he recently pointed out that before we buy another airplane or ship, we ought to look at what we can do to save the lives of our soldiers, marines, airmen, and sailors through our dependence on oil and other energy technologies. what are your thoughts on what the d.o.d. can do to reduce our dependence on foreign oil? >> senator,>> this is an area io learn a lot more about in terms of the area of how the defense department is approaching this. the defense department really is a leader in trying to develop better energy efficiency, and we need to be, because we use an awful lot of fuel. my hope is to continue those efforts and to work with you and others to try to determine what additional steps we can take both in developing weapons --

the development of weapons, the development of technologies, how we can better use clean energy, how we can better use some of the new forms of energy in order to reduce fuel costs at the pentagon, but more importantly, to contribute to hopefully a cleaner environment. >> i just introduced a bill along with congresswoman difference -- giffords that would provide more direction to the department of defense. that has widespread support from particularly retired officers and others. i look forward to working with you. the chairman has been moved to authorize defense department activities for 2012. it is about $13 billion a year,

and the d.o.t. uses more energy than most countries -- dod uses more energy than most countries. my time has expired, but for the record, maybe i could ask one question and you could give a brief response. i know 2014 is our date for afghanistan, the full handoff. you know all too well about the safe havens in the sanctuary they provide for the taliban. if we cannot reduce the safe havens or at best eliminate them, what are your thoughts about what that means for hopes for a resolution of the situation in afghanistan? >> we can only win in afghanistan if we can win in pakistan by reducing those safe havens. the two go hand in hand. the ability to achieve stability in afghanistan is dependent on whether or not we can limit and

hopefully stop the transfer of terrorism across the border. >> thank you, mr. director. you and the chairman are both my heroes because you have been sitting here for some four hours. with great patience and particulate answers. thank you. articulate answers. >> before we break for lunch, let me try to clarify a couple of things. first, would you agree that security transition to afghan security forces is to be completed by 2014, but that the process of transferring provinces and districts to an afghan security force league begins in july? >> that is correct.

>> president karzai in march tontified diffthe first areas begin transition, and that has already been presented and approved by nato? >> that is correct. >> next, my staff tells me that they have not been able to find any statement of secretary gates in which he specifies the number of u.s. troops that he believes should be withdrawn from afghanistan starting in july. are you aware of any statement by secretary gates identifying such a number, whether it is 3000-5000, or any other number? >> i have discussed this with staff at dod. and they're not aware of any statement that has indicated a number that would be involved at this point. >> at this point? >> at this point. >> thank you. it looks like about one a 5:00

p.m., is that right? -- 1:05 p.m., is that right? we will meet at 2:15 p.m. in a classified session. thank you all for your testimony and your service. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> the time i just spoke is to 30 p.m., not to 3:00 p.m., to 30 p.m. -- 2:30, not 2:15, 2:30.

>> c.i.a. director leon panetta

wrapping up 3.5 hours in front of the senate committee for armed services. he has been nominated to replace secretary gates. we have been covering the hearing today. michael shearer, what did leon panetta say about the proposed budget cuts that secretary gates has previously identified? >> he has been part of the national security team, and was careful today in all aspects, especially the budgeting, to say that he supports what the president and the outgoing secretary of defense have broadly said is a need to cut defense spending over the next 10 years. he also made clear that there is a process of review that is going to be going on that he will be leading if he is confirmed as secretary of

defense. he left himself a little wiggle room and said, if that review concludes that making some of those cuts would harm the military's effectiveness and ability to do its job, he would obviously not hesitate to say to the president that he thinks there need to be some changes made. >> what about the afghanistan operation? some late questions there by senator 11. any chance he would deviate from the drawdown -- senator levin. any chance he would deviate from the drawdown in july? >> he has the president having made a commitment to begin the drawdown of troops this summer from afghanistan. there is a lot of pressure from a lot of different quarters, including some in the white house that that drawdown should

be robust, a signal that the united states is serious about withdrawing. on the other hand, the outgoing secretary, mr. gates, has really signaled in this round the world tour that he is taken in the last few days that he thinks that whenever the drawdown is should be quite small. there were a lot of questions today directed at mr. panetta about this question. where does he fit on that spectrum? he tried to dodge them and say, it is not for me to say at the moment. i'm not defense secretary ed. ultimately, he made it pretty clear that he -- defense secretary yet. ultimately, he made it pretty clear that he works for the president but that there is not much daylight between him and the secretary either. >> did he say much about libya? >> he is mostly in the same position that the united states

has taken, which again, is a difficult one. the president has verbally said, look, our position is that mr. gaddafi, the leader in libya, should go. of course the military mission is to protect the civilians and to put the pressure on mr. gaddafi to go. it is not being led by the united states. it is being led by nato. one question he was very definitive about however in answer to a bunch of questions from the senators was whether or not there was any indication the ground troops would ever be necessary either during the conflict as it is now or after mr. gaddafi would leave. mr. panetta said absolutely not. i do not know of anybody who is thinking of boots on the ground. >> michael shearer covering the hearing today of leon panetta. you can read his work at nytime

s.com. in about 15 minutes, a hearing on property is. president obama has ordered federal agencies to eliminate properties that are not being used which would save money. a committee was set up to recommend which federal properties should be put up for sale. we will have the subcommittee holding a hearing this afternoon at 2:00 p.m. come alive on c- span. until then, we will bring you part of the senate armed services hearing with leon panetta, including the beginning of the hearing, with statements from opening members -- opening statements from members and from leon panetta. >> good morning, everybody. -- overmittee meets to so

the course of this long and distinguished career in public- service, we welcome you to the committee today and we thank you, mr. panetta for your decades of dedicated service to our nation and your willingness to enter the call once again. we know your wife is not able to be here with you today. she has made her own sacrifices over the last 50 years, supported your efforts in the public and private sectors. i know that i speak for the committee when i say that we love to think her in person for the sacrifices that she has made. please let your wife know of the committees gratitude for her support and your sacrifice. if confirmed, director panetta will replace secretary robert gates at the helm of the department of defense.

he was asked to stay on. it provided a welcome continuity in our defense leadership. director panetta's nomination represent change and brings an impressive level of continuity as well. the next secretary of defense will face a complex set of demands on our armed forces. for most of the ongoing war in afghanistan and iraq. we continue to have approximately 150,000 troops deployed. in addition, even after the extraordinary raid that killed osama bin laden, terrorist threats against our homeland did seem to emanate from pakistan, yemen, somalia, and elsewhere. the risk of a terrorist organization getting their hands on and detonating an improvised

nuclear device or other weapon of mass destruction remains one of the gravest threats to the united states. the defense department is working with the departments of state, energy, of insecurity, and other u.s. government agencies to prevent the proliferation of nuclear weapons and dangerous technologies. a number of key national security decision will have to be made in the coming weeks and months, even as the drama of some kind ofaq -- continuing u.s. military presence beyond the december 31 which role does not agree to by president bush and prime minister maliki in the security agreement between our countries. another key decision point is looming in afghanistan. regarding reductions in u.s. forces starting in july.

president obama said the other day that, "it is now time to recognize that we have accomplished a big chunk of our mission and that it is time for afghans to take more responsibility." the president has also said that the reductions starting in july to will besignificant -- will be "significant and i just a token gesture -- and not just a token gesture." to assume security responsible for all of afghanistan. i support the so-called transition strategy, which calls for afghan security forces to take more and more of the lead in providing for their countries security. the more that afghan security

forces do that, the better the chances of success, because the taliban's biggest nightmare is a large effective afghan army, an enormous party perspective of the afghan people and control of afghanistan security. having security forces in the lead would deprive the taliban of the biggest propaganda target, the claim that foreign troops are occupiers of afghanistan. there is nothing inconsistent between transitioning security responsibility to afghan security forces and long term strategic relationship with afghanistan, which is also important to sustain a successful outcome. another major issue facing the department is the stress on our armed forces after 10 years of nonstop war.

the repeated applause of four military has resulted in many of our service men and women being away from their families and homes for two, three, or four torours. military families are also stress. our men and women in uniform can t to answer the call. the next secretary of defense will be required to juggle the competing demands on our forces while washington struggles with an extremely challenging physical environment. the defense budget will not and should not be exempt from cuts. this will require congress working with the next secretary of defense to scrub every program and expenditure in the defense budget and to make tough choices and trade-offs between the requirements of art were fighters today in preparation

for the threats of tomorrow. the administration in february submitted a defense budget for fiscal year 2012 which included some efficiency savings. in april, president obama announced he wanted to reduce security spending by foreign billion dollars over 12 years -- by $400 billion over the next 12 years. including the departments of state and homeland security. we have asked the a ministration what parts of the $400 billion reduction to the recommend the pentagon cuts and how many of those for fy 2012? so far we've done no answer. hopefully say we'll get mr. panetta's understanding on that

matter. his service is invaluable because he understands the into workings of the budget process and because he shaped the decision that helped achieve the budget surpluses of the late 1990's. fort lee, director panetta brings a compelling record of achievement and experience as well suited to the demands of the position for which he has been nominated. leon panetta has repeatedly demonstrated an ability to work across party lines. since entering public service, he worked on the staff for the republican whip in the u.s. senate, headed the office of civil rights in the nixon administration. he served eight terms and became chairman of the house budget committee. leon panetta has been indicted by a clear compass.

he has said, "in politics, there has to be a line beyond which you do not go. too often people don't know where the line is. my family, how was arrays, my education all reinforce my being able to see that line." leon panetta has been involved in the most pressing national security issues of our time during his tenure as president obama's director of the cia. this includes overseeing the manhunt for osama bin laden and the impressive operation that brought an end to al qaeda's murderous leader. this operation epitomizes the way in which the cia and the defense department are finally working together to support each other in the counterterrorism

operations. the assault on bin laden's hideout is the first significant instance, i believe, of an operation that could have been conducted under defense department authorities, but that was instead executed under the authorities of title 50, with the director of the cia exercising operational control over our elite military force. then the conclude by expressing on behalf of this committee our gratitude and are a deep admiration for the man whose shoes director panetta's has been nominated to fill, secretary robert gates. service to thes' country has been extraordinary. he worked under the administration of eight presidents. he filed a long career in government and served his country again in the critical post of president bush's

secretary of defense a difficult time in our history. to route his tenure, -- throughout his tenure, his leadership and kantor have earned him the trust and respect of all who have worked with them. secretary gates has combine business with the toughest and cleric and courageous, a firm decision making. secretary gates is devils a direct and open relationship with congress -- secretary gates developed a direct and open relationship with congress. his time has been exceptional. senator mccain. >> let me welcome director panetta. i am grateful for its remarkable career of public service and is a lotus to serve in this new and

important capacity. i am appreciative of your family and the support they have given to you. i also welcome my colleague from california who was wrote underscore your important qualifications to assume the position of secretary of defense. your successor as director of the cia over the past two years, and have been many, or credit to you at the men and women of the intelligence committee. you and i know the director would be the first to limit that he has big shoes to fill if confirmed in a person of robert gates. i have seen many secretaries of defense and i believe history will long remember secretary gates as one of america's finest, most effective and most impact all secretaries of defense. one of the key criteria that we should be looking for in the next secretary of defense is continuity. the county was of the wise

decision making that characterized secretary gates' leadership at the department of defense. things to is -- thanks to the good work of this team, the next secretary of defense will take all this with a good deal of positive momentum. many challenges remain. our countries faces decisions that will echo for decades to come, this is a double determine whether it would remain the world's leading global military power able to meet our many commitments worldwide, or what we will begin abandoning that role. will have perhaps the most impact on this outcome is the stated goal of cutting $400 billion in defense spending on top of the $178 billion in

