of the leadership can be described as lack of leadership i guess i would ask the american people have a real concern about they know it is an uneasy alliance and there'll kind of problems but the one question i would ask is how should we measure this performance based on those commitments?

what are the signals or the signs or the substantive achievements or goals he should meet that you are the most interested in in terms of the advancing our mission? i realize we have been frustrated sometimes and i realize that we can expect perfection but i think we need some way to measure progress and i wanted to get your sense what indicators you are the most interested in. >> i think in specific regard to your question which focuses on what the government or the war but when individual i think as chief executive of the country, the way to evaluate is the way you evaluate any chief executive. does he lay out a clear program? he did. it does he fulfill his own deadlines?

sometimes. and are the programs he lays out effective? sometimes. i'm not here to plead on his behalf or to criticize him but only to point out what we all know, which is that he may have the hardest job in the chief executive in the world because of the complexities and poverty of the country, and the programs he is laid in place are the programs we feel comfortable with and the difficulty of implementation which is the subject of repeated exchange this afternoon is one we have to keep working on and then there's the issue of corruption and we all agree and president karzai said this publicly corruption is a serious issue and he's working on it and he's upgrading the high office of oversight, which is in charf that issue. it would be on a fair, however,

to hold any one person accountable for the totality of the defense inside any country even if that person is the chief of state and in this particular case even more so, a good chunk of the country insecure ethnic divisions and historical a complicated relationship between kabul and the outlying regions which have different ethnicities to them. so i am not -- i think he's doing the best job he can under the circumstances. i know that doesn't satisfy some of your colleagues, but i absolutely know he's doing that, and if the reintegration program gets off the ground and if it is successful, it will have a huge effect. >> thank you very much. >> thank you, senator casey. senator wicker. >> one bit of housekeeping. in response to senator corker,

mr. holbrook reference to a report would like to ask unanimous consent that report to be entered into the record of this hearing at that point in the testimony. >> without objection the report will be -- >> the context is important and i don't want people to read this transcript to have to refer back to previous hearings. thank you. you know, i think ambassador holbrooke, you have answered a lot of questions today and clearly you are inexperienced and long-suffering diplomat and you have demonstrated that today, too. why are we in afghanistan today in 2010? well, we are in afghanistan

because of 9/11, and we are in afghanistan in 2010 because we still are not sure that the situation that a rose from afghanistan in 2001 might not happen again. i think you have made the compelling case that there are direct threats to the united states of america that could arius from that area. i think you've made an excellent case about the uniques strategic position of afghanistan and its neighbor, pakistan. clearly we are interested in yemen. we are interested in somalia but there are things about the location and afghanistan that gives al qaeda an advantage for being in afghanistan that would not have to have if they had to rely on a safe haven in yemen and and afghanistan you made a

very telling statement, mr. ambassador, about the consequences if we walk away from afghanistan as we did 20 years ago and i believe that is almost a direct quote of your testimony today that the results could be catastrophic as they were earlier because we walked away and in that context i want to ask you to respond, mr. ambassador, to the comment of the cia director when he said u.s. officials had not seen any firm intelligence that insurgent troops in afghanistan and interested in reconciliation, which i think we've acknowledged in this room today is important

if we are going to bring this effort to successful conclusion. mr. panetta said davis, and you've read the testimony but let me quote for the record, we have seen no evidence they are truly interested in reconciliation where they would surrender their arms, they would denounce al qaeda, where they would really try to become part of that society. my whole view is that on less they are convinced the united states is going to win and that they are going to be defeated i think it is difficult to proceed with a reconciliation that is going to be meaningful. that is as far as i will quote. this present cia director and i ask you to respond. you may feel that the president's position on the july, 2011 beginning of

withdrawal is clear as you said, but i would submit to you, mr. ambassador, that it is not clear to everyone who listens and it's not clear to the taliban and it's not clear to the people who feel threatened by the taliban. i agree with you. the vast majority, overwhelming majority of afghan people do not want the taliban back, but they are legitimately worried about who would fill the vacuum is indeed they are interpreting the president's position in a way that is different from the way you are. we have walked away before according to your own testimony, and so how can our enemy in

afghanistan who might be willing to acquiesce and suggests we want to be part of peaceful society and a peaceful government, how can they feel that they are going to be defeated if we are sending a signal that depending on conditions on the ground in 2011 we might get dee dee to and yet make the decision to walk away. >> senator, in regard to director panetta's comments that you quoted, and a i agree with his comments. they are not inconsistent with what i said because he was referring to reconciliation. the idea of higher level negotiations or effective negotiations with the leadership of the taliban supreme and the

press at the time of the hearing was filled with reports iranians reports of deals in the offing it just wasn't true and director panetta was trying to clarify the record and what he said was precisely right. i've been talking about reintegration. the program announced supported by the u.s. international community which is so critical to take the fighters off the battlefield. there is overlap between the two but i think we see the clear distinction. in regard to your other question, you stated correctly the misunderstandings. all i can say is the misunderstandings are an ironic sense enhanced by constant questioning of the day. the president has been clear on what he said. i tried to be clear this afternoon had testified before

you. but some people continually -- in the guide is helping the united states some people assert that the president is leaving when he made clear he is not. he is starting a withdraw and that it will be the size and scope and pace will be determined based on the situation on the national security interests. but some troops will begin to leave. that is a big distance from the misperception that both you and i have seen, and i understand or point because it concerns me greatly, and i never make a speech where this doesn't come up and especially overseas. so i appreciate your comments and i take them to heart. >> thank you very much, senator wicker. senator web? >> thank you. ambassador, good to see you again. it is always i have great admiration for your spirits of public service and the energy that you always bring in to

anything that you do here. i would also like to say that i really identify with senator lugar's opening statement and to an extent the concerns senator corker was laying out here there are a lot of people in the country they're very confused and when you are working on this as intently as you are the perception may be different. there is in need in my view for clarity in terms of what actually can be accomplished and the way that we are going about this we know one the one hand we have an obligation to be doing something because of 9/11 we also know international terrorism is by its very nature of fluid and mobile. there were no real operational

and al qaeda when we got to al qaeda they left largely before we decided to withdraw. we know that al qaeda is active in other countries. we have seen estimates from mr. panetta and the general jones and other people that the level of al qaeda inside afghanistan as less than 100 people, and i know where your jurisdiction is and i know the work that you're doing across the border but for a lot of americans this is a very confusing thing. also, you and i know from history how effective targeted assassinations are. you will recall when you're talking about the very beginning of when you were in vietnam when president kennedy first announced the escalation in the amount of the vietcong were assassinated on the average 11 government officials a day. so a lot of this talk about people being nervous and

afghanistan be nervous about the time line i would venture a good bit of them are a lot more nervous about the way that it is being driven between them and this government because of the policy of the target of assassination. so all of this sort of comes together in a way that i think honestly just speaking honestly because i greatly respect what you're trying to do here and i have withheld any judgment about our policy on till this december review. i said that when general petraeus was at his confirmation hearing, but in a way this is becoming more and more opaque to the public understanding it as it has evolved. so what i'm looking for and i know you spent a great bit of time today talking about specific programs and these sorts of things but what i need to see, with the american people need to see by december are measurable results in a way that

affects policy not simply program by program evidence of political stability against something they can get ahold of rather than operation by operation in an agreed upon conclusion and when i say that i take your point this is and whether we will walk away from obligations but there has to come a time when it will be appropriate to withdraw. we are not been to be there forever so that is what the american people need to see and that's what i'm we'd be looking for and i wish you well. >> senator, nothing is i can quarrel with and you used the two words you used which echo and i hope that we all remember our measurable results. as senator kerry began by saying accountability, and you talk about measurable results.

so we are judging ourselves by that. the president is demanding that of the military and civilian team that you have had testified before you. that is why i am making this trip. i was in the region two weeks ago and coming back. i'm not doing it for the frequent flier miles, and i cannot tell you how deeply we feel that pressure particularly because as several of your colleagues have said american men and women are risking their lives sometimes paying the ultimate price for this policy and it has to work. we owe it to them. at the same time, we recognize as senator wicker said that this began with 9/11. we are not there in the way we were in the other war you and i remember, and so we have to make

this work. no one knows it better than the outstanding general who is now commanding isaf. i know a lot of four-star generals in my career and i have never seen anyone better than david petraeus. he has come in under extraordinary circumstances and he has immediately intensified the efforts just to give you one example that shows civilian military and addresses your point of the very first issue he raised with us in his first telephone conversation with ambassador eikenberry and me and general from the nsc of civilian military was electricity in kandahar. you all understand the relevance of that to the war effort. we are going to give it our best. >> well again, i don't want to be labor this i just want to be very clear that i would agree

our difficulty with respect to responding to international terrorism was eliminated by 9/11. the question here, the question i'm going to be looking at over the coming months is whether we can address the issue of international terrorism through the structure we are putting on the ground and afghanistan and that will be the benchmark. >> senter i just want to finish my response by focusing again on what i really actually wanted to talk about more today which is pakistan and you understand why i answer your comment with that comment. the western part of pakistan, all less areas are the epicenter of the issues that threaten our country. they directly linked to the taliban but they are in pakistan. we have made real progress in pakistan in the last year and a

half but the focus is so overwhelmingly on afghanistan for valid reasons that's where the troops are that we haven't even recognized the movement in pakistan across the board economically, politically, strategically and the fact that that is an important step forward you want measurable results, that is one. >> thank you, mr. chairman. >> thank you senter web. senator shaheen. >> thank you ambassador holbrooke for being here and to do and all of the folks sitting behind you think you very much for the work that you are doing. i would like to go back to the issue of reconciliation and focus on that a little bit. you mentioned, and pressed for holbrooke the polling that has been done shows consistently that women in particular have concerns about the taliban and what not like to see them return

one of the concerns i have heard consistently about any reintegration or reconciliation efforts with the taliban are that that would be at the expense of women and progress of women's rights and women's issues on the ground so i wonder if you could talk a little bit about what is being done to insure any effort that reintegration and reconciliation will not undermine progress for women in afghanistan. >> i can assure you as i know the secretary of state has assure you this will not be allowed to happen. i could give you many facts on this in london in the conference coming up next week and the visits here by president karzai and his cabinet. we have in the percentage of women in the national assembly

we and the previous administration consistently made this a priority issue. on every trip i make i meet with women of legislators or six society groups. they are the bravest people in the world as you know first hand from when you and i were over there together, and i can assure you the united states will make sure they are involved in every area. we also have these direct programs the use to be handled under contracts. i felt the contracts distance us from the actual issue so we eliminated most of the contracts. there were some complaints and some of the complaints reached for committee so i wanted to explain clearly to you, senator, that we terminated as many contracts as we could in order to give more flexibility and responsiveness in the women's programs through the ambassador, the ambassador fund for women

instead of these two or three year times for the programs which don't meet the time crisis. this is also true in pakistan. i know you talked to the secretary of state about this as have many of your colleagues. i can assure you we will never let this issue all of our site. .. if someone wants to be an integrated, they have to accept a constitution. we have to respect for all minorities and the role of women. it would not be possible to go back to the black years. >> could you then talk a little bit more about how this process might work? are we on the same page with president karzai un how are

integration and reconciliation will happen? what elements of the taliban are we focused on and what is the role of pakistan as we are focused on negotiation efforts? >> are you talking about the role of women or the whole reconciliation? >> i am talking about whole process, but i assume the role of women is part of that. >> were on the same page with president karzai on the role of women. i would be misleading if i said that everyone in afghan public life agrees with that. there are many conservatives who are anti-taliban but have the same views of the role of women that you and i would object to. in pakistan, it is even more evident. so we can never cut down our vigilance on this. the last three times i was in afghanistan, i called on the council, the senior religious a governing body, specifically to

discuss these issues. here are anti-taliban people, but they are very conservative. any afghan women themselves have told me that it is legitimate in their views. but at the same time, we cannot leave it where it is, and i am-- we are constantly talking about it. in the larger issue about reconciliation, we and president karzai have begun an intense dialogue on this issue, with secretary clinton and i will continue on this trip. and we have had similar toxin and islamabad that i would tell you in all frankness that we are in the early stages those talks. we could not begin them until after the inauguration after the london conference and after a certain sorting out, and very importantly senator, we want reintegration programs to be out there and establish before we

start getting out. that is why director panetta made the comments that senator wicker referred to, and the last point here is critical. the success or failure of reconciliation efforts will be linked directly to the success of the military operations. the more pressure, the more success the general petraeus and his troops have, the more likely it is that the other side will recognize the impossibility of their situation. many people say have a cease-fire, stop it, it will work. i have based on my own experience the opposite view. military success on the battlefield dictate the conditions of this sort of process. >> so, can you just briefly address pakistan's role? >> pakistan's role in reconciliation is, it and ambiguous and opaque at this point. it is something that we want to learn more about pakistani

attitudes towards-- remember we are talking about reconciliation in afghanistan, not pakistan's own relationships but they have five major insurgencies going on in their country. the afghan taliban, the pakistani taliban who were the trainers of the times square bonner-- romer, lat responsible -- the haqqani group in north waziristan who have been attacking the american troops. al qaeda itself and several other groups, so their situation is enormously complicated, and you need to pakistan. >> this is the first time senator we have had these discussions on islamabad and we are very grateful for the leadership that has been shown by the pakistani government, and its military leaders, for the kind of dialogue that is underway as part of the strategic dialogue that secretary clinton and foreign

minister qureshi have had her go. >> thank you very much. >> let me in tree for just a moment. the ambassador will need to leave for the airport in 15 minutes. this does allow for two, seven minute question., but i would ask senators to be respectful about and defined correctly to the scene. senator menendez. >> thank you. mr. ambassador i want to thank you for your service and i especially want to thank your team. this is tough duty under the best of circumstances and the sacrifices your team makes over there and the second thing i would say is i think it is really key-- we kind of crossed over it, the civilian side is going to make the difference in this. i think our military is performing incredibly. they know what they are doing, they are doing it well but it is going to be the civilian part of this that it is going to make it

a success or not my opinion. with that in mind we talked about benchmarks. one of the benchmarks i have had for the last year and a half is not just generally corruption, but what happens when we get the many people we have brought in, our civilian people and they start working with the ministries and they start uncovering corruption and they find specific cases that they have wiretapped information and all kinds of information. so i would like your comments, there's a june 28 article in the "washington post" that the kabul government has been derailing as the cases are being brought. to me this is extremely, extremely serious. it goes right to what he said in a statement. it goes to our success. not that there is corruption in general but when you find corruption and you bring the case, people either, the cases are being pushed aside or people are being--. >> could you just clarify the specific question? >> june 28 there was an article in the--.

>> this is the corruption article? >> not just corruption. the article says that they are finding cases, they are checking their investigations, they are bringing the cases in the cases are being dismissed either by the kabul government. >> i read the article carefully, and the companion one in "the wall street journal." we are very concerned about it. and, i just can't count on the specifics of the cases because i just don't know enough about them, and i don't think i should comment on internal afghan ongoing investigations. demand they talk to, we mentioned mr. z, was part of the bribery case against mohammed neuer. he was the former treasurer of hodge operations. mr. neuer's boss, the minister,

escape the country before he could he arrested under the indictment. of neuer himself has been convicted by the anticorruption tribunal since the 15 years in prison and the 900,000-dollar fine. and i understand that the afghans have an extradition effort against ministered to kari. we have a huge and anticorruption effort underway, but it is built on nothing. there was nothing when became. and so, to set it up as taking some time. also as i said earlier, the elections really slowed it down. i'm not trying to defend our inability to have done more on this issue. it is of the highest importance. general petraeus and i and ambassador eikenberry all share that concern and we take that article very very seriously. >> you know there is a general charge of corruption and clearly

issues people i've talked about and i think that is serious but i think the task force 2010. >> you made on the american side? >> yeah. but just saying to me where the rubber hits the road, the benchmark, the metrics and all that kind of stuff. one of them is when we get our folks over there and they bring in good folks from dea and at the eye and those cases, will the cases actually, will the government bring the cases is one of the key landmarks not just general corruption allegations, discussions, rumors but actually bring cases and they think this is especially true when you go into kandahar because i think when we go into kandahar we are going to find many many cases of corruption. this is the pashtun. this is the government so i'm just concerned i am going to be watching very carefully. >> you know senator, the anti-

corruption tribunal of afghanistan just convicted a border police general and two of his aides on corruption charges. he had 800 goes to soldiers on his payroll. this tribunal has only been in existence for five months. it is that a correct result of the efforts of of the team seated behind me. it is part of the come on the u.s. side, and major crimes task force. i don't want to leave you with the impression that we are solving the problem but at least we have identified it, we are working on it and it is one of our highest priorities. this tribunal and kandahar has the conviction rate of about 90%. >> and as you know it is a battle between whether the people respect the government are not and it is basic to counterinsurgency. i've touched in the committee about these different things than the one thing when they ruled the government and clearly this is where the the government

does that. >> one last point senator, admiral mullen responding to these concerns had recognized a previously unrecognized fact, which was one of the major sources of corruption was u.s. military contracts. established with the task force i mentioned a minute ago, task force 2010, and they think that the admiral in charge of it is i think you met with her. that is the admiral you are referring to. and, i apologize for not remembering her last name. admiral dassault. she has been into our offices and we are working very closely with her. and their task force 2010 is really important. its task is to review all contracts in order to limit contract related fraud. imagine that a year ago the issue wasn't even acknowledged. not an excuse and it is not a solution but it least, at least

we are being open and addressing it directly now. >> thank you and thank you senator menendez for yielding. i appreciate that. thank you mr. chairman. >> mr. chairman, thank you and thank you ambassador for your service. i appreciate you had to leave and i hope you appreciate i had to vote and cast lives on millions of dollars. i remain deeply concerned and i agree with you in your opening statement that you cannot talk about afghanistan without talking about pakistan. and, based on the concerns that many of us have had for some time, obviously the more troops that we have deployed to afghanistan, the more dependent they become on pakistan border logistical and other support, so as we develop the enhanced partnership of pakistan act of 2009 we sought to ensure provisions were included to

