networking sites and find our content any time through the c- span video library this brings our resources close to your community. is washington, your way. >> in a few moments, the congressional budget office forecast a deficit of 1.3 trillion dollars. a little less than an hour, a special airing of our newsmakers program with masochist representative edward markey. after that, a hearing on the gulf oil spill and seafood safety. >> one of the things i regret about political and rhetorical like in washington is that every

major figure from the president on down is merely reading what somebody else in some committee has produced. >> philip perzian wrote about presidents and his literary editor at "the weekly standard." sunday night he will share his insight on washington on "q&a". >> the congressional budget office projects the federal deficit will be more than 1.3 trillion dollars this year. slightly below last year's record. speaking to reporters on capitol hill, doug elmendorf warm about the long-term effects of higher debt and the effect of high employment over the next several years. this is a little less than an hour. >> good morning, everybody. thanks for coming. this morning, cto released the

summer update to our annual budget and economic outlook. it is available on our website at www.cbo.gov. if you have any questions during the day or afterwards, please don't hesitate to find me. are briefer today is our director, douglas elmendorf. he will do a short talk and then will be happy to take your questions. >> good morning, and thank you all for being here. cto released its annual budget update. our current projection of budget deficits is not much different from our previous projection in

march. our current forecast of economic conditions is not much different from our previous economic forecast in january. unfortunately, this is a case where no news is not good news. the country faces serious budget problems and serious economic problems. let me summarize the key points of that report, and then my colleagues and i will be happy to answer your questions. i will begin with our outlook for the budget and then turn to our outlook for the economy. for fiscal year 2010, we estimate the federal budget deficit will be about $1.30 trillion. that is 7 $1 billion below last year's total and $27 billion below our estimate in march. relative to the size of the economy, this year's deficit is expected to be the second largest shortfall in 65 years. at 9.1% of gdp, is exceeded

only by last year's deficit of 9.9% of gdp. as was the case last, this year's deficit is attributable in large part to the weak revenues and elevated spending that occurred automatically because of the financial crisis and recession. as well as the policy responses adopted. for the period from 2011 to 2020, it is assumed as always the current law will be unchanged. make that assumption so the projections can serve as a neutral benchmark to help evaluate the effects of their actions. this means for our current projections that we assume that the tax reductions enacted earlier in this decade expire at the end of the year as scheduled. that no new legislation aimed at keeping the alternative minimum tax from affecting many more taxpayers is enacted, and that future annual appropriations increase only with inflation.

under those assumptions, the federal budget deficit will decline substantially over the next several years to 2.5% in 2014. from 2015-2020, it would stay in the range -- projected deficits total more than six trillion dollars over the coming decade. raising federal debt held by the public to nearly 70% of gdp by 2020, almost double the 36% observed at the end of 2007. however, the assumption that current law is unchanged may significantly underestimate actual future deficits. because we presume the changes in tax laws, we project that revenues will reach 21% of gnp in 2020. compared with an average level of about 18% during the past 40 years.

because we assume that future annual appropriations will be in the inflationary adjusted terms, we project that inflationary spending will fall by 2020, compared with 9% of the past four years. if instead our baseline assumptions, the tax reductions enacted earlier in the decade were continued, the alternative minimum tax with indexed for inflation and future annual appropriations remain the share of gdp they are this year, the budget outcome would be quite different. the deficit in 2020 would equal about 8% of gdp, and debts held by the public would total nearly 100% of gdp. unfortunately, the economic picture is no brighter. according to our projections, recovery from the economic downturn will continue at a modest pace during the next few years. growth in gdp since the middle of calendar year 2009 has been

anemic in comparison with that of previous recoveries following deep recessions. the unemployment rate has remained quite high, averaging 9.7% in the first half of the year. such weak growth is typical in the aftermath of financial crises. the united states, a considerable number of vacant houses and factories and offices will be a continuing drag on residential construction and business investment, and slow income growth as well as lost well will restrain consumer spending. in addition, the rapid reduction of the budget deficit that will occur under current law means that the budget will provide much less support to the economy that has been the case for the past two years. the projected drop in the budget deficit from 9.1% of gdp in fiscal year 2010 to4.2% in 2012 would be the sharpest two-year drop since shortly after world war ii.

all those forces will tend to restrain spending by individuals and businesses and therefore economic growth during the recovery. we project the economy will grow by two. % between the fourth quarter 2009 and the fourth quarter of 2010. just 2.0% in 2011, given our consumption at current laws affecting the budget or unchanged. our forecast, the growth of gdp picks up after 2011, averaging 4.1% through 2014. the modest growth in output projected for the rest of this year and out your point to sluggish growth in employment. as a result we projected unemployment rate will fall slowly to 9.3% at the end of 2010, at 8.8% at the end of 2011, 7.6% at the end of 2012, and back to around 5% by the end of 2014. a different fiscal policy will

yield different economic outcomes and different budget outcomes. for example, cbo estimates that most of the tax reductions enacted earlier in the decade were continued and the amt was indexed for inflation, real growth of gdp in 2011 would be 0.6% higher than it is in the baseline forecast. the unemployment rate at the end of 2011 would be 0.3% lower. all are -- under this alternative scenario, real gdp would fall below the level later in the coming decade because the larger budget deficits would reduce investment in productive capital. i want to emphasize that economic forecasts are always subject to a certain degree of uncertainty. uncertain regarding our current bridgette current forecast is large because forecasting growth in economy your porn in -- near turning points is difficult.

many developments could lead to outcomes that differ substantially in one direction or the other from those cbo is projecting. our report highlights some of the ways in which economic growth could turn out to be stronger or weaker than we project. as well as some of the ways in which inflation could be higher or lower than we project. beyond the 10-year budget window, the country will face daunting, long-term fiscal challenges posed by rising costs for health care and aging of the population. continued large deficits and the resulting increases in federal debt over time would reduce long-term economic growth. putting the nation on a sustainable fiscal course will require policy makers to restrain the growth and spending substantially, to raise revenues significantly above their average percentage of gdp during the past 40 years, or adopt some combination of those approaches. thank you. we are happy to take your

questions. >> i will start. i am a reporter with modern healthcare magazine. i was going through the first box which talks about the effects of the new health care reform law. i was wondering if you could talk about that. -no later in the report there is a couple of paragraphs on what impact it might have on the labor market. can you summarize what effect the new reform law will have? >> in the keyword or less. those of you have not had a chance to look at report, there is a box on pages 6 and 7 that summarizes the budgetary effects of the health legislation enacted in march. there is a box later in the economics chapter that summarizes the effects of the legislation on supply and demand for labor in economy. in addition, in appendix a to the report where we discuss

changes in a report for the budget since march, there is a link the and repeated discussion of the aspects of the health legislation. the short description of what we have done is that we have taken the estimate of the legislation that we made with our colleagues on the tax committee in march and subtracted that to what the projections would otherwise have been. our view of the effects of the legislation has not generally been altered, but it is true that in incorporating that into the baseline, we have done so consistent with our new economic forecast and a variety of technical assumptions. for a number of aspects of the law, one cannot separate out any more the effects of that legislation from the effect of all the preceding law. when you project medicare spending on physicians or hospitals or other things, we do that based on the totality of

law. there's no easy way to know how much is due to the law as it exists waked -- as it existed last february versus the way it exists today. there are other categories that established a new flow of spending or of tax receipts that appear separately in our tables and will appear separately in the budget over time. in those cases, one can observe changes in our forecast of the effect of the law and we will eventually be able to observe what the reality turned out to be relative to the projections. in the cases where rican identify the changes, the new economic and technical assumptions make only a small difference relative to the estimates we produced in march. i want to emphasize this is by no means a complete reassessment of the legislation because we don't do it that way. is now part of the beverage of

law, and we estimate complement's of spending and revenues based on all the law that exists. based on the pieces that are observable, we see no reason to think those pieces have changed very much, and we see no reason to think if we were to do a complete estimate that we would end up with a substantially different answer than we had in march. >> could you give us an update on your estimate of the overall cost of tarp and if that has changed from last when you did? >> the cost of tarp now looks to be lower than it did in our previous estimate. i believe our previous estimate was that car would cost a total of $101 billion and then $9 billion. it is now down to $66 billion.

it reflects changes in law, reduction in the amount of funds available through tarp that was legislated earlier in the month, which plays a role as well. >> do you have any different assessment of the cost of tarp as it pertains to the auto industry? >> we know how much they contributed. >> in terms of the economy, can you give us some idea of this divergence between the baseline assumptions you are required us versus the more likely scenario, and what impact that had on your economic forecast in 2011 and so

on? also, we have seen the recent low in 10-year interest rates. i wonder if that has any impact that are not foreseen currently. >> on the first question, as i said in my prepared comments, we prayer b.g.e. prepare projections based on current law. is not our place to build in some gas on our part on what members of congress will choose to do. on our part. where they have proposed a the changes in current law, we thought it was important and useful to give our readers some sense about how some set of possible changes would affect the budget and the economy. in economic terms, what we chose to use for this alternative was the alternative fiscal scenario that we developed as part of our

long-term budget outlook that we released in june. but that scenario, -- under that scenario, essentially all the tax cuts enacted in the decade are extended except for those applying to taxpayers with high incomes. the threshold to the alternative minimum tax are indexed to inflation, medicare payments to physicians don't drop the way they are expected to under current law. those of the most important assumptions that matter in the near term. there are others that matter more for the long-term analysis, but those are the important ones. we looked at economic forecasts would be different under that alternative set of fiscal assumptions. we offered our estimate as arrange to try to reinforce the view that this is a very uncertain business. we did our original estimate of the effects of the american recovery and reinvestment act on the economy, which provided ranges.

we have done the same thing here. the alternative scenario provides considerable boost to economic activity in 2011 and beyond for a few years. it represents a very substantial increase in budget deficits relative to the baseline projection of deficits, and over time, the negative consequences of very high levels of federal borrowing build up. by the end of the decade, we would expect gdp to be somewhat lower under that scenario than under the baseline projections. >> also there is the recent low in interest rates. >> we completed this forecast about a month ago. the economic news since then has been more negative than we had anticipated. we note this in the report.