reductions that secretary gates already announced. this cuts into the muscle of our military capabilities. defense spending is not what is sinking this country into a fiscal crisis. if the congress and president akbar that flawed assumption, they will create a situation that is truly an affordable, the decline of the u.s. military power. i know there will be cuts to defense spending and some reductions are no doubt necessary to improve the efficiency of the department of defense. but also remember -- more rubber when the former chief of staff of the army warned in 1980 after cuts were made and testify before this committee that we have had a hollow army. that is not an experience that

we should repeat in the years to come. we must learn the lessons of history. how the proposal could be implemented. another major decision involving how we achieve our objectives in the three conflicts in which u.s. forces are now engaged -- iraq, afghanistan, libya. in iraq, the key question is whether forces will remain in iraq beyond the end of this year to support their continued need in our in our national interests. i believe such a presence is necessary, as secretary gates has argued. in afghanistan, the main question is the size and scope of the drawdown. i would agree with secretary gates that any drawdown should be modest celesta maximize our ability to lock in the gains of

our troops during the next fighting season. in libya, there are signs that muammar gaddafi may be starting to crack. the odds of a stop remained far too high. i believe u.s. treasury to be to reduce those odds as much as possible and quickly force muammar gaddafi to leave power. another significant challenge department defense pa -- secretary gates has made some courageous decisions to get major weapons to kermit project's contractor is similar focus is brought to of the defense department chooses to buy billions of dollars in services to maintain the highest degree of readiness. as best in this budget a farmer, it will be important to continue to limit weapons programs that are over cost, behind schedule, and not providing improvements

in combat power and capability. we must continue to eliminate every dollar and wasteful spending that siphons reserves away from our most vital need, enabling our trooped to succeed in combat. director panetta, you are nominated to lead our armed forces. this has placed a major strain on our armed forces and our families. our military is performing better today than at anytime in our history. this is things to the thousands of brave young americans in uniform who are writing a new chapter in history of our great country. they have shown themselves to be the equals of the greatest generations before them. a: all + + enter is to be equal and for ever faithful to the sacrifices of these amazing americans.

we have a quick 10 second comment. >> thank you. i have an unavoidable conflict. i have served with mr. panetta and i consider him to be a close friend. but for to support his confirmation and serve it with him in is the capacitor think you for the opportunity. >> thank you, senator mccain. our two colleagues from california are here to introduce mr. panetta. it is a treat the you're with us. senator feinstein, the chair of the intelligence committee. she has a lot of direct experience long before then with director panetta. >> thank you, mr. chairman and members of the committee. it is distinct pleasure for me

to introduce the director of the central intelligence agency and distinguish california, leon panetta, who was nominated by president obama on april 28 to be the 23rd secretary of defense. as members of this committee will know, it is 47 years of public service, director panetta has held positions of congressman, chairman of the house budget committee, director of the office of management and budget, chief of staff to the white house, co-director with his wife of the leon and sylvia panetta institute for public policy, which i've had the pleasure of speaking before, a member of the iraq study group, a secondof the caia, and first lt. as an intelligence officer. trusted adviser to the president

and respected member of his national security team. in the course of two years, he has mastered the intelligence field, led the cia three very tumultuous time, restored badly damaged relationships with congress, and with the director of national intelligence, and carry out president obama's personal instruction to him to find osama bin laden. i have no doubt that his past experience and is capabilities prepared leon panetta to meet the major challenges before the department of defense. with knowledge of cia operations and analysis, he will come to the pentagon with a thorough understanding of the situation in afghanistan as well as the aggravating factors of our relationship with pakistan. through cia analysis, he has

also well aware of the other contingencies around the globe, where the united states military may be called to deploy. director panetta is also well positioned to guide the department to the constrained budget environment which the chairman spoke of along with the rest of government. he possesses the credentials and experience to make cuts are needed and were prudent. i am confident that he will do so in a way that keeps the military strong and capable, and in a way that maintains the cohesion of the department's and its services. finally, let me recognize the there many officials in government with the intellect and management skills to do this job. leon brings something more. he has an interesting leadership style, with a deft personal touch that matters to the

people in his charge and that really benefits the oversight responsibilities that we in congress have. then give you an example. it was early in his tenure at the cia in 2009 when director panetta requested an urgent meeting with the intelligence committee to brief us on a program he had just learned of and that he had learned had never before been briefed to congress. he found that unacceptable and we very much appreciated his position. in the two years since, he has never declined to answer a question or provided with this -- or provide us with this candid views. i believe center chambliss can testify to this -- i believe senator chambliss can testify to this. let me conclude -- a national

public group into the last week with secretary gates noted that the health care budget of the department of defense was bigger than the entire budget of the cia and that no other position could fully prepare someone to be secretary of defense. i have great respect for secretary gates and praise him for a service to this country beyond all reasonable expectations. he has been in debt stemming secretary of defense. but i would suggest to you that leon panetta, who has served honorably and successfully in congress, at omb, at the white house, and of the ca, is prepared and uniquely qualified to be another outstanding secretary of defense in this very challenging time. i think the committee. -- i thank the committee. >> senator boxer.

>> i appreciate every word my colleagues about my friend, leon panetta. i will try to add more of a personal side because i've known this man and work with them since 1982. he became one of my mentors. eventually, i served on the budget committee or he was the chairman, and i watched him very carefully reach out across every kind of line that would divide us. republican, democratic liberal, conservative, moderate. we were facing a lot of new, complex issues. one was the eighth crisis -- one was the aids crisis. i remember saying there was a new disease and we have not done anything about it. he said, what do you hold some

hearings and bring in the republicans, and we did. we were able to get the first funding for aids research. was ready to listen. he gets it. we have seen that in every single job that he has fulfilled. this is a man who has dedicated himself to public service, and we're so grateful to him. i won't go through every job he has held. it would take too much time. senator feinstein highlighted anye many of those -- so mn of those. to be someone who could be such a trusted advisor that two presidents have chosen him. i could go on the about

leon. let me say what is meant to the people of california. he has recognized the importance of our resources in our sta te, namely our coast and our ocean. he said it this is an economic issue for us. he preserved the coast. he is a visionary. we saw the move into the cia and the work he did and the latest issue and he can talk about does not do that much in terms of making sure that osama bin laden was finally taken out. this was a brave mission by our military. leon panetta was a part of the decision making. i think at this time were york in gazed around the world and so

many difficult conflicts, so many difficult conflicts, he is bringing out the intelligence perspective to the job. i would ask unanimous consent that my formal -- i want to turn to leon as a senator from california and say thanks so much for everything you have done throughout your career for this country. i know your origins. i know how proud your family is. i think we'll sure that pride in nyou. good luck and help the committee does as quickly -- good luck and i hope the committee does this quickly. to stay.e both welcomed tuesda >> we have a bill on the floor. i will be going to the floor.

>> you never miss a point to point.ur linda colorado mr. panetta -- let me call on mr. panetta. thank you again for your service to correct thinking, chairman -- think you for your service. >> thank you. i am deeply honored and humbled e as the e at new-paragraph hers president's nominee. i thank my fellow californians who are dear friends and it dear colleagues for the role of

secretary of defense, without question, it involves a very large responsibility in size alone. still, in a very basic way, it is the similar to the role of the cia director in that our first and foremost mission is to protect the country. if confirmed, my number one job will be to insure that america continues to have the best trained, the best equipped, and the strongest military and the world. in order to make sure that we protect our country. as many of you know, i had devoted my career to public service. it began a long time ago when i served as an intelligence officer in the united states army.

i was proud to wear the uniform of our country. my respect and admiration for our nation's armed forces has only grown the decade cents. my youngest son, jim, served in afghanistan and received the bronze star. i have personally -- i personally witnessed the tradition of service and sacrifice that drives each generation to fulfil a fundamental duty to our country. in addition to respecting that great tradition of duty, i have done a number of things to try and prepare for this very difficult and challenging job. first, in the weeks since my nomination, i spent a number of hours with bob gates. he is a dear friend. when he and i first got to know

each other as we were building our careers in public service, we also served together, as you know, on the iraq study group. we continued to serve together as members of the president's national security team. we share a common belief that the national security of this country is the responsibility of all americans regardless of party. i, too, believe he will be remembered as one of the greatest secretaries of the defense and our nation's history for the way he led the department during a time of war and for the crucial reforms he has tried to put in place in the way the pentagon does business. those are reforms that i intend to carry on. second, i talked with our service secretaries and a

service chiefs. i believe it is important to have a candid, open line of communication between the secretary and all the service chiefs. they are the ones who are out there leading each of one of their services. i need to know what they're thinking. i need to know what is important in terms of serving the interests of the troops that they directly lead. one of those chiefs told me -- for our troops, there has been no shortage of war. indeed, we are a nation at war. our volunteer force has been stretched by combat that has lasted nearly a decade. we owe it to them. oh to their families to insure that they have the best leadership, the best training, the best equipment, the best

benefits, the best health care that we can give them. i pledge to them and i pledge to you that every deployment decision that i make will be mindful of the stresses on our men and women in uniform and on their families. third, i have reached out to former secretaries of defense both democrat and republican. i ask for their advice. to a person, they impressed upon me how important it was to stay focused on the management of the pentagon. this is the biggest enterprise in our government. it requires focus and hands-on management. which is the only way i know how to do business. fourth, i sat down with many of you and have known many of you throughout my career. because i really do believe that

congress has to be a partner in this role in the protection of our country, i am a creature of the congress. i believe that the pentagon is made stronger by your oversight and buy your guidance. as a young legislative assistant a long time ago here in the senate, i had the honor of seeing firsthand the bipartisanship of leaders like dick russell and henry jackson and barry goldwater. as a member of the congress, i saw that tradition carried on by other great leaders. i believe deeply in the tradition of strong, bipartisan national security leadership. you, mr. chairman, and you senator mccain, have carried on that tradition and i thank you for that. this is a time of historic change. unlike the cold war, when we had

one main adversary, we face a multitude of challenges. al qaeda and other global terrorist networks, in places like yemen, somalia, north africa, not just fataa in pakistan. dangerous enemy spread out across the world. we face insurgents and militants who cross borders to conduct attacks. we placed the proliferation of dangerous weapons in the hands of terrorists and in the hands of rogue nations. we face cyber attackers, a whole new arena of warfare that can take last not only now but in the future. that is something we have to pay attention to. we face the challenge of rising and changing powers, in nations in turmoil particularly in the middle east undergoing enormous

political transformation. we are no longer in the cold war. this is more like a blizzard war. it is a blizzard of challenges that draws speed and intensity from terrorism, from rapidly developing technologies and the rising number of powers in the world stage. despite the times we live in, there is reason to be confident. the operation that killed osama bin laden, in my view, has not only made clear to the world that we will do what we have to do but it is also -- it has also given us the greatest chance cents 9/11 to disrupt, dismantle, and to defeat al

qaeda. to do that, to be able to finish the job, we have got to keep our pressure up. if confirmed, my first task at dod will to ensure that we prevail in the conflicts we're engaged in. in afghanistan, we must continue to degrade the taliban. we got to trade security forces. we've got to help the government take ownership of their country so that they can govern and protect their country. in iraq, we must assure that iraqi military and security forces are prepared to safeguard their nation. so that it can become a stable democracy in a very important region of the world. as we do that, i am very aware that we must be highly disciplined in how we spend the

taxpayers' precious resources. this committee well knows that the days of large growth, on limited defense budgets are over. our challenge will be to design budgets that eliminate wasteful and duplicative spending. while protecting the core elements that we absolutely need for our nation's defense. i do not believe, based on my long experience in government and working with budgets, that we have to choose between strong fiscal discipline and a strong national defense. i don't deny that there will be tough decisions that have to be made and tough choices that have to be made. we owe to our citizens to provide both strong fiscal discipline and a strong national defense. finally and most importantly, it

is the job of secretary of defense to be a tireless advocate for our troops and for their families. it is their sacrifice and their dedication that have earned the respect of a grateful nation and inspired a new generation to volunteer to wear the uniform of our country. they put their lives on the line to fight for america. i will just as surely fight for them and for the families that support and sustain them. as director of the cia, i had no more solemn duty than sending young people into harm's way with their lives on the line. after we lost seven of our colleagues in afghanistan in december of 2009, i had to do what my colleagues in the military do all too often --

visit the wounded at bethesda, attend the ramp ceremony at dover, offer a prayer at the site of an arlington cemetery graveside. a patriot who left this world to yawn. not one day will pass where i don't think of the brave souls who have fought and died and those who fight today for our freedom. as secretary gates emphasized in his last trip to the troops, there will always be, in my thoughts, and prayer. if confirmed, i pledge to you that i will always keep our troops for must in my mind and i will be a careful and accountable steward of our nation's precious resources and that we will have the strongest national defense in the world and that you will always have my best and most candid advice and

that i will always, always seek yours. as you know, i am the son of italian immigrants. my father used to say to me -- i -- that to be free, we have to be secure. that is the pledge that i make to you. i will do everything i can to keep america secure so that it can be free. i will do that >> coming up at 2 p.m., a hearing on the efficiency of property use. we will have that live when it

gavels in. until then, a segment of "washington journal." is one of the ideas anin " the wall street journal." the piece by neil king says that for months now the governor has told potential donors and potential higher ups he has no interest in running for the white house for 2012, but over the past two weeks political advisor say he has changed h tune on a possible presidential campaign.