ensure the united states has a comprehensive strategy, to eliminate terrorist threats and close safe havens to pakistan and two to assess the effectiveness of assistance provided. including as it relates to effort undertaken by the government of pakistan to disrupt, dismantle defeat extremist and terrorist groups. as of this moment the administration has yet to provide these congressionally mandated reports as the law calls for, and i highlighted that fact in a letter to secretary clinton last week, and i urged the completion of those reports. have you been involved in the preparation of those reports and are you ready to make such congressionally mandated reports to congress? >> senator, of course i'm ready to comply with any congressional mandates, as i have throughout

my career. >> have you participated in the creation? >> with europe or mission senator may i just consult secretary burma for just a second because i just need to clarify what we are talking about here. i was not aware of the noncompliance on a mandated report. there was a request for an up day. i'm not familiar with your letter from secretary clinton. perhaps secretary burma can address that they do want want to assure you, because it is not just because we have an obligation to you, but because

it is everything i believed in in my career that we owe you whatever information you ask for, and i don't know if. >> i would just simply ask you and the state department to reiterate my request to secretary clinton. if you are all in conformance that somehow this member of the senate foreign relations committee has yet to see that report, so i would like to see it, and i would like to get a copy tomorrow if i can. if it is already out there we should be able to have it. clearly, we cannot determine-- i certainly will not vote for any more money unless i have a clear sense that we are headed in the right direction or that we are meeting goals in the resources are being well spent and i can't do that unless i start off with the basis of understanding that we have benchmarks and those benchmarks are being met. so i hope we can get the report. somehow maybe it missed my office, and i have one other

question and then i will let you go. >> i absolutely, i will commit that we will, as soon as this meeting is over, drill down and determine what the issue is and locate where it is and we will get back to you. >> one of our questions, general mcchrystal had a series of comments he made about our overall stability. of course he was released of his command. i just want to know this. are we all on the same page, you, the ambassador, turner petraeus? are we all of the same page because even being on the same page, it is a hard battle and challenge to win, but if we are not all on the same page, it certainly doesn't you know create confidence by those of us who are asked to cast votes here for a continuing engagement. so, maybe you can reassure me that we are all on the same page moving in the same direction, executing the same strategy and

having-- towards a goal that we can collectively have success with. >> it is a very legitimate question of course in light of "the rolling stone" article, which obviously was extraordinarily unfortunate and necessitated a completely correct decision by our commander-in-chief, because basic issues of civilian and military control were involved, and although it brought to an end the career of a very distinguished and fine officer it was necessary to do. as far as your core question goes, let me assure you an state again for the record that my counterpart, until two weeks ago was david petraeus. for a year and a half we worked seamlessly, continually. he is now the counterpart of course of the ambassador. there was never a problem between us.

we had tactical disagreements but we traveled around the world together. we testified before your committee together and we forged a common civilian military strategy. i have been involved with civilian military efforts all of my career. this is the best one i have ever seen and as i have said before general petraeus is an outstanding senior officer. we are absolutely on the same page when it comes to the overall strategy and working together. there are disagreements once in a while and the press exaggerates them. the article was a group of ad hominem remarks, some of them aimed at me, which made no difference to me in the conduct of the war nor in fact for my regards to general mcchrystal. president obama addressed exactly the point that you raised in his meeting with us the day he change the command, and then in his public statement. he made absolutely clear we are all in the same page. i have done since mill before.

we are in good shape here, and i am fully satisfied about it and i will be seeing general petraeus and just a couple of days and we will continue this. >> have a good journey and i look forward to the report. >> thank you or. >> thank you senator menendez and special thanks to you ambassador holbrooke once again for remarkable testimony and response to the questions of our members, and likewise to bring additional materials requested in a timely way and we wish you godspeed in your travels and we are hopeful that europe conferences you have will be very productive for our country as well as those who are working with. >> thank you senator lugar and thank you again for kerry-lugar-berman. it really made a difference. >> thank you sir. the hearing is adjourned.

[inaudible conversations] [inaudible conversations] >> put an end to this war. there could be lots of civilian casualties. we do not want to seem more soldiers and civilians died. we cannot afford this war. you are all running our country. you two senators. it is running america. people don't have jobs. we don't have infrastructure. what are you doing for our

country? these people are running our country. -- ruining our country. people don't have jobs. people are desperate. [inaudible] >> later, on c-span, arizona senator john mccain and former congressman j.d. hayworth, as well as tea party activist jim dee can, as they meet in the second and final republican primary debate. that is today at 6:30 p.m. and 3:30 p.m. east -- 6:30 eastern

and 3:30 p.m. pacific time. >> they are all different. they have their different towns in dangerous. >> this weekend, barber for robert service on his trilogy on lenin, stalin, and most recently leon trotsky. learn about their relationship and roles in developing their form of communism. robert service tonight on c- span's "q&a." >> this week on prime minister's questions, prime minister david cameron talks about the loss of six soldiers fighting in afghanistan. he talks about the recent rioting in northern ireland. he is questioned about the costs of reorganizing the national health service, maintaining the national minimum wage, and funding for medical research. that is tonight at 9:00 p.m. eastern on c-span. in a moment, we will show you a house hearing on the trend of

unbundling air fares to require passengers to pay for some services individually. first, we talked with the bloomberg reporter for some background on these issues. >> it looks like they are saying that airlines have to do more disclosures on fees for bags. what did the committee members here yesterday? >> that is right. you have said it. we have seen so many more of these if you are flown in the last couple of years. there are additional fees for checking your bag, buying a sandwich, or even getting a drink. congress members are hearing about this, because they fly a lot. go back to their districts every week. consumers are coming up to the congress members and complaining

about these fees. the congress members are trying to respond by holding the hearing, such as the one you are about to see. the government accountability office did report that was requested by the committee and the gao found there could be much more disclosure of these fees so that consumers know about them before they purchase their tickets. that is sort of what the committee focused on in the hearing. >> there was a quote from congressman oberstar who said, if you do not exercise self restraint, you will get pushed back from the traveling public. did he also implicitly mean that they will get pushback from congress on this is a the legislation? >> that was implied. he directly said, you can expect more regulation if you do not fix this yourselves. a big problem is, how do the airlines fix it? some of the testimony pointed

to the need for the government to step in so that the carriers can be made to fix it. nobody wants to be the first to step in. if everybody had to do it, it would not be so bad. >> what is driving these baggage these? >> the oil price shot up to new record levels a couple of years ago, prompting airlines to look for other ways to make money. the fuel costs were so high, so they turn to these fees. then the recession hit. people stop flying. again, to make up some of that revenue, they looked to fees. the picture has now improved. . people are starting to return and live a little bit more. the errors -- fares have

increased. the carriers are likely seeing some level of a substance from the consumer of these on a certain level. >> is any indication that consumers are choosing airlines based on whether or not they do charge baggage these? at the hearing you are a -- baggage fees? >> at this hearing, the southwest airlines' representatives said they have done very well by not charging fees for the first two bags checked. they say that has been very good for their business. you'll also hear the ceo of spirit airlines, who charges fees even for carry-on bags who says the consumer likes these fees. depending on the business model, some carriers are finding they work well and others do not like them. >> what should the consumers expect to happen next in congress? what should they keep their eye on in terms of legislation and

hidden fees? >> person to watch as secretary of transportation ray lahood, who has a proposed rule out that would require, potentially, broad disclosure of these fees. that is likely to happen before congress acts. >> john hughes, covering the transportation during we are about to show you. you can read his article on line at businessweek.com. >> now, the house hearing on the issues pertaining to the trend of unbundling air fares to require some services to pay for services individually. they also examined requirements for disclosures of fares, taxes, and fees, and how passengers could recover some of those costs. this is one hour and 50 minutes. [gavel] >> the subcommittee will come to

order. turn off your collective -- electronic devices. we're here to receive testimony regarding airline fees. i intend to gi a brief opening statement and then call on mr. petri. i might mention that we have -- we will have votes at 2:45. i will welcome everyone to the hearing today. secondly, i want to especially recognize and think the families of colgan flight 347 for being with us today and for their steadfast support of improving pilot's safety and the industry. we will move things along. and will enter my entire stake in into the record. -- i will enter my entire

statement into the record. i ask unanimous consent for two weeks for all members to extend and revise their remarks and include additional material. my entire statement will appear in the record. without objection, the chair recognizes mr. petri. >> thank you very much, mr. chairman. to demonstrate how effective your leadership is, i'll ask unanimous consent that my statement be entered into the record. >> without objection, so ordered. welet me now -- obviously are trying to get to the witnesses to hear your testimony before we go to votes. let me now recognize our witnesses today. first, dr. gerald dillingham, the director of civil aviation issues with the government accountability office. mr. robert rivkin. mr. ben baldanza.

the president and ceo of spirit airlines. mr. david ridley, southwest airlines. kevin mitchell, chairman of the business travel coalition. kyle moore, vice president of marketing for sabre travel. with that, i will now recognize dr. dillingham. we would ask that you summarize your written testimony that you have submitted to the subcommittee into five minutes, so that we will have time to ask questions. the chair now recognizes gerald dillingham. >> thank you, mr. chairman and

members of the subcommittee. findings of gao study of aviation related fees and the potential impact on the rport and airway trust fund and the flying public. our report was published this morning on the gao web site. the study addressed four questions. first, what are the scope of the fees including the fees' relation to the cost of the services provided and the degree of transparency. second, what is the potential impact of such fees on revenue used to help fund a fae through the trust fund? and third, how have the fees' affected the number of the checked bags and airline policies associated with the check and mishandled bags and last, what process these are available for refunding government imposed taxes and fees to passengers who cannot use their nonrefundable tickets? with regard to the major scope of the fees starting in about 2007, airlines began to charge for many services but which

separate charges did not previously exist such as first and second checked baggage, carry-on bags and selection. the flying public generally consider these services were included in the price of the ticket. since the services were not bumbled and fees established, the revenue from the fees have become an important part of the statement of many airlines. during 2008 and 2009, u.s. passenger airline poted operating losses of $4.4 billion. however, during that same period the airlines reported fee revenues of at least $7.9 billion. $7.9 billion represen only a portion of the revenue that we are generating from optional fees'. according to airline officials, the fees are based on a combination of fctors including the cost of providing the services, competition and consumer demand. i think it's worth noting the fees are not assessed equally.

for example, me passengers such as business class and elite frequent fliers do not pay for certain services such as check bags and early boarding. in addition, airline optional fees' are not transparent. specifically the dod does not require the disclosure of most of the fees by airlines or ticket distribution channels that are used by consumers. therefore consumers cannot readily compare the total cost of flights offered by different carriers. with regard to the potential impact of the fees on the trust fund the irs determined many of the fees that have been established by airlines are not related to the transportation, therefore they are not subject to the 7.5% excise tax which would be deposited into the trust fund. however, if checked baggage revenues reported in fiscal yea 2009 had been subject to the excise tax on domestic travel it would have generated aout

$186 million or something less than 2% of the trust fund revenue for 2009. with regard to the question on the checked baggage issues, since the airline's established checked baggage fees, the number of checked baggage per passenger and the rate of mishandled bags have both declined. according airline officials that we talked to, the airlines generally have not changed their baggage handling policies or compensation methods. consequently, it would be reasonable to conclude the decline in the number of checked bags was likely a factor in the decline in the rate of mishandled bags. finally, regarding the process available for refunding govement taxes and fees to passengers who do not use their nonrefunble tickets the government taxes and fees includes a 7.5% excise tax and on september 11th security fee and various inspection fees. we found the refund ability of thestaxes and fees on the

unused non-refundable tickets vary depending on the tax and the fees. we also found clear information was not generally available to consumers about the eligibility of refund for the fees and taxes. mr. chairman and members of the subcommittee, to address the issue that we identify through this study our report contains a matter for congressional consideration on the taxation of option fees' and six recommendations to the various agencies the generally focus on disclosure and transparency issues. thank you, mr. chairman. >> thank you, dr. dillingham. the chair now recognizes mr. rivkin. >> chairman customer, ranking member petri and members think fothe opportunity to appear before you to discuss the airline's ph. secretary ray lahood is committed to protecting the interest of the airline consumers. during this administration department implemented a numb of initiatives to further that

commitment. last december, we established a new foundation of consumer protection through a rule that attacked several persistent pernicious practices including lengthy tarmac delays, chronically delayed flights and lack of consumer information about on-time performance. in the last year we issued 37 cease-and-desist orders against airlines and agents assessing more than $3 million in civil penalties, and we are very focused on the impact of new airline fees on consumers. we believe the proliferation of the fis and the manner in which they are presented to the travelling public can be confusing and in some cases misleading. many travelers still expect that the basics of air travel are included in the ticket price. but that is no longer the case. the published fare used by many consums to choose flights does not clearly represent the actual cost of travel once the new fees are added. fee-for-service is that used to

come included in the fare like checking bags, carrying bags on board and now even getting soft drinks. as a result, it is difficult for consumers to compare the offerings and make rational economic decisions ased on the full cost of travel. we believe consumers should have complete information about the full cost of the trip at the time they make their decisions about the travel. we believe that information should be presented in a clear, straightforward way so that consumers can make informed decisions. the department recently issued a notice of proposed rulemaking that would apply these basic principles of transparency and fairness to the airline industry's new fee structure. among other consumer protections proposed. fees, here's what we propose. first, we would require true full price advertising. advertised tickets would be required to input all mandatory taxes, fees and charges ifyou have to pay a charge to fly like

some airlines call a fuel surcharge or convenience fee, it must be included in the total price presented to the consumer. second, we propose airlines optional fees' be fully disclose on airline web sites. optional fees' we mean charges for things like checking baggage or seat assignments so passengers can choose to avoid and get still fly. we would also require more detailed prominent disclosure for the fees related to carry-on and checked bags and such fees be affirmatively agreed to by the consumer with no opt out requirements or shenanigans. faired, we propose to require imbursement of baggage fees when the bags are not delivered or are not delivered on time. fourth, we are seeking comment on a proposal that airlines report both a full fare, the carriers base fare plus the mandatory charges as well as what we refer to as full fare plus which would be the full fare ticket price plus the cost

of baggage charges that consumers are traditionally used to seeing included in the price of the ticket. we are seeking comment on that and have not made any determination with the department thinks is appropriate. at fifth, the department proposes to require airlines to provide their agents and global distribution systems complete, accurate and up-to-date information on ancillaryees so that the information is readily available to consumers. among other key provisions of the rule and related to fees', we all supposed to increase compensation and transparency for but passengers and require airlines to allow cancellation of a reservation without penalty within 24 hours of booking a flight. all proposed rules address most but not all the recommendations of the general accountability office report that was released today. one recommendation of the report involves the tsa $2.50 security fee that is imposed per flight segment up to $10 to cover the cost of screening and related service as well as other fees

imposed by government agencies although the fees are beyond the scope of our current rulemakings we would be happy to work with you and the gao on this issue. we are committed to acting swiftly to complete the rulemaking by the end of this calendar year. in closing, i want to thank this committee for invigorating our consumer protection program. your leadership and support have enabled us to redouble our efforts to protect consumers. we are committed to the mission you have given us and we look forward to continuing to work with you. i would be happ to answer any questions you may have and i ask my written statement been a part of the record. thank you. >> thank you, mr. rivkin. you made mention of secretary ray lahood and the action that he has taken thus far. we applaud him for his swift action and look forward to working with you on these issues. the chair now recognizes mr. baldanza. >> thank you for the opportunity to appear today in connection to the review of airline fees.

spirit is based in fort lauderdale florida. we currently have 31 cities in the u.s., the caribbean, central and south america we carry approximately 6.5 million passengers a year and over the next five years will add 35 aircraft to meet the growing demand for the uniques ultra low cost carrier service. spirit be leaves on bundling, and by that finance the breeding of optional customer service from the fair that are not essential to transporting the passenger allows the customer the choice to purchase services or not and this benefits the traveling public for lower total costs. this approach generates increased tax revenue by stimulating more travel. these unbundled services do not impose any cost on airport infrastructure, on the nation's air-traffic control system or any other government service funded by the aviation federal excise tax. as such additional tax burden should be imposed on the cost of the services. over the past decade the dallas airline industry lost approximately $60 billion in light of continuing weak economy

and reduc demand for transportation as well as volatile and uncertain fuel prices imposing additional taxes on the industry and the passengers will be counterproductive and result in loss revenue. in 1978 congress passed the airline regulation act which stressed competition is the way to stimulate efficiency, innovation and low pricing. spirit takes this policy to heart. our goal to offer a real trees in selecting an airline for their travel needs. since 2007 when we adopted our unique paltrow low-cost character business model to provide basic air transportation at the lowest possible price and a free market it serves it provides an important public interest by disciplining fares. spirits impact was clearly demonstrated when our pilots went on strike last month and other carriers including a low-fare carriers immediately raised prices. for example, jeffbloom raised in the fort lauderdale market we and jet blew are the only serve

the market nstop, they believed the fare from under to hundred dollars to over $600 while at the same time putting out a press release saying they were helping spirit customers. in an effort to make air fare as low as possible in 2007 the unbundled the charge for checked bags and despite the rising fuel costs lowered the base fare to adjust for the unbundling. this april we announced the decision to charge for carry-on luggage that is too big to fit under the seat beginning on august 1st. this does not apply to such items as medical equipment, baby strollers and the like, carry-on bags have become a nightmare for passenger boarding. the cree and a safety risk for passengers and flight attendants and lead to costly delays. carrying more than one bag is not necessary for all travelers and we believe it is not fair to charge those customers for extra service they do not use. mostest 20 or $30 spirit reduced the base fare by about $40 to offset the charges. spirit also lowered the checked bag to encourage passengers to

check that. the fee is not affected to the booking because the total cost to the customers to travel once feared it remains far lower than other airlines. as a group low-fare has gained a greater percentage of the ticket cost than to the higher legacy carrie. this is because much of the burden on the airlines and fixed charges. on the domestic flight of these include addition of the upside tax of $3.70 segment fi, $2.50, pst at airport and a 4.3 cents per gallon fuel tax. so flexible that 300-mile trip with $180 und-trip fare the customer could pay a total of $35.40 in taxes or 20% of the fare including the federal excise tax. since spirit as the lowest fare in the industry the lower income passengers are already effectively playing the highest taxes on the percentage of total fare. this is unfortunate and highly regressive of the existingtax structure. our average fare is under $85.