if we were putting the forecast together today, we might be slightly less optimistic about growth in the second half of the year. i don't think the news has been dramatic. the decline in interest rates, in part that reflects people's assessment of the weaker economy, and the other indications are the things i describe that would make our forecast less optimistic today. the current interest-rate itself helped to stimulate economic activity. all else equal about the economy, it helps to encourage borrowing. spending, it was just reported that mortgage refinancing is moving up strongly, and that helps to provide more disposable income for households and more spending. declining interest rates by itself is good news, but in this case it reflects an assessment

by market participants that economic data had been a little weaker than expected. that news caused us to weaken our forecast a little bit. >> as you point out in your report, you are forecasting the debt held by the public as a percentage of gdp in 2020 would be almost 70%. can you put that in historical context? is that higher even than in world war ii? >> u.s. debt at the public was over 100% at ge peak at the end of world war ii. 7% of gdp, our baseline projection for 69% of gdp, our baseline projection for 2020, puts it back to where it was in the early 1950's. it is an extraordinarily high level of debt by our --

experience of our country over the past 65 years. there is also an extraordinarily difficult situation in which we find ourselves. the unemployment rate picture on the front of our document, going back to 1950, is nearly as high as it was at its highest point in the early 1980's. the significant part of the run- up in the debt from its historical average has occurred in just a couple of years, the last fiscal year and this fiscal year, attributable in large part to the economic conditions and the policy responses -- a very worrisome budget projection of arises from longstanding features that

we have talked about year after year, rising healthcare costs and the age of the population. now it is compounded by the sharp run-up in debt due to the financial crisis and a severe recession. it is a combination of the underlying, long-term problems that we have this short-term economic downturn, which is the most severe in decades. it has led now to accommodation of the levels of debt accept not quite high. -- that is now quite high. >> back on the tax cuts that are going to expire. you are talking about if they are extended indefinitely. did you look at what would happen if they were extended just for a few years? >> i should have made that clear

before. the alternative scenario we in this report is a permanent extension of those tax cuts. we did not in this report look at the effects of a short-term extension. in the report we issued in january about policy options for dealing with economic weakness, trying to raise output and employment, we looked at the effect of short-term extensions on those tax cuts as well as the effects of a number of other policies and proposals. at that point, we focused on the bang for the buck, in a sense. the increase in gdp or production and unemployment that would otherwise occur per dollar increased budget deficit through higher spending and lower taxes. in terms of that bang for the buck, extending those tax cuts

were at the bottom end of the .cale of effectiveness bi significant amounts of money involved go to people with fairly high incomes. if those people receive a temporary tax cut, they are not likely to spend a very large share of that, in our judgment. other policies that we examine in the january report that focus the flow of money were at people further on income distribution or focus on hiring specifically are some of the sorts of things were more effective for dollar budgetary impact and extending the tax cut and a broad based way. >> how can you make assumptions on spending about wars in iraq

and afghanistan? >> our baseline projections for discretionary spending, both defense and nondefense, jump off of the latest level of funding provided by the congress. for this report, that includes the supplemental appropriation passed a few weeks ago. we simply take the levels of funding for the latest year and grow those over time with inflation. that is not take any accounts of whether the specific deployments of troops will change over time. however, we do show in a table in the first chapter some alternative scenarios and their effect on the budget. alternative scenarios for revenues and for non-defense

discretionary spending and for defense spending. with that purpose, it is on page 24. we look at two alternatives, and these are somewhat arbitrary. many other paths are possible. one in which the number of troops deployed overseas in iraq and afghanistan in related operations, or something else that might arise to follow those actions. 30,000 by 2013, and that option would reduce discretionary spending by $1.20 trillion over the 10-year period. we have another option that reduces the number of troops to 60,000 by 2015. that saves $900 billion, roughly. one thing i would note regarding that is that the baseline

projections don't take account of the possible savings to reductions in those overseas deployments. neither do they take account of other pressures that might lead policy-makers to want to raise defense spending over time. particular we have written other reports discussing the effect of wearing down a lot of the equipment purchased in the 1980's, ships and planes and other sorts of equipment that are wearing out. if the congress chose to try to maintain the size of the current u.s. navy or the number of planes flown by the air force, there could be more money required to do that and is incorporated in our baseline projections, so i think it is a case where there are risks are pressures building on both sides. >> could explain the discrepancies of this fiscal year between cbo projection and

the projections -- >> there is an of appendixb that talks about the difference in the projections. the difference for this year is not exactly small, given the scale of numbers involved. we anticipated deficit of $1.34 trillion. our estimate is $62 billion lower. part of that is our assessment of the outlays that will be made by various departments over the remainder of the fiscal year. it is customary for departments to be optimistic about how much more business they will get done. those numbers below into the omb estimate. our numbers are traditionally somewhat lower. >> they did not know how much

would be out late for fannie and freddie -- outlaid for fannie and freddie. >> i did not look at the way they pitched their number. >> there is well then on and off split there, so you can see our on budget compared to theirs. it is about $60 billion difference. there is very little revenue difference. >> it seems the difference in the outlays is $44 billion in mandatory spending and $35 million in discretionary spending.

>> it looks like we are on track to have a larger debt that will be financed at higher interest rates. what does that mean for consumers who are financing their own business? >> so far, the very large increases in federal debt over the past three years has not pushed up federal interest payments very much because interest rates are so low. all overpate that's time, that interest rates will rise. we showed the projection for treasury rates, but we also expect -- that will occur in large part because of the strength of the economy. households and businesses will begin to borrow more themselves, putting more pressure on the supply of funds. it also occurs in part because the federal government will be borrowing. the increases in interest rates

will make it harder for households and businesses to obtain funds. they will have to pay more than they otherwise would, and that will raise the cost of mortgages. it will raise the cost of business loans and so on. we have not tried here to separate out that parts due to the federal budget due to other economic conditions. a very important factor in interest rates in this country is not just actions of the u.s. government and u.s. businesses and citizens, but also the actions of people overseas either in lending money to this country or not. the projections are one of the many uncertainties, but i think we have a good deal of confidence that rates will rise over time. >> i wonder if you can address the flip side of the bush tax

cut question. if cuts are to lapse, we have heard the argument that revenue will put a crimp on economic growth because it will damage small business and so for. can you address that argument? >> i think report does not address it on the flip side. addresses and on the front side, or maybe vice versa. the basic protections here follow current law and as in the tax cuts expire. we tried to illustrate the effect of an alternative policy by supposing the congress instead chose to do something else. it was the alternative scenario used before. economic growth would be stronger next year, unemployment would be lower next year. also as i said, over time, that

is a good deal of extra borrowing that would have a negative consequence to the economy. you get some sense of the magnitude about the extra borrowing. going back to the table we talked about earlier, page 24 and 25, this is a budget effects of selective policy alternatives. the top half of the page is for discretionary outlays and the bottom is what affects the tax code. there are several sets of numbers. there is the extension of the tax cuts, extension of other expiring tax provisions, indexing for inflation, and the bottom set of numbers is accommodation of extending and the alternative minimum tax. you'll notice the numbers are larger than the numbers in the other pieces. there's an interaction effect.

if one just extends some cult it does not lose as much as otherwise. the combined effect is to raise the deficit by a belt $4 trillion over the next decade. in the alternative scenario we excluded the people with higher incomes. this is an extension of all those tax cuts. the budget deficit over the next decade would be instead of six trillion dollars, in the neighborhood of 11 trillion dollars. a very substantial difference that over time would have significant negative effects on the economy. >> you also talked about the possibility of being able to do short-term stimulus to measures

while still putting in place something that does more for the long-term deficit outlook. does this lead index tax cuts expire fallen to the latter category? >> including the presentation i made to the physical commission, it i said to them there is no intrinsic contradiction between providing additional stimulus today when the unemployment is high and many factories and offices are under use, and imposing fiscal restraint several years from now. to do that, to provide additional stimulus in the near term and additional restraint later on, one needs to develop a somewhat subtle fiscal policy.

so a temporary extension of these tax cuts would not quite fit the bill, because it is not providing any additional restraint later on, relative to our baseline. whether it is the best way to provide stimulus in the short term is not for the cbot judge. and now that according to one metric that we used, which was the effect on gp per dollar of water budget deficit, it was not particularly effective. there are other objectives, other criteria that members of congress would use in making that sort of decision. it is a method of providing stimulus, but again, it only would provide additional restraint later on if it was done. our baseline projections assume that all the tax cuts expire as scheduled. $6 trillion in projected deficits is assuming revenues

2020.in 20 to an with those assumptions, the deficit is as low as $6 trillion. if the assumptions were revised, the deficit would be higher. it would require stringency beyond the things built into current law. >> last year you said when comparing your projections to the administrations, there was a poorly the difference due to the way you treat fannie and freddie. was that just a one time, 2009 issue, or is that difference going forward? >> the conceptual difference persist.

for the conservatorship that the federal government established for fannie and freddie, it took direct control over the operations we g8 it is the judgment of cbo that they should be viewed as part of the federal government for budgetary purposes. when we assess the budgetary costs of the conservatorship, we made an estimate of the expected losses, adjusting for market risk. it is my experience over the coming years -- when we look at the cost of fannie and freddie on an ongoing basis, we assessed the subsidy we think is provided through the guaranteed loans and other factors. omb, in contrast, views fannie and freddie as not part of the government for budgetary purposes. when they assess the cost to the

budget of what is happening at fannie and freddie, they look only at the cash transfers being made from the government to those entities. the cash transfers or an intergovernmental transfer. those differences in treatment lead to substantial differences in amounts. for this projection for fiscal year 2010, in this report, because omb will report the fannie and freddie effects on the budget, they will report on the ultimate total for the budget the cash transfers for the past year. our estimate for fiscal year 2010, we have used cash amount. so there should not be a surprise from that when the total scum then, because for the

year which is almost over, in an effort to enhance the clarity of what is going on, we reported the numbers here on the same basis we expect omb to report them. looking ahead, our projections 32020 include fannie and freddie on this market value subsidy basis. that does differ from the amounts we would project in terms of cash transfers in the amounts omb has projected for transfers. the differences are not huge. >> the mean in the future? about $10 billion a year. >> so about $10 million a year difference going forward because of this difference in ethnology.

at the beginning it was very different, because we book and our projection this onetime cost for taking things into the government, which omb did not. >> has your estimate on a cost of the stimulus package change? >> only slightly. on page 12, it talks about the update on the budgetary effects of the american recovery and reinvestment act. there are two changes to our estimates. one is new economic and technical assumptions. the other is legislation. in this case it rescinded some of the budget authority originally included in the recovery act. since our original estimate, the economy has been a little weaker than we expected. the unemployment rate has been higher than we expected. that has led to higher costs for unemployment compensation for

the emergency benefits that we had originally expected. at the same time, the costs have been reduced. the net difference is very small. our current estimate is that the act will cost in totaled $814 billion. we had originally estimated $787 billion. so is slightly more expensive than we had originally estimated. i should also say that the money is going out the door, both in terms of additional outlays and reduced revenues, at a pace which on balance across all the provisions is very close to what we and the staff and the committee estimated last february. there had been some criticism at the time that the money would flow faster than our estimate showed.

it looks very close to what we had judged early on. when we made the original estimate, reviewed some aspects of the bill as generating very rapid blows of money and other aspects generating more gradual flows of money. if you look at this table, the two areas where there was a good deal more money yet to go out and has gone out today are from the transportation department and the energy department. those are to the areas we anticipated the money would flow more slowly because of the difficulty of making effective use very large increases in expanding -- in spending.