there is a lot more here in this piece. we will go through them for you. first call this morning on thought the president perry kidding -- ken mr. perry going into the presidential race. caller: think we all need to focus on the last governor of texas who ran for president and became president unfortunately, and that will be a guide for the current governor ofexas.

host: what is your thinking in linking one with the other. they are to separate men, no? caller: it is true. i did not think too highly of president bush, and i do not think too highly of gov. perry. >host: let's go now to bobbie. caller: i am just a static here. ep, but thisa bad ra is great. he is a decorated air force pilot veteran. he is extraordinarily good family man. texas has a booming economy. this is the greatest news i have had all week. host: for those who do not know him, you laid out a little bit of the biography, but what is your sense if he is warming to this idea, what do you to think

will make him want to run ultimately? what are you looking for? caller: i think first and foremost he smells blood metaphorically. he smells weakness in the obama administration, and he sees us in wars, economic crisis, weak, inexperienced man wanderingn the office of presidency, and he knows that as chief executive and a decorated air force pilot he should get in and lead this nation. >host: you obviously are supporting the president, but can you tell us if the is a knock on his record? caller: the only been one could say is the classic weakness of his strength. he tells it like it is. he is a classic straight shooter. he is not a mitt romney wabble

politician. he is a hard-nose fighter, and i am looking forward to this. host: one more call, and then we will go back to the article. lou on the republican line. what is your reaction this morning? morning? caller: i am ok with rick perry boating for president. it seems like too many people in america keep lookingo the government to fix things. the government policy since jimmy carter when he started the and reinvestment act and bill clinton fine-tuned it, everything the government sticks their nose and becomes a disaster.

host: we will move from connecticut. more of your calls in the second. want to remind you you can send in your tweets this thursday morning and every morning. we will get some of those streets on the air as well. back to this piece by milking. -- by neil king.

host: bill, a democrat, good morning. caller: good morning. that is a interesting piece of propaganda here. did they get into the question what the debt is in texas? host: in these articles? i do not see anything here, but why you bring it up. caller: because it is enormous,

and that is why they did not bring it up. it is qte large, and we do not need this guy. in he wants to succeed from the union, and then he wants to become the president? it is ridiculous. host: let's here from arkansas where alices on the line for republicans. what do you make of this? caller: i am a republican, but i would never vote for rick perry. he puts more people in the electric chair in the state of texas than any other state of the union. i think he is the worst choice all the candidates talking about running. i would vote for sarah palin before i would vote for rick perry. caller: good morning. if you want another tom delay who is now in prison, get this guy in office. come you say

that? caller: well, he does not like children to well. the powerless and the poor lose. what i have to tell everyone is there is a lady by the name of she is the oneois, who back the lawsuit that will clear the supreme court's, that made the supreme court allow corporations to get candidates as much money as they want, and the're throwing money at the republican party like crazy. host: we are reading about rick perry this morning. they say that the governor, who is 61 years old, is making a number of national appearances

this month, including an address this week and an annual dinner of the gop. last week he announced an august summit in houston and invited all the nation's governors to attend. he described the event as a day -- a week of prayer and fasting. -- he described the event as a day of prayer and fasting. >> we are taking you live now to a hearing on the efficiency of federal property use. tom carper from the delaware, the senator who heads the governmental affairs subcommittee, on what to do with unused federal property. live coverage here on c-span

.ues >> good afternoon, one and all. i am happy to welcome you to hearing. as it turns out, we have the votes starting at 2:15, i think senator brown is going to sit back and a few minutes and vote, and he will come back and chair the hearing until i get back and we won't waste your time and get this show on the road. today we will examine the challenges that our federal government faces in managing our property, the property of the american people.

we will also discuss the president's proposal to address some of these challenges, but the administration is calling the civilian property realignment board. there is general consensus that the federal government has to get smarter about the way we manage our buildings and lands, and with concerns over the implications for our deficit, eliminating waste and achieving cost savings in this area must remain a priority. between 2001 and 2009, we have as much debt as we did in the first 208 years of our nation's history. last year we read about me be the largest budget deficit in our nation's history -- we ran up may be the largest budget deficit in our nation's history. we are facing an ocean of red as far as the eye can see. a wide variety of ideas has been put forward as to how to

begin whittling down our debt. last fall, the bipartisan deficit commission appointed by president obama provided us with the road map to reduce the federal deficit over the next decade by roughly $4 trillion. a number of the steps we would need to take to accomplish this goal will likely be painful. many americans believe that those of us in washington are incapable of taking these steps. that we cannot do what we were sent to do, to effectively manage the tax dollars they sent to us. the look of the poor management across government and the question whether the culture here is broken. i don't blame them for being skeptical. we need to establish a different kind of culture in washington when it comes to spending. we need to establish what i call

a culture of thrift. that involves looking at every nook and cranny up federal spending, domestic defense, entitlement programs, along with tax expenditures, asking this simple question -- is it possible to get better results for less money, or at least for the same amount of money? when it comes to federal property management, it is clear to me and others that we can get better results and save money. federal property management is on the government accountability of this's i risk list since january 2003, in part due to the number of underutilized and vacant facilities held by federal agencies. the most recent data show that federal agencies possess more than 25,000 under-utilized buildings totaling more than 340 million square feet of space. that is about the size of delaware.

i exaggerate, but it is a lot of space. it cost $1.7 billion annually to secure and maintain. just last month, the administration released a list of 14,000 property assets identified as excess, meaning they should be disposed of. in addition, the likely over- leasing since 2008 -- the general services administration has leased more property than downs, even though owning a federal building is often more cost-effective way of meeting an agency's long-term needs. fortunately, but congress and the obama administration are united in the commitment to address this issue. in june 2010, president obama issued a memorandum ordering agencies to more stiffly dispose of a needed property. he put into place a goal of achieving savings and property sales and other disposable actions by the end of the fiscal

year 2012. in addition, the president's budget involves a recommendation to form what the administration calls its civilian property realignment board, whose purpose would be to review the government's property portfolio and dispose of those deemed excess an expedited manner. this is a proposal that my colleagues and i on the homeland security government affairs committee still need to spend time examining, but i am pleased that the president has put this suggestion comes something aggressive, on the table. clearly, momentum is building to address a widely recognized problem not out yet in our zeal to say, we must be intelligent -- a widely recognized problem. yet in our zeal to save, we must be intelligent in our approach. we have an opportunity to do this right and change the way the government manages hundreds of billions of dollars worth of assets. the president's proposal may be the right approach, it may not

be. it does, however, hold some promise. the agency shouldn't be waiting for a civilian brac to solve the problem in the meanwhile, a managing properties. in an era of the shrinking budgets and scarce resources, it is critical that agencies come up with innovative property management tools to expeditiously dispose of assets that they no longer need and take better care of those that they do need. our government has many and to utilize and vacant properties that cost billions of dollars each year -- many and to utilize and vacant properties that cost billions of dollars to maintain each year. we pay for utilities for many of those properties. despite efforts to reduce its inventory, will double obstacles remain that a new quick and easy -- multiple obstacles remain that include a quick and easy solutions. i look forward to hearing from the witnesses today as you share your thoughts on the plan and

share with our colleagues in your insights on this issue so that we can afford on a more difficult work that lies ahead. senator brown. >> thank you for holding this hearing. i enjoyed our time together and learning about where the waste and inefficiency is i commend the president for putting forward a plan on how to deal with the underutilized properties, which cost us billions a year at the weekend using in other types of programs are putting back to paying down our debt is that. i will submit a statement for the wreckage -- paying down our deficit. i will submit a statement for the record, and i look for to witness testimony as well. >> let me say to our staff, a democrat rabat again, thank you for helping us prepare for this hearing -- democrat and republican, thank you for helping us prepare for this hearing. our first witness is someone who need little introduction here he

served on this side of the dais many times, senator alan dixon. i was serving in the house and we had a fair amount of overlap. senator dixon was a member of the committee on arms services, the committee on banking, housing, and urban affairs, where i used to serve as well, and the committee on small business. since retiring from the senate, he has continued to demonstrate his commitment to public service by serving as the chairman of the defense base closure and realignment commission in 1994 and 1995. he is currently senior counsel at an international law firm. senator, welcome. it is great to see you. mr. david -- is it baxa? -- is president and chief executive officer of vista technology services, inc., which supports

large organizations getting the most out of their property asset portfolio. he has more than doubled the size of vista since 2003. previously, mr. baxa spent more than half of his career as general manager for a team providing support for every defense base realignment and closure since 1988. you worked a lot with senator dixon in the mid-1990's. welcome. tim ford is chief executive officer of the association of defense communities, which has been credited with helping guide hundreds of its members through brac 2005. mr. ford is a nationally recognized expert on the impact of base closure, but base redevelopment, and community partnership. previously, he was executive broken up in new york city employment and training collision, -- executive director of the new york city employment

and training coalition. nice to see you. our fourth witness is a person whose last name has never been correctly pronounced. i am going to try to do it. i asked my staff, whenever we have a tough name is bell, i ask them to spell it out phonetically, and we will see how well i do and how well they do. foscarinis? ok, good, thank you. maria foscarinis is executive director of the national law center on homelessness and poverty. she is the founder of the said it has advocated for solutions for homelessness since 1985. ms. foscarinis is the primary architect of the homeless assistance act. that was the first major act of the federal legislation passed addressing homelessness. she led successful litigation securing legal rights for the

homeless and she is an internationally known expert. what we go ahead and begin your testimony? we ask that you keep your testimony to fight minutes or so -- five heads are so. we will renew in. -- five minutes or so. we will rein at you in. does the boats start at 2:15? if you want to do that -- i will -- we will be in good shape. feel free to summarize as you wish. >> thank you very much, mr. chairman and senator brownback. it is delightful to be here today -- and senator brown. it is delightful to be here today. my full statement is in the record. as chairman of the 1995 brac -- that year, my good friend, senator sam nunn, chairman of