most of the industry as well over $100 our passengers paid over a $11 in federal excise tax between the ticket price and the fuel or 13% of this amount just for the ticket tax and fuel. the primary impact of charging for nonessential ancillary service would be to raise prices for consumers thereby dampen the travel demand and resulted less excise tax revenue. the time the industry is serious financial issues and secretary of transportation from the commission on how to strengthen the industry for the benefit of employees, consumers and shareholders would be counterproductive to impose another tax burden. as noted the services spirit unbundled do not involve activity the drive up the cost of air traffic control or other services paid for by the aviation trust fund. they are not charges for the transportation of any person. flexible de handle leggitt checked bags for high labor costs on the airline doesn't touch a traffic control. another long transportation

involving nonrefundable tickets covers the cost imposed by the airline by such change. these include direct cost for the time, direct cost for a time of reservation agents and the potential loss revenue from a bcts. passengers who want to avoid fees can purchase a refundable ticket purchase low-cost travel insurance. recent articles in the press based on the first quarter d report says spirit of the highest revenue as a percent of total revenue. we believe this comparison is misleading. spigot percentage of revenues that total is higher than other carriers simply because the fares are lw. for example of this because this an average fare as american airles percentage of ancillary fees will be 14%. over 70% of spirit revenue comes from ticket sales subject to the aviation excise tax. of the 25% of the revenue that could be labeled ancillary about six to present is related to itinerary of the suit 50% from baggage fees and 10% from a seat selection fees. in total about 15% of spirit revenue is from ancillary fees

expected by passengers in connection with their travel. we are certain spirit if a decision to unbundle services not essential to the transportation has have minimal it of any excise tax paid for the travon spirit. this is because lower fares have been able to despite the difficult economy the last several years opposing excise tax many will simply raise fares, and in the public ability to afford travel and therefore a result in lower overall tax revenue. last comes. believes customers deserve to have access to as much information as reasonably available on the cost of the travel. spirit's provides information on all of its charges and customers can see e total cost of the flight including all optional services they selected before confirming their purchase. this makes it easy for customers to compare to come from spirit's prices are the lowest. unfortunaty out of the d.o.t. policy airlines must with federal excise tax as part of the base pairs of this tax is hidden from the customer. we are not aware of any retail

product whereby government feet prevented from showing customers how much of the payment is forgot. in closi i would like to note to a particularly onerous proposed new rules recently announced by the dot. first after decades of permitting airlines to list certain government taxes and fees separately from the base fare and advertising department proposes to require airlines to include all applicable taxes and fees in the advertised fare further obfuscate the portion of the ticket price. we belie congress should direct the department to this plea fears of ebsite to customers to immediately see the full tax component of their fair. secondly the department proposes to require all airlines allow customers panicked or cancelled without charge for a police 24 hours even for nonrefundable tickets allowing 24-hour hold with circumvent sales resulting in a return of lower revenue and meets higher fares. also holding the fare for 24

hours allows customers to take away valuable selling time potentially resulting in an empty seat. most low-fare carrrs including southwest do not permit either of these options for nonrefundable tickets. such a rule would require substantial costly change on the reservation system as well as changing the contract of the credit card processing agent. as noted the spirit passengers can shop and cpare prices before they buy. in conclusion we believe and so their fees and other consumer protections congress must be guided by the objectives established by the airline regulation act. manly dandridge at innovation, competition and the expansion of low-fare service. tax revenues to be generated by promoting economic expansion and taking steps to encourage more people to fly imposing taxes on fees for nonessential customer services a related to the cost imposed by the system must be avoided. such would surely help competition, raise costs and slow the industry recovered from a decade of lost. in addition congress should look

carefully at the rules proposed by the dot, rules that benefit few customers decrease cost for all should not be imposed on the industry such rules create efficiency, reduce innovation and lead to higher fares. thank you for your consideration. >> the chair now recognizes mr. ridley. >> chairman costello, ranking member petri and members of the subcommittee thank you for inviting southwest airlines to testify at today's hearing. i'm senior vice president of marketing and revenue management i've been at southwest employees since 1988 and my role on accountable for the company's top line revenue performance. my resonsibilities include among other things pricing advertising and the maintenance of a brand image as america's leading if low-fare airline. today southwest is the nation's largest airline in terms of domestic passengers. carrying more customers than any other u.s. airline. we now carry over 100 million

passengers a year serving 69 cities and 35 states. we are the most heavily unionized airlinin the country and the only airline that is not had an involuntary furlough of employees since our inception in 1971. after 39 successful years in the airline business southwest contins to look for ways to differentiate ourselves fro other airlines beyond our consistently low fares and a great customer service. most recently, we chose to make a more affordable transparent and easy to understand pricing structure a focl point and a winning the hearts and minds of the flying public. by not following the industry trend towards nickel and diming our customers. our philosophy of southwest airlines is to not charge customers for things they have historically received for free. but as i southwest is committed to fares with no hidden fees.

what you see is what you pay. when you book a ticket on southwest you will not pay a fee to check your first or second bag were to carry on a bag for that matter. you will not pay feed to pact dee dee to check your bag curbsi or paved $150 to change your reservation. you will not pay a fee to sit in a window or an idol or exit seat. you will not pay the fee to make your reservation or the phone. and you will not pay fuel peak travel surcharge be either. and as always, snacks, sodas, smiles and the occasional bad jokes are complementary on southwest airlines. our position on fees' aligns our corporate goal togenerate positive financial results with the passion of our people to provide good customer service. we listen to our people. they do not shy away from telling us exactly what they think. ou people tell us they don't

want to nickel and dime their customers allowing our peopl to do what they do best in a customer friendly way is just one reason why since 1987 when department of transportation began tracking customer satisfaction statistics, southwest has consistently led the entire airline industry with the lowest ratio of complaints passengers boarded. this is further evidence that our policy of not nickel and diming is not a gimmick. it's a good busins and it makes people feel better about who they are and what they do. due in large part to the bags fly free campaigns of west experience a domestic market share shift worth close to a billion dollars since the introduction of this campaign. as the result, our customers, employees and shareholders have been the beneficiaries of this decision. while we are not fans of fees for services that historically have been part of the base fare,

we believe strongly that the cision on whether or not to charge the fee for an airline product or service is a business decision best made by each individual airline. southwest made the decision to limit our customers expose to what we view as on a reasonable and a million fees'. that was our choice. other airlines have chosen a different business model and should have every right to do so. however, we do think that the federal government should focus on insuring the full disclosure of any of these to consers making sure that air fare are advertised fairly and honestly. only an informed consumer can make apples to apples comparisons which allow them to shop for a flat that meets the needs and preferences to protect the travellig public fees one to pummel to discuss and debate consumers wherever their tickets are sold. though related elements of the d.o.t. would achieve this goal. on behalf of southwest airlines,

thank you for the opportunity to testify and i would be happy to answer any questions. >> thank you, mr. ridley and the chair recognizes mr. mitchell. >> mr. chairman, redeemable petri and members of the subcommittee, thank you for inviting the business travel alition to appear before you today to represent passenger and corporate managed travel interest on airline product and bundling fees. today's hearing is critically important because of the potential for consumer abuse and it's fast changing marketplace for airline services. we are not against unbundling as a matter of principle. but rather it is opposed to te access of full disclosure of all as long fees and charges such that all consumers cannot make a genuine apples to apples comparisons of all in airline fares. without timely and complete airline disclosure of an incrsing array of charges to the global distribution systems,

the travel agencies they ought to make consumers deprived of the all in information will become as economically trapped by airlines as they would be physically trapped during a seven hour tarmac delay. the need for consumer protection in this area is acute but the remedy need not be burdensome. the highlights of the btc survey results of 188 travel industry experts released yesterday, revealing that they change in thinking about government oversight and commercial air transportation. consider 100% of corporate travel managers indicated unbundling an extra fee have caused serious problems in the managed travel programs. 86% believe the airlines absent government rules will not make fair and adequate and readily accessible disclosure of their add-on fees and charges so the

travel managers and thr travel management companies can do comparison shopping of the all in pces for air travel across carriers. at 95% support the proposal but the u.s. dot requires airlines to make add-on data available and easily accessible to the travel agency channel through any n which the airline or an airline is agreed to participate. these surveys present law should point out our business people who did not generally favor government intervention in the marketplace. however, they see a market failure coming at them with a speed and impact of a stevens strasbourg fastball to decide of the ead. with across-the-board unbundling, of air travel serves and absent the government and higher stepping in, consumers will not have the ability to evaluate the full price of air travel options available to them. for decades, the transparency of air fare information through all

channels has been a marvel of modern technology and has benefited consumers immeasurably unbundling without disclosure threatens to catapult us out of the 21st century and back into an opaque stone age where a telephone calculator, pen and paper and a lot of unproductive time were needed to figure out how to compare airlines services. add-ons like checked bags or material to air transportation away a tear is material to a restaurant meal. but some are akin to a restaurant advertising 20-dollar business persons luncheon special and then a surpring with a 10-dollar add-on fees for use of the chair when handed the man you. the patron is given partial information and essntially tricked into coming to the restaurant. the stakes of course are much higher at the airport for families and businesses on tight budgets which is why you are having this hearing today.

of significance is that major airlines remain at age 30 to 35% cost disadvantage vis-a-vis the low-cost carriers. and as such cannot offer the kind of across-the-board low-fare the low-cost carriers do. there is, therefore, motivation present to obfuscate the true price by keeping the fares to opaque and especially esisting efforts to have fees and fares displayed transparently for travel agents by the global distribution systems. important like, the publishing company has a new airline tested data system ready to facilitate the loading of add-on fares in the global distribution systems. however, not a single major u.s. airline has signed on to the of btc's knowledge to permanently use this new system because the first airline to do so would likely show all eight and higher air fares of 30% or more compared with its competitors.

this is an industry where a few dollars can make a difference. for consumer choosing one airline over another. so no one airline can rationally be expected to make the first potential, otentially suicidal move. but as we reasonable measure of government helis needed to ensure that all airlines joined together for the benefit of consumers. moreover, except to the extent congress or d.o.t. ann gates specific consumer protections, airline passengers are without legal rights and remedies because preemption, federal preemption and the lack of ftc oversight in this area. in conclusion, mr. chairman, the internationalirline passengers association and 00,000 members joined btc in encouraging the committee to urge the o.t. and its npr and to require airlines to make add-on data easily accessible, not only on their own web sites, but also to the

travel agency channel through any gps which an airline agreed to purchase a bit. congress could also provided this relief in the reauthorization act to senator menendez sensible disclosure propos. either way, consumers would finally have the batting needed to step up to the plate confidently in today's on bumbled marketplace. thank you. i look forward to your questions. >> thank you, mr. mitchell. we now recognize mr. moore. >> thank you, mr. chairman. thesabre travel that were part of the business that runs the gse and travel paucity one of the nation's largest and most popular online travel companies today in my testimony i am representing three groups, the director of travel services as a season, the trade assoation for online travel companies, the american society of travel agents, the largest association of professional travel retailers inhe world and the consumer

travel alliance of nonprofit member of the legislators and the -- member of the consumer federation of america o inform and educate legislators and regulators about policy of consumer travel. i am responsible for the systems that manage the sale of air travel across all channels where airlines distribute which is heavily focused on airline on bubbling. up till recently air traubel shopping in the u.s. has been one of the closest things you'll find to the adam smith perfect marketplace. consumers have enjoyed access to near-perfect information on air products and prices. through the internet travelers can shop anytime da or night and the prices while constantly changing are also consttly updated. they can book when they feel the product is appropriately priced for themselves and travelers are extremely price sensitive. the majority select air travel at or very near the lowest fare offered. unfortunately, that perfect model was not broken.

mr. mitchell and the rest of the panelists held land is very well but in short with the removal or the repackaging of many services from what is traditionally included in the fair the shoppers have a very difficult time finding out the true cost of travel for their proposed trips. they are left to find out the true cost only when they are completed through return flight for the trips when they've paid for the last baggage feet and picked the seats for themselves and their families. to the painful surprise and budgets. consumer travel alliance just released information that aligns the impact on consumers from hidden fees with the effective price increases of 20, 40, 60% and higher but it doesn't hav to be this difficult or harmful. solutions are coming on line that will bring back. but this can only happen if the airline community makes information on ancillary fees readily available. let me repeat it can only happen if the airline community makes

information on ansel garrey fees' readily available. mething that the edta strongly believe the airline should be compelled to do. a broad collection of airline agencies and standard setting bodies such as the atp have outlined how the information for ancillaries can be shared within the industry of the airline owned fare clearinghouse has adopted their systems to support ancillary fee information with the same level of specificity airlines have for base barras. targeting the ansel race to specific dates, routes, flights, fares, traveler groups, corporations or agencies and many other variables. at sabre we are on the cusp of being able to make this information available to shoprs as they shop whether online or through a traditional travel agent. the end of this month, sabre is poised to interest ancillary and their priceinto the

shopping of the traditional travel agent. in referencing fi graphics you see in front of you. next month we will take this a step further. a big step in a way in the low fare search process. the low-fare search is something you wouldike and online shopping where you ask for license fares for the desired departure and return dates. next month we will allow shoppers to choose what and so the rates are important to them for their trip. if they believe they are going to need to check a couple of bags they can specify that up front. if they're traveling with their family to indicate the need to be about to select ets together. the system did find the lowest fares that meet those specific needs inclusive of the ancillary giving the consumer the total price for the trip with no surprises of the airport. these standards can solve yet another problem that today's corporations and agencies have virtually no ability to manage where the money is going. the systems can fix that, too. and it is important to note tha

sabre and the rest of the industry are all going down this path, currently. of course all of this only happens if the airlines are compelled to provide that information to the channel that represents approximately half of the air travel sold in the uned states. absent this, consumers will invariably end up selecting flights only to find things were not as they appeared on thir screen. and to be clear, this isn't about compelling an airline to particate in fudgy ds. airlines have the choice to bring this debate or not. this doesn't change that at all. this is unequivocal about the consumer. if the airline chooses to sell thairline should show the consumer their full prices, not something that dramatically understates the price travelers pay. finally, airlines have a powerful disincentive to actively provide this information to consumers. as this is the ast holdout airline the added advantage of

appearing a lower price than the competitors who might actually be providing the information on the full cost. this is hy the government must step in. we don't believe airlines will do this on their own we believe it is important that those airlines selling the gps provide thinformation in a way that allows consumers to shop with full knowledge of and confidence and the travel cost in total. as you can see above. at this time, at the same time consumers deserve the opportunity to know and expect what they are buying. in this matter, the cost of compliance for the airlines are negligible and the benefits are enormous and i think you for your time. spec the chair thinks you and recognizes the distinguished chairman of the full committee chairman oberstar. >> we greatly appreciate you holding this hearing, mr. chairman, and participation

of mr. petri as well. there are a few issues of more lively interest to air travelers than the checked baggage fees and other fees that airlines are charging and hardly a week and goes by in my travel i'm not asked by my passengers aren't you going to do something about those fees can't something be done about these? will we are starting at least having a hearing the dustin with mr. costello and by asking for -- thank you, dr. dillingham, for your thorough report to report to us. i would say it looks to me like the airlines are learning from units of government. it's a back door price increase.

if it's not a tax, it's not a tax if it's a. call with a fee it's not a tax so you can impose these with impunityy calling them a c. it's backdoor financing. passengers are paying for meals, pillows, blankets, headphones, beverages, check the luggage and some at least one airline proposed carry-on luggage in europe a low-fare carrier proposed the fee for using the poddy onthe airplane and that didn't last very lg but at least they proposed that up front. premium services come early boarng and early access to overhead space there's never anybody on board those lans to

say no, you are in a row 24 you can't park your bed and wrote three. they can do these things emselves but they are not doing at. in 2009, $7.8 billion in fees, $2.7 billion which is baggage. first quarter of thi year's $770illion in checked baggage fees while the carriers were losing money the industry as a whole reported profit of only $12 million. so, look, you have additional effect and i make it a point mr. chairman in every airport i go through i talk to the tsa agent. what does this mean for you? the fee for hecked baggage? well, it means more carry-on, more densely packed carry on and

far more difficult to screen is taking us longer to screen and more difficult find things that are jamm in and packed in when you frequently have to have back of tsa persons to read andack up the primary screen all around the country. those are hidden consequenc of this crash to add more money by imposing fees for bags. and then those fees are n subject to the airline ticket tax. and as the gao report indicated that could be the equivalent 2.5% of the revenue into the aviation trust fund which benefits primary to the airlines.