experience has shown that it takes time to set things up. >> just eyeballing your comparison on page 56 and the one that seems most potentially at variance. is that within the range you expected a difference, or is any of that expected by the differing assumptions of what happens on the physical side? >> our economic forecast is quite close to that of other forecasters for 2010. we anticipate significantly slower growth or real gnp in 2011.

if instead one took our four best and at the effects of the alternative fiscal scenario that i described, then our forecast for 2011 will look much closer to that of outside forecasters. we don't know in every case what other forecasters are assuming. they are making some assumptions of their on a we do not always know exactly what they are. if one assumes that most forecasters expect much of the tax cuts from 2001 and 2003 to be expanded, that explains the difference between our forecast for next year and that of most other forecasters. there may be specific issues about the it ministration forecast. in general, it is important in evaluating all these numbers to remember the importance of that assumption about fiscal policy.

it is the assessment of how the law is likely to be changed. >> we think real gdp growth next year will be up to 1.7 percentage points higher than 2.0%. are there other questions? >> there alternative scenario implies certain extension of all the tax cuts. x as you understand, many alternatives are possible. we wanted to give a sense of -- a quantitative sense of how a significant difference in policy might matter. we developed a scenario in other

contexts or long-term projections. here is a permanent extension of those cuts. >> on unemployment, there is some talk that the jobless rate has not bounced back as much as expected given the rate of gdp growth in the last year or so. is there really expectation -- where you stand on that possibility that there will be some kedge of growth in joblessness? is that a relationship that was the rise to correctly? >> the unemployment rate has been higher the last couple of years than any economic models would have predicted, given the behavior of gdp. a number of economists have wrestled with that puzzle.

it has been partly resolved by downward revision to real gdp growth, annual revision to the national income accounts. it still seems higher than we would have predicted, given the level of gdp. there are a number of hot-button issues for that. even the current estimate of real gdp growth is not right. another reason our assessment of the potential level of gdp growth is incorrect. when one thinks about the unemployment rate, i am sure there are important economic models. one is thinking about an alternative path to dtv and if we had the alternative path wrong, we and others would have a different estimate of how much the employment rate in the future would have risen. it also could be particular things that have happened in this recession, the long-term unemployment rate, a share of

the labor force out of work for more than 26 weeks has risen to an unprecedented degree. there is is very striking picture on page 42, a figure 2- 11. this is the long-term unemployment rate. we have gone back 60 years. you can see the level long-term unemployment relative to the labor force is well above its previous peak and way above the experience we have had over most of the. . -- our most of period . we now -- our projection of the

unemployment rate after we think we are back to the potential level of output is 5.0%. a couple of years ago it was four 0.8%. we of actually nudged up our projection of lower german unemployment rate in part for this reason. there is a box in the economic factor that talks about lingering effects of the recession. this is one of the effects we discussed there. i think it is very uncertain at this point how significant the longer-term effects will be. there are more straightforward effects through lower investment. it lowers our assessment of potential output. that is more straightforward because it is more familiar and the possible effect on the labor market of long-term

unemployment. we have talked in other reports we have done about the need in this recovery for there to be new jobs, because many workers have lost their existing jobs and have no prospect of going back. these new jobs member are people living in different places with different skills than the workers who have lost their jobs. i think that is a matter of very significant concern. it is also matter of very great uncertainty. >> there is no expectation of a catch up are a snap back in terms of greater than expected employment growth, given expected levels of ddt? >> we think the unemployment rate will eventually get back level -- down to the level that is sustainable. at some points the excess increase unemployment rate comes off. i don't know what the timing of that will be.

we have a slow decline over the next years partly because of slow upward growth. between now and 2014, the excess will come down. maybe it's worth saying that most of the increased unemployment rates we observe in this country is traceable to the decline in output. there was some excess beyond that, but we think principally what will need to happen to bring the unemployment rate down is that we will need to have growth of the demand for goods and services and then growth in production. that requires additional workers and the use of offices and factories that are not being fully used today. >> there may have been a structural shift in the labor market causing that effect. >> i think we are concerned about that. there are different sorts of

structural shifts. part of what has happened is that we have a construction sector in this economy that was very large a few years ago. it was much larger than is likely to go back to being, even when the economy recovers. there are significant numbers of people who have worked in building houses in 2006, for example, who are not likely to be doing that at any time in the foreseeable future. in part it is because certain sectors of the economy were hit very hard. the unemployment rate has risen much more for men than for women, more for those who have left education and for those with college degrees. so there is a structural shift in that sense. the jobs will be in different places in that future. there is a related but different factor which is that people who have lost their jobs and are out of work for a long time may end

up with a weaker attack of the labor force. their skills will depreciate over time and some of the habits of work will be lost. i think there is a different sort of structural change which is the concern that these people will have trouble getting back into the labor force. that concern is accentuated in a different sector of the economy. all those things play some role in hide the unemployment rate reedy and how high the unemployment rate is now. those are very difficult factors for us to assess quantitatively, and we have made our best estimate, but it is very hard to know. >> if other things occur to you,

you know where to find us. we are very happy to answer your questions. thank you very much for coming today. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> if anyone has not signed the press site and she, it would help us to be able to notify you. >> and "washington journal" de mar morning, a discussion of the deficit with douglas elmendorf. a focus on travel restrictions to cuba, and a series on the new financial regulations bill looks at how the government is designed to prevent financial problems. our guest is a correspondent with "rolling stone." "washington journal" is live every day at 7:00 a.m. eastern

on c-span. in a few moments, a special airing of our newsmakers program with massachusetts representative edward markey. in a half hour, represented markey chairs a hearing on the gulf oil spill and seafood safety. after that, obama encourages senators to pass the small- business bill after the congressional recess. later, a town hall meeting in california with republican representative ed royce. >> after nixon lost the 1962 california governor's race, the owners offered a former vice president the job as commissioner of baseball. nixon was flattered, but declined, telling the owners

"don't tell pat. she would kill me for turning you down. >> find all of c-span american history tv online anytime at the c-span video library. is washington your way. watch what you want, when you want. >> our guest this week is as it chooses ed markey who chairs the house energy environment subcommittee. on thursday the latest oversight hearing looked at the effects on the bp oil spill in the gulf of mexico. >> thanks for having me on. >> that he introduce our reporters. we have an energy in burma and reporter and a washington post internment reporter. but since the oil stopped blowing in the gulf, there has been an increased focus on the long-term effects of the spill. the administration earlier this month announced that as much as

anybody% of the oil may be gone. do you think that was a mistake? if they somehow this meant -- diminish the threat that exists? >> when they released the numbers, the government should have released their work with it, so that there could be a full understanding of the formulas, of the algorithms, of the assumptions which were used in coming to that conclusion. that is why at have asked the government to release all of that information, so that independent scientists can do a real-time analysis, so we can understand fully what assumptions they made and whether or not they may have been over optimistic. >> is there any sort of specific way we may have been given too rosy a prognosis?

>> i would begin with the fact that while 4.9 million barrels of oil were released from that spill, 800,000 barrels of it were captured immediately in ships. only four 0.1 million barrels actually went into the ocean. that number, if you are calculating the amount of oil which was captured, birch, sopped up with the boom, would result in a much higher percentage of oil still being in the gulf of mexico. under any estimate, at least five exxon valdez side oil spills are still in the gulf of mexico accounted for. it is important for us to continue to focus on that, because rather than low balling the size of the problem, i think

it is important for us to keep the pressure on, so that everything that can be done is done in order to protect the long-term viability of that ecosystem in the gulf and also the livelihood of the fishermen and others in the gulf of mexico. >> do you think this was just a rush product, or do you see in intention to make the numbers look it should be double checked by independent scientists. they indicated, and the hearing, that it would be several months before the information could be reviewed. i do not think to take that long. i think that information should be made public now. independent scientists should be able to evaluate it and a commentary should occur in a way which makes it possible for

every calibration of that study to be made before it is too late to counter some assumptions as to the magnitude of how large this spill is. >> there are some contrarian thinkers out there who offered testimony that the long-term impact of oil might not ever be as great as some of the alarm we are hearing. do you want to hear sort -- hear from those sorts of country and thinkers? -- contrary and thinkers? >> we're dealing with the best scientist that our government has. the best scientists which the best universities have. they have spent their lives working on these issues. there is no question that what

we are dealing with are materials that are part of nature. any material in excessive quantities will begin to harm me. wages talk to make sure that we and stan with the consequences are because this is something that has never happened -- we just have to make sure that we understand what the consequences are. the sciences are still trying to catch up with this underwater chemical experiment which has been taking place in the gulf of mexico since april 20 at the 2010. there should be a little bit of humility, which all scientist bring to this particular task. >> you also raised concerns about the chemical dispersants

use to fight the spill. do you feel like the epa rushed to quickly to allow people to use those? >> initially, bp raised questions in response to my letter. what happened subsequently was that while there was an agreed upon atlantic on a daily basis that could be used as dispersants on the surface, bp used more on a daily basis and then saw retroactive permission to have done so. in other instances, they were granted permission to exceed what was believed to be a safe level of dispersants, which could be sprayed onto the surface of the ocean. yes, i am very concerned that

the formula was constructed to ensure there was a minimization of harm to the ocean and to the workers of the surface of the ocean and that those standards were not abided by it. >> given the large volumes, are you confident that there is enough being done by the federal scientist to disarm -- to determine that the seafood was safe? >> there is much additional work to be conducted. for example, there still is very inttle known about the metal's the materials that are being consumed by the fish to give guaranteed assurances to the public that there is no long- term harm. i think there has to be indication of work that is done to make sure testing is conducted in order to call many concerns that people might have. -- calm.

>> is anyone looking into methane? >> that is another subject that has not received a lot of attention. i raised that question repeatedly today, as i have in the past, in order to ensure that we do the evaluation of what the impact of that nothing is. again, these are events that have never occurred before. we have a chance here to study them and understand them and protect against the worst adverse affects. >> question about the seafood testing. i've heard people say that we need more seafood testing. what sort of testing would satisfy you? what more needs to be done? the more in volume or different kinds of tests? >> not much testing is being

conducted on the seafood in the areas that still have had the concentrations of oil. i think -- the closed areas. studies should be done right now. that will make the long-term tracking a lot more informational in the future. that is really not happening right now. that should be done as a way of augmenting the information being gathered where the fishing is not being permitted again. it is there that people have the greatest concerns. where the oil was most heavily concentrated, people want the most information gathered so that long-term, there can be an understanding of what the impact was did not just on the fish, but on seaford eggs, on the

ecosystem, on the dispersants and the oil as it is interacting. there are others that process that much less quickly. it could be better understood if we did massive testing right now where the fishing areas are still closed. >> you asked the witnesses whether or not they would eat the seafood. >> i would eat it. where the fda has determined that it is save -- safe. i if i receive it for the last several days. -- i have had seafood for the last several days. we have to have some confidence where the fda is acting that they're acting in the best public interest. there are still questions that have to be answered. more research has to be done.