the armed services committee, recommended me to president clinton to be the chairman of brac and talked me into it. i have come to forgive them both, mr. chairman, for that experience. but i can testify on the basis of that experience that brac was an immense success, billions and billions and billions of dollars saved by what we did. i am simply going to close by saying my experience is outlined in the record for you. the brac experience shows that some form of government assistance to communities affected by major closures or realignments was essential both brothers in communities to overcome the economic and -- to settle both for losing communities to overcome the economic impact and for gaining communities of port local infrastructure and new activities. i know that under the administration's proposal, the civilian party realignment board. -- board's meetings are not open

to the public and the ranking member of the oversight committees can sit in on all meetings of the board. i respectfully suggest that the subcommittee should take a close look at these aspects of the administration's proposals in light of my brac experience. the value of transparency, the value of openness, the value of opportunities for people to be heard is terribly important, and the brac experience shows that military base closures can be done in a fair, open, and compassionate manner, and the communities affected can recover economically. i believe that will be true of your experience with this legislation if you are prepared to protect transparency. i thank the chair. >> to your point, i spent a

couple of days last week in california, where, as you know, anmany of the bases, including where i was unable flight officer, had been closed and transition and other activities, and for the most part, very successfully, so i think you are absolutely right. >> in my own state of illinois, mr. chairman, they closed to new air force base near the university of illinois. everybody thought that would be the ruination of this community in central illinois. as a matter of fact, that has become a tremendous industrial park and has contributed a lot of good economically to the community. they closed at four in northern illinois, and that became one of the most beautiful residential areas of lake michigan you could

ask to see. i definitely believe that the economic results of this will be very beneficial to the government and the people of the united states. >> staff often either meet " all but einstein, who said, "-- he ar me quote albert einstein, who said, "enough diversity lies opportunity." you have shown it in the work you have that. -- you have done. >> we appreciate your invitation to share our views. our views, and my personal views, are found by nearly 25 years of experience, through five rounds starting in 1988. our support to dvd includes development of tools and space requirements in concert with -- to dod includes development of tools and space requirement and a concert with missions. these proven methodologies

continue to result in major savings and cost avoidances to dot. we recently helped the army avoid more than half a billion dollars in new costs for medical and parking facilities. we examine other government agency practices, applicable industry standards, analogous private sector benchmarks to help the army adopted new criteria. the result was cost avoidance of $220 million for medical facilities, $310 million for parking. the result in elimination of these 500 square feet of medical and 8 million square yards of parking allowed the army to avoid tens of millions of dollars of additional costs in operation and maintenance of those facilities. this is the kind of thinking that should take place as civilian agencies chase away they view their need for property. i would caution the congress not to view the current initiative as a fire sale of assets for short-term gain. rather, it should be viewed as

an opportunity to affect permanent changes in the federal real property asset management practices. the most substantial benefit to the taxpayer will come through reduced year over year sustain the costs for facilities we no longer need. we should not miss an extraordinary opportunity to help federal asset management professionals drive significant costs out of the system. my written statement offers several suggestions for the subcommittee's considerations. i would like to highlight six of them here. first, the to confirm the commission should operate no less than eight years. it will likely take two or three rounds to achieve maximum benefits were agencies to get in sync with the process prescribed by the commission, improvements in agency asset management business practices become institutionalized, and congress in taxpayer expectations are met

with regard to assets to proceed out property management cost avoidances, and other savings. second, the commissions development standards for development a standards or best practices and criteria is one of the keys to this process. the commission should avoid a one-size-fits-all criteria, but downright, standard benchmarks can lead to the integration of proved business methodologies across all agencies, but this would be ensured that realignment is an ongoing activity. agencies should regularly evaluate their real property holdings and configurations as the missions and all -- missions evolve and workplace realities change. third, steps should be taken to ensure that agencies at a central data -- have essential data for how it is being utilized, how it compares to

what is needed to support essential to soon and programs. without these important data points, decision makers will have diminished ability to effectively realign or improved management of their real property assets. fourth, agencies should be given sufficient time to work through the body issues associated -- the thorny issues associated with making recommendations to the commission. it will make them rethink their space requirements. based on years of practical experience, this undertaking requires sufficient time to promote the best choices. fifth, congress should consider requiring a departments and agencies to prepare and published work force projections and planning criteria in the federal register. brac required dod to publish criteria for determining closure and realignment candidacy, establish consistency and recommendations in the way relationship to develop, and would be helpful to civilian

partners and agencies as well. finally, congress should consider the development of an rtc-type entity to take possession of all designated properties and dispose of them in a way that maximizes returns. this would reduce the disposal burdens on agencies and promote unbundling of assets across agencies as part of the process. wild gsa is still, the customer- focused landlord, and does a good job there, its experience in bundling assets and maximizing returns is more limited. and rtc-type entity could more effectively engage private development interest to effectively address such disposal innovations. i applaud your efforts to address this need. congress should take care to design a process so that the taxpayer realizes the greatest benefit possible. >> thanks, mr. baxa. mr. ford, please proceed. if we get five minutes into your testimony, i want you may be

adjourned or at least recess. -- i will have to maybe a church or at least recess. -- maybe adjourn or at least recess. 35 years, we and the agency representing the brac process. we represent committees dealing with the impact of brac. 3 past rows and our current involvement, we bring the experience with working with the federal government, state government, and the private sector on the impact of the federal property transfer. that this committee that considers legislation, we hope they learn from the brac process and that the role of communities and states should be given consideration. they and an essential part of the brac process since their inception in the early 1980's. one of the reasons we ended up with brac was to meet the concerns of committees and

states regarding the transparency of the overall process. while this isn't related t brac c-span.or-- while decisions relo brac have been challenging, the process is viable because of the independence of the process, transparency, procedures for engaging in committees and states from the beginning through implementation of decisions. as currently written, at the administration's proposal risks making similar mistakes in the 1988 brac round, i will speak to recommendations that would improve the overall approach. it is critical to recognize that committees and states will be impacted, and they will be involved in the decisions regarding the federal footprint in their area. potential negative impact could range from the elimination of jobs, the movement of jobs, and implications of property redevelopment. at the same time, this process to have positive outcomes for committees and states. working with the local government and the private sector, there's opportunities to maximize the efficiency of the

federal footprint and enhance the local tax base. engage in communities it through the entire process may add complexity, but we think it is essential to the success of the process now, we see pre critical elements to rebuilding his impeachment. first, transparency. -- to rebuilding this engagement. first, transparency. the independent nature of the decisions through the commission in the brac process has been critical to maintaining the support and involvement of communities. second, institutionalizing community involvement, given the length the tproposed process, methods for institutionalizing it all and need to be part of this legislation. first, to facilitate coordination across the state, the board should be required to establish regional state liaisons' that would manage interaction with affected areas.

second, in the areas where significant interactions are taking place, the board should have the option to create federal joint agency comprised of federal and local members in the impacted areas. this entity would provide a mechanism for ensuring that local tools such as zoning and land use entitlements are pleased to maximize the return to the federal government. a similar model has been a very important in the successful transfer of property in military base closure. third, given the ongoing budget discussion, there is a high interest in selling and needed at all property as an way to generate revenue. while this -- what it can be an option in some situations where market conditions are favorable, our experience in disposing of their party in brac has shown that cost avoidance, rather than generating revenue through land sales, is the more realistic goal. a chance to focus brac-property transferred have not been successful, and in many

instances, the value of the property decrease because the extra costs to the government while they tried to maximize value in the marketplace. another issue for property disposal involved the transfer of parcels to state and local entities for a public benefit. communities need to have a strong voice in this process and in some cases receive federal property at little or no cost if it meets local meats. community involvement needs to be extended to it screening of property for homeless needs. in most instances, community and state leaders will understand their communities' needs and the best accommodate the needs of the homeless. finally, while there is value in easing existing disposal authority's within federal agencies, most agencies are not set it to manage significant property disposal actions. centralizing the disposal authority into one agency without real-estate a party expertise is essential. -- with real estate and property expertise is essential. communities and states can play

an essential role in the disposal effort, creating a process that maintain the independence and transparency while engaging communities will be key for implementing this process. at the decision is made, the process must focus on a partner in with the local entities to expedite the process. brac has taught us that, while complex, this process can create mutual benefits for all involved. we appreciate the opportunity to testify today. >> great, thank you very much. ms. foscarinis. >> thank you very much, et chairman carper, ranking member brown. i appreciate the opportunity to testify today. i and the executive director of the national law center on homelessness and poverty. our mission is to serve at as the leaders of the nationwide effort to end homelessness in america. the numbers have increased as a result of the recession and

foreclosure crisis. in fact, the u.s. conference of mayors estimated a 9% increase in family homelessness in 2010 alone over 70% of the officials surveyed for the report expected family and child homelessness to increase further during the coming year. the united states government has committed itself to ending homelessness. just a year ago, the u.s. interagency council on homelessness released "opening doors, the federal strategic plans the two end homelessness." the central belief is that no one should experience homelessness, no one should be without a safe, stable place to call all bahome. recently, our government stated that homelessness implicates our human rights commitment and renewed a pledge to end homelessness. congress has made similar

commitments, most recently in act of 2009 that established a federal goal of an ensuring that families that become homeless return dousing within 30 days. -- return to housing within 30 days. you might wonder what this has to do with federal surplus property. in 1987, title 5 of an act but in place a set of important protections for homeless people. under the law, homeless service providers have the right of first refusal to require federal property no longer needed by the government to use it for rigidly -- urgent needs, such as housing and services for people who are homeless. more than 2.4 million americans benefit each year as a result of this provision in the law. formally vacant federal properties now provide shelter, transitional and permanent housing, case management, food pantries, job training, that the hall and substance abuse treatment, and child care.

just in the states represented by members of this committee, it transfers have been accepted in arkansas, alaska, and montana. massachusetts is also on that list. not sure why i didn't include it. as congress reviews efforts by federal agencies to dispose of surplus properties, all most people must be protected. i know the committee is very concerned with cost reduction, and i want to note that ending homelessness is not only the right thing to do, but also, the fiscally responsible thing to do. it is more costly to allow homelessness to continue in our country than 2 end 8, entitled 5 is one of the important federal programs that can help us do that. i want to make three points that are operated in our written testimony. the title five process is not

incause of inefficiencies an the federal process, and it should be protected and not eliminated or drastically altered as a result of tort reform. the process takes a mere matter of months, and once complete, the government meet move forward with any alternative means of disposal. we know that i nearly all of the 14,000 properties on the list of existing -- on the list of properties that have been screened a title 5, the review has been completed and they are awaiting transfer. tunnel 5 is not the cause of all the. -- title fight is not cause of the hold up. title fight it should not be altered to address the inefficiency. -- title 5 should not be altered to address the inefficiency. while we reject the could

contention that title 5 is causing delays, we agree with increasing efficiency of the process and we are happy to work with the committee to do that. we believe that more federal properties could be made available that would be useful in providing housing for homeless people and thus saving the pro-government resources. -- saving the federal government resources. we understand the committee is considering a legislative proposal put forth by ellen the that would replace title 5 by brac-like process. we cannot support the proposal in its current form. the protections in brac are not in place in this proposal. we cannot support the proposal without those protections. those protections include representation of homeless people on the commission that would reduce property and it would include a right to have

representatives or for property to be screened on behalf of homeless people. this is not the time, as a whole list as it rises across the country -- as homelessness continues to rise across the country, to take away an important federal program that has been in place almost 25 years. this is a time for the federal government to be looking at increasing ways that it can assist in addressing the needs of homeless people. as i said before, this is not only the right thing to do, is also the cost effective thing to do, because thomas is not all the costs lights come across resources. -- because homelessness not only cost lives, it costs resources. i thank you very much for the opportunity to testify, and i would be glad to respond to questions. >> thank you very much. obviously, with senator begich here, and senator coburn. i will start with seven-minute