air-traffic control, the facilities and equipment account, airport construction improvement program. all of that would benefit, but you have the airline saying well, we've got more ticket prices. but if you add in the cost of all of these charges i've missed the moment ago, the ticket prices are back up where they were before the fees'. so, d pobably higher. i think the gao report recommendations for disclosure and some of the testimony you heard today is at least a starting point. but i just want to say to the airlines who aren't sure and great number here or in offices listening and if they don't excise restraint that there' going to be a continuing outcry for the traveling public and you're going to have some kind of regulation you would like so

if you don't exercise self restraint then you're going to get pushback on the traveling public and come to the congress and then the congress will act that's not a threat. that's history. thank you. >> the chair thinks you and i now recognize mr. petri. >> thank you. i have a couple of questions for mr. rivkin and maybe others would care to respond. focussing on fees and disclosure of fees on airlines, and what about discounts and undisclosed discount? i mean, i -- ayman the strategy of the airlines seems to have had all these fees and then to have programs with lots at diounts the if you belong to this thing you don't pay parity get into a bind to get free

drinks r 101 different perks so to speak or upgrades. i guess i mean, is it legitimate to have a strategy that differentiates them that way on bumbled so customers more or less get the benefits and charges they want to pay for rather than one size fits all? >> thank you for the question, mr. petri, congressman petri. the focus of the department of transportation since the deregulation has been to ensure the extent we are able with of the great support of this committee and the congress that we can guard against unfair deceptive practices, unfair methods of competition and to ensure safe ad adequate transportation. all we are trying to do is fulfill that charge.

we hve as ou know a current rulemakings proposal which i can't discuss beyond describing that under the rules related to the regulatory proposals. but if there are other suggestions that are not included in the scope of t role we put forward which is rather broad we would be happy to consider them in discussions with you and your staff. >> okay. i'm just curious if were a customer of mr. moore or someone else and kube flew four times eritrean you could get a free first-class upgrade or save big defeat to baggage charges or some other airlines that might make a difference because you might figure well, i'm taking several trips and would be better to go with the airline will charge $5 more but will give us these extra discounts.

so you're looking at the extra charges but not the other side of it in this disclosure, and it seems to me a lot of these airlines have a strategy to try to capture the business and higher by giving the individual business traveler all kind of perks through these plans the boss is paying for it might not even realize it's going into this because he's making the decision he has to choose between two trips and people choose the one that gets him the extra personal perks that he would like. is that what you're doing or is this a problem? is this something we should be addressing here in this congress? >> i think it is a wonderful observation and i think is exactly right. but i also believe that this was an unintended consequence. you had airlines that were introducing the additional fees but they did not want to anchor their most loyal passengers said

they were waiting in to that. an act we drove greater loyalty for those most loyal passengers because now they had even greater differentiation in the products and services that they could expect relative to some that were not loyal travelers and that really just kind of speaks to why all this is so important. this has made it even more complex than it used to be, and so the travel -- that is why consumers ar not happy. this is an incribly complex process that is why we believe it is incredibly important for the airline to provide the information so that you can differentiate between those that may be frequent travelers versus not in comparison shopng. the systems are ready to do that. we need the data. >> i just have one other question slightly unrelated but as long as mr. rivkin is here we have a pretty strong rule currently to protect the travelling public which says if

an airli stays more than three hours i guess holds passengers on the ground more than three hours there is a tremendous find and we are starting to hear from various carriers that to avoid that day are asking people after about two hours to get off even though it might actuallymean flights armore deeply than they would otherse be and people are overall more inconvenienced. so i'm curious whether you or the department, people dealing with the school and its implementation would be open to sitting down and reviewing various ideas for fine-tuning it with the idea of ending convincing rather than inconveniencing but unanticipated deeply concerned.

>> of course we would be, congressman. we just got our full month of comparative data which showed the three hour tarmac delays are down substantially from at last 34 a year ago to five last may. we are investigating those five and any that we have become aware of that have occurred since then. we always looking for ways to improve on our regulatory responsibilities in are very happy to work wh you. >> mr. petri? >> yes? >> just want to let you know the gl has amassed by committees of the congress to evaluate the impact and implementatn of the rule and as mr. rivkin said there's only been about a month of data on this point and we're waiting for more time to pass so we can have something to base our study on so we will be looking at that as well. >> we are just hearing various people in the industry who a big fine concentrates the mind, and

there are some ideas people think they have that they would like evaluated to implement not to set aside the rule but implement in a way that would benefit the traveling public more than a rigid one-size-fits-all approach as it currently appears is the case. there is some unanticipated consequences facing a big role when they get near the three hours they fear they might get everyone back in their word and then maybe they will have to sit there but six hours or eight hours waiting for another flight whereas they could have if they had gotten, taken off knowing the change or whatever was causing the delay was about to be overcome. the airlines are paying a couple million dollars because they hit this three hour point. they would rather save that

money and inconvenience to customers than to give them true convenience. anyway, this is the concern they have. it's not a voluntary deily. they are trying to work with real-world situations to save the money they are faced with inconveniencing customers so they can do that currently are inconveniencing the customers. it's not our intention. >> we will be looking for unintended consequences as we undertake the work. >> mr. petri may i make a brief, it? the reason the rule is working this finally the airline's senior management teams have been made to prioritize the problem. one more the six months of data will of better. what matters as the airline had a period of ti over the next 12 months to the enormous work required in their systems and

operations to make this work for the passenger. i would virtually guarantee a year from now this will be a non-issue the airlines will adjust. >> mr. rivkin, to follow-up on mr. petri's question, let me ask, did you say the department has one month or was that a quarter, the five tarmac delays? ..

>> we take the report. we also in addition investigation media reports, call in complaints. yes, we are investigation whether those are actionable delays. >> the chairman recognid the gentleman from oregon, mr. defazio. >> thank you, mr. chairman. mr. baldanza did you lower fairs or increase the bundle? >> we ncreased the revenue because we carried more passengers. >> okay. per passenger, per average, did you realize more by unbundling and charging them a little bit less on the fare, but a lot mre for the bag? >> no, the average fare from each customer is dropped each year. >> okay.

so you did it as a public service. that's good. so when you begin to charge for people to carry bags on and put them in the overhead, are you going to lower fares again? >> we already have. >> okay. that's good. now why would you object to a system where a customer, you know, tell you what in the end, you know, i've flown about 4 million miles since i've been in conversation. a lot of conversations with people here and there. first thing they care about is lie and safely, and the second thing is conditions and what they paid for the ticket. they don't care where that money goes. they don't care. they just want to know how much is the ticket going to cost them? why would you object to a system where people would be able to meaningfully compare what they are going to pay in total to go from a to ? >> we object to that system. in fact, we have spent lot of

money changing our web site so that it is fully disclosed. when you buy a ticket on spirit airlines, you know exactly what you are paying for the chices you choose. >> on the first page or when i finally get to the point. >> before you pull out your credit card and put your money in. >> right. but then you are not providing the data to the marketers? >> absolutely. because as customers go through the shopping process, they say i want to fly from a to b, check two bags, maybe i want to buy travel insurance, maybe i want to join this club or not or whatever. at the end say see the whole piece of what they are going to buy? >> excuse me. i reclaim my time. i thought you taking your head from dr. dillingham and yr testimony, they are not operating with the secondary marketers in terms of the fees and charges? >> i'm never going to get this down. thank you for the question. in terms of the data that we

would need, that a consumer would need to say up front i'm going from point a to point b, and i'm going to check a couple of bags and preselect my seat. that type of information that has not been made available. there's no airline that said they are going to do this permanently. there's no airline that said we are doing this expressly right now. >> all right. i think you said that there's a system that could accommodate that. >> absolutely. >> ithink you said that airlines, some are more or less interested. they are worried about the effect if they go first and consumers are getting fully honest, what's it going to cost me in total for this trip for me and my kids, you know, and get a meaningful comparison of all of the airlines as opposed to the captive sight. maybe they give you the information. you can't compare it. unless you want to close it down and do a comparison. they can't go to the one stop

shopping sight and get the information; excellent >> that's absolutely correct. >> that reminds me. i was trying to ban committee. the ceo would say i would love to do it. we uld be competitive disadvantage. i tried to say it would be a competitive advantage. we're not going to allow smoking. now you are a level playing field. my question would be why wouldn't we create a level playing field here. especially since half of the tickets is purchased through secondary marketing. why wouldn't we create a level playingful by the meaningful transfer to the data. why wouldn't we do? >> well, mr. defazio proving that our airline is -- less than 10% of our customers buy from

third-party companies. >> you are not answering my question. why if the government orders you to do this is this going to be a big imposition on you? >> no, if we would do it for 92, why not 8%? >> maybe you'd get more customers if you are marketed more honestly. that's great. thank you, sir. thank you very much, sir. thank you. i appreciate it. dr. dillingham, do you have any comnt on whether ts would be an overly burdensome on the airlines to provide meaningful to the system that mr. moore described. >> mr. defazio, on the work we have done, we don't think it would be a burden to provide the information in a way the customers could make meaningful comparisons. airlines having have administerrive mechanisms that

could facilitate doing the kinds of things. it would not be free. but it would not be overly burdensome either. >> okay. why wouldn't we have a comprehensive rule as you are picking ound the edges is what you are proposing. >> we have asked the question and propose it be a government mandate. we are awaiting comment. >> thank you. >> thank you, the chair now recognized the gentleman from north carolina, mr. coble. >> thank you. why ways would airline fees be improved? >> thank you, mr. coble. i think the reports indicate the fees are not very transparent. what mr. rivkin is talking about is the way the rulemaking is being developed and put out to the public is closer to or at

least we would consider it a first step of making it more transparent. so the consumers can, in fact, compare what they are going to be buying from across web site. >> mr. relationship -- rivkin, how does d.o.t. define deceptive advertising? >> our mandate is unfair or deceptive practices, that's similar to the res around the country. where there's a body of case law that describes whn there's a misrepresentation or a misleading assertion. >> how specifically, mr. rivkin, does d.o.t. plan to require full disclosure of optional fees and what would this require? >> mr. congressman, in our

current rulemaking which is now out for comment, w've set forth a whole series of proposals that ancillary fees as i went through in my oral testimony, baggage must be fully and prominently isclosed, other ancillary fees, and the key disclosure the total mandatory price must be disclosed the same way by every airline nd agent. so that the consumer can actually compare the real price the consumer would have to pay as the final prie that is mandatory for the ticket. >> oh, yeah. thank you. mr. mitchell. how will more transparency on the part of airlines and their ancillary fees benefit corporate travel programs? or will it benefit corpote? >> well, the -- the direction of

the d..t.'s mprm will solve self problems. first of all, knoledge of fares and the fees, they will be able to budget through auditing, enforce travel policy, currently a fee is indistinguishable between checked baggage and upgde to business class. there's a whole host of benefits including their travelers not being surprised at the airport by these fees, and confused. so there are great benefits that would come from full disclosure and transparency that's laid out in the mprm. >> thank you, mr. chairman. i yield back. >> chair. thanks. the gentleman now recognized the gentleman lady from california, ms. richardson. >> thank you.

mr. bal den somewhere, i realize you are the representative, but i'd appreciate not being yelled at. i'm going to talk to you with respect, i'd like you to do the same with me. let meask this to mr. dillingham, when the plane is unloaded, is it done by a general employee or specific carrier? i seem to fly, and i fly two times a week, i don't always see it's a specific carrier. could you clarify that for me? >> when the plane is unloaded? >> like if they are unloaded in the florida. the florida iport, their employees or is it spirits employees? or does it vary from airport to airport. >> riht, i think the latter. it varies from airport to airport. >> that's an important point. i think it gets to the question

of why are we charging more fees? my next question is of spirit, have you collected data on your imagines? and what do you know in terms of the number of packages. has it increased or decreased since you've added this fee? >> since we began charged for checked luggage, we arecheckig less luggage than before. it has decreased. >> mr. dillingham, in your professional opinion and evaluatn, what i see on the plane, i've noticed a dramatic increase of people on the bags and how much longer it takes. it does become dangerou we have people slinging. not everyone is strong enough. it becomes a problem. is there a safety issue that we plight have a concern with the new policy, mr. dillingham? >> mr. richardson, there is a potential for a safety issue here. i think when we talked with the

flight attendant, for example, they are really concerned. because they are usually the ones that are trying to lift those heavy bags over into the bin as well. there's also the issue of flight delays that are associated with that. trying to get all of the bags on. and then you ave situations where people, for a while, they would bring a big bag that wouldn't fit. they didn't have to pay for it by hecking it in, but then they could get it free by taking it down to the gate. there are all kinds of uniended consequences and gaps that are going on at this point in time. >> okay. and then i have two quick last questions, i realize they are calling for votes. the answer is if we can have them be brief. i believe you have said they have not responded to the

recommendations. is it they didn't the respond or they have not agreed or disagreed? >> the recommendations in our report. >> yes. >> they have not responded. it wasn't an agree or disagree. usually, you know they are 60 days to fully comply in one way or another. so it is not unusual that we're in the situation since we just issued. >> okay. and then my last question is back to you again, mr. baldanza, or i apologize i i butchered your name. i understand and read in the testimony that the information is available on the web site. however, the committee that i -- not the committee, the community that i represent, not everyone has a computer. not everyone has access to web sites. many people are utilizing services as mr. moore has mentioned, calling their local travel agent who helps them to answer all of the questions. so if you're providing the information on the web site, really what is your objections to providing the information to the agencies ad to the gds

system? >> we don't have that objection. what i have said s -- >> if you don't have the objection, why aren't you doing it then? >> simply because we have not had the abiity to see how the system works yet. and w won't put ourself at the competitive disadvantage. >> excuse me. i'm reclaiming my time. that's how it works here. are you saying to me that neither two of these gentleman, mr. mitcher or moore have provided you an example of how you could provide that information? >> what i'm saying -- >> no, yes or no. as anyone provided you with the information. >> not that i'm awareof. . >> if you were provided, would you open for considering? >> weould be open to considering it, yes. >> thank you. >> the chair recognized the gentleman from arizona, mr. boozman. >> thank you, mr. chairman. mr.rivkin, what are the top priorities in the fee rulemaking?

your toppriorityies? >> what are the top priorities in the rulemaking? >> yes, sir. >> well, we don't list them in order of priority. this is a rulemaking that encompasses a broad number of consumer issues that we issue in the wake of our last rulemaking. we've tried to be as comprehensive as we could be understanding that there's always going to be other issues. i would say that true full price advertising is one of the key principals. that baggage fees be fully disclosed and reimbursable when not delivered. we've also got proposed increase compensation for involuntarily bumped passengers. cancellation of reservation within 24 hours without charge, so there are a number of additional provisions and, in fact, we've tried with this

ulemaking to make the maximum public involvement that we could by partnering with cornell university at regulationroom.org so the public might find it easier to comment on the proposal. cornell will summarize the comments and place ion the rulemaking docket. >> so you don't feel that certain ancillary phase should be included in the base? you are not going that way with the rulemaking? >> we do not have the authority to regulate fees, routes, or service. we are trying to discharge our mandate to just ensure that what the airlines do, they do openly -- >> and transparticipaty. >> and transparently. >> when do you think the final rule will be issued? >> we are oping, but never can be sure, to issue the finl rule before the end of the calendar

year. >> i guess the thing, we have a minute or so. is there a -- in separating out the baggage, and again, i'm a guy that's flying all the time. that's an extra fee and things. is there -- is it such though that in having the increased fee and thus not having as much baggage, is that a good thing as far as transporting people and using less fuel and less, i guess, what i'm saying are there any positive consequences as a result o people not having two bags every time they go some place? does that make sense? >> i'm sure there are arguments, and i've heard some of them on different sides of that issue. we just heard some comments from mr. dillingham that more carry-on bags could be dangerous, delay flights loading and unloading. on the other hand, you know, perhaps ople are incented to

carry less with the i personally, don't really have an issue. >> how about you mr. dillingham? i guess what i'm saying do you carry more people on top? is weight a factor so you can carry more people and thus theoretically, you are not having as many planes in the air to effect the environment, fuel, all of those kinds of things. is that a factor in reducing the weight? >> mr. boozman, as you have indicated, weight is a factor in terms of flight. and, therefore, you could make that argument and weight taken all together. we haven't done any work that would indicate sort of what the increment is between baggage and persons. but the logic is there. >> thank you very much. >>the chair thanks the gentleman. we'll announce we have three votes pending on the floor right

now. we will return. members have some questions and i have some questions as well. i would ask everyone to be back in the room in your chairs, if you will, by 3:40. 3:40. the subcommittee will stand in recess until 3:40. [inaudible conversations]nd. thd at the 7.5, how much did you say

it would generate for the trust fund? $200 million? >> around $200 million, yes, sir. >> okay. and obviously, it's not. and the trust fund while the airlines have made a substantial amount of money off of these fees, the trust fund has shown a deficit in the same period of time, is that correct? >> the uncommitted balance in the trust fund has, in fact, been going down. mr. chairman, i wanted to point out is that part of what we say in our report is that we only are talking about a proportion of the fees that have been charged by airlines. because we couldn't disaggregate some of the other fees. so the total amount is yet to be determined. >> but it's clear from what you have seen is revenues from the airlines as a result of these fees, obviously, the revenue has gone up. while at the same time, the trust fund is going down. >> that's correct. but i'm not sure i would link them. but both of those statements are

true. >> but we would generate $200 million more if, in fact, the fees that are collected were, in fact, part of the tax and going into the trust fund? >> yes, sir. >> okay. let me ask you and there are a number of recommendations, several recommendations that you have made to the secretary to improve disclosure and information on airline imposed and government imposed fees to improve airline reporting of revenues to the department of transportation. can you walk us through just for the record to be clear what some of those recommendations are in the goa report? >> yes, sir. they fall into two basic categories. the first one is the matter for consideration that we offered to the congress in the sense of if the congress wants to consider

taxing the fees and that is a policy decision that the congress needs to make. but with regard to the recommendations that we made to the various department, dhs, agriculture, it was the same basic principal, that is, full disclosure, transparency of fees, let those departments, dhs to let the d.o.t. know what their defund policies are, let the airline knows what those refund policies are across those agencies. again, it's an attempt to be transparent and disclose to the flying public. >> mr. rivkin, in your testimony, you state that the in the proposed rulemaking that your asking for comments on the cost and benefits of requiring the two prices be provided in the certain airfare

advertising. i was wondering if you might explain that? >> certainly, mr. chairman. the basic principal is we want there to be a full, fair price that includes all of the nonoptional prices, so apples to apples can be prepared. we are -- seeking comment really in an agnostic way and hoping we can become educated and learn, you know, through the rulemaking process what would be useful is whether in addition to that price the mandatory price that includes fees, it would be helpful to the public to have another price that would be essentially the bare minimum price, plus what people normally do and what they are normally used to be included. a bag or two, perhaps a seat being selected, and see if there might be some standardized way of kind of comparing that notional price as well to give more information to consumers.