>> congressman, if i could shift gears. two summers ago when gasoline was up $4 a gallon, there was talk about offshore drilling. how do you think this bill changes the politics of drilling? what with the fallout be during the campaign? >> we have 2% of the world oil reserves. we consume 25% of the law " -- world oil reserves on a daily basis. this is what happens when you only have 2% of the world's oil. we're out 50 miles and drilling down 5 miles to find that oil. it should be a wake-up call to the american people, that while we need all of our domestic energy resources, we have to begin a transition to a

renewable based energy economy. we have to begin to transition their cells. by the year 2015, we will have 400 million people in the united states, not 300 million people. we will still have only 2% of the world's oil reserves because we will have been consuming it. the one big lesson out of this should be that while i understand senator mcconnell wants to block any energy bill, the oklahoma oil and history wants to stop any energy bill from moving forward, at the end of the day, if we do not move, we are not only going to subject ourselves to $4 a gallon and gasoline again, but we will wind up importing renewable energy technologies from china and

germany and other countries as they moved in to exploit this lack of vision thus far that the republican party has shown. >> it seems that you must worry that you could get some momentum behind that cause, reducing oil consumption, moving to clean energy, and then gasoline goes up to $4 again and everybody forget that. you saw how quickly the debate changed when gasoline was up to $4 a gallon. how do you prevent that? >> one of the things that we did, as you know, in 2007, as it is the democrats took over the house of representatives and the senate, we're able to pass legislation to increase the fuel economy standards of the vehicles which we drive. we did that, even though for the proceedings six years, the republican congress and president bush had opposed it.

speaker plus the and i were able to stand over president bush's shoulder while he signed that bill. that bill lebanon? at the equivalent of all the oil which we import from the persian gulf on a daily basis. what we have to do is to look at this on an economy wide basis. think through a smart transitional plan in which the bill actually was in order to make sure that the coal and other industries make the transition would be clean energy technologies and let people know that it is not something that we want to use as a weapon against oil industry's. ies.il industr unfortunately, republicans are adequately opposed.

-- adamantly opposed. in the long run, our country is going to pay a huge price and they will look back and it will say, and historical mistake was made by those generations of republicans which have stopped any progress toward that clean energy economy. >> you keep mentioning senator mcconnell. there are a lot of democrats, some moderate democrats from coal producing states to have also been very reluctant to engage on that issue. that is one reason why the bill has not gone through the senate this year. given the conditions of this congress are more favorable than they ever ben with democratic majorities in the house and senate and a democratic president and you have a catastrophic environmental disaster, if not now, when it? >> senator mcconnell actually

has taught american at all lesson. the power of 40 votes to say no. that is what he is saying on energy. let's keep the proportion of the problem correct. it is 95% republican who are opposed to making any progress on the energy and environment issues. if any of them broke off and began to work with us in a way that said, let's pass a renewable energy, let's double the efficiency of new buildings in our country, let's double the efficiency of appliances, was quadruple the funding for plugging hybrids, you would know their names. you would know who it was that was saying, let's put something together. but there is no one right now that anyone it -- no evidence that anyone is in a way that can be politically viable breaking off from what senator mcconnell

wants to happen. to stop anything on this energy legislation from occurring this year. conditions should have been right for us to act. there is no question about it. but those situations are going to arise again. we are going to be heading back toward $4 a gallon gasoline. this wild weather around the world, from pakistan to run shot dead nine it states -- from pakistan to russia to the united states, all of this is only going to increase as a problem that american policymakers are going to have to deal with in the months and years ahead. it is not a question of whether it is ultimately going to pass in the senate. it will. it is a question of time. not a question of if it is going to happen. >> the senate did not take it

up. but they are so popular, -- if they are so popular comedies think anybody is going to pay political price this fall for standing in the way of climate legislation? >> is the entirety of the minority which is blocking any progress. isy're doing so anyway which successful. i envision that there will be a reverse -- when the advertisement run on solar, on plugging highbred, contrasting members who support that with a member to oppose it. it is going to -- backing up the renewable and other technologies that the chinese want to send

into our economy. that is going to pull out for many members across this country in a very powerful way. whichever republicans have decided to align themselves when that kentucky pulte and oklahoma oil agenda, they will wind up with a very big surprise on election day. >> the conventional wisdom is that there will be more republicans in both the house and senate next year. if the democrats retain the house, what do you do differently strategically to engage them on this issue? >> again, henry waxman and nancy pelosi and i work very hard to pass legislation in the house of representatives. the question that you are asking if the senate question. it is not the congress, it is the senate. that will be something that we will have to determine based upon what the composition of the

senate is next year. we are very proud of what we did. we were able to build a consensus around that approach. . that is how slow the senate has ben. -- has been. i do believe that time is our ally. i do believe that in the same way that bob dole blocked passage of the telecommunications act of 1994 so that he could win a majority of the house and senate, it did become the telecommunications act of 19962 years later that unleased the creation of google comic ebay, you too. they were able to delay it two years without question. there will fully committed to that goal.

over time, technology always triumphs. innovation always wins. markets triumph. there are many republican businessmen across this country looking on with dismay, watching republican senators trying to block an innovation revolution that can create new millionaires and billionaires in america who are republicans. that political pressure is going to inject itself into this debate is each succeeding month and year arrives. >> speaking of technology, it was you and your office who -- to make it available to the public. what difference did that make? >> the medium was the message. once the still camera went up, every american could see what

was happening. in fact, when i put it on the website, the whole site crashed. hundreds of thousands of people immediately tried to gain access to it so they could see it. it almost became a channel like c-span unto itself. that is what put the pressure on the political process. congress is a stimulus response institution. there is nothing more stimulating than millions of people becoming assessed with something that they believe was a problem. this crime against nature, which bp had committed, now became more palpable. they could see the smoking gun. they could see the oil, methane, the natural gas as shooting out of that pipe. that is really what's catalyzed the nation to put the pressure on bp to find a mechanism to cap that well.

people thought they were going to get mit. all the sudden, we left this world where there were making these representations which were completely absurd and the federal government -- it was then made possible. that is why i asked the camera to be put out. >> now that that oil has stopped flowing, there have been some polls that show that the public has started losing interest. does that slows the momentum for a possible legislative response in the fall? >> that is why i had a hearing on thursday of this week. we have to ensure that just because the spill camera went away, there is a pressure to

deal with the consequences of that spill. we want to make sure that does not go away. that is what i am committed to doing. i am going to ensure that from the congressional perspective, we keep the spotlight on this issue because bp's fondest wish is that their commercials on television, public attention to what is being going -- what is going on today. >> i want to ask about this moratorium on drilling. what do you want to see in terms of new regulation, new safety precautions? what would satisfy you to say, it is time to let people start drilling offshore? >> what we did in the spill response bill that passed on the floor of the house of representatives three weeks ago on the last day before we broke was to say that a system would be put in place that individual

rigs would be cleared one by one and then they go back into operation. the republicans, of course, voted against that because they would rather have the issue of the moratorium than a solution to the problem, which is to not have a time limit on how long it would take, but rather a mechanism by which as soon as the rig was checked out and prove to be safe, people could go back to work. as the moratorium still stands, if you remember, there is a $100 million conversation fund that is their pain for the salaries of all the workers on those breaks. that will stay in place. will become back in september, the republicans will cross the aisle and put together a common sense plan that can get them back in operation as soon as possible by getting them cleared one by one by a process that is inside of the legislation. >> we are at a time.

-- we are out of time. you heard from fishermen that said they were in debt. with ken feinberg taking over the distribution of the claims, you have confidence that the money will get to the people that need them? >> i have great confidence in ken feinberg, but i do think it is important to ensure that bp does stand for "bills paid." we do need to make sure that these fishermen are not left with their families holding the historical back. we have to make sure they are made whole. i told those fishermen today, as i told them and other members of congress told them, that we intend on ensuring that everyone who was harmed is paid.

that $20 billion is something that i am sure bp would like to walk away from. by minimizing the actual accounting of any of these individual fishermen in a way that only gives them 20 cents or 50 cents on the dollar. >> thank you for being on the "newsmakers." >> we are with newsmakers after talking with ed markey. gentlemen, and a lot of your questions had to do with the energy legislation.

>> to me, the question is, is anybody going to pay a political price for having stood in the way of the final legislation? moderate democrats are a little wary of taking up climate legislation. is anybody going to punish them for that? if they do not, i do not to the dynamics of this bill changing very much. obviously, the other side has a lot of money. and perhaps a lot of votes as well. i do not to be political handle behind this issue that would punish them for not acting. >> even separate legislation that passed the house that was just -- that would just addressed the oil spill seems to be going nowhere in the senate. it is tied up in election-year politics. nobody wants to do anything before november. there are -- is really starting

to lose momentum. there is an open question about whether congress will do anything. initially, there was a great deal of agreement between both parties that something needed to be done and that this oil spill have highlighted some of the problems of how we deal with offshore drilling. but that has sort of fallen away now. >> i have read that both the american petroleum institute and environmental groups banded together are going around to town hall meetings and advertising campaigns. how much interest to you think the public will have in this issues campaign? >> it is hard to say. it is something that generally happens in the last several august. the environmentalists want to resurrect that momentum. i think the american petroleum institute really wants to sort of put the last nail in the

coffin for this bill, if possible, or abuse traded get anything that does get through water down. >> last year, there was a similar kind of dynamic. some groups had town hall meetings. the industry -- the energy industry would have these huge rallies and a band and speakers. it seemed then there was a real imbalance in terms of political momentum between the environmentalists and the energy industry. now you are seeing the environmentalist having to play defense, having lost that attempt to pass a bill, they're now trying to extend what they have left. a lot of the energy companies want to take a way through congressional action. you are going to city and by mls having lost their charge. now will try to defend their own home territory.