ads and alternate until the jar gets here. -- seven-minute rounds an alternate until the check gets here. how would the creation of a board instead of a commission impede the independence of the president's proposed process, if at all? >> i am not an expert on all the debate is between the board and commission. . and 8 brac, presidentially appointed -- the experience within brac, a presidentially appointed, can establish its own transparency requirements. is in a process that has been successful for brac. >> during your experience with the brac process, any mistakes that you encountered that we should avoid in administering its civilian property realignment proposal? >> well, i think some other things that probably i would call attention to is there were instances where there could have

been more done to help localities deal with the disclosures. i am not sure that the same thing applies to the civilian brac, since we are not looking was likely at shutting down -- most likely at shutting down small cities like we were with defense installations. there are different parameters that come into play that need to be recognized. >> mr. ford, back to you. there are many stickle the interests involved in the disposal of the federal property -- many as stakeholder interests involved in the disposal of the federal property. parochial interests, obviously, protecting or eliminating or dealing with these types of properties. you have any suggestions on how to ensure we have an efficient process while also considering stakeholder interests? >> it is establishing a process on the beginning so you are engaging communities and states

and regions in the decisionmaking process. some of these early attempts at disclosure or down from a washington perspective, and they started making decisions and communities and states fought back and that is why we ended out with the brac as a more transparent process. and establishing assistant -- establishing a system to engage communities add complexity to it, but it could make the whole process move more smoothly. >> on the 14,000 properties you indicated have little market value, what types of properties are we talking about? are we talking about undevelopable plots of land, buildings? >> when you that the list put out by zero n d at this point in time, you can -- see that ou -- out by omd at this point in

time, you can see that there are various structures. some of them are scattered in remote areas. there are federal enclaves that could not reasonably be cordoned off -- >> access issues -- we are actually spending money maintaining these buildings. >> exactly. the real savings are what comes down the road no. >> with the recommendations also be to tear the building down -- >> in some cases that is the logical approach. >> what has taken so long up to this point? it seems like we're spending 1 billion -- keeping some of these parties maintain, yet they have no fair market value -- keeping some of these properties maintain, yet have no fair market value. >> there is no strong impetus to dispose, in the past -- i think

that may have slowed things down. there are environmental considerations. i don't have the full view of all of his properties. but there is certainly a number of different hurdles that have to be overcome in the disposal process. >> i will wrap up with ms. foscarinis. you indicated that you are not in favor of the president's proposal, and you have suggestions to streamline the process. what are your suggestions? turn your mic on. >> first of all, our first boy is don't alter title 5, because title 5 is not the cause of the problem -- >> no, but what do we do about those 14,000 properties? >> i can address the issue of title 5. with regard to title 5, there could be better targeting some of the properties that could be

of use to homeless people are targeted and made available for that used to serve at the providers. . right now there is all kinds of properties that go through the title 5 process that are not have any practical use, including national security properties, all kinds of properties that could not conceivably be used to house anybody. those don't need to go through the title 5 process. there could be better outreach so that service providers become a better aware and are assisted in the application process. that would also speeded up. -- speed it up. >> i will turn it back over to the chairman. >> how did they do answering those questions? >> very well. >> senator begich, go ahead. >> i am listening to the

testimony in the ideas. i come from the city where, for 20-some years, we had a surplus properties. we put them into what we call the heritage line make run by an independent board, appointed by the mayor under republican and democratic mayors. they hold land in trust, and that they released the land and sell it off, or they look for public purpose. i am listening to your concerns, because we at the same concerns. we have a high homeless population. we also recognize that every property as eliot. there is no property that doesn't have a value -- every property has a value. there's no party that doesn't have a value. they take it and develop it into some away, and it is amazing what they will do. i am looking at this from a very simplistic idea, that taking all this surplus property -- i do think it should be a board that disposes of this. i don't know how long it would take, and i don't mean dispose

and attempted just selling, either. a combination of things here. if you could respond, why not -- brac to me is a whole different process. we had to deal with that in anchorage. it is like towns disappearing, commercials that is disappearing. these are buildings and facilities that we drive by and go, "what is that, who owns that?" and then there is a window broken, and you go, "oh, it must be a government property." why not just take all these properties, 14,000, and you can , new law,dtle 5 whenever it occurs over the years. one goal is to look at these properties for public purpose. the properties that have no public purpose, those that need to be inventoried, valued, or

put on the market to sell, and then there is usually this third category, although i'm not sure yet, there may be, there may not be, more analysis has to be done. the board continually looks at the inventory, the inventory that the federal government does go up and down depending on what is going on in different industries, and we are right now consolidating the homeland security properties into one building. i don't know that they are all these, maybe they are. why not just keep it simple, that is what we do, keep the concept of title 5 in play, but get rid of some of the properties you i identify? someone will buy the airfield. who knows what they will do with it, but they will buy it. i'm afraid to ask for verbal comments -- if you are nodding

your head yes, it to me it seems so logical that the brac in this situation is not what it is about. it may not be used for u.s. federal government purposes and more, but it may have other purposes. >> our first goal would be to keep title 5 separate -- >> i've heard that, no more ra -- i've heard that, don't worry. >> found a point of view of the planning people, or not in a position of power at all in the process, is to keep title 5 separate and address the reforms post-title5. >> we used to do a lot of a partnership with habitat for humanity for that purpose. they would inventory the property, and it was stopped they could use, and there was something with it and it was never possible. the board would debate on the

best value for the community and social services end. . >> we are calling it a brac process, but the property realign a process with the commission puts special impetus on getting the job done. having that in light brought -- having that in play provides, if you will, a chance for decisions to be made that may be politically difficult to make outside of that construct. i would suggest that something along the lines of brac commission, and i do favor a commission because i thing that has a wider acceptance, would help us to get to the endgame much more rapidly than we would otherwise. >> and i think that there is -- in discussions about this process, there has been some assumption that the commission could look beyond the 15,000

properties on the surplus list to look at how to create efficiencies across the federal footprint, and that agencies have not put on some of the properties that the commission might consider. this could have a broader impact. the history of brac, especially in the last round, where brac used to be about closing bases -- in the last round it became about transformation. again, brac is the decision making process. at least it is a process that has shown the ability to deal with local politics and the federal-level politics no. >> i agree with you that it is semantics, whatever you call it, a mechanism. maybe i am not naive about this, but the political controversy of getting rid of properties that no one uses, at least as a mayor, someone who was mayor for five years, 10 years on the city

council, is not really controversial. the controversy occur is that you don't do it, and it becomes dilapidated, falling apart, deteriorating, the neighborhoods get upset because you have not done anything. brac is so much -- i understand the politics of brac. that is a nightmare, which bases should be closed, which it should not be closed, all the businesses affected. but when you have surplus properties, maybe i am naive, but i don't see the controversy even comparable to brac. i understand brac is a process, but just some thoughts. i think there is a way to do this very easily, and i hope we don't over think this, because it is a way to make this happen for the benefit of both ends at the same time meet our goal, which is that we know what these properties if there was no public purpose -- from the purpose -- we don't want these properties if there is no public

purpose from the federal government side. you are going to produce economic development which produces new revenue streams for those communities, and it just dominoes. what i have learned a run this place is that sometimes over think these issues to the point where it is not that complicated, i would just say from a local government perspective, we have done this -- mayors have done this a lot around the country and it seems to work. use a realignment, and the what you are doing is reassessing the assets of the federal government. it is not realizing it, just reassessing that they don't need it anymore. we pull back and move it over here. i don't want us to get complicated. that is all. i am all for this. mr. coburn and i have talked about it. mr. chairman, we have talked about 8. it is the right movement to do. this is not make it too complicated or it will never

happen, we will have a 14 a dozen properties back up. >> senator begich, are you suggesting be invoked the kiss principle, keep it simple, stupid? >> keep it simple, senate. [laughter] >> thank you for your work, appreciate you being here today. thank you. i was going to reply di senator begich that it is that simple because you have every roadblock in the world. we have -- $1.2 billion does not come close to the cost of maintaining those 17,000. we have billions of dollars. the question i would ask ms. foscarinis, should we use cost- benefit analysis? we have title 5 here,, we can

sell for 5 million, and the whole list and use it, -- and yet it's not -- the homeless can use it, and yet is not -- what we do that instead of saying that we will do this because we have title 5 blocking the good sale of the building for a real purpose when we could take the profits of that and put it for the homeless? why would we not want to do that? >> we to do that sometimes -- >> most of the time we don't do that, and most of the time it becomes an inhibitory factor for us to get rid of buildings. it is not just title 5. tribes in my state -- when we at $14 trillion worth of debt and we are drowning in debt, and we are saying instead of making smart moves, the right of proper economic move, we are going to give it the ability to the estate by law because we have to come when in fact what we should

be doing is selling at lowering the debt, and that we have an obligation to take care of on this, and your account says that title5 -- touched title 5, we can do it in a way that makes it better. if we can help the homeless, we ought to do it in the most cost- effective way. we have a bureaucracy lined up that says that you cannot get rid of any real property. i been working on this for 13 years to try to get some movements. every time we get close to a movement, we get blocked. the number one thing it blocks is title 5. people get afraid rather than saying we will make a commitment to the homeless. what we have heard is that you cannot change this. what we need to do is make a commitment to the homeless, but also to the smart thing economically for the country,

and that is why i am supportive of the idea behind this, because i think it will do it. >> senator coburn, let -- i know you have been a working on this issue for many years, as have we. title 5 is not problem here -- >> i disagree. i have looked at it, is a problem. >> the reason the 14,000 properties are languishing -- >> no, i am not talking about that. title 5 is a problem because we inappropriately match properties to the benefit of title 5. what we should say this here is how much property we have come here is our commit to the homeless, forget all this, and let that happen. we are making something very difficult, and every time we try to move anything on this -- you

are very effective, because you have dead stopped every movement at party reform in congress the last -- 13 at property reform in congress the last 13 years -- >> i guess i should take that as a complement. >> you are very effective. when you're adamant statement is that you cannot touch title 5, what you are saying is that there's not another way to care for the homeless in the country except the way we are doing it today, and i reject that. >> senator coburn, i think you might have missed my statement, when i said that we are happy to work with the committee to reform title 5 to make it better. we are open to reforms that will streamline it and make it work better -- >> you are still stuck on a title 5. why not just a commitment to the homeless in this country at separate from title 5.

>> it is not just about title 5, you are absolutely right. but in many communities, an absence of a piece of property is the key factor -- >> take the money, a separate real property from homelessness, commit a portion of the money to homelessness, create an organization where you do the ideal thing for the homeless rather than less than ideal. that is what i am saying. >> i understand. i think we need to do both. there needs to be money, a title like to insert an important role. they're only a few properties that go through title 5 4 homeless purposes, but those make a big difference. >> but every party that goes to the warehouse has to encounter title 5 to see if it is available. that is crazy.