>> i mentioned earlier when i recognized you that i commend the department of transportation and the secretary for being proactive and taking regulatory actions concerning consumer protection issues. i'm pleasing you are moving forward. i don't think regarding deceptive fares and advertising for airline fees. i frankly do not belief that we are going to get where we need to be unless we do this either through rulemaking or through action taken by the congress. mr. baldanza said earlier, that he did not object -- i think he said, talked about an unfair competitive advantage if one airline does it and the other one doesn't. obviously, if you do not have an objection to posting all of the fees, if everyone has to do the

same. and he said he wouldn't have an objection. i assume, mr. ridley, you would say the same. is that correct? >> given our situation where we have very few fees, we would not object. >> mr. baldanza, let me ask you, in your testimony, written testimony, that you indicate that spirit believes it is unfair to charge passengers for extra services that they do not use. what do you mean by that? >> thank you. chairman, what i mean by that is different customers ask for different things in terms of their air travel. we think it's unfair to presume that a customer might want -- might need to check two bags or might need to have a certain service on board. so at spirit, we think it's very important to only charge them what is necessary for their trip. but then make available in an

optional basis other services and options that they may be able to use. we think this benefits consumers. we think this results in lower fares, and it gives customers the option to say this is valuable to me. so i'll pay for it. or it's not valuable to me and i can save the money. >> you also indicate in your written testimony that unbundled services do not impose any cost on our -- on airport infrastructure. that there's no cost imposed on airport infrastructure. as a result of unbundled services. what do you mean by that? are you saying that checked bags do not plus additional cost on an airport. >> whey mean by is that is that the cost of transporting the passenger are the base fare.

the things we charge extra we don't believe add to the burden. so checked bags, for example, add cost to the airline, but they don't particularly use air travel control, they don't particularly add airport related cost to the airport. they add to the airline. >> i would respectfully disagree with you. i think it's pretty clear that it does. at this point, i'll recognize the ranking member, mr. duncan. >> well, thank you, mr. chairman. and thank you for calling this hearing. and i just have a couple of questions. so first of all, does anyone on the panel disagree with the statement by mr. ridley when he said that southwest strongly believes that the decision on these charges should be a business decision and left up to the airlines?

anybody disagree with that statement? yes? mr. moore. >> i'm not sure that i would disagree with the statement. what i felt like i heard mr. ridley say is that it should be left to the airlines as to rho they actually market their products and services. whether they choose to bundle or not, i too believe that's an airline decision. the thing that i think was important is that i believe mr. ridley also would support is transparency. and so if that means that the, you know, that the -- that you've got an airline that is bundling and one is that not that you characterize those. did i say that right, dave? >> the ruling through various d.o.t. and guidelines they ask

that you disclose the fee, fuel surcharges, peak holiday travel, and government fees among others. do either of you or what do you think -- do you think it would add substantially to airline cost or would it really substantially decrease airline travel with the airlines were required to disclose these things like extra charges for bags and things that kind of fees that we've been talking about here today? >> mr. duncan, from the work that we have done, we have seen no indications that the showing of fees and transparency of fees and disclosure would decrease travel. >> well, would it -- would it be substantial cost for the airlines to do that in some ways? >> again, based on the work that

we've done, we do not think it would be a substantial cost to the airlines. the airlines have administerrive mechanisms in place starting as a base. and the technology that we currently have make these kinds of disclosures relatively easy. and as you heard some of the witnesses today, the market is beginning to rev up to produce all kinds of mechanisms that will make this an easy thing to do. it then becomes the airlines choice short of as the chairman said, short of conservation action. then it becomes the airlines choice whether they want to participate. >> mr. rivkin? >> i agree congressman duncan, mr. dillingham, there is not a substantial cost to putting -- to disclosing fully the fees in

the way that are regulations have suggested. of course, the committee needs no reminding that every rulemaking goes through the cost analysis, and it won't go through it if doesn't have benefits with its cost. >> let me -- i'll let all of you respond. but let me ask the airlines. not only about that question i just asked, but also and maybe you've covered this, but i've had votes in other committees and haven't been able to hear all of the hearing. but what is -- what is the problem with the travel agents? they say that the airlines won't give the information about these additional fees to them and it's caused some problems for them? what mr. baldanza and ridley do you say to that in the response to the travel agents? >> this may be a bit of

clarification on the testimony earlier. i can commit that spirit provides full disclosure about all of the fees and services to all of the partners today. perhaps we are not providing in a timeliness and way they can use it. if we are not, we need to know and we'll do that. because we are very open to that idea. >> mr. i think mr. duncan might be a better purchase, but in the southwest where we sell 5% of the booking through the online travel agent or travel agent, this is an issue that i'm really not -- kind of -- it's -- >> is your alls main concern that you don't mind disclosing all of these ancillary charges, but you don't want to be taxed on them? is that the main concern of the airlines? mr. baldanza?

>> well, we are fine with full disclosure. we believe with full disclosure we still will often have the lowest total point. we don't believe it's appropriate to charge the ancillary fees because it does not use t structure. >> if they help make any profit, you are going to pay taxes in that way. >> it's correct. lower fares for the consumer and generating more travel and more tax revenue. >> mr. ridley? >> well, in southwest, we're talking about $100 million. which is a lot of money, even in this town. that's a lot of money. compared to the billions of dollars of fees that are subject to perhaps this. we really don't take a position on whether this should be taxed or not. because it's just not that

relevant. the industry is over taxed. i will make that point. but in terms of whether the ancillary revenues that are the discussion of today's hearing, they have come under the excise tax. that's just -- we just take the position, too much taxes. mr. mitchell, mr. moore wanted to comment either on the earlier questions or the later parts too. so go ahead. >> mr. duncan, thank you. my comment that i wanted to make just surrounding the question that you want asking on difficulty. and the what i would suggest to you is today there are a number of airline, 26 airlines, that are test filing this information through atpico. they are experimenting with, you know, if i had this ancillary fee, how would i file it? they have done some good work to lay the ground work even internally for this. those 26 airlines respect 86% of the u.s. point of sale bookings

in u.s. labor. meaning from today the airlines that know how to do this, respect the vast majority of booking. the airlines can do this. it doesn't have to be that difficult. >> all right. mr. mitchell. >> yes, congressman, i think there's five reasons why the airlines are resisting us. the first as we said earlier, a few of us, the first airline to jump into the system and show fares that are 30% higher than their competitor is doing to lose. >> right. i heard that. >> yup. the second reason is that there's great profitability from complexity and confusion. when you purchase a fare, you purchase it thinking many times that's what my all in price is going to be. then you get to the airport and you are paying 30% or 40% more. had you known about that earlier, you may have made different choices of airlines or transportation. there's money to be made.

the third point is that by withholding this information, from the gdss and the travel agencies, it's common view of many industry participates, what the airlines are endeavoring to do is force the agencies to actually pay them for their content. what that will do, in effect, is shift the cost of matching on the backs of consumers. and finally, or fourth, you know, let's move panels and droves to airlines.com where they do not comparative shopping and where they are going to get higher yields and finally fares and finally there's the tax avoidance issue. >> have you received complaints about the extra fees. have you gotten thousands of

complaints or hundreds of complaints? what's the situation there? >> we do get complaints. i can get back to with the numbers if you like. i don't have those with me. we do get complaints about a lot of people that are unhappy with fees. they just are. >> all right. all right. thank you very much, mr. chairman. >> i thank the gentleman. mr. moore and mr. mitchell, you heard mr. baldanza say that spirit fully disclosing all of their fees online. you don't agree with that, do you? >> my perspective would be that the -- and i have shopped spirit.com. it's a more arduous process than i would like as a consumer. i have to pick my city. i then get what i feel like is a fare. then there's taxes and fees added on. basic security fees and those kind of things. and then i'm going to have to

put in my personal information on, you know, where ili to get what i believe is the true price. and then, after all of that, i find out there might be a seat fee. that actually might take place after i pay. it's troublesome to me as a consumer. >> mr. mitchell? >> mr. chairman, i think the way i would answer that is i think spirit should be fee to unbundle until the cows come home and price to their hearts content. but as long as the carrier is in a gds and providing agencies with fair data. they need to provide complete data. and they need to do it in a way that's very transparent. i think the marketplace will reward or punish spirit airlines based upon how they conduct their business. >> well, and that is the -- what we hear from consumers is that, look, they set the prices and as you said, they are setting fees. just tell us what we are

getting. you know, what's the price going to be? so we don't have to spend a half hour or an hour shopping around on a web site. as i see it, as you said, mr. mitchell, the first airline that jumps out there and does this and showing the 30% increase over the cost in comparison to other airlines, they are not going to do it voluntarily. and they are not going to do it in a uniform manner that consumers can easily understand. unless they are required to do it. now would you disagree with that? >> i would agree with that, 100%. and i've done a file with the d.o.t., a comment on behalf of the major corporation. who's travel manager came here last month with a family friend and took a flight from boston to l.a.. the surprise at the airport on baggage fees increased their total trip cost.

we went back to bull gum and looked through the gds, went back to the major travel management company and looked. there was no mention anywhere. there is a professional corporate travel manager. if it can happen to him, how about the average consumers? >> mr. costello, may i make a comment? >> yes. >> thank you. it was accurate about of six months or so. but spirit has invested hundreds of thousands of dollar to change our web site to where today you don't go through the arduous process he described which again was accurate as the way we used to work. today the process is very simple and disclosed. >> wouldn't it be in the interest of your passengers if there was a uniform way of posting prices if they go to spirit or if they go to united or delta or southwest airlines?

all the same. easy to find. easy to understand. isn't that in the consumers best interest? >> well, it maybe. that's interesting. i would like to be able to buy a refrigerator. know what it cost me at sears and home dee -- depot. the diversity is a great thing. the world wouldn't be a great place if every airline was like spirit. the world is a better place because the customers have the choice of airlines like spirit and southwest and many, many airlines. >> one the problems when it comes to prices though is many people do not understand what their choices are, and number two, they are getting services that they didn't know, paying for services that they didn't know that they wanted, more did they ask for. so i think i've made my point. i think you've made your point. final question that as i think

all of you know, we have passed in this committee and out of the house of representatives an airline safety bill where we increase the requirements for pilots, both in training and in number of hours in the cockpit and also a number of other things, flying conditions and so on and so forth. just out of curiosity, since we have both of you here, what is the starting pay, the entry-level pay for first officer with spirit airlines? the unbundled. >> i don't know the starting pay. i can give you the average pay. and we tend to be a pretty low see yourty airline. so our average first officer is about three years senior with the airline, and last year they earned about $70,000 a year on their w-2. our average captain is about eight years senior and last

yeared earned about $145,000. >> but you don't know what the starting salary is the first officer that's hired? >> i -- they are -- the starting wage rate and how that translates to that w-2, i don't have that information right now. but we can certainly provide that. >> we would request that information. and mr. ridley? >> chairman costello, that's not my area of expertise. but we will get you an answer as soon as possible. >> you know, when i read and i understand the business model where we have -- i think in your written testimony, mr. baldanza, you say that since 2007 when we adopted our ultra low cost carrier business model, our goal have been to provide basic quality at the lowest possible cost. i understand what that means. my concern is about safety. that's why i'm interested to know the lowest possible cost.

what are we -- your airlines and other airlines paying starting first officer? the entry level. we found with a number of regional carriers that in at least one instance that we know of that the first officer was hired and paid less than $20,000 a year. i'm certain that's not the case at southwest and hopefully not at spirit. but i'd like to have that information if you would supply it to the committee staff. the chair now recognized mr. petri. >> thank you. i had one question that you might -- it probably reveals my ignorance about how the web information is collected and works and so on. i think it's mainly directly add mr. moore as to why if mr. baldanza's web site is posting this and other airlines post it

in maybe somewhat different formats and so on, the burden shouldn't be on you to visit their web sites every day or upgrade it and say what's available. and if you want to matrix and that airline does no provide that information, put the x there or something. and the public would be informed. but they would then have the diversity of choice or is this a legal issue? are the lawyers for you saying you wanted to provide by the airline so that if there's a confusion or some difference the liability is on them and you can show piece of paper or something that -- is this what we're really talk abouting? because the information is there on different web sites. so it must be someone is trying to shift legal liability to the airlines from themselves who wants to present their information. or am i misunderstand -- misrespecting the situation? >> i appreciate the question, mr. petri. it's one of those things where i look at it -- i don't look at it

a legal issue at all. i do look at it a question of complexity. when you've got, you know, 600 airlines in the world that have their schedules. to try to go out and gather the information in the very laborious fashion, it would be incredibly challenging to try to keep that stuff fresh. as soon as you do, it's been made stale. and the other thing that make it is hard, or impossible basically is that these charges are often applies and in many times aren't. and that level of granularity is not made available on the web site. if one of mr. mitchell's corporate customers has negotiated a way, a baggage fee. that's not posted on the web site. we have no means to know that. it is an imperative of the airline to provide that information. because we have no knowledge of that level of granularity. and particularly, that those things might apply at very low fares, but perhaps they don't

apply at the higher fares. and the fees are applies for seat fees, but perhaps not baggage. it's just -- it is a level of granularity that would never be gathered by going out and trying to get it from the carrier web site. >> so there aren't -- excuse me. i'm serious. i thought there was the search engines and that half of the web sites are being hit automatically by google and someone. they have ways of updating this practically instantaneously. they wanted to change their business model or go through the government regulatory process. it could takes months. and there are seasonal differences and you buy a new airplane and it may have different requirements has to what kind of bundling or unbundling would be appropriate. this could get a lot of flexibility, or am i misunderstanding the information? >> i believe it introduces the flexibility that we would need to allow a consumer to shop in

the way they want. when you think about some of the stuff that i was discussing earlier about how a consumer can suggest upfront, i'm an elite frequent traveler on united, as an example, and i'm flying from new york to l.a.. and in that, i go and shop. well, perhaps i'm not a lead on anybody else. the fees that might apply to me. they are not available on the web site. they are certainly not applicable to me. and particularly the fact that they may be applied for one corporate or not just based on the negotiation or agreement. there is no -- there is no level of specifity that would be required in order for that shopping mechanism to really work for the travelers. it's just way too much data that changes far too rapidly. i mean when you think about the way a consumer shops and this speaks to something you were talking about earlier, mr. chairman, fully half of the

consumers that shop in the online space buy at the lowest fare. and it's the curve on total price. so in other words, you get to about 70% of the travelers. they would have bought within 120, 130% of the lowest fare. but half of those people, if they missed the $20 charge that may have been incurred, they might have made a very different decision. there's a level of information that's just going to be lost that consumers would benefit from tremendously. and would actually change the way they -- the products may be buying because they are better informed. it's too much information to be trying to gather laboriously all the time. >> anyone else have any comments? >> yes, congressman, the atpico, the aim -- airline company that

distributes the fares and fees, they have identified is 00 ancillary fees. -- 100 ancillary fees. that's what they are ready to go to market with. if you do the math with one airline, $100 times $100, that means 10,000 combinations for the one online, perhaps, 9 to 11:00 on wednesday. if you are comparing, that's 100,000 possible combinations. this is orders and orders of magnitude, more complex than anything this industry has ever known or faced before. and it strongly begs for the technology and the standards to get in the place so that the consumer has the full disclosure he or she needs. >> all right. i thank mr. petri and mr. mitchell, you, in fact, state in your testimony that airlines often have a strong incentive to

mislead consumers on prices. >> mr. chairman, that is correct. whether it is looking, trying to look in the gds and the travel agent as if you are matching the southwest or an air tran or whether it was just simply misleading the consumers to think he or she has an all in price. and they get to the airport and they are surprised. but, in addition to that, this is the no man's land for consumer protection. mr. baldanza mentioned going to the store for a refrigerator. luckily for him and the rest of us, we are protected in large part by the ftc. the ftc has no oversight responsibility here and the consumers have no rights or legal remedies because of federal re-examination, which the airlines have fought and championed and fought to expand. so that is central to this idea that the consumer needs

protection here. >> well, we know there's one person at the witness table that recently went through and examined off of the airlines and the fees that they charge and the goa submitted this report to us. so i would ask dr. dillingham, was it a simple process to go and understand what fees each airline charges? would it be -- you just went through this. you and your staff. is it simple for the average consumers to understand? >> you know, mr. chairman, the goa cannot own up to it being a simple process. but we were able to identify those fees that we, in fact, showed in the hand outthat we passed to you. >> which was highly professional staff. >> yes, our highly professional staff. >> yes. not the average consumer. >> yes. we agree the permutations can be

never ending. so we are on the side of, you know, the -- making it completely accessible and transparent for the consumer. >> and that is the goal of what we're trying to achieve here. and i think what senator and his amendment and his transparency. so people understand and know what they are getting for the money and they can compare one price to another in what their options are. mr. petri, do you have any further questions? if not, i will ask very quickly if anyone on the panel has anything to add before we close out the hearing? mr. riddy? >> mr. chairman, i cannot let it fly while we are on record that we believe in greater transparency to sit here and be