>> closing with bp, congressman markey spoke about how long -- halt bp should stand for "bills paid." what tools do congress have in their tool test to ensure that the people who might have claims actually get it? >> there is a great deal of statutory enforcement authority against bp to actually pay for the cleanup itself. there is a fuzzy issue on the damages. there is a cap on the liabilities at $75 billion. those bills would both eliminate backcast. that is why the obama administration stepped in and made them do that. but it comes down to is the administration has exacted this promise from bp that they will continue to do that beyond the $20 million.

they will have to hold them to that promise. if these bills make it through this year or in the next congress, they would lift that cap retroactively. >> you have somebody who is very skilled in handling this difficult issue. in the end, it is not going to be done seamlessly. you will see a lot of people pulling for a particular kind of -- people who are in the tourist industry. this will tefillin not be without comment -- this will definitely not been without controversy. >> thank you for your questions. i hope you'll come back. >> thank you for having us. >> a hearing on the gulf of mexico oil spill. chaired by representative edward markey. earlier this week, a university of georgia report refuted the government's finding back three-

fourths of the oil had been cleared up. this is about three plan five hours. -- 3.5 hours. >> for anyone who has been diagnosed with a life- threatening illness, one of the best words you can hear is remission, whether it is cancer, hiv, or some other illness. a battery of modern taurus can reduce the disease to lower, perhaps even to undetectable levels. even in remission, there is often on the east -- unease that

the disease could return. where did it go? put it come back? right now, we are in a similar state in the this environmental disaster. after many trials and several false starts, bp finally created a system to cap and sailed well. will has not come from the well for about a month. we are no longer her at the bleeding this stage. a tourniquet has been applied to the well. now we're told that we may need to wait for the final procedure, a relief well, until september. just like a patient in remission, we have reached a more stable stage of help with this bill. to say the well is capped is tantamount to a cure with the

full confidence. like unseen internal bleeding in a trauma patient, the veiled oil persisting in the gulf poses continued risk. today, we are here to ask the same questions about this bill as a patient or a doctor would of the disease. where did go? could come back? according to the most recent estimates, 4.9 billion barrels of oil spewed from bp is well over the course of this 100-day gusher. of that oil, some was captured. some was disbursed. some evaporated naturally. yes, at least 1.3 million barrels still remain unaccounted for in the waters and marshes of the gulf. an amount five times larger than

was spilled during the entire exxon valdez disaster. just as we are worried about weapons sold on the black market, and the public, we must be vigilant eye on a rope oil from this disaster harming the public, -- rogue oil from this disaster harming the public. millions of gallons of dispersant chemicals have been used in unprecedented ways. just a few weeks ago, fda told me that they had determined that dispersant have a low potential to accumulate in seafood and do not pose a significant public help risk through human consumption. while this news is welcome to come at it addresses only the issue of short-term toxicity. the fda knows little about the

long-term impacts that these compounds will have on marine life. nor did they know how the presence of oil and as persons may influence the concentration of other toxic compounds in seafood species. we'll get to see the full picture of hazards posed by this spill. the work done by the fda, noaa will be critical. we will ask today where do we go from here? where should monitoring and cleanup efforts be focused in this new chapter of recovery and restoration? are the clouds of oil suspended below the ocean's surface still a concern? what about the plumes of methane gas? where have these plumes gaunt

and will microbes use of oxygen in the water, potentially asphyxiating areas of the gulf? what impact will all be oil, methane, and chemical dispersant have on marine life in the gulf and on the seafood supply in the years ahead? is seafood from the gulf safe to eat today? will it be safe to eat in the future? american families want the only oil in their seafood to be cooking oil. ending bp is gusher in the gulf does not by itself the harm that -- toward the harm that has been done. to have a successful continued response to this spill, we need

to do three things going forward. one, monitor the health of the waters, wetlands, wildlife, and people of the gulf. 2, maintain the pressure on bp and others to continue the recovery and restoration process. and 3, luster the attention of our entire country -- muster the attention of varco entire country of solving the economic challenges from our continued dependence on oil, especially foreign oil. we have an extremely distinguished group of witnesses appearing before us today. we appreciate the fact that it is the middle of the summer. we know that many people have gone away. however, the oil has not gone away. it is important for the gulf of mexico residents to know that

the attention on this issue has not gone away. dr. bill lair is a senior .cientist at noaa we thank you for being here. whenever you feel comfortable, please began. >> thank you, chairman. clucked time you turn on your microphone? >> it should be on. thank you, chairman and members of the subcommittee.

i would like to discuss the critical role that noah -- noaa serv steering oil spills. -- service during the oil spills. scientific experts have been assisting with response from the first day. this support has included daily trajectories of the spilled oil, whether data for short and long-term forecast, special forecast for cleanup operations, the satellite imagery and performed a real time observations to help verify this bill location and movement. in addition, scientists provide expertise and assistance regarding sea turtles, marine

mammals, and other protected resources. we also coordinated with the federal and state and responsible parties to conduct natural resource damage assessments, which is a process that quantifies the total losses and develops restoration projects and compensate the public for their losses. we have also participated in a number of enter agency's expert team spirit this include the group estimated the size of the spell. -- the spell. a joint effort with the department of interior, the coast guard, and other outside experts to develop an oil budget calculated to estimate the fate of the spilled oil. there's been a lot of discussion on this, so let me get into a few details. according to what our experts for able to determine, the oil that was billed to be divided up

into four basic categories. about one-quarter of its was either recover directly, was burned, or was skimmed on the surface. another quarter was either a vast -- evaporated or dissolved. another quarter remained out there. -- remained out there for cleanup purposes. another quarter was dispersed into the water. part of that was through national -- natural dispersants. dispersants were only used where oil was present on the surface or applied at the wellhead on the seafloor. a total of 1.8 million gallons of dispersants were used. these dispersant -- the effects are being monitored by noaa.

over 2000 water samples have been collected in the deep waters of the gulf. we have analyzed for component of the dispersants. only one dispersant component was detected in a sample that was close to the well head. in addition, the epa is monitoring surface water samples near the shoreline. my colleague from the epa can discuss that. to ensure the safety of fishermen and consumers, we prohibited recreational fishing in certain areas of the gulf of mexico because of the spill. now that the wellhead is capped, scientists are going back into the spill area and taking seafood samples to determine which areas are safe for fishing. areas only reopened to fishing and only after the seafood

passes rigorous testing. every seafood sample has passed chemical testing for contamination of oil dispersant. no unsafe levels of contamination have been found. we began reopening portions of the closed areas. thank you for allowing me to testify today. i am happy to answer any questions that you might have. >> thank you very much. our next witness is mr. donald kramer. he is the deputy director of the

office of crude safety at the u.s. food and drug administration, where he is responsible for the administration of the fda seafood policy. he has been with the fda since 1977. you may proceed. >> good afternoon. >> move that microphone a little closer. >> good afternoon. i am donald kramer, acting deputy director. with me is a senior adviser to the chief scientist at the fda office of the commission. >> a little bit closer. >> we appreciate the opportunity to discuss the role in ensuring the safety of seafood harvested from the gulf of mexico in the wake of the deepwater horizon oil spill. fda has been active an integral

part of the federal government's comprehensive coordinated multi agency program to ensure that seafood from the gulf of mexico is free from contamination as a result of the oil spill. this program is important for the fisheries industry, which needs to be able to sell its products with competence. fda is working closely with the national oceanic and atmospheric administration, the epa, other federal agencies, and state authorities in the gulf region. i would like to note the high level of cooperation that fda has experienced among these agencies, both at the leadership level and among the technical and scientific staff the carry out the research, testing, an analysis needed to fulfill our respective missions. the federal government is taking a multipronged approach to ensure that markets seafood from the gulf of mexico is not a contaminant as a result of the oil spill. these measures include a precautionary closure is a fisheries, the surveillance and

testing of seafood products, and a heightened emphasis on fda has analysis and critical control regulations. fda, in conjunction with the gulf states, have developed a strict protocol for reopening the fisheries. we're also planning for additional research. the primary provider of controls for protecting the public from potentially contaminated seafood is the closure of fishing areas that have been or are likely to be affected by the oil spill. immediately after the oil spill, at the worked with the states to ensure that the appropriate closures were put in place. these closures aren't -- these closures are enforced by wildlife officials as well as the u.s. coast guard. the second element of our

approach is a heightened emphasis on the fda is longstanding program for seafood. processor obligated to identify hazards are reasonably likely to occur and institute preventive controls to address them. the framework of our seafood program is proving its value in the context of this extraordinary public health challenge. of the past several weeks, the fda has conducted more than 300 inspections of seafood processors in the gulf region. to verify that their implementing controls to ensure that they receive fish harvested only from waters in which fishing is permitted. the third element is a verification that the other controls are working properly. this is the analysis of a variety of seafood samples that have been commercially harvested from gulf waters. we are testing for hydrocarbons , the primary contaminants of concern and oil. we have so far tested in about 500 animals, including crabs and

oysters from open state waters. the result of all samples have shown levels well below the level of concern, usually by a factor of 100 or 1000. the same levels outsourcing before the oil spill. with respect -- the same levels that were seen before the oil spill. we look to close approximation to establish a single agreed upon protocol for opening to ensure the safety of seafood harvested from these waters. hundreds of protocols -- they will not reopen until all oil from this bill is no longer present in quantities that could contaminates seafood. a scientifically valid sampling plan is agreed upon. all samples from the area successfully pass both chemical and sensory analysis. experts examiner's check the

oder and appearance of raw seafood and a taste and odor of cooked seafood. samples that passed sensory testing are sent for chemical testing for oil but allow scientists to conclusively determine whether contaminants are present in the fish or shellfish. the results of all chemical analyses have shown ph levels to be well below the level of concern. again, by a factor of 102,000. -- 100 to 1000. reopenings are likely in the coming weeks. with respect to the impact of dispersant's use in the gulf on seafood safety, the current scientist -- signed indicates a low risk that these dispersants will concentrate in seafood.

they're unlikely to present a food safety concern. epa data confirm that dispersants are not present at the technical levels and the overwhelming number of samples taken. however, i have an abundance of caution and in order to gather additional information, we are conducting additional studies to reaffirm the dispersants do not accumulate in tissues of fish and shellfish. the fda will continue to study the long-term impact of chemical disturbed -- chemical dispersant on seafood safety. i see that i have exceeded my time, so i will forgo my concluding comments. >> you may continue, sir. >> the safety of consumers is our highest priority. the responsibility we take very seriously. in close coordination with federal and state agencies, we have been proactive and monitoring this disaster, planning for its impact, and mobilizing our personnel and facilities to take the steps

needed to ensure a safe food supply. the protocols and approaches are protecting american consumers while minimizing the negative impact on gold seafood processors. thank you for the opportunity to discuss these important issues. i look forward to answering your questions. thank you. >> thank you, mr. kramer. our next witness is dr. paul announced this -- dr. paul. he is the assistant administrator for epa's office of research and development. he has conducted groundbreaking research on the design and manufacturers and use of environmentally friendly chemicals. we welcome you. please began. if you could turn on your microphone. >> thank you, chairman. i appreciate the opportunity to testify on the import issue of dispersants and the use in the

ndp to deep water crisis. we've now passed a rigid day 120 of the bp oil spill tragedy. -- daily 120 of the bp oil's the tragedy. we are relieved that the well is currently sealed. the hope and expect that this will continue to be the case. at the president has said, this tragedy does not end with a ceiling of the well. we're committed to the long-term recovery and the restoration of the gulf coast, one of our most precious ecosystems. in addition to our responsibilities, epa continues to rigorously monitored the air, water, and sediments for the presence of dispersants and crude oil components that could have an impact on how -- on the environment. these are posted on our website

and publicly available. the dispersed oil mixes with the water and is deleted -- diluted. are --esponsibly -- we the decision to use dispersants as part of a larger oil spill response is not one that epa took lightly. when considering dispersants, we're faced with environmental trade-offs. the potential long-term effects on aquatic life are still largely unknown. bp has used over 1.8 million gallons of dispersants, a volume never before used in the united states. because of our aggressive monitoring, we know that are monitoring data overwhelmingly confirms that dispersants are

not present at levels of detection. we investigate the validity of the detection. of the more than 2000 samples and a nearly 1000 epa generated samples, there been only two detections above the detection limit. these were immediately investigated. oxygen in the water is not being depleted to dangerous levels. given the unprecedented nature of this bill, epa director of bp to identify less toxic dispersants. when the company failed to provide this information, the epa decided to conduct this testing independently. epa conducted a toxicity test to determine legal levels.