>> that is why we do think that the process can be reformed. there are parties that have no conceivable use to homeless people -- there are properties that have no conceivable use to homeless people. i believe we propose and work with this committee on sensible reforms that would target properties. >> that was not the response when we had a bill on the floor. i want to follow up a little bit with senator begich. i think we can use a lot of his experience. first of all, i think he knows real-estate. it is like an old haberdasher told me, you never short sell the city, you keep it on the rack because somebody is going to come and buy it. he may not get as much as you wanted, but you can always sell it. i think senator carper's idea, this idea of getting our hands around property -- what i want to ask you is we have seen because of our budget process that we have to account for the

cost of a new facility under the budget guidelines in the year we take position. consequently, what we have seen is that we have gone from buying properties to leasing properties. quite frankly, that costs the federal government a whole lot more money. do you have any comments on the stupidity -- those are my words -- of the budget process that forces us into leasing properties at a great deal more expensive than we can afford right now? >> i would simply say, if i may, senator coburn, that it just doesn't seem to make reasonable censense that you cannot count e total cost of a lease. if i were leasing on my own for my own personal purposes, i with the that and count that as part of the cost of -- i would look and count as part of the cost of doing the particular -- >> the net cost to you over --

>> over the expected life -- >> least to purchasing ability. >> exactly. we have worked with elements of the defense department to see where they can take things out of lease and into government- owned facilities. we have driven out a lot of the cost for the army, for example, by doing that. >> some of the smaller agencies don't have that option, because if we buy the property, we charge it to them in the year we buy it, rather than amortize it over the life of the building. >> no specific comments. his expertise is probably more clear in this area. >> thank you, mr. chairman. i went over, i apologize. >> quite all right. i want to hit rewind, the discussion anbetween ms.

foscarinis and senator coburn. share your wisdom with us, how we it end up with a better outcome. what advice would you have for us? >> every base closure community, every community impacted by brac, has to go through a process. i won't speak to all the technical changes that brac communities face, but what has always been important is maintaining the community role in that process. the communities are at the table trying to figure out what is in the best interest of their community. in the case of brac, all this providers are working with the redevelopment authority -- homeless providers are working with the redevelopment authority to make those decisions. it becomes not an abstract discussion of what is going to be good for the homeless, but fitting in with the overall concept of how to reuse the land. the biggest focus for brac communities is to get jobs back

in from the jobs they have lost. i think it is a much more comprehensive approach to it. while i cannot say it has been without challenges, because the redevelopment authority's and around the country will tell me that a create a lot of headaches, and has been a process that has at least allow them to move toward and has not been a huge stumbling block moving forward. >>-- i can only say that it is e more step in the process. i think what senator coburn has outlined seems to make sense, that we can accomplish the same end and not hold up the process of getting the most from those assets that we no longer need. >> ms. foscarinis, we have heard from agencies -- let me go back and recover some of this ground. property disposal has a lengthy screening process before property can be put on the market for sale.

let's just back up. explain to us, if you will, how does the mckinny screening process work? how does the agency determine if property is suitable for the homeless? how long does it take for property be to be transferred -- property to be transferred to a homeless service provider? >> properties are listed in the federal register. there is a 60-day period in which homeless service providers have first crack at the property. during that 60-day period, they can submit a letter of interest. if there is no interest, the property is free to be sold. 60 days. if there is a letter of interest submitted, there are 90 days for full application to be submitted. even the application is submitted and the process goes forward and is reviewed by hhs

and the property may or may not go to the service provider, or does not go forward and it is over and the property is free to be sold. it is a matter of months that the process goes through the title v screening process. >> what advice -- take off your hat, put on our hat. what might some ways to streamline the process? >> one way might be to target the properties. right now, there is a very, kind of broad-brush approach. basically, there are a lot of properties published as being suitable for use for homeless purposes under title v that really are not. there are national security properties, properties that are contaminated, not habitable, the air-strip example. an air strip that could not

conceivably be used by a homeless service provider. there could be a more targeted process that happens up front so fewer properties go through the process, but better properties, properties that are more likely to be usable for this purpose. we have made that recommendation. we have made that proposal. there could also be a greater effort -- or right now, there are often hold up in the application process -- hold-ups in the application process. hhs will often come back for additional information, which further holds up process. the application process itself could be streamlined or more assistance could be offered. those are some of the ways that i think the process could work better on serving everybody's interests. it is not in our interest to hold up lots of property that is of no possible use to anyone. our interest is simply taking

these resources, which are publicly forces -- public resources, which are valuable to the provider -- getting realistic is often the biggest barrier -- or real-estate is often the biggest barrier. >> in dover, delaware, we have a huge air force base. we have huge airplanes. c5, one of the largest aircraft in the world. c17, another major airlifter in our armed services staff chudinov 5 miles away, we have the -- about 5 miles away, we have the dover air force base. it employs about 5000 people. it is our largest employer south of the canal. brac can be our friend. as it turns are, braque has --

brac has been our friend. it has been beneficial to us. we have a federal building about 5 miles away that is being moved -- emptied. congressman castle, congressman kearney -- they moved out more recently. the federal building sits on about -- on a piece of property about the size of a football field. the base itself is quite large, as you might imagine. the 5000 people who work at one, fewer than hundred -- 100 at the other. i have been through the brac as a congressman, governor, and senator. it seems that there are some real differences between disposing of dover air force base and the federal building.

let me as of each of you, what are some of the key differences between -- ask of each of you, are some of the key differences between the property realignment board and brac? what can be learned from those similarities and differences? >> if i might, senator, one of the key difference is, right off the top, the board versus commission. it seems that the commission structure has worked well in brac's in past. commissions tend to have some inherent in then, the ability for the legislative branch to recommend appointees -- in them, the ability for the legislative branch to recommend appointees. they seem to be more bipartisan in their structure. as a result, it tends to carry

more weight and be more credible than many boards have been in the past. that is certainly one key difference. the other difference is that we have a little bit different scenario in the fact that, with the civilian property realignment board or commission or act, you are talking about multiple, independent civilian agencies. omb is the most likely capstone that would provide some oversight to that. in the case of brac, you had the secretary of defense, who depended on the services in the defense agencies to make recommendations. then there was a certain normalization that took place at the osd level before that was,

in turn, submitted to the commission. i think there needs to be a step like that that is included in the civilian side. omb could possibly play that role, so that you have the same opportunity to look across the agencies that the recommendations that are being made, because there may be some opportunities to do some colocation, comminations that cross agencies that would be worthwhile for the garment to consider -- combinations across agencies, that would be worthwhile for the government to consider. >> d.o.d. started this process wanting to get rid of the property. they want to get rid of bases. congress has stopped them. the motivation is slightly different in starting this. i do not think a lot of agencies will necessarily put forward higher-volume pieces of property that could be consolidated --

higher-value pieces of property that could be consolidated or taken off of's the federal role -- taken off of the federal government's roll. you not necessarily have communities who will be posturing to try to save something -- you will not necessarily have communities who will be posturing to try to save something. it may be easier to try to sell a piece of property that the federal government owns. there is more opportunity to develop creative solutions to this at local level. it is a win-win for the community and for the federal government. another issue that crosses both is the issue of property disposal. we're still dealing with property disposals from 1988 brac grounds. we still have land that is not disposed. it isn't an easy process.

even the smallest pieces of property can be challenging. on the brac side, we only had to deal with street -- three services. i cannot imagine working with 16 or 20 different agencies trying to do disposal. it is important to consolidate the disposal of 40 into some sort of an entity that is able to move these properties quickly -- disposal authority into some sort of an entity that is able to move these properties quickly. of course, gsa as those bills. -- gsa has those skills. it is probably something that will take more analysis did figure out what makes sense. the focus on expertizing the transfer -- expediting the transfer as quickly as possible should be the goal. >> mr. ford ms. foscarinis --

ms. foscarinis, i'm sorry. >> from our perspective, the brac process is quite different from what is being proposed currently. it has provisions for the consideration of homeless people. it is written into the law that the needs of homeless members of a given community must be considered in disposing of the base property. representatives of homeless people must also be part of that process and hud must oversee the disposal of property in order to ensure that the needs of homeless people are dressed. that is very different. all of those protections are missing from the administration's current proposal. >> one more question. mr. baxa, you recommend that we

consider -- something i got to know well. you say we should consider this to help with the surplus. drill down on that idea. describe how that might be favored to a civilian brac process. >> if you look at what happened on the defense side, most of the agencies had to -- the services had to have their own offices to dispose of these. we do not want to try to recreate that in every land- holding agency in the federal government. we could create a situation where the various agencies might be bidding for a certain talent

against each other in order to staff a fairly sizable disposal activity. i would suggest that the resolution trust corp. enabled bringing in development interests and other professionals into an arena where they could begin to look at combining and bundling. if you had many properties in different cities around the country, it might be possible to bundle those and make it attractive to a particular business that needed to be located in all of those locations. having the wherewithal and the talent to be able to kind of put together those kinds of packages, i think could facilitate the disposal process and perhaps get a higher return for those properties than might

otherwise be the case. >> thank you. as anyone. add anything before we invite the next panel -- does anyone have anything they want to add before we invite the next panel? >> thank you for the opportunity. >> how long is it to submit questions? two weeks? some of our colleagues who are not here will have up to two weeks to submit questions. we ask that you would respond in a timely fashion. thank you.

>> [inaudible] we welcome all of you. our first witness is the honorable daniel werfel. it is a good thing we do not have to pay him on an appearance basis.

he works with and the office of management and budget. he is no stranger to our subcommittee or our committee. is responsible for coordinating -- he is responsible for coordinating omb efforts in this area. we have -- he went to both duke and chapel hill, and cornell -- three pretty good schools. robert peck serves as the commissioner for public building service. and he is responsible for over 300 million square feet of u.s.- owned space.

mr. james sullivan is the director of the office of asset enterprise management at the u.s. department of veterans affairs. he assumed this new leadership role in 2009 after serving as the deputy director since may come in 2002 -- may, 2002. he has over 25 years of experience, including the asset management. is that true? just checking. he plays a pivotal role in managing some of the largest properties in the federal government. mr. lepore is a director of defense debilities and management at -- defense capabilities and management at gao. mr. wise has a bachelor arts in

n m.a. he is twice a panther. mr. lepore directs audits and reviews. he holds a masters in public administration from suffolk university in boston. he also holds a degree from elmhurst -- amherst. who do you root for when the red sox play the yankees? senator.n easy call,

>> thank you. we'll ask you to take about five minutes to testify. if you go way over that, we will bring you in -- rein you in. your entire statements will be made part of the record. >> thank you for holding this hearing. given that our students are entered into the record, i thought i would use my few minutes -- are statements are entered into the record, i thought i would use my minutes to make some clarification after listening to the first panel. the president's panel is not entitled -- intended to overtake the entire process by which federal property is dealt with and disposed in the case of surplus assets. instead, what has happened over the course of time as we have about a weighted the real-estate within the federal government -- we have evaluated the real

estate within the federal government, we have identified some opportunities that require a different approach. senator coburn was discussing the fact that we often find roadblocks. we have a certain type of opportunity that usually and typically has a much higher- value proposition for the taxpayer in terms of savings. for the 14,000 assets that currently set as your boss, we have not hit those types of very challenging -- sit as surplus, we have not get those types of very challenging roadblocks. we do not think we need a brac- like process to deal with them. instead, as we work with federal agencies, as president obama directed us to do a better job on a realistic, we seek to tie the opportunities -- see two types of opportunities.

more short term that could take place under the current regulatory environment we have today -- we are pursuing those. it is a $3 billion goal. we're making good progress on that. beyond that, and at a much higher savings level, or the more challenging opportunities that we believe we need a different process to go after peter are two types of processes -- to go after. there are two types and processes. there are not thousand, but there are a number of them, of high-value assets that have a couple of things going on. it is not the highest and best use for the federal government to be sitting in that property at this time. might be fully utilized, but it does not need to be fully allies by the fully government in that space. by transferring or consolidating

-- fully utilized by the federal government in that space. by transferring or consolidating, it could be used more wisely. there might be assets with such a level of competing stakeholder interest in whether the federal government stays or goes, or what happens to that property after the federal government leaves, that those types of competing interests have created an under shot in the living goes forward. moving thosehoan inertia in forward. these assets are so high value. we want to break through and make progress. the other type of opportunities - the thousands of field offices that exist throughout the united states.

in some cases, every county has its own agency office, which no longer reflects the best way in which we can deliver benefits in a post-internet era. do we downsize that footprint? how do we start thinking about no longer having an office in every region? we have seen some of the competing stakeholder interest emerged. it is a very complex array of challenges in terms of getting from point a to point b in downsizing. when we talked agencies about this, we have often gotten a response that you need a brac- like process to make progress. that is how the idea was going bang. we will continue to carry on in the same way that -- was born. we will continue to carry on in the same way that senator begich mentioned.

for those tighter-value, tougher opportunities that end up being more transformational -- higher- value, tougher opportunities that end up being more transformational, we are open to a different approach. >> thank you for those comments. >> mr. peck, welcome. >> thank you, senator. [inaudible] i want to thank you and the committee for your interest, and also the members of the house who have moved some proposals. we are fully in support of the administration's proposal. at first, i would like to brag on gsa just a little bit. sometimes there is a sense that no government entity is thinking about real property management. >> you do not know how pleasant it is to hear it said like that. i'd like to brag.