lumped among all airlines. the airlines believe where there's confusion that's chance for profit. i would add where there's complicity, there's a chance for profit. i don't want to be lumped into mr. mitchell's description. >> i would as well, chairman, thank you. i would like to say this has been extremely interesting to us and the whole industry. while mr. may be differences among spirit and many other airlines in fees that measure generally in the tens of twenties of dollars. the real outrage is where the hundreds of thousands of dollars. when customers are paid -- are asked to pay enormously high fares and taken advantage of because the supply demand relationship or their inability to be flexible takes advantage of them, that is a more

outrageous situation for consumer exploitation than the tees. >> that's an issue for a different hearing. >> that's right. >> let me just thank all of you for being here today and offering your testimony and answering questions of the members of the subcommittee. and mr. rivkin, i hope you will go back and pass on to the secretary and the administer as well that we encourage the department to stay on schedule and to move quickly with the rulemaking. >> i certainly w [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> congress is in session this week. the congress devils in tomorrow for general speeches, with legislative business beginning at 2:00 p.m.. house leaders plan to work this

week on two pieces of legislation stalled in the senate. the war supplemental and the extension of long-term jobless benefits. the senate resumes business at 2:00 p.m. for one hour of general speeches. at 3:00 p.m. work resumes on the small business lending trust fund bill, setting up in lending fund. passage of the bill providing long-term jobless benefits could be finished as early as tuesday. afterwards, carter goodwin is seated as the new democratic senator from west virginia. live said the coverage on c-span 2. >> for a snapshot of washington and the 111th congress, the c- span directories, guide to governors, house members, senators and justices. order it online at c-span.org /store. >> the senate judiciary

committee is preparing to vote on the confirmation of supreme court nominee, elena kagan. we spoke with a capitol hill reporter from "cq." >> said stern joined us for an update on who has decided what. what can you tell us about senator specter and his opinion piece in "usa today? >> it was an interesting opinion piece, who spent most of it saying that he was not particularly pleased with what she said at the hearing. at the end he said that he decided to vote for her anyway. when he was still a republican last year when her confirmation

came up for solicitor general, he voted no at the time. there was a question of how you reconcile that. he did not specifically address it. >> your piece in "congressional quarterly," late yesterday, " second to announce opposition, who are you looking at"? >> there are not many left on the committee. the obvious one is lindsey graham, the only of the senate that voted yes last year for sonia sotomayor. >> as you watch this process, how much different has it been from the nomination of sonia sotomayor? >> it has played out similarly in the sense that the democrats are lining up for her and so far whoever is announced in the republicans have been pretty, less around voting against her

so far. 14 republicans have said they will vote against her. >> aside from the fact that the committee members are able to call for a delay of one week, what in particular was senator sessions worried about with her record? >> he voiced some new concerns on tuesday about the solicitor general participating in a challenge to the health-care overhaul constitutionality. republicans submitted a letter asking for additional clarification about whether she participated in any constitutionality. like that she have to respond to that letter? >> sought -- so far the white house spokesman has not

indicated whether or not there will be some kind of response before next tuesday. >> what can you tell us about the timetable from there on out? >> the expectation is that she will be voted out of the committee and to the floor. it could wrap up next week. certainly before the august recess. >> thank you for the update. >> the senate judiciary committee will vote on tuesday on the nomination of elena kagan to the supreme court. watch live coverage on c-span 3 and on c-span.org. learn more about the supreme court in c-span's latest book, providing unique insight about the court. available in hardcover and as an ebook. >> monday, a discussion on attitudes affecting u.s.-china

relations. the woodrow wilson center host speakers from panels on the u.s.-china university. >> by a vote of 60 to 39, the senate approved the financial regulations bill on thursday. they decided to tighten regulation practices and expand consumer protection. prior to that vote, the senate had the vote to end a bit on the bill. ranking member, richard shelby, took the floor to discuss the bill. this is just under 30 minutes. on the dodd-frank regulation conference report which is now before the senate. madam president, nearly two years ago, the financial crisis exposed massive deficiencies in the structure and the culture of our financial regulatory system.

years of technological advances, product development, and the advent of global capital markets rendered the system ill-suited to achieve its mission in the modern economy. madam president, decades of insulation from accountability distracted regulators from focusing on that mission. instead of acting to preserve safe and sound markets, the regulators primarily became focused on expanding the scope of their bureaucratic reach. and after the crisis which cost trillions of dollars and millions of jobs, it was clear that significant reform was necessary. but despite broad agreement on the need for reform, the majority decided it would rather move forward with a partisan bill. the result is a 2,300-page

legislative monster i believe before us that expands the scope and the power of ineffective bureaucracies. it creates vast new bureaucracies with little accountability and seriously i believe undermines the competitiveness of the american economy. unfortunately, the bill does very little to make our financial system safer. therefore, i will oppose the dodd-frank bill and urge my colleagues to do the same. madam president, this was not a preordained outcome. it is the direct result of the decisions made by the obama administration. had they sincerely wanted to produce a bipartisan bill, i have no doubt that we could have crafted a strong bill that would have garnered 80 or more votes in the senate. if the american people haven't noticed by now, that is how -- not how things work under the democratic rule.

unfortunately, madam president, the partisan manner in which this bill was constructed is not its greatest shortcoming. one would have assumed that the scope of the crisis, trillions of dollars lost and millions of jobs eliminated would have compelled the banking committee to spend the time necessary to thoroughly examine the crisis and develop the best possible legislation in response. unfortunately, madam president, such an assumption would be entirely unfounded here. the banking committee never produced a single report on or conducted an investigation into any aspect of the financial crisis. in contrast, during the great depression, the banking committee set up an entire subcommittee to examine what regulatory reforms were needed. the pecorra commission, as it

became to be known, interviewed under oath the big actors on wall street and produced a multivolume report. unfortunately, this time around, the democratic-run committee gave wall street executives a pass, i believe. there were no investigations, no depositions, and no subpoenas. in fact, madam president, chairman dodd, my friend and colleague, never called on the likes of robert rube rubin, lld blankenfein, or mozillo to testify before the bank committee. not a single individual from a.i.g.'s financial products division was questioned by the committee or its staff. also congress did establish the financial crisis inquiry commission, we did here, to do the work the majority party i believe refused to do, the commission's work will not be completed, madam president, until the end of this year.

most amazingly, the banking committee did not hold even a single hearing on the final bill before its markup. the committee never took the time to receive public testimony or survey experts about the likely outcomes that the legislation would produce. we know that the majority heard from wall street lobbyists, government regulators, and liberal activists but they clearly decided what they did not want the american people to have a chance to understand and comment on their bill, the bill before us today, before it was enacted. the question is why. the majority knows that this bill, i believe, is a job killer and will saddle americans with billions of dollars of hidden taxes and fees. allowing to public to weigh in on this bill would have spelled the end of the democratic version of reform that's before us today. madam president, i believe we owed more to those who lost their jobs, their homes, and

their life savings. this truly i believe it was a missed opportunity. the difference, madam president, between what we needed to do, what we could have done and what the majority has chosen to do is considerable and i will speak on this. congress could have focused this legislation on financial stability. it could have utilized the findings of the financial crisis inquiry commission. instead, the democratic majority chose to adopt legislative language penned by federal regulators in search of expanded surf. they chose to legislate for the political favor of community organizer groups and liberal activists seeking expansive new bureaucracies that they could leverage for their own political advantage. the result here is an activist bill that has little to do, madam president, with the recent or any crisis and a lot to do with expanding the government to satisfy special interestsment

congress could have written a bill, madam president, to address the problem of too-big-to-fail once and for all. in fact, the shelby-dodd amendment began to address this problem right here on the floor. unfortunately, the democrats once again overreached i believe at the 11th hour and undermined the seriousness of our efforts by emphasizing social activism over financial stability. democrats insisted that the overall financial stability mission of the financial stability oversight council i believe was less important than the political needs of certain preferred constituencies. this dangerous mixing of social activism and financial stability follows the exact same model, madam president, that led us to the crisis in the first place; that is, private enterprise co-opted through political mandates to achieve social goals. fannie and freddie proved that

this definition can be highly destructive. oochecongress could have writte, madam president, legislation to address key issues that played a role in the recent crisis. on government-sponsored enterprises, fannie and fredy, the bill is silent aside from a mere study. on the tri-party repo market, the bill is silent. on runs in money markets, the bill is silent. on the reliance of market participants on short-term commercial paper funding, the bill is silent. madam president, on maturity transformations that allowed the shadow banking system to effectively create money out of aaa-rated securities, thereby make the system much more vulnerable, the bill is silent. on the financial system's overall vulnerability to liquidity crisis -- crises, the bill, again, is silent.

madam president, we know with certainty that all of these factors, none of which are addressed in the bill, were integral to the recent financial crisis. and while we do not want to write legislation that only deals with the last crisis, we do want to enact a law that addresses what we know are systemic problems. this bill fails to do so. congress could have written a bill to streamline regulation and eliminate the gaps that firms exploit in the race to the regulatory body. this bill does the opposite by making our financial regulatory system even more complex. we will still have the fed, the fdic, the s.e.c., the cftc, the o.c.c. and the remainder of the regulatory alphabet soup. in fact, most of the existing regulators that so recently failed us have been given expanded power and scope. this bill also will add new letters to the already confused soup, such as cfbp and o.f.r.

in addition to increased regulatory complexity, there will be new special activist offices with each regulator for almost every imaginable special interest. madam president, congress could have set up reasonable new research capabilities in its new stability oversight council to complement financial research performed by the financial reserve and others. instead, the democrats decided to establish the office of financial research with an unconstrained director and a focus on broad information collecting and processing. i believe that this office will only -- not only fail to detect systemic threats and the asset price bubbles in the future, it will threaten civil liberties and the privacy of americans, waste billions of dollars of taxpayer resources, and lull markets into the false belief that the new government power

will protect the financial system from risky trades. congress could, madam president, could have been transparent in identifying the bill's fiscal effects and costs. instead, the majority wrote a bill that hijacks taxpayer resources but hides that fact from public view. and just as the administration refuses to acknowledge trillions of dollars of contingent taxpayer liabilities residing with fannie and freddie, this bill provides americans with a transparent view of the cost of the new multibillion-dollar consumer protection bureaucracy. according to the report on the bill offered by the majority, the consumer bureaucracy's budget is, and i quote -- "paid for by the federal reserve system." madam president, make no mistake, paid for by the he fed means paid for ultimately by the taxpayers. taxpayers will be on the hook

for billions of dollars of unchecked, unencumbered and unappropriated spending financed by the inflationary money printing authority of the federal reserve which will be hidden from the american people in the arcane federal budget. congress could, madam president, have also used this legislative opportunity to begin the process of reforming the failed mortgage giants fannie and freddie whose ever-growing bailouts have no upper limit. when it became clear this system was not the intention of the democrats, republicans sought to address the current and worsening conditions of the g.s.e.'s. we established -- we suggested establishing taxpayer protections such as portfolio caps on the mortgage giants. we recommended making the costs of fannie and freddie bailouts transparent to the public, that is to the taxpayer. we offered initial steps toward the never -- inevitable

unwinding of these institutions. yet, madam president, at every turn the democratic majority blocked efforts for at least establishing reform here. the democrats prefer approaching this bill in reforming the mortgage giants is a stay. let me repeat that notion. in order to address a bailout that has already cost american taxpayers roughly $150 million to date with unlimited future taxpayer exposure, the democrats proposed a study. it does not take a study to determine, madam president, th that $150 billion in unlimited loss exposure needs to be addressed immediately, now. congress could have focused, madam president, on securities market practices that were known to have contributed to systemic risk in our financial system. again, democrats overreached, i believe, once again. for example, the bill gives the securities and exchange commission, which has failed to

carry out its existing mandates, a new systemic risk mandate to oversee advisors to hedge funds and private equity funds. yet, no one contends that private funds were a cause of the recent crisis or that the demise of any private fund during the crisis resulted in a systemwide shock. congress could have acted, madam president, to curtail wall street's speculative excesses and enhance main street access to credit, but instead here in this bill large financial firms on wall street seem to have benefited. judging by the behavior of their stock prices while the legislation almost surely will increase uncertainties and costs for main street and america's job creators. madam president, the actual provisions in the bill will benefit big wall street institutions because they substantially increase the amount and costs of financial regulation. only large financial

institutions will have the resources to navigate all of the new laws and regulations that this legislation will generate. as a result, this bill, i believe, disproportionately will hurt small and medium-sized banks which had nothing to do with the crisis. and madam president, while the largest financial institutions get special regulation under this bill, the unintended result will be lower funding costs for these firms. that will benefit the big banks and hurt the small banks. therefore, this bill will result in higher fees, less choice, and fewer opportunities to responsibly obtain credit for blameless consumers. moreover, this bill raises taxes, which as we all know ultimately are borne by consumers. make no mistake, when wall street writes a check to pay higher taxes, the ones that end up paying those taxes are american consumers and workers. madam president, congress could have written legislation for consumer protection that

respects both american consumers and the need for safety and soundness in our financial system. instead, the dodd-frank bill was basically constructed by architects in the treasury department who have a certain condescension, i believe, for american consumers and their choices. the ultimate goal is to substitute the judgment of a benefit he have leapt bureaucrat for that of the american consumer, thereby controlling consumer behavior without regard for the safety and soundness of our banking system. the american people, i believe, madam president, are being told not to worry, however, because it's all being done for their own good. and while a consumer protection agency might sound like a good idea, the way it's constructed in this bill will slow economic growth and kill jobs, i believe, by imposing massive new

regulatory burdens on businesses large and small. it will stifle innovation in consumer financial products and it will reduce small business activity. it will lead to reduced consumer credit and higher costs for available credit. less credit at a higher price will dampen the very small business engine of job creation that our economy desperately needs right now. that is a price i'm not willing to pay. congress could, madam president, could have implemented reforms to improve derivatives market activities. instead, the bill's derivative title seems to have been inspired by the desire to be punitive or to provide short-term political support during an election or both. instead of imposing a rational and effective regulatory framework on the o.t.c. derivatives market, the bill runs roughshod over the main street businesses that use derivatives to protect themselves every day. madam president, the dodd-frank bill will increase companies'

costs and limit their access to risk-mitigating derivatives without making our financial system safer in the process. as a result, there will be fewer opportunities for businesses to grow, fewer jobs for the unemployed and higher prices for consumers. congress could, madam president, have written a bill to put an end to overreliance on credit rating agencies and underreliance on their own due diligence. instead, the dodd-frank bill sets up new regulations and liability provisions to give the impression that ratings are accurate. it then takes a contradictory direction and instructs regulators to replace references to ratings with other standards of creditworthiness. to make matters even more confusing, the bill also provides for the establishment of a government-sponsored body that will select a credit rating agency to perform an initial rating of security issue. i anticipate that the net effect of these conflicting provisions will be a redution in competition among credit rating

agencies and potential competitors either will be deterred by all of the new regulatory requirements or be destroyed by the liability provisions set up in the bill. the lack of competition led to poor quality ratings in the runup to the crisis. this bill perpetuates and in fact worsens that problem. madam president, the congress could have eased regulatory burdens on small and bead yum-sized businesses that are not integral to the recent crisis or any crisis. instead, main street corporations will be subject to a panoply of new corporate governance and executive compensation requirements. these new requirements will be costly and potentially harmful to shareholders because they empower special interests and encourage short-term thinking by managers. these features were included solely for the purpose of apiecing unions and other special interest lobbyists, and there is no demonstrated link between these changes and the enhanced stability of our

financial system, our improved investor protection. we're getting toward the end here. congress could have held hearings or analyzed a number of changes that this bill makes to the securities laws. instead, dramatic changes in the laws were written with little discussion and no analysis. madam president, throughout this process, there has been a lot of talk about the influence of wall street on this bill. to be sure, in the early stages of negotiations, wall street and the big banks were very engaged. i think the american people know, however, that in the end, the real influence peddlers on this bill were not wall street lobbyists but rather liberal activists and washington bureaucrats. wall street and the big banks just happen to be the incidental beneficiaries of their success. when chairman dodd and i began this process, we agreed that the bureaucratic status quo was unacceptable and that radical changes were necessary, and with that in mind, we agreed to consolidate all the financial regulators and constrain the fed to its monetary policy role.

this was not a result the big banks wanted. the last thing a large regulating financial institution wants is a new regulator. after all, they spent years and millions of dollars developing a relationship with their current regulators. a major regulatory organization would have seriously upset the status quo and cost them a great deal of money. neither chairman dodd nor i were persuaded, however, that the necessary change was going to come. unfortunately, that provision of reform again denies the bureaucrats and the liberal left begin to exercise their influence over the bill. when it became apparent that i was not willing to embrace the left's expansive consumer bureaucracy, it also became apparent that actual regulatory reform was not what the majority was seeking. all other serious reform was scuttled by the democrats in defense of the new consumer bureaucracy. that was the point at which chairman dodd and i began to seek a new negotiation --

negotiating partner, ultimately to no avail. as the fed and other regulators began to regain their foothold with the democrats and the administration left consolidated, it supported around an expansive new bureaucracy. all the democrats will succeed in doing with the help of republicans is to give the failed bureaucracies more power, more money and a pat on the back with the hope that they will do a better job next time. ths not real reform, madam president. that is just more of the same. we had an opportunity to lead the world by creating a modern, efficient and competitive regulatory structure that will serve our economy for years to come. instead, i believe we squandered that opportunity by barely expanding an obsolete, inefficient and uncompetitive system. to make it even worse, they have added to the bureaucratic morass several more unrestrained and unaccountable agencies.