first, we tested each of the dispersant alone. we tested mixtures of the oil with each of these eight dispersants. these species are widely considered to be representative of those found in the gulf. they were tested during a juvenile live stage when organisms are most sensitive to poland's. the tests were conducted over a range of concentrations, including those much greater than what aquatic life is expected to encounter in the gulf. the testing delivered three important results. all of the eight dispersants were tested alone to be categorized as slightly toxic to practically non-toxic. dolon was generally moderately toxic. -- the oil alone was generally

moderately toxic. all of these results indicate that the eight dispersants' tested possessed roughly similar toxicities. all this data is important, i want to emphasize the continued monitoring is absolutely necessary. decreased oxygen levels, increased toxicity to small organisms. we have not seen oxygen levels approach concerning levels. we have seen no excessive mortality. more needs to be done, we see that the dispersants have work to help keep oil off of our precious shorelines and away from sensitive coastal ecosystems. the crisis has made -- additional research is needed. congress has recently appropriated the epa $2 million for a long-term study on the impact of dispersants.

we will also for their research efforts to include innovative approaches to spill remediation and to address transport and effects of the dispersants. epa will continue to monitor, identify, public health concerns. epa is committed to protecting the gulf coast communities from the adverse environmental effects of the deepwater horizon oil spill. we will persist in asking the hard questions until we more fully understand the long-term effects of the bp oil spill. we will conduct investigations required. epa is fully committed to working with the people of the gulf, our federal partners, the scientific community, toward

debt recovery of the gulf of mexico and the restoration of its precious ecosystem. i welcome any questions. >> thank you. the chair will now recognize himself for a period it of asking questions. intended or not, i think the reaction to the oil budget reports that was released last week is one of relief. people want to believe that everything is ok. i think this report on the way it is being discussed is giving many people a false sense of confidence regarding the state of the gulf. overconfident breeds complacency and complacency is what got us into this situation in the first place.

how much oil was actually discharged into the gulf? can you turn on your microphone, please? >> the best estimate of the combined efforts of the department of energy national laboratories, the best estimate would be 4.1 million barrels, plus or minus 10%. >> it would be 4.1 million barrels. >> that was actually discharged into the environment. there were 8,000 barrels released -- capture directly. >> is the 8 million -- is the 800,000 included in the oil budget baseline?

>> the old budget baseline follows closely the form -- the oil budget baseline follows closely to the situation unit for preparing categories and for the purpose response, that would be the standard procedure. that is included in that budget response. >> that will lead directly into ships and was never any water at all? >> that is correct. >> there were 4.1 million barrels that were captured discharge into the water. >> that is correct. >> out of the 4.1 million barrels discharged, how many barrels are still in the gulf war on its shores in some form? >> probably about three-fourths -- to go through the calculations that we have, the

only oil that you would say that it is removed from the environment would be that 800,000 plus the amount that was burned. the stock that at -- evaporated into the atmosphere is still in the environment. plus the amount that was on the surface or in small tar balls. in that case, most of that is still in the environment. it is not available for response. that was the purpose of the oil budget numbers. you cannot do any recovery >> even according to the calculations of the oil budget report that was released last week, between 60%-90% of the discharge oil, which actually

went into the ocean, remains in the gulf of mexico, and that would be between 2.45 million barrels and 3.67 5 million barrels? >> i would have to do the calculations. when your including your numbers there, the oil that evaporated, which was a substantial amount, whether it is still in the gulf of mexico, we would have to look at how it was transported by the wind. i think you would want to stick with the amount that would be in the water column along the shoreline, and that would be the amount that we estimated as naturally dispersed or chemically dispersed, and the amount on the shoreline. some of it has been recovered on the shoreline as well, and the amount that has been disbursed is bio-degrading.

we are still working to determine the rate. the numbers that we have put in the budget calculator for response purposes, to answer the question, about the fate long term, that is a different question, that is more with damage assessment. >> i am interested in understanding how bp has performed in terms of removing spilled oil from the gulf before it hits land. what percentage of the oil that was spilled into the gulf was actually removed from the ocean? i am talking about burning and skimming and actually removing oil from that echoes system -- from the ecosystem. let me state it -- of the 4.1 million barrels of oil that actually went into the ocean,

what percent was moved -- removed by bp? >> i would have to redo the calculations, because these were based on the 4.9 million. >> actually, the only issue that the american people are concerned about is the 4.1 million barrels that actually went into the ocean. it is important for us to discuss that issue and separate it from the oil that would directly into the ships and was never in the ocean at all, because that is where the concern is. people should have a very good understanding of what percentage of that oil has been removed thus far. do you have a number? >> you'd have to take the ratio of 4.9 million, divide it by 4.1 million, and multiplied it by the fractions.

>> if you could use your own chart, dr. lehr, and break that down in a way that could help us to understand of the 4.1 million barrels how much bp did it? >> if you take the 5% that was burned and multiplied that by the ratio of 4.9 million, i must admit in the era of public -- pocket calculators, i cannot do that in my head. when you take the amount that was scammed, will supply that by 4.1. >> are you using 4.9 or 4.1? >> you asked me to use it with the new ratio. >> 4.1. >> have to multiplied those numbers by that ratio. i could get a calculator and see what that rate is. >> the ehab assistance with you? has anyone accompanying you this morning? could one of your assistance do

that? >> i have a calculator here. >> roughly, the bird would be 6%. and the skimmed would-be 4%. >> so between the skimming and the burning, 10% of the 4.1 million barrels would have been removed from the ocean? leave a 90% unaccounted for?

-- leaving 90% unaccounted for? >> there would also be what is on the shoreline recovered. >> with the arithmetic that we're doing now, the burning is 6%, the scheming is 4%. let us continue with the arithmetic. what else? >> in your have whatever was captured and the residual, and we have not quantified how much of that as they do the beach recovery and so on. i cannot give the numbers on that. we were looking for response purposes. >> so, again, but recapitulate for a second. 6% was burned, 4% skimmed, and an unknown amount was collected on the beaches, correct?

>> right. >> can you tell us the reason that has not been calculated yet? >> it was mixed in. you don't just pick up oil, you pick up oil and debris, and it is separating that out. it is not a simple process. >> is there a range in terms of some estimate of how much oil that might represent? >> there may have been, but i am not aware of it. i could get back to you with that answer. >> in the wake of the exxon valdez spill in 1989, the government accountability office and technology assessment published reports looking at the capacity to recover oil after a major spill. they found, given technologies available at that time, we could really only recover 10%-15% of the spilled oil.

so it seems to me that bp's oil recovery effort comes in on the low effort of what was achievable 21 years ago. you seem to have come in at the number of approximately 10%, plus whatever was on the beaches, but still within that range of 10%-15% that was determined to be recoverable after the exxon valdez spill. would you agree? >> in terms of those categories. of course, in this case, there was the unusual event of a large amount of natural dispersant and the additional large amounts, the record amount as far as i'm aware of chemical dispersants. that is considered a type of response. one would have to say, how do you weigh that -- >> i understand.

>> in terms of the standard mechanical and burn off and beach recovery, this was about average for what we have seen. >> i am just trying to devise the question so that the public can understand what it is we're talking about. so in terms of recovery of oil, it is somewhere in the range of 10%. >> yes. >> in my mind, that is not a passing grade, only 10% of the 4.1 million barrels having been recovered. i think we all saw this coming, and with all of bp's talked about using golf balls, nylon, and here to clean up the spilled oil, it is important that even using a 21-year-old grading system, bp has done a very poor job of cleaning up the gulf. dr. lehr, throughout the entire

sock back, i have pushed for bp and the unified command to make this process as transparent as possible -- throughout the entire dp saga, i have pushed for bp and unified command to make this process as transparent as possible. we're trying to make the better and more reform response decisions. with regard to the boil budget, is this something noaa does as part of the operational response to a major oil spill? >> but will budget is a traditional part of a response. there is a special form that is filled out as part of the situation in unit in the command system. the standard procedures for that use, amongst other things, a model developed by noaa, but also uses other techniques, such as observers estimating the

size of the spill. in the case of this spill, because it was so large, because it went on so long, and in particular because it was occurring at a mile under the water's surface, it was necessary to develop a special tool, which is what we did with the budget calculator. now, i have noticed in the press this is called a noaa budget calculator. i would like to receive credit for that, but inside you have to recognize the contribution of others, and this was a joint effort, both government agencies and the outside experts in the field that developed this tool. >> is there an established methodology for making the oil budget calculations? >> there is a standard form that you to calculate to divide the budget into, and there is a

normal procedure that we had to modify because of the circumstances of this spill. >> in the case of the deepwater horizon spill, how long has noaa been calculating and will budget to guide the response efforts from unified command? >> in terms of the incident command, we start working early, i believe in either june, starting to work on the development of the tool. and we were providing guidance for some time in july for the incident command. >> has noaa been using the established methodology for calculating and oil budget in this case? -- an oil budget in this case? >> i will have to ask clarification by what you mean. we used the standard procedures for estimating oil for each of

the techniques, based on methods that had been used in the past but were modified. let me give you an example. in calculating dispersion, natural dispersion, this is based on looking at something called the energy dissipation rate, due to breaking waves. in the case here, we had a plume that was below the surface. we did not have breaking waves, but we had the energy dissipation rate. we then had to employ some of the experts that work on the frtg to calculate that for a new estimate for natural dispersion. in the case of the evaporation, we have some standard models for estimating the evaporation of louisiana sweet crude. it is in our library data base, but that is for spills that happen at the circus.