>> we do manage 370 million square feet. >> this won't count against your time. [laughter] >> we do look at the inventory that gsa controls. we modernize where it makes sense. we get rid of them where it does not. in 2002, we disposed of more than 300 properties are valued at more than $300 million. that has eliminated almost $484 million in the future, anticipated repair needs. there is cost avoidance as well. at their risk of making the complicated -- the risk of making things complicated, some of the properties are listed as under-utilized. they are undergoing

renovation so they will be more you will at. -- more utilized. when we finish renovating, we will have three times the number of federal employees and will have avoided the least cost of $20 million per year. that is significant. aside from monitoring our own inventory, we have the job of disposing of assets that others do not need. we do believe we have the expertise and the capacity to take a lot of properties through the disposal property -- process, each entity is responsible on deciding whether the asset is access to their needs or not -- excess to their needs or not. we have disposed of 3,300 government-wide assets, valued

at about $8.5 billion. the process works fairly well. we believe there are still improvements that could be made so that we can give better information. in our case -- and i have worked with cities, so i know what senator begich is talking about. in that case, it is pretty clear that the building is vacant. i want to emphasize what danny talked about. we have some assets in which they are almost vacant, but not quite. a couple of things have to happen. we have to look at an asset that is partially or mostly utilized and decide whether it should be kept in the inventory. then, we have to decide how to get it out. sometimes, that requires an up- front cost so that we can move out the last shah of a people or goods -- chunk of people or goods to make the property vacant. there is another issue, would

you have seen in all of the information we have seen -- which you have seen in all of the information we have given for the administration's process. the free disposal, the discounted convinced -- politics rears up its head in that process. at that point in the process, we need a brac-type proposal to move things along. there are a couple of things we think are necessary to the ministry -- to accelerate the administration's proposal. we need to incentivize disposal by enabling agencies to realize the benefits of the proceeds. experience tells us that makes a big difference. second, we need to address the upfront costs in being able to move properties that we do not need to the disposal process.

obviating or eliminating the stakeholder interests that sometimes slow us up. one thing that piggybacked on comments in the other panel, with technology, work is done in the workplace. the ability of people to work from home, on the road, wherever they are, we believe we can work with a lot of federal agencies to reduce the amount of space they need. constrained budgets are having -- encouraging a lot of agencies to come and talk to us about how that is done. we're moving out aggressively. even with this legislation pending, under any -- danny and the white house's leadership, we are looking at how to make some of those decisions to reduce the overall inventory and move some things were disposal. >> thank you. mr. sullivan. >> thank you for the opportunity

to discuss the department of veterans affairs management of its property, in particular, our efforts to reduce vacant properties across the country. we have more than 300,000 employees at the department of veterans affairs, who worked tirelessly on behalf of our nation's veterans and their families everyday. i would like to highlight the a's successes in repurchasing and disposing -- the va's repurposingn the repurchas and disposing of properties. i will begin with a brief overview of our portfolio. we have one of the largest health-care related portfolios in the country. we have over 7100 buildings on more than 3,000 acres. the va is one of the first agencies develop a highly- driven process.

the strategic planning process, skip, shows performance gaps, including how well this addresses disposal of unneeded assets. it is all in consideration of the va's aging infrastructure. we directly addressed challenges posed by aging infrastructure with abandon -- with a consideration of a number of factors, including saving the government cost. the strategy presents a similar idea. the va has aggressively pursued disposal or reuse opportunities. from 2006 to 2010, we completed disposal or use of approximately

381 assets. 111 in 2010 alone. since 2001, we have reduced our owned vacant space by 41%, despite the growing pressure on structure.nfra we have 313 vacant properties out of about 6,500. the remaining 63 are what we call our most daunting disposal actions, because they involve many environmental and historical elements. we have been able to identify properties for housing for homeless veterans. this is critical to help achieve

secretary shinseki's goal to end veteran homelessness. tesapproved 34 si conversion the homeless housing for veterans and their families, bringing the total of # -- total number to 5,000 units ffor use or in development. operations and maintenance savings, investment, new long- term revenue for the va, job creation, additional tax revenues for local and state sectors. since the process was started 10 years ago, we have awarded 60 projects this way -- 18 specifically for homeless housing units.

from 2006 to 2010, to give you an idea of the consideration these have brought in, $260 million consideration was brought in. in cleveland, ohio, we consolidated medical campus facilities and we were able to outlease more than four acres in downtown chicago as a result, which was not to hard. fro mthe s -- from the sale proceeds, it was $10 million in cost savings. currently, va has 19 of these

projects under way to provide 2200 units of housing for homeless. the va's authority bang for this program expires at the end of the year -- authority for this program expires at the end of the year. we view this civilian realignment act as just one more tool. there is not one single thing that is going to solve the problem. it will be different tools in different cases. we believe this will help the viet manage properties in a much more efficient manner. -- the va manage properties in a much more efficient manner. mr. >> wise -- >> mr. wise. >> thank you for the opportunity to testify today. my testimony will focus on the civilian sector. my colleague, mr. lepore, will focus on the military side.

there are challenges that remain in how the administration passed legislation -- the administration's legislation marespond to the jaundiced -- my respond to the challenges. we have 341,000 square feet. the underutilized buildings cost about $1.16 billion annually to operate and are potentially valuable. we found that there was no government-wide, strategic focus on real property issues. the government's data was unreliable and outdated. since that time, government has made significant process, establishing the interagency real property council.

it is meant to improve data reliability. based on progress in those areas, we're moved the data element of real property management from this year's -- elementmoved frothe data of real property management from this year's data. we recommended in 2007 that omb develop an action plan to assist agencies in dealing with federal property that was not needed. the administration has recently proposed cipra. that proposes an independent board that would streamline the disposal process by selecting properties considered appropriate for public benefit uses. this streamlined process could reduce disposal time and cost. it would establish an asset proceeds and space management on

that could be used to reimburse agencies for unnecessary exposure across -- necessary exposure costs. while it does not explicitly addres the government's overreliance on leasing, a could address consolidation -- address the government's overreliance on leasing, it could address consolidation. we'll be happy to answer questions. >> thank you. mr. lepore? >> i am delighted to be here to present our thoughts on the brac process, which may be useful to you as you consider

the current -- civilian property realignment program. here is how the 2005 brac process worked. d.o.d. developed the criteria to be used and published it in the federal register so that everybody had the opportunity to see what d.o.d. thought was the way to do it. congress and codified the criteria -- congress then codified the criteria. congress tightened it up and said, ok, here is how we're going to do with. d.o.d. develop the closure and realignment recommendations and sent them to the independent brac commission, which could approve, modify, reject, or add to the recommendations, based on the criteria and the force

structure plan, and d.o.d.'s compliance with both of those. they heard each recommendation and reported to the president. the president could disapprove the commission's report and send it back for revision or send it in total to congress. congress then had 45 days to enact a joint resolution of disapproval, or the recommendations become binding. now to my second point. you're the key steps that dod used to develop its recommendations. first, they developed three goals for the brac round -- excess infrastructure was part of it. they wanted to have a consistent way to compare candidate recommendations. d.o.d. also developed a common format analytical framework and organizational structure -- a common, analytical framework and

organizational structure to try to ensure data reliability so that there was accurate data to look at. this concludes my prepared remarks. i would be happy to answer any questions that you may have. >> thank you very much. listening to your testimony, there is a bible study group that meets in the capital most thursdays. we have sessions with our senate chaplain, who talks to us about our faith guides us in our work, about moral imperatives. sometimes, he shares with us matthew 25. not many people know about matthew 25 -- the least of these, what are our obligations to the people who are hungry, thirsty, naked, sick, in prison.

the question i want ask is about moral imperatives. we feel a moral imperative for the least among us. we feel an obligation to reach out and be helpful and responsive to them and their needs. as legislators, we have an obligation to run our government in a fiscally-responsible way. i think it is imperative that it goes beyond fiscal stewardship. it is a menorah imperative -- a moral imperative as well. in this case, we need to be consistent in addressing both of those imperatives. we need to look to the needs of the least of these in a cost- effective way. senator coburn and i have been working on this -- he has been working on this longer than i have. i have been in the senate for 10 years and have focused on this

with him for the last half- dozen. i am determined to make real progress and am happy to have an administration that shares that real conviction. talk to us about how we need both imperatives. please, mr. werfel. >> that is an excellent question. one of our objectives in creating this board is to drivea a decision, not necessarily to exclude viewpoints and exclude perspectives and state water interests. we are not getting around the stakeholder interest problem by saying you shall deployed with one stakeholder's interest in mind -- a savings for deficit reduction. that is critically important. deficit reduction will shine through as a primary objective. i believe that there are a lot of legitimate stakeholder

interest, homeless groups being one of them. other community interests, when we vacate or rethink how we're going to use the property -- the goal is to make sure that voices are heard, issues are surfaced and considered by a knowledgeable set of individuals, and that, ultimately, they make a decision that maybe not everyone is going to walk away fully happy with, but there will be a fair and open process, and the decision will be made and will move forward for good or for bad. in that way, our goal is to strike that balance that you described, but do so in a much better way than what we have done today. right now, the balance is being achieved in away where a lot of voices are being heard, but the result, in too many cases, is inertia. we want to let the voices be heard, but drive to a decision and move forward, which is our perception of how the brac process has moved -- worked.