it became apparent early on to me that the administration, the democrat majority are not really interested in regulatory reform. all they were really trying to do is exploit the crisis in order to expand government further and award special interests. the dodd-frank bill will not enhance systemic stability. it will not prevent future bailouts of politically favored institutions and groups by the government. the bill serves to expand the beryl bureaucracy and government-controlled private sector. it will impose large costs on the taxpayers and businesses. for these reasons, i urge my colleagues to reject this bill. i note the absence of a quorum. the presiding officer: the clerk will call the roll. mr. dodd: madam president? the presiding officer: the senator from connecticut. mr. dodd: well, madam president, let me thank my colleague from alabama once again. i say this with respect, but i almost feel like i'm listening to the same speech i heard back

in november when i offered the original proposal of this bill. i'm wondering whether or not we have been in the same chamber, in the same city over the last several years. i'm not going to go in the time between now and 11:00 a.m. when we'll vote on the cloture motion. i won't go through the long list here, page after page after page of amendments that were adopted as part of this bill offered by my good friends on the minority side. 80 hearings held over two years. countless efforts to reach out and bring people in. you can make a lot of accusations i suppose about the bill, but this was a very inclusive process. half the amendments that were adopted on the floor of this chamber during the consideration of the four weeks were ones offered by the minority were accepted and bipartisan amendments. there was never an alternative offered. there was never a substitute offered. it was really a question of whether people wanted to amend this legislation we had before us. it is not a perfect bill. i will be the first to admit that. we don't know ultimately how well the ideas we have

incorporated here will achieve the results we all desire. it will take the next economic crisis, as certainly it will come, to determine whether or not the provisions of this bill will actually provide this generation or the next generation of regulators with the tools necessary to minimize the effects of that crisis when it happens, but we believe we have done the best we could under the circumstances to see to it we never have another bailout of a major financial institution at taxpayer expense. in fact, it was the shelby-dodd amendment adopted in this chamber as the second amendment to be considered that actually completed the process of seeing to it that there would be either bankruptcy or resolution of financial institutions that got themselves into so much trouble they put the entire system at risk. we have set up an oversight council to make sure we could observe what was occurring, not only here at home but around the globe, matters such as greece or spain that could put our economy at risk. so it isn't just one set of eyes, but having those responsible for seeing to it that our economy remains safe

and sound, have the opportunity to provide the early warning that never occurred. you didn't need a commission to find out what was going on. you had mortgages that were being sold in this country to people that couldn't afford them, marketing in a way that would guarantee failure, securitizing them so you could be paid and then skipping town in a sense. i don't need to have hours of hearings to find out what was the cause of it. it's how to put a system in place to minimize the kind of future risks our nation would face t. wasn't just to deal with those who created the problem but rather to look ahead, not in a punitive way but to try and set up an architecture and structure that would allow to us get to that point where we could be confident that we were addressing these issues. thirdly, of course, we tried to deal with the exotic instruments that had caused so much of the difficulty. the derivatives market was a $90 billion market and it mushroomed in less than a decade to $600 trillion, putting our nation at risk because of a lack

of transparency and accountability to determine what was occurring in those markets. we considered it a radical idea that we might want to have transparency and accountability i find rather remarkable considering what our country has been through. and also we provided a consumer protection bureau. what a radical idea that s. the idea that people who -- what a radical idea that is. the idea that people who buy mortgages, have a student loan, a credit card, a car loan, they might have some place in this city that watches out for them, for their jobs, their homes, their retirement accounts were lost. and so while this bureau is in place in this bill, the idea was at least to see to it that people when they have the problems they've been through or are going through, someone is watching out for them. we have a consumer product safety commission, when you buy a faulty product, what happens when someone abuses or takes advantage, as happened so many

cases in financial areas that people have a chance to have a redress of their grievance or to at least in the outset have an opportunity to address that before it becomes a broader problem. mr. president, again, we've debated this -- madam president, again, we've debated this and we spent four weeks on the floor of this chamber. amendments were offered. never once -- i get on one occasion did we have a super majority vote. there was only one tabling motion that i know of. i did everything i could to make it as inclusive a process as possible. and the fact that i understand people don't like the bill. it saddens me in a way that once again it's become sort of a mindless partisan argument rather than talking about what we need to be doing. this is not the end of all of it, obviously. oversight will be required, consultation in the coming weeks and months and years to make this work well. but, madam president, i can't imagine another process that has

been as inclusive. my colleagues will recall going on ten months, almost a year ago that i invited both democrats and republicans on the banking committee to assume responsibility for major sections of this bill which they did do, by the way, and made a significant contribution to the product. and so while i expect those who want to vote against the bill, that's their right to do so. find some arguments based on the merits rather than arguing about whether or not this was a process that was inclusive or allowed people the opportunity to be heard. now, again, we have the right to be heard. you don't have a right to necessarily have your ideas become the law of the land. that's what a body like this is for. and so this is a major undertaking, one that is historic in its proportions, that is an attempt to set in place the structure that would allow us to minimize the problems in the future. i can't legislate integrity, i

can't legislate wisdom. i can't legislate passion or competency. what we can do is create the tools and the architecture that allow good people to do a good job on behalf of the american public. and theatsd what a bill like this -- and that's what a bill like this is designed to do. i regret i cannot give you your job back, put retirement moments back in your account. what i can do is see to it that we never, ever again have to go through what this nation has been through. and that's what this effort has been about over the last several years, to try and create that structure, that architecture it will be incumbent now on the present administration and those that follow to nominate good people to head up these operations, to attract good public servants who will fill the jobs in these various regulatory bodies to see to it that they do the job we all want them to do. again, i can't legislate that. i can merely create the opportunity for that kind of protection to occur, to

modernize our financial system, to lead the world, if we can, in harmonizing rules so we don't have the kind of sovereign shopping that has gone on with regulatory bodies, where major financial institutions shop around the world as to the nation of least resistance or the regulator of least resistance to see to it we have the unanimity and at least the harmonization of rules that will allow us to have a more orderly system in our globe, because as we've all painfully learned, matters that can occur thousands of miles away can affect the economy in our own country. so for all of those reasons, madam president, i thank my colleagues for their efforts over the last two years. i thank the leadership for providing the opportunity and time for to us do this in this chamber. i thank my colleague in the house, barney frank, and his colleagues for the work they engaged in in order to produce a bill there. the two weeks we spent, some 70 hours of debating the conference report, again, where more

amendments were adopted, again, offered by my colleagues, republicans and democrats, to make this as good a bill as we could in all of this. so with that, madam president, again, i'll reserve some comments for later but as we approach this vote in the next few minutes, i urge my colleagues to invoke cloture, to allow us to then have an up-or-down vote on this bill, to do what we can to restore some trust and confidence and optimism in the american people that in the midst of the worst economic crisis of the lifetime of most americans, this institution, the united states s senate, rose to the occasion and crafted a bill and a proposal to address the financial service structure of our nation to give us once again that hope that we can see wealth created, jobs produced and an economy that will offer opportunities for the next generation of americans. i urge my colleagues to support that cloture motion, and i urge them to support the bill when the vote occurs later today.

>> later, on c-span, john mccain and tea party activists meet in the second and final of primary debates in arizona. today at 6:00 27:30 on c-span. -- 6:30 and 9:30 on c-span. >> these towering figures are different. they have different talents. they have different dangers. >> this weekend, robert service on his trilogy of russian leaders. learn about their relationships and roles in developing their form of communism. robert service, tonight on "q&a." >> now, jamie walters, editor of "top line," discusses the

midterm elections with seat -- teachers attending the c-span educator conference. this is one hour. [applause] >> as we told you this morning, having you here energizes us very much. i have be very nice honor of introducing outgamie walter, our speaker tonight.

the c-span video library, by check how often she has been on c-span. when she first made her first appearance. i sumter. what did you guess? 12 times? it was 171 times. since the year 2000 you were on 56 times. what she does is join us during "washington journal" each morning to give us the big cats on races around the country. she has knowledge of friends among voters and congressional districts -- we were watching that at our table. when you say hello, i am from birmingham, alabama, you can see her thinking about congressional districts, who is running -- her

mind just thinks that way. we have not stumped for yet, it is a lot of fun. you also heard us laughing a lot. she brings together an encyclopedic knowledge of politics and voter trends. doing it in an interesting and humorous way. what we do tonight, we talk about teaching and c-span, which is important, but at these dinners we ask someone with inside so that you can go home and say -- guess what i heard what happened based on my experience at the dinner. amy walter is here to give us an inside skinny on campaign 2010. join me in welcoming her. [applause]

>> thank you. i was on here with brian before, i knew where it was going. the good news is, if you are on as a guest in the studio and you have decent eyesight, you can see on the monitor where the calls are coming from. if it is coming anywhere west of the mississippi, this is probably bad news. because if it is 7:30 here, nothing good is happening at 4:30 in the morning, right? [laughter] carlsbad, california, you are on the call. here we go. [laughter] that is definitely worrisome.

i can handle that more than brian, because you never know where he will go with questions. you'd think they'd you will talk about house and senate races, you start on the pennsylvania senate race and you move on to what is happening in colorado. we were talking about pennsylvania? we could talk about my dog and other things. the one time that i will never forget, my favorite moment on the hill was with marjorie margolis, who used to be the most famous person in washington because she was the deciding vote in 1993 for president clinton's budget, one of the very few votes that, believe it or not, in american history, although you do not know it, the

amount of losing the campaign in '94 -- which i had the pleasure of managing. [laughter] rye and ask me about that. you worked for marjorie? how is she doing? it was right around the time in my life that things were not going well. her husband was involved in the various, nigerian money, white- collar -- send me money from nigeria funds. he was actually sent to prison for a significant amount of time. already i was feeling uncomfortable. they lost the house, the husband was in jail, everyone was uncomfortable. how is the has been doing?

>he is in jail. [laughter] kind of awkward for the family. are they still together or married? [laughter] i do not know. my stomach was release starting to hurt. she is now much more famous for the fact that her son is marrying chelsea clinton. they met when she was first elected, stuck together at the renaissance weekend in south carolina, where they are both light -- can you believe how dorky our parents are? so, it is a cute story. they met when they are 13, up getting very all of these years later. but i am not invited to the wedding. so, thanks to you, probably. [laughter]

remember when you told our family secrets on c-span? no, it will be interesting to see. it was the big question in washington, which was -- are they not invited? or did they just decide that now was not the right time to be going? after the enquirer story. the good news is -- it is great for the clintons, they do not have to explain that. did you not invite but gorthe g? that is awkward. now it is just like -- they are not here. good for everyone. it will be beautiful. they are a good couple. i am happy about that. i am here because supposed to be here, to talk about politics.

you guys are such a unique breed and i am very thankful for you. i was thankful enough to come from a wonderful high-school experience. i thought that i was going to be an english major. i do not know what it was. what you do is set the stage for the students going forward. .

>> if your m.i.a. -- if you were one of my high-school teachers, i would think you. now i get to talk about politics, which is a very fine job. believe it or not, people do get paid to cover politics. scalia does a great job of it for you on c-span. everybody else who is involved

on the c-span team does, too. i started covering the house, which my friend told me is basically the crime beat for washington. [laughter] this is how you start in politics. if you start in journalism, of the traditional place to start was crime beat and then you become the national reporter. in politics, starting in the house is a good place to go. you get to understand the politics of the house and then you will understand everything you need to know about any other level of politics. plus, it is the thing that's very few people focus on and it determines everything in this town. control of the house and the senate is really where all the decisions are made will like talking about the white house because it is -- decisions are made. we like talking about the white house because it is glamorous.

but when it comes down to legislation, how things move in this town, they have to move through congress. if you understand that, you can really a understand washington. i am very thankful for the time i spent there. i spent nearly 10 years with charlie cook covering house races. i get to meet two hundred candidates every year. i probably meant every one of the members of congress. you learn about a lot of out of america. i remember the day i got to meet ronnie shells from southern mississippi who was the roads commissioner in southern mississippi. the big issue there -- for a lot of it, i needed a translator because there was a heavy accent. [laughter]

i was not really getting that. it is all about expanding in. the issue was getting from rural mississippi to jackson. that was the main focus that he was running on. literally, five minutes later, i met the david wu from portland, ore.. and he was an attorney who specialized in software and intellectual property. we were talking about the internet superhighway. those are literally to different kinds of highways. and we talk about coffee and nike and expansion of the suburbs out there. hold on, this is the same country, the same party, and

they are on entirely different planets in terms of what they need to do for their constituents and what they want to do -- what they think they're taxed to do when they come to washington. i think it is important to understand when we watch congress work and c-span does that very well and it looks very dysfunctional the problem the democrats have had is the fact that they ran in 2006. the president ran in 2008 on the theme of change. we're going to change our washington works. it is broken and we are going to come here and fix it. the president also talked about bipartisanship. but two parties can work together. we can come up with common solutions to solve common problems. the reality of that actually is that, of being able to get a

solution in the democratic party itself is a bipartisan solution. that party is so big and so diverse that being able to get the two hundred 18 votes in the house, getting -- even if it is all democrat, they come from such a divergent ideological and geographical perspective that it is quite a feat. i think this is where the democrats did not set themselves up very well by focusing so much on the fact that it had to be bipartisan. the reality was that they had gained so many seats in 2006 and 2008 by beating the very people who would be willing to cross party lines and help and support them. they killed off all the moderates. they got the majority by beating the people in new england.

there is not one single republican member of congress from new england. there are two members in new york state who are republicans, thank you to eric mess up. there may be three very soon. that era of when you think of the rockefeller republicans, that moderate push from the northeast, that was to cut -- that was totally thrown out in 2006 and 2008. you wondered what it would be like if they had not beat gordon smith from oregon or lincoln cheesy from rhode island. what would look like? what with this post-partisan world look like? i think that is part of the problem. the 2010 election, in many ways, feels like a traditional

midterm election. midterm elections are not good for the party in power. we like to use the barometer of the president's job approval rating. a time it is under -- any time it is over 50%, his party loses on average 12 seats. --n when you are doing well george w. bush actually gained seats. that is very much an anomaly for a first term president, natalie to not lose seats, but to actually pick up seats. of course, that was in the wake of 2001. but even his father, who had astronomical job approval ratings at his midterm ratings, even he lost seats. but when the president is under

50%, the average loss of seats is 41. right now, democrats have a 39- seat majority. president obama is teetering somewhere around 46% to 47%. that suggests some real troubles for democrats. you have the president's approval rating that becomes very important, although, going into this election, every democrat new that they would lose seats. you sat down with the head of the democratic campaign committee. you sat down with folks in the white house in 2009 and they would have told you that they would lose 15 seats. quite frankly, we won a whole lot of seas. we had no business winning them. it is true. they bring in people that

probably would not have one but for that environment. 1994 was another example of that. i like this in 1994 because the script at the bottom of the ocean as the way was coming through. -- because i scraped at the bottom of the ocean as though we've a -- as the wave was coming through. there were plenty of seats were the wrong person was sitting in that seat. but now we are at the point where there other really important factors. the president's approval rating is one of those. another factor suggest that this

will not be just a 15-seat thing. the odds of keeping the house continues to diminish. if you want to go back, depending on how sophisticated your students are worth your to do this for your own dirty pleasure, -- your own nerdy pleasure -- we are all nerdy. people are watching gets in with the stars and you want to be talking about politics. we are not normal. just admit it. and move on. i am totally in your camp. you can look to these factors and say how bad will it be for democrats? is it going to be kind of bad? bad? really bad? or think about it in starbucks

terms, a tall, grande, venti bad? we are in the venti bad. the other thing that i think is really important is to look not just at the national labor, but the number of districts that will determine the selection. when you take a national poll, you take districts that are really republican and really democratic and you wish them all together and do, but this average number. but now just look at the destruction that will be the most competitive and will really determine who controls the house? basically, npr does this. they do a poll that does this. three weeks ago, the chemo with this poll, but i do not think much has changed since then -- they came out with this poll, but i cannot think much has changed -- but i do not think

much has changed since then. i put them side by side, the national lumber and the 60 seats, democratic house seats. the president has an approval rating of 46%, 50% disapprove. so that is - 4. in the districts, he is down to -14. that is a big jump in the swing districts. then there is the congressional ballot test. and our friends at a gallop put together this great short.

it is how people respond as democrat or republican. democrats have always been ahead. the only three times that republicans have been ahead on that question, 1994, 2002, and now. nationally, they are ahead by two points in those swing districts -- national, they are ahead by two points. in this swing districts, they are ahead by 5 points. your democratic incumbent john salazar against the republican, who would you go for november? 47% picked the republican. that is painful. the other really important number is the enthusiasm gap.

how excited are you about voting in this election? we know that mid term elections have big drop of elections. folks that turned out in 2008 are not likely to turn out in a midterm election. i like to say, i am somewhat of a romantic for an idealist, and love can conquer all, but when it comes to elections, i want anger and hate homicide, not love and acceptance. [laughter] angry people vote. complaisant people do not. reno, -- the angry people were democrats. now, they are republicans. at a national level, republicans have an 18-point of vantage. 18-point advantage.

the other really important thing to remember is to say, the enthusiasm gap, we can balance it out. we will do things that will make democrats really happy. we will just get the democrats really fired up. that is great, except, if you're losing independence by the margins, i do not have them for the 60 swing districts, but nationally only 40% of voters say they will support a democrat right now. 53% will look for a republican. when democrats won control of the house, the number was 40% for republicans and 57% for democrats. you can direct your base as much as you want. but if independent -- you can fire up your base as much as you want. but independent voters in the

swing states are voting against do 47% to 50%, you cannot win. you can see, we have a lot of time. it is a long time between now and november. it is true. a lot can happen. emir can fall to the ears. [laughter] -- a meteor can fall to the birtearth. [laughter] lindsay lohan ken birkhead of jail. -- lindsay lohan can break out of jail. [laughter] but not much might happen between now and november. this is not a referendum on us.