-- that happen at the surface. when they are a mile deep, many of the molecules that would evaporate at the surface dissolve in water and we have to modify to analyze those cases. it was the standard procedures, to the extent that we had to modify for the specific instances that happened with this spill. >> can i ask, has noaa made available about the background data and formulas that were used to reach what happened to the spilled oil? >> in terms of the one component, in terms of the flow rate, there are reports that were released on that. in terms of the oil budget calculated, which is what i assume you are referring to,

this was an oil spill emergency, not an oil spill experiment. when we took it -- when we put together the team, our priority was to get an answer as quickly as possible for the command. the technical documentation is being written, and will be reviewed. it will be long, it will be boring, it will be filled with graphs and charts and all the references and passive voice that are filled with all of the reports, and it will bore everyone except the handful of us who like these, but some of our academic friends have asked us for this. i would suggest patients in this case is a virtue. in an emergency, you first get the answer. you don't tell admiral allen that he has to wait for his report until it goes through peer review, but we welcome people comments on it.

i'd encourage the new people coming into the field, from the non-traditional areas of this, to stay interested. we would like to welcome them, but you'll have to wait a little bit for that report to get out. >> i appreciate the desire to complete a full peer review dr., but you have already issued four pages of findings and a 10-page supplement that explains some of the calculations in greater detail. if much of this oil budget is standard procedure for noaa in response to an oil spill, why can't that information be made available sooner? especially given the historic issues that many independent scientists have voiced regarding the conclusions of this report? >> well, i would say this -- i

would prefer, and i think all the scientists would prefer, that because the emergency and questions now are different time frame, and we have moved from the response to the assessment, that it is better to take the time to do it right. now, some of the methods are standard, but some have to be modified, as i mentioned in my testimony, in terms of the evaporation calculations and natural aspersion. we're doing a thorough survey.ure al we understand this will be looked at by oil spill scientists who have been doing this for 20 years and are contributing to the report but by other scientists who are coming to this as their first major spill at that. we want to provide a complete document that will answer all of their questions. >> let me ask you this, will noaa agreed to make available to

the public the citations of the scientific literature formalist, or actual algorithms -- literature formulas or actual algorithms that will allow them to evaluate the report's findings? >> of course. >> will you really is that now. -- will you release that now? >> it is still being proposed. >> you have already released a report last week. could you give us, for the public consumption, the citations of the scientific literature former los rigid formulas or actual algorithms that used and creating your oil budget? >> first of all, again, i will come back to this, this is not a noaa product, this is a product of joint efforts.

>> what we're trying to do, doctor, is to get at the methodology so that we understand what was it used in order to produce your initial oil budget. you are saying that it has to be reviewed for some time in order to determine whether or not you got it right. so in order, i think, to ensure that we have this done in a time frame that provides the information to the residence of the gulf of mexico, that you released these algorithms, if you release the scientific literature that you relied upon, -- that you released the scientific literature that you relied upon, so there can be

independent judgments and real- time to be able to make judgments as to whether or not the formula which was used was the correct one to be used, given the consequences to the public if that formula was not constructed accurately. in other words, would you support making that information available to the public? speaking for noaa? >> for noaa, and i would assume all the experts that contributed also release this information. that is the purpose of the report. the representative, what we're doing in this case is going through the standard procedure which is done for a scientific report. we get the experts, they all contribute to the report. we send back to them for them to look at, picture we have their

comments and opinions and assessments correct, and then we send it out to independent scientists. that is what a peer review is. we send it out to people and we welcome recommendations. >> when will that happen? >> what is that? >> what is the time frame for that to happen? >> well, it has been delayed by a week because i had to come here, but we're hoping to get it out within two months. >> two months. yes, that is not timely enough, doctor, that is the problem. we're trying to tell people the time frame in order to get the information into the hands of independent scientists. all ofdon't want to make the data and models available, but you have given us conclusions that result from these models of the data. you then say that he did not want to make the models and data available to outside scientists

because you are still having everything peer reviewed, post release of your budget report. that is, to me, not acceptable. we need to have that information. the report that you released last week received international attention. there are many people who are making decisions based upon that report. so it is important right now, dr. lehr, for that information to be made public so that not only is it being peer review in the regular process, but because of the real-life consequences for the lives of the people in the gulf of mexico and outside the gulf of mexico, because of the toxic nature of the material in the gulf, that that information be made public. there is too long of a gap that

will collapse -- that will elapse under the process you have adopted. the real issue here is that the public has a right to know right now what is going on in the gulf of mexico. and your report should be analyzed by others right now. so that we are sure that we got it right. because if the numbers are wrong, two months from now could be too late in terms of the remedial recommendations which are made to the public, to the fishing industry, to the consuming public in terms of the consequences for their families. so i asked, again, for you to release that information, that data. the team estimated 4.9 million

barrels of oil from deepwater horizon well. the uncertainty of this estimate is plus or minus 10%, as you said. does noaa have certainty with regard to the figures of the estimates of what happened to all 4.9 billion baht. 4.9 million barrels? what is the best and worst case estimate for the residual oil that remains in the gulf? >> we do as part of the calculator have the estimates of uncertainty for each of the various processes. for example, in terms of the burn, there are some standards for the burn rate that were applied to this bill that give us a high degree of confidence, and we have very low uncertainty

for the estimate of that. for a back operation and dissolution, -- for evaporation and dissolution, we have taken samples from noaa from the environment of canada and from a large research organization in the european union, and those results matched closely, so we have a fairly good confidence on most values. when we get into the dispersed oil, the uncertainty becomes larger, particularly for the use of the chemical dispersants below the surface, which is a new experience to us. we were very conservative there, but we have a large ma rgin. standards and technology has brought an excellent statisticians to calculate the net uncertainty. that is given in the extra pages that you were given. that will also be in the final

report. and i will commit today to do whatever i can to speed up the report. i appreciate the concern. i hope that you and public and the other academics appreciate that because of the importance, because of the points you stressed, we want to make sure is done right. that is why i am making sure -- >> here is the thing, doctor, you should not have released it until you knew it was right, because so much is going to depend upon that release. if you are not confident it is right, it should not have been released. because it basically sent a signal with regard to how much of the problem remains. that is really something that is obviously of great concern to people in the gulf. they don't want to be forgotten. they don't want this to be downplayed or low balled, which

in some quarters what has happened since the report was released. i think it is important, since it has been released, to be examined right now so that we can be sure that those numbers were accurate, and independent scientists can quickly look at the formulas and corroborate or question. but it should not be something that is done in a boring academic setting over a prolonged time. it is something that has to be done in a dynamic setting in real time because of the resources that may need to be dedicated to this problem to ensure that it is remedial it in a shorter time than otherwise, if your estimates are not accurate. so that is critical. from a political perspective, the longer the time that elapses is the lower the political

pressure and the public attention to be there to ensure the resources are brought to the problem. so we have to make sure we do this in a timely fashion so that unlike the exxon valdez spill, we actually do something in real time so that everything that can be learned about it is learned about it. and you, you agree, dr. that the amount of oil that is still in the gulf of mexico and not accounted for is at least five times the size of the exxon valdez spill. you agree with that? >> i agree, and i would also note that noaa is taking a lead role in monitoring the oil that is out there. we will continue to do that. i don't think the report, it should not be interpreted as saying that this spill is somehow over with. >> it is not that it is over

with, but there was an optimistic spin in some quarters that was placed upon that report. and since that is happening in real time, then the independent evaluation of that report must happen in real time. because if it is wrong, many opportunities for a calibrated response to the defects in the report will have been lost. so that is why it is important for you to surrender this information now two independent scientists. so according to noaa's will budget, 408,792 barrels of oil were chemically dispersed out of a total of 4.1 million barrels. approximately 9% of the total oil in the gulf of mexico.

this means that 43,0009 -- 43 ,900 barrels of dispersant were needed to get rid of just over 408,000 barrels of oil. this means that 1 barrel of dispersant dispersed just over 9 barrels of oil, yet according to your budget documentation, a dispersant will ratio of 120 is considered successful. dr. lehr, it seems to me the ratio used in this disaster of one-to-9 would not be successful by noaa's own definition. would you agree with that? >> this is an area where we had the hardest time calculating was

the effectiveness of the chemical dispersant. the dispersant that was applied below the surface or but we would call ideal conditions. we would make sure that the dispersant was injected into the oil so it made direct contact. this would be the ideal conditions for dispersant operations. we asked the people who make a living applying dispersants what they thought would be an effective number, and they had numbers as high as 30 to 40-1 ratios. the oil industry literature suggested 20-to-1. we decided to be conservative and go with the 20-to-1. we may have underestimated the effectiveness of the sub-surface dispersant. on the surface where the dispersant was applied, they

were applying it on the oil that had partially emulsified. the viscosity was high. according to past studies, it would not have been as effective. but there was a study that was done by a research group at of norway with this multiplied oil using dispersants that showed some effectiveness, plus observations on seen by noaa and coast guard personnel that suggested surface operations were being at least partially affected. what we did was scaled down what we would estimate to be the effectiveness of the surface operation. i believe we estimated it would be 4 or 5 barrels of oil per amount of dispersants parade, and that would take into account that some of the dispersant not interact with the oil, and secondly the fact the oil has emulsify to such an extent it was difficult to disperse into small droplets that are

necessary for the oil to disperse and the water column. >> according to the budget documentation of dispersant to oil ratio, -to-20 is considered successful -- 1-to-20 is considered successful, but this ratio was 1-to-9. do you believe that is a successful application? >> i think my colleague noted the significant uncertainty in the estimates of dispersion. all of the evidence, all of the monitoring that was conducted in an ongoing way that was required by the epa during the application, especially of the sub-surface application of the dispersant showed effectiveness. we ensured that, through

florescence pictography, the particles were being formed. this was a high energy system. we have reason to believe and evidence shows it was effective and relatively efficient. >> given your own numbers and your own analysis, how successful would you say it was? >> i don't think there is a way to measure the ratio between chemically dispersed and biologically dispersed oil, so i don't think we can have precise numbers. i think that the estimates, as dr. lehr noted, whether it is 20, 30, 40-to-1 in terms of ratio would be more potentially in the ballpark. >> dispersed does not mean exactly the same thing as gone, does it? >> it is not. >> for example, if i put a

spoonful of sugar in my iced tea and store it, the sugar is dispersed, you cannot see it. but if i drink iced tea, it still tastes sweet because the sugar is still there. the sugar is dispersed, but it is present. isn't that somewhat analogous to the situation that we face in the gulf with this disbursed oil as well? >> not exactly. the sugar dissolves in solution. disbursed means it is broken up into small particles that, the whole purpose of which, is to make them more digestible and indigestible by the microbes. the only time that will actually goes to weight is one it is degraded. the degradation can happen through biological process these, it can happen through physical process these. -- it can happen through physical processes. when it is broken down by the water, is called hydrology.

when it is done by temperature, it is phonology, broken down by light is another process. the whole purpose of the dispersant is to make it more accessible. >> what is the time frame for that process to take place? how do you measure that in terms of the actual amount of oil that is as a result more subject to being consumed because this person has been released? how can you measure that over such a vast area? >> there have been studies done even by the epa and the department, and part of the rationale for applying dispersants is it helps the rate of degradation increase by as much as 50%. >> 15% or 50%? >> 5-0, over those on treated.