voices were heard. decisions were made. not everyone walked away happy, but savings have been realized and efficiencies gained. >> your thoughts, mr. peck? >> the record of the public- benefit conveyances we have done, which accounts for 13% to 15% of the disposals we have done in the last 10 to 15 years, fewer than 5% of those have gone to the homeless. it is not a huge number. we should put that fact in our minds. second, the administration's proposal suggests that, in the course of coming up with a list of properties to be disposed of, the board would consider those properties that are likely to be useful to the homeless. i suspect it would be done in consultation with hamas group. i think we have -- with

homeless groups. i think we have begun to think about how to balance those two important issues you're talking about. >> i believe in terms of the va, our moral imperative is to ensure that, no matter what row property action we take, it has a positive direct benefit -- real property action we take, it has a positive direct benefit for veterans and their families. we need to be compatible with the local community that we live in and operate in the with our va medical centers and cemeteries. throughout that process is a secondary factor of trying to do it in the most economical way. i think there were cases where we can use current authorities -- are cases where we can use current authorities to do so. we have cases where there are hard things to do, where we think a tool like the brac-like

process would be helpful, where we cannot get the benefit for the veterans because of the existing configurations we have. >> thank you. mr. wise? >> at gao, at the request of you and other members of the house and senate, we evaluate various programs. from a public-policy perspective, your philosophical question, as it were -- personally speaking, not necessarily representing gao, i think almost everybody, whether from an advocacy group or a member of congress, wants to do the right thing. people approached it from different perspectives. i am pretty confident that, as we work through these issues and you get a different perspectives from folks like in the first panel and this panel, that it will give you the perspective to move forward and be able to account for the

differences and come up with an appropriate piece of legislation that will accomplish what you are trying to accomplish here. >> i think the brac statute may offer the model for you. the property disposal provisions of the 1990 brac statute are pretty detailed. what it says, essentially, is the military service that proposes to close and installation offers it within the department of defense to other military departments or organizations. if they choose not to take it, it did then is made available to other federal agencies. should the other federal agencies not to avail themselves, it then goes through a very detailed process with the secretary of defense works with local redevelopment authority's to include -- authorities, to include represented of the -- representatives of

the homeless -- there is a whole laundry list of what the secretary of defense is required to do as he goes through the process of disposing of properties under brac. perhaps it will offer a model for you as you consider the civilian property realignment bill. >> we have the dover air force base for 5000 people. 5 miles away, you have the federal building, downtown dover, maybe 100 people. do we need, for the federal building in dover,a a brac- like process to be able to dispose of in a reasonable, humane way? >> i am not familiar with the exact circumstance, but what i can tell you is that we have come across different real

estate transformation opportunities where it is maybe not as complex as downsizing the military base. i think it was mentioned in the first panel, it is like shutting down a major city or a minor city. yet it is complex enough in terms of various stakeholder interests that, historically, we have not been able to push through under the current frame. i do not know that the brac0like -- as the brac-like board gets together -- as we consider downsizing thousands of field offices across the united states -- they might not have the same complex array of issues and immediate community impact, but i think it will get a healthy dose of legitimate

interests and concerns, whether civilians are concerned about a giant office building being placed where green space exists now, whether there is concern that the local educational institution should get the property versus the mayor, versus the homeless, versus etc. we see that with the dover federal building. it is a case-by-case basis. i think that is why this board will be somewhat surgical. we will hear where they are seeing this makeup of competing interest or lack of financial incentive. here is where you might be able to help. for our relatively-low investment in this type of mechanism, the proceeds could be enormous. >> mr. peck. >> the dover federal building is a gsa building, a multi-tenant

building, typically the type of asset you want to hold on. it is government-owned and almost always in the best interest of taxpayers to hold onto. there are other facilities that we do not need. when we ask agencies, well, how about this property, it looks like you are not using it terribly intensively, the answer is often, well, things will change, we might need it. the agencies are, in essence, land-banking their property. we need to say to them, you do not need that. it is time to think differently about how you function and to go someplace else. that is something we could use a little bit more clout to do. >> thank you. i had to go on the floor to pull

an amendment and deal with an faa issued. -- issue. >> are we going to vote again? >> no, not till tuesday. i am shocked. they highlighted the lengthy process. it is -- contributing to that lengthy process is the housing use you heard from the prior testimony. in the past 10 years, what percentage of excess properties have actually become homeless housing, if you know? >> i gave one no. while you were out. i think it is the best number that gets to your answer. of the public conveyances we have done, those that would decide are not eligible -- we decided not eligible for state and local press, it is about 5%

of those that have gone to homeless services. >> how long does that take, on average? >> the immediate screening process, which involves a a referral to the housing and urban development, only takes about 60 days. and that aspect is not that long ago process. to be candid, sometimes that process stretches on after that as various entities, public and non-profit, decide that there may be another way to get the property and maybe it would be useful. it is hard to put a number on that. >> i have been running around. it has been one of those days. if you have answered something, i do apologize. i appreciate your consideration. mr. werfel, it is good to see

you again. i have been impressed by your testimony before. i appreciate you coming back. how does this streamline the process of it's still it -- process if it still contains these time -- these other uses? >> the processes will not run concurrently. we have a lot of legitimate interests looking at -- will now run concurrently. we have a lot of legitimate interests looking at the properties. we want to take the issues collectively and drive to a particular decision. rather than waiting a certain number of days while the local education institution has its process, then the homeless, then the local correctional facility, then the local airport, then other government entities -- which can link in the overall

process -- the board would say, ok, -- can lengthen the overall process, the board would say, ok, everybody come in. we will try to find the optimal that protect the local taxpayer and the community -- protects the local taxpayer and the community. but is it true that there is a property in -- >> is it true that there is a property in west l.a. owned by the va that is worth $4.7 billion? >> we have a large medical center that has had to- restriction = -- that has had significant restrictions on the disposal of the property dating back to 1960. but it is underutilized -- >> it is underutilized? did they make the determination?

>> i would have to look back to the 1960's. >> did the va -- would the va submit the property to this process? >> in terms of any property realignment, we would look to see what is the direct impact on veterans. it is a positive in -- is it a positive impact? >> how is it being used now? >> portions of the land are being used for medical center, a state home, a nursing center. there are portions of the property that are under agreements to be used by other agencies for revenue that comes back to the va. >> mr. werfel, with the president's proposal help to ensure that there are no

sacred cows that are exempt from the process? >> that is the goal. the property you are raising has a lot of particular sensitivities with it. we would want that to be closely looked at by the board to determine whether some or all of it could be better utilized, not only for the benefit of the taxpayer, but to work through some of the issues going on within the local community would that property. it is a good example of the property where an independent process will help us drive to a quicker decision. i look forward to being able to work with the va to get them the right information they need. >> i do not want to see what your intent is. is it fair to say that, by going through this process, we can step back from our use of leasing proxy's and -- proxies and utilize our own properties?

>> it absolutely is. there are a couple of ways to skin that cat. one of them is by doing some tough realignment. a lot of our county offices across the nation, which would be important to downsize and would be tough to downsize without this type of independent process that can drive through stakeholder interests -- you will see a significant drop in the leasing footprint because some of those facilities are leased. elsewhere, there are opportunities to downsize, realigned, and operate in ways that can dramatically impact our leasing footprint. that overbuilding -- maybe we should bring in other properties -- dover building, maybe we should bring in other properties. >> we are renovating the d.c.

and -- the gsa building. we will get about 6200 people in the building and avoid an annual lease cost of about $20 million. >> back to you, mr. werfel. how much in savings and the taxpayers expect on the sale of these excess properties? where will it be comingoperatio? i don't expect an exact number. >> in the first three years that the board is operational, the opportunities are for $15 billion over three years. it is made up of two different types of savings. one is the proceeds from sales.

there are numerous high-value assets that we cannot sell today under the current legal and competing stakeholder interest climate that we can sell under this process. the other is the elimination of operating costs. when you sell the building, you eliminate those operating costs and get the proceeds. if you terminate a lease, you eliminate those leasing costs. >> in the final questions? -- any final questions? >> based on everything you have heard so far, is the civilian b.r.a.c. process affected and your ability to dispose of excess property? >> they worked in complement of each other.

there will be a win-win strategy. in cases where we have major challenges where we cannot reach that decision, that process will be helpful in helping us with those properties. we will be working together. >> thank you, mr. chairman. >> thank you. i want to follow up on a question mr. brown asked. when we look at the potential questions -- but gentle savings, we can get properties off of the books and sell them for a few dollars. we spend money for utilities. we can save some money for some of these buildings that we stand for security. we visited a postal processing

facility in chicago about six years ago. they had a considerable security costs and cost of maintenance that had to be covered. are there others in terms of operating costs? >> there is one other thing that we mentioned in our testimony. there is the liability that the government holds of deferred liability costs. you are either holding a building that is depreciating in value, deteriorated, or you keep it up. you reduce operating costs and reduce your liability, the need you have to rehabilitate the building at some point. >> savings on lease versus purchase. let's talk about that a little bit.

we talked already in a couple of exchanges here. let's go back to the dover federal building. it has been made available to other stakeholders in the community. one of our colleges and universities have said they would like to use that facility for some of their course work. i think that is what is going to happen. meanwhile, a federal agency has moved into rental space. there is an argument that maybe we should have gone someplace else and build another building from scratch and moved into that. then we could have saved money. i do not know if that was ever

seriously considered. >> without knowing the facts in dover, it sounds like situations we have all but the country. you can say without knowing the specifics that it makes sense for long-term government uses to put the offices in federally owned rather than leased buildings. i suspect what has happened in dover is that someone decided the building is functionally obsolete and the cost of bringing it up to standard is prohibitive. taking a look at how much capital investment we are likely to convince the administration and congress to get us, it is not in the cards to build a building anytime soon. that leaves the option of going to modern private sector space. we do not have the option of enhanced use leasing, which allows you to use private-sector

capital to build a facility that is owned by the federal government. there are all kinds of legitimate scoring issues to keep that from happening. it is a constraint on capital investment that has pushed us into a lot more least space and less of a percentage of own spacepercentage-- lease space and less of a percentage of owned space. >> what is the direct impact on veterans? the va is a huge believer in leasing. most of these are medical leases. we need to get the services into the community where veterans are. the demographics of veterans change. that iran demographics will change and services are needed. -- the demographics of the veterans will change and

services will be needed. there needs to be a balance. we do not want to substitute leasing or building our own. there is a great need to have the flexibility for leases and have those medical clinics have the ability as medical technology changes and demographic changes happen to shift them to different locations. >> that is absolutely right. when you have permanent needs, you want to be in owned space. where demographics are changing, social security offices are like this, you want owned space. with social security -- we have been talking about social security -- the demographic is

computer literate. that will change where and how many social security field offices are needed. >> mr. werfel, what other approaches did the administration considered in helping us deal with the problem of surplus or underutilized property? why did you settle on this b.r.a.c. process? >> as we pulled back the onion layer on agency inventories, we started to see the transformation of opportunities that existed. they seemed to be around areas that were going to be tough to address under the current legal and regulatory framework.

the three issues are the process is long and can be tiresome and bureaucratic, the financial and the competing stakeholder interests. one option we considered is more of a straight to legislation issue. we do the work and we show you our cards in terms of what we have and you guys react to it. we say, here are the 10 best recommendations we have. what i learned and what i believe it is that if you set me off with my colleagues to try to do that knowing what i know about how the government works, we will take a bite out of that apple and try to give you something. it will be a smaller bite that if he sent off an independent board to do the same work. i have constraints on what we can reach for and how old we can

be. in many ways, that is an option. i also believe that if we submit to you and administration- generated set of recommendations and put it on the plate of congress, that by it would get even smaller by the time it got to the process. it is how big and bold you want to be and how aggressive? in this budgetary climate and the more we got excited about this transformation opportunity -- the social security office is a good example -- agencies have scratched their heads. we said, let's go for the larger chunk. the budget environment demands that we maximize our approach. >> you were quoted in front of a

house infrastructure committee. you said the federal government could be saved $15 billion in the first three years of operation. is that correct? >> yes. >> how long do think it will take the board to begin its operation? >> it can be done relatively quickly. if you give us a deadline, no matter how complex, we will figure it out and fplow through. i would look at and 18 months lead time to get the members together and to get the staff. one of the things we are doing to diminish that 18 months is to form a property advisory committee. there was a memorandum on the

same day we transmited bthe act to create an advisory committee. mr. peck and i sit on the committee. one of the main objectives of the committee is to create a set of objectives. we did not want them showing up to an empty office. if you approach it this way or if you approach it that way. there is a lot of slicing and dicing. >> that is probably right for setting up the board. if we knew we were getting legislation and if the legislation were passed, we would be able to present the board at its first organizational meeting with a first cut at the property.

in 18 months, shortly after they meet, they would be able to start making the decisions we would like them to make so that we could start moving properties through the pipeline. >> the last question i will prowl we asked will be of mr. wise. i will telegraph my question. if you were in our shoes, you are an independent watchdog agency. here is my question. if you were sitting on this side instead of at the witness table, what would you do? it is a pretty simple question. do not answer it gets. if you were sitting up here -- yet.ot answer it g if you were sitting up here, what would you do about you said

that there was access by the federal agencies