it will be a choice. do you want to go the way we are going or do you want to hand over the keys to the people who drove the economy into the ditch in the first place. the empirical decided to test the back. -- to test that. democrats say that republicans left america with deficits and unemployment. i make sure that wall street pays back every penny. government reduces the deficit. we cannot go back to policies that hurt the middle class. and the remark -- and the republicans say that stimulus failed, health care field, deficits have skyrocketed, we need to bring down the deficit. work to create jobs, not kill jobs.

the republicans win that argument 53% to 47%. it is one thing to say that voters just need to hear what we're saying. the bigger problem for democrats is that voters hear what they're saying and they are not buying it. you can try selling it, but if voters are not interested in it, it will be a very tough sell. the one thing that i will say that makes this election different is the fact that voters are angry at washington. we hear that every day.

i did not bring this number with me, but there was a poll that showed anger. people are not paying your -- people are not angrier with iran today than they were in 2006. in fact -- people are not angrier with the government today than they were in 2006. take the 2008 election and make a carbon copy of it. time for change, status quo is not working, these guys and not working. though one difference is that in

the approval ratings for congress continue to drop. at some point, serial killers will be more popular than members of congress. i bet he would not raise our taxes? the people now are angry at everybody. you can look at it from a social studies perspective for a demographic perspective or a historical perspective on the way americans see the institution and how that is eroding. you look back over the last 10 years and think about the way people see corporations, the way people view their own job security.

one by one, all of these major institutions that were held up as everything that we love to brag about as americans not to long ago have fallen, wall street, automobile companies, tiger woods, for god's sakes. major league sports, everything has a scandal or problems attached to it. there's a cd anderson to everything out there. -- there is a seedy underside to everything out there. democrats are hoping this -- i will take my incumbent washington and i will raise you up and outsourcing corporate wall street middle-class destroyer.

for those of you who said in swing states or districts, i apologize on behalf of all of us who covered politics. he will be inundated with nothing but negative ads until november. it is going to be really ugly. i am also a teeny bit hopeful. candidates are running at a time and corporates are trying to sell things that a time when frustration is at an all-time high with institutions. authenticity and competence are really key words in trying to get people to believe in that. there's a higher bar for that there has been in a long time. i look at two things for guidelines.

the first was a new yorker cartoon. it was brilliant. it was over a year ago. it is a scene of a politician standing like this with all of these angry people. he says, " i know you are angry at me. o."m angry at me, to [laughter] that is brilliant. you're right. we stink. i got it. we are bad. that is just the way it is. this is how authentic i am. i am going to let you know how bad. domino's pizza did that. [laughter] which was brilliant. that is brilliant pizza marketing. i thought it was a parody. you have all these people in the

for prescription saying that the pizza was terrible, the crust was cardboard, the sauce was terrible. then they poppa john's guy was going to come out and say, that is right. you hate dominoes. instead, it is the dominoes person who comes out and said, "you're right. we sought. we made a really bad pizza. we took you for granted. and now they're doing this thing. we are not even when to show you these made up pictures or photoshop our pizzas. you send us pictures of your pizza. this authenticity thing is really smart. there are a couple of politicians picking up on that. blanche lincoln from arkansas that the best. after she gets thrown into a runoff against a challenger, her

closing ad, which i thought was really smart, she says, " blanche lincoln. i know you are mad at washington. believe me, i heard you. for washington, that is up but as close to admitting that we are not doing so well as you're going to get. she is not going to say, you're right, our pizza sucks." if it is easier when you are an independent candidate. maine now has a tradition of electing independence. but i thought his dad was very smart. "-- i thought his ad was very smart. "i am not quick to tell you it is clear to be easy and that you can have tax cuts and increased spending, no. if you look for me, i am going

to make the tough things happen ." that is very impressive. candidates are talking directly to camera. there is no flashy stuff going on. it is just me, you, whatever state you are in. i do not know what they grow in arkansas, wheat or soybeans or whatever, but it was in the background for blanche lincoln. in north dakota, he is on some of road that is gravel and there is no bustling around. it is just me and you. we are talking to you. you have to believe me. i'm going to be authentic to you. it is a real question about whether voters believe it. there's a frustration that is so deep and so significant that i do not know that that great ad is going to overcome that.

in the blanche lincoln case, it is an example of where she was between her campaign and the miscalculation of the other side. she was able to go from the person who is the insider to the outsider. that is going to be the fascinating part of this election. how many of these insiders are going to be able to repackage themselves with outsiders? how many of these outsiders will get elected? for you all, it will become "now what?" you ran against the system and now you'll be in the system. how will you be with the system? for the folks like us who cover some it can be of somof -- it can be awesome.

there are those who do not want to play with others and the idea that you will elect these people who -- the say i am not one to go along with the leadership, the institution. i will be my own person, my own ship, and do my own thing and i think i am going to solve problems. how are you going to do that? you're going to be with the team? you're not going to be with the team? scott brown has done a great job of figuring out how to do that. he was elected -- he was a dead as the tea party candidate. -- he was elected as the tea party candidate. i'm either going to be the bomb- throwing really conservative tea

party candidates or i'm going to be the bipartisan consensus- maker. he is setting the path there is merely to say, "you guys elected made to come to washington to get something done. i can throw bombs all day or tote the party line or make something happen for massachusetts when it is important." i think that is what voters are looking for in this election. if they do not see it from republicans -- by the way, the senate is also getting very close. a year ago, i would have laughed out loud if you had said that the republicans would win control of the senate.

today, it is still something of a long shot, but it is not out of the question. but if republicans do take control and they do not have an agenda for moving the country for, if they do not look like they're competent, our voters will be just as happy to throw them out in 2012. they are smarter than a lot of people give them credit for and want something done. this merry go round will keep spending until they get that. i would like to open it up for questions or accusations or comments or anything. does that work for you? you want to do the microphone. >> i come from oregon's third congressional district, east side.

the 60 districts that are showing states, paid as a picture of those districts and why they are swimming -- paint us a picture of those districts and why their swing states? -- why they are swing states. we know. state or a blue state. >> i love morgan because everybody assumes it is a blue state because -- i love it or again because everybody assumes it is a blue state. you think about portland and in and coffee and you think it is a pretty liberal place. but you get outside of portland and it really is not. the first district used to be very competitive, suburban. the fact is that the state is really more competitive.

" i like about the 60 districts is -- what i like about the 60 districts is, yes, the they are from the south. democrats managed to hold onto them that they really should not have. tennessee has probably many more democrats than it should based on its national voting percentage. arkansas, tennessee, they are overpopulated with the democrats given their national voting behavior. you have districts that republicans have held for a long time that the to cut -- that the democrats picked up in 20006, like florida. the great irony -- i am sorry? pennsylvania, a great place. you have western pennsylvania, which, in the old days, it used

to be very democratic and eastern pennsylvania was republican added it has flipped. -- and it has flipped. one of the best quotes i got in 2000 was a democratic consultant. in 2000, everybody was assessed with the presidential race between gore and bush analyst covering the house. at that time, there was only a five-seat majority. five seats? how hard can that be? but the country was so evenly divided that it was hand-to-hand combat. and they did not win it back. i remember talking to a

democratic consultant whose said that we got killed in every district that did not have a starbucks in it. so here is where the divide is, of the starbucks and wal-mart divided. in 2004, democrats were winning the inner-suburban starbucks, but they were losing the ex surbs. they did not have starbucks 10 years ago, but they have malls -- colorado is another great place where you can do concentric circles outside of your main area. washington county used to be very republican but not so much anymore. but if you keep going further out, 10 miles, 20 miles, 30 miles out and you get dark blue, blue, light blue, purple, red,

dark red -- right? the further you get out from that urban center. bush did brilliantly where there were the fast-growing exurbs. obama did as well in 2008. even people who live in the suburbs, a few live in the exurbs, you think your rule because you live next to a farm or you have to drive 10 miles to a starbucks but there is a starbucks next to you and you can get a wi-fi. some of it is your mentality in some of it is your actual locality. the battle for those soccer mom's, security mom's, waitress moms, office park dads, they

always have a new term every election. they are independents. that is who they are. they moved to these places. most people who moved to the exurbs move there for a reason. they want to be able to have a place to raise their family that is affordable. they moved to this place for a job. it is not ideological. they do not have the luxury of being purely ideological. those are the people that become the heart and soul of every election. if you live in one of those areas and every one of those states has one -- it isn't the new battleground. rochester, that area between st. cloud -- you can see it all. for your state is exploding for 10 years ago it was not, that is

where you will seek election won and lost. -- that is where you will see elections won and lost. >> the latino vote is so difficult with cuban-americans and mexican-americans. how do you see them in the midterm election and how do you recommend we teach it? >> that is a great question. you're right. we like to say it is a hispanic vote. my old boss, charlie cook, like to tell a story about being at a minor league game or a spring training game. a player came up -- when they come up, they play songs for everybody. they played the mexican hat

dance and he was from the dominican republic. whenever, same thing. no, actually, it is not the same thing. very different country. they speak the same language, but they are not in the same country. i know, it is hard to believe. [laughter] in a place like florida or new york where it is clear -- there is a cuban boat and a porter rican vote -- it is very different. and are is a cuban who votvote porter rican vote -- there is a cuban vote and a puerto rican vote. it comes up very different way depending on how where your, when you came into the country, and what your issues are.

it is not as easy to categorize. you can see that this will generate a lot of enthusiasm for x or y. it depends on the overall electorate, who is turning out. the reality is, even in states that may be majority anglo, barely, or a van -- we know that taxes will soon be minority and low. -- minority anglo. that will determine the election. you combine that with redistricting. i have been fascinated by watching members of congress reacting to the new arizona law and the white house decision to sue theire.

arizona has eight congressional districts. five of them are held by democrats. two of them hold a majority hispanic districts and they have come up vociferously for the o.j. decision. but three democrats have been could, i don't think it is a great idea. these are suburban swing districts, scottsdale, tucson, at the end of the day, white voters will make up 70% of the vote. so how you do that as an elected

official and as a public policy thing? that is the sort of thing you deal with all the time, right? public policy vs. politics, which often get in the way. >> i teach film and tv production. i am not in the social sciences. from hearing you, i think it is up to us as educators to bring about what is going on. we are talking about the cosmopolitan cities are the ones that are a certain red white or whatever we are calling it. as you expand from the city, you get to the rural area where i do

not think education is -- they are not -- it is not being told what is really going on. >> actually, people are actually moving out there because of the schools. they do have fantastic -- it used to be that if you live in this area, fairfax county schools, that is where you wanted to be. [unintelligible] >> -- >> [unintelligible] >> when i grew up, i grew up outside chicago. we were good. now it is considered suburban. now it is considered in the middle of nowhere. it was a fantastic public school system. in part, i did was because it was suburban -- in part, it it

was because it was suburban. fundamentally, you are right. teaching kids about sex seems to be one of the most difficult civics to do -- about si seems to be one of the most difficult things to do. i remember my first convention in 1992. at that time, you could sneak in. i snuck into madison square garden. you cannot do that, security, block, block, block -- blah, blah, blah. and they say, i gather, in 1992, i was in the third grade. i always forget that.

come on, you guys. this is not that new. 2002, 2004, all right, you were in diapers. but what they do know about is jon stewart and, as the midget and comedy central. they were raised on a lot of cynicism. i have spent a lot of time beating that out of them. if you ever read "the hotline," you would notice. it has always been irreverent and likes to poke fun at people and politicians and stuff. but we do it with a measure of respect for the process. we love politics. we love the process. bottom line, yes, there are people in it who are kind of easy to make fun of. but fundamentally, we believe in the process and the system and we have respect for it. what i fear is that there is so

much cynicism out there now, especially with the comedy central-youtube world -- and i think that obama helped to temper it some, to help kids be for something and not just against something -- but they failed to understand what the point of it all is. this does not matter to me. i do not care. it does not affect me. that is the most difficult thing to let them know and ness behindthe humanist the people that are doing this. in washington, we have the luxury of doing this, to say that so and so is really a nice guy. i know that it comes across on

tv like whatever, but he is really thoughtful. people not get that opportunity in the real world. as educators, we can tell them here is the best way to evaluate these people. between googled and youtube that web sites and c-span, people can get tons of information about folks. so there is no excuse not to have it. i think the issue for some many people is how to filter it. it's like you have too much information. teaching folks how to filter it, what matters to you, what do you want from an elected official, what do you need to hear, see, whatever becomes the more important question. >> [unintelligible] >> that is right. you have to put it out there as here they are and they made it really clear.

you saw it on their website. you heard their debate. c-span runs debates from candidates and they had in the kansas senate debate, for god's sakes. [laughter] does anyone who know -- does anyone know who they are, besides you guys? [laughter] no. but there is no reason not to know it. you can tune into it, that is the key. thank you. [applause] >> thank you so much, amy, for demonstrating york encyclopedic knowledge. the great thing about all of those citations in the c-span video, you can watch her from her early days.

we just learned through media reports that her next gig will be at abc news. so the next citation will be working on the elections for abc. congratulations for your continued success in your career. [applause] that is it for tonight. 7:45 a.m. for "washington, d.c. traffic." thank you, everybody.

>> later, arizona senator john and gin dee can meet in the second and final of two arizona senate debates. >> now the latest on the efforts to cap the oil spill. joining us on the phone to update us on t situation regarding the capping of the well and the cleanup in the gulf is admiral thad allen, retired u.s. coast guard, now the

national incident commander of the deep water horizon oil spill response. good morning. tell us, what is the latest on the cap that has been put on the deepwater horizon oil well? guest: yesterday we exceeded a 48-hour period where we were able to shut the well and maintain some pressure. we will go for another 24 hours and assess where we are, and that will be sometime this afternoon. there is a quandary presented by the shut-in of the well. we have established pressure -- the good news, but it did not se as high as we thoht. we were looking fosomewhere between 7500 and 8000 psi, which we thought would be the difference to of the top of the well from that being pushed up from the reservoir, but we are between 6760 hundred now. the curve on th pressure is consistent with the well with the treaty, but there is a question as to why the pressure islow, and crawls around two

competing theories. one is that the oil released so far released into the and from the depleted the well and drop theressure, or that the oil is escaping somewhere below, or there is a leak with a problem in the casing. bp and our scientific team are working on this and we agree to take readings on the bottom with seismic, acoustic, and so forth, and look for the leaks while we continue to evaluate. there is some benefit to having theil shut in and not been released into the army, but the real end will be when we do the bottom kill, intercept the well and begin to put it, as early as nexweek. host: tell us a bit more about the measure of the seismic activity. here in the washington, d.c. area we had a 3.6 earthquake earlier this week. we're kind of getting up to speed on the measure of seismic activity. tell us a little more about how

the technology is being used in the gulf? guest: before they begin to drill the original site the had a series of hadruns, and created at time-phased, almost four- dimensional model of what it would look like down to the reservoir. there were different types of rock formations. a very good indication of what they were drilling into. they did another run on april 26, after the event occurred. it was not quite as good because there were many problems with the pipe. but they got pretty significant indications. we have been taking the vessels that have find seismic sensors and going across-cuts a different angles, and shooting some large-type images through the rocks and getting a return to allow us a profile of the formation.

we'retrying to look for anomalies where oil might have moved into the formation, or my becoming towards the surface. host: there was an advertisement in the paper this morning in "the new york times" taken out by bp. the top one says that bp is taking full responsibility for the cleanup in the gulf, and are committed to keeping you and the american public informed. how informed is bp kping you on their activities regarding capping this well and given the situation under control? guest: we have a federal government signs team located in bp headquarters in houston, where the command center is that monitors the pictures and work on the well head. we have been integrated with them since the start of the. there are daily meetings with the suns team and bp o try to talk about the competing theories -- between the science team and bp. i myself have daily contact with bob dudley, and we have several principles call for

route the day for government leaders are briefed by the science team. that will continue through the weekend. host: what is the next briefing you have with the people from bp, and what kind of decisions we make based on that? guest: the science teams only drop the day. one team is looking at whether there is water is as do with the reservoir. if so, the order will be on top of that. that will continue to put pressure there. if there is no water, it would account for the depletion theory. we have several teams looking at individual questions. about midday the will come up with their best estimates based on data from the last 24 hours, and about 3:00 p.m., those principles will have a conversation to decide on the next 24 hours, as we did yesterday. host: and autumn says that's a

noa summer ship has been brought to assist on the monitoring of the entire seafloor around the welding are you concerned about leaks coming now that you have a cap on the initial will spring? guest: that is what i was referring to in making sure that we understand the nature of any problems. while we're keeping that well under pressure, we don't want to cause any irreversible damage or allow oil to get to the surface. we brought in the pisces that has very fine sense in devices looking for things like methane bubbles. that is togetr with the seismic vessel also during this survey i mentioned earlier. we're also using rov's, hydrophones.

we're really monitoring the sea floor. host: when can you expect the operation of the reli well? guest: they are at the end of putting the well bore down. there within about four or 5 feet of the well right now, going down at a slight angle towards it, one or two degrees. by next weekend will be in a position to attempt a first entry into the well, the need to reinforce the bore they have built so far. host: give us the layout of what is on tap for the process this week? guest: we will contie to fight the spill on the surface. while we move to the new cap which we are testing now, the

was a time where oilwas going to the surface. we have gotten them in modest skimmers, and are trying to get it from thbeaches or skim it before it gets there so, the oil recovery will continue even though there is no oil coming from the well at this point. so, what we're trying to cap it, our attention is also on >> they are the towering figures. they're all different. they have their different talents. they have a different dangers. >> this weekend, robert service on his trilogy of books on

russian leaders, lenin, stalin, and leon trotsky. learn about their relationship and roles in developing their form of communism. that is robert service to ninth on c-span's q&a. this week, prime minister david cameron talks about the loss of soldiers in afghanistan. he also is questioned about the costs of reorganizing the national health service. the prime minister's questions, tonight at 9:00 p.m. eastern on c-span. >> the senate judiciary committee will vote on tuesday on the nomination of yelena on the nomination of yelena kagan -- of elena kagan