>> ok, thank you. government scientists have estimated 4.9 million barrels of oil escaped from the bp well, but that does not include the methane that also came out of the well. although the impact of methane is not as well understood as that of oil, we know it has the potential to cause harm when released at such significant levels above the natural seepage of methane in the gulf. as part of the natural resources damage assessment and associative restoration plan, will noaa be looking at the impact of the release of methane from the bp well?

>> in terms of the effect, i would believe that would be taken into consideration for sure. i am not part of the damage assessment team. there is a different group that does that. the oil budget calculated not take into account because it wasn't well budget capulet. there is no -- because it is an oil budget calculator. that is why it was not in the report that you saw, but in terms of the damage assessment, you would certainly take into account all the hydrocarbons that were released and what affect it would have on the environment. >> just a few weeks ago, in response to a letter that i wrote, fta explained what it does not presently monitor -- fda explained what it does not presently monitor for this in

the seafood, they are working closely with noaa to conduct further studies to determine if dispersant chemicals or their metabolites can concentrate in the flesh of seafood species. what is the status of the studies? >> mr. chairman, i would like to refer this question to dr. margolis. >> what is your title, please? for'm the senior adviser science and policy for the fda. we have been working with noaa on developing chemical methodologies for detection of one of the major components of dispersant. this component is about 20% of the total dispersant that was

applied in the gulf. but essentially what we have done is two series of studies where we are exposing craft and fish in settings to the chemical, 100 parts per million, which is comparable to at the dock. we do time exposures at 24 hours, with subsequent washout in clean salt water at 24, 48, and 72 hours and assess the concentration of the chemical in the pancreas or liver, as well as the muscle tissue. preliminary data suggests there is not any by a concentration -- bio concentration of the chemical. >> can you explain that chemicals so that the public watching understands? >> it is a detergent,

essentially, a detergent-like compound found in a variety of products, including over-the- counter medical products. it is used to help disperse the oil, but is generally an art and nontoxic. there have been significant studies demonstrating a lack of toxicity with this particular component. >> please continue. >> essentially we conducted the tank studies and found no evidence to date of bio- concentration of the chemical in the crabs and some shrimp that have been tested so far. we're still actively assessing these samples and a controlled setting. additionally, we are able to go back to all of the retrospective samples that were collected because this particular component is present in the extract that we made for

monitoring p.a.h. for the reopenings. >> what about the other components, in addition to doss. have you done the analysis of the other components of this chemical that was shot into the ocean in order to determine the toxicity of those components? >> we have not. we start with this as a marker for the chemical because it is one of the principal components and therefore would be readily detectable. it essentially serves as a marker for the dispersant. >> what is the timeframe you will use to analyze the other components to determine whether or not there is toxicity, there is a danger that could attached to it if human beings consume

that chemical? >> some of the other components that are present, such as petroleum distillate, would be found in the p.a.h. analysis. it would be difficult to distinguish those from petroleum distillates and the oil itself. we are not currently looking at any of the other components. >> could you repeat that? >> we are not currently doing tests on the other components right now because we wanted to establish the methodologies using one of the principal components which we felt we could detect readily as a first that. >> how long will it take before you actually conduct experiments on the other components? >> i cannot speak to that because it is not clear whether we have the methodologies to detect all of those at the present time.

>> so -- if you find dos in the seafood samples, then what? >> then we would consider that as something we would need to go back and reevaluate the samples for possible presence of this person -- of dispersant. >> are there potentially other components that are known to be toxic? >> there are a number of components. i think the epa could probably speak better to the toxicity studies that have been done on the various components of the chemical. >> are there other components that have been known to be very toxic? >> i guess i would first start

off by saying that the testing that we conducted, that the administrator ordered conducted was on the chemical itself. so when you are looking at the entire formulation, all of the components and their contributions to toxicity would be considered. it is important to look at the formulation as a whole. the toxicity results and report, in my opening statement -- >> are you saying as a result, there is no point in even bothering to examine the other components case you have already studied the chemical? >> i am saying when you do toxicity studies on the collective as a whole, you are in essence doing toxicity studies on the components. >> what i am asking, as a result, if i could go back to the fda, does that mean there is no reason to do any further study of these materials, even

though some of them are known to be toxic? >> mr. chairman, fda is fully aware of what are the components of the chemical. we have looked at each one of these for toxicity, and i think if you are aware, in response to your letter to the agency, each of these components are low toxicity to humans. we have to separate the distinction between toxicity to marine animals, as i think was the concern epa was suggesting, from toxicity to humans if it is present in the flesh of fish. fta's concern is the latter toxicity to human -- fda's concern is the latter toxicity to humans. we have looked at the individual components, and they are all very common household

constituents. there are in things such as lip gloss and toothpaste and a variety of over-the-counter drugs. so they have been approved for use and consumption by people. these are components that fda reviews for food additive purposes. >> you have yet to put in place, though, a test in order to determine whether or not any of these chemicals, many of these components are in the fish, is that correct? you have only done a study so far on dos, as a marker, but not on these other chemicals? so as you are sitting here as the fda, representing the

public's interest in determining whether or not these fish are safe to eat, it is without having completed the study in terms of these actual component chemicals and side of the fish? is that correct? -- inside of the fish? is that correct? >> i would like to put that in context of what we have done. i intend to with your question specifically, but the first question that fda wanted to answer with respect to dispersants is whether the constituents of or the components of the chemical, what do we know about those and what do we know about whether, one, it is in the flesh of the fish, and second, if they are in there, what is the risk to humans? the answer to all of these is to have a very low potential to get into the flesh of fish. that does not mean they will not

get in at any level. it means they have a low likelihood of getting into the fish and are highly unlikely to accumulate at levels above what is in the environment. which we believe is comforting. the second is, the question as i mentioned, is, to the components, are they toxic in and of themselves? as i said, we are aware of all of these components, and they have common uses in products that are either intentionally consumed or, as in the case of lip gloss, it consumed as a matter of course because of the way they are used. these components have approval levels in each of those uses. and those levels are much higher than the levels that, under any circumstance, you could imagine would end up in the flesh of fish. so it is true we have decided in the case of dos in particular,

at least as a starting place, we are looking to see whether -- we want to confirm in a definitive study what we already believe we know the answer to, and that means is unlikely to bio- concentrate, as dr. -- of the studies are very suggested that they will not bio concentrate. that is confirming what we believe we already knew. it is a reasonable question to ask if we can look of the other components. i think that is something that we ought to do. >> just so i can understand, right now, in the parts of the gulf --

gulf that has been reopened for fishing, you have ok'd the consumption of that food, those fish. even though you have not completed testing on at the component parts of corexit, with the belief that it does not accumulate in the fish at a level that would pose a danger to the public as they consume that fish. is that correct? >> is correct to an extent, but what i would like to clarify is that we are doing some analysis of the fish. this is through the sensory testing that i explained, that i mentioned earlier period to give -- mentioned earlier. to givei think there is a the

nature of this test. quite frankly, these are people training. not everyone of them can get through that training and demonstrate the skills to be able to pick up different odors. but what we -- the panels that we have in place in and the gulf coast now are truly expert. they have been calibrated against a standard of seawater oil and a dispersant that was collected at the oil site so that they can detect that combined odor. there were also calibrated specifically against the odor of dispersant, which has a much milder older, but still deductible. -- detectable. so the standards we are using for the reopening of the waters have been run through this analysis. we recognize that there is more comfort in having a chemical test, and that is the reason that we have engaged with noaa in the chemical test for the cost component. -- dos component.

again, i do not want to suggest that we lightly came to the conclusion that the components of corexit are unlikely to accumulate, and if they did, are nontoxic. there is an extensive body of science around all of these components which fda has looked into. as we have said, and made in public statements, we are confident that based on the current science, the likelihood for by a concentration in dish -- by a -- -- by a dash concentration in finish -- is very low, and should it -- is veryntration in fish

occur, theuldn' it toxicity of those components would be very low. the studies that we are talking market. >> in the same letter, fda defers to epa to determine if oil and revenues can accumulate in a product, plant and eggs. can oil and dispersant by a concentration in and fish eggs? -- bio-concentrate in and fish eggs? >> the consistency of the oil can allow oil, in principle, to enter into fat tissues and potentially enter those biological systems. all of the models that we have done on the dispersants would suggest that we would not see

the dispersant and into and -- dispersants entering into and accumulating or magnifying in a way that oilcan. >> is it possible that a fish may be caught and kept clean in the adult issues, but contain eggs that have high levels of these toxic chemicals? >> i am not aware of a mechanism by which that could occur. >> do you believe it could occur? >> no, i am not aware of a mechanism by which it could occur. >> do you believe that testing on eggs meant for human consumption could be performed to ensure that all products on the market for demons are safe? -- on the market are safe? should testing on eggs meant for human consumption be performed to ensure that all fish products on the market are safe? >> i would defer to my fda colleagues on that. i would have to say that a more data that we have, the more

sampling that we have to verify this is always good. we need to rely on the data and data needs to drive us. >> have been the fda and noaa -- how do fda and noaa assure us that fish that were located in oil waters and contaminated with toxic chemicals have not been swimming to areas that have been cleared for fishing? >> the presumption here is that the fish is guilty until proven innocent, so to speak. when they do their sampling, you do not assume that it is clear. you assume that it has to pass the tasting test, and all the of the passes those, does it go to the -- only when it passes those does it go to the

laboratory for chemical tests. that into account. however, to be on the safe side, as there is a 5 mile buffer between the area where it would be open and where it would not be closed in the first place, and where oil has appeared. >> are you right now engaging in intensive testing where the oil is still present in large quantities? >> of the testing of the fish is being done in areas where the

oil is no longer present. it is in the areas where oil was either at never present or areas where it has not been present for some time. then they do the sampling. every sample has turned out to be negative. we have not detected any ph levels in at the fish. >> i am going to use a hypothetical, and i do not know how accurate is, but let us use it as a hypothetical, that the bluefin tuna, which is ultimately caught off of new england, spawns down in the gulf of mexico. let us say for the sake of discussion, and only for the sake of the discussion, that some of that spawning is going on right now inside of the much more oil the area of the gulf. -- oil the area of the gulf --

we know that those fish are ultimately going to migrate up area of the gulf off the coast of new england. what is the testing for that fish or other dish that is going on inside of the oil area that will ensure that it is safe when it finally reaches the part of the ocean where that this or any fish is caught? >> i will defer that question to experts that can answer that better than i can. >> is there someone here who can do that for us? can you move up to the microphone please and identify yourself? >> i am john l. gramm. we do not have a person from the fisheries service here. we had one witness, but we can get those answers to you. >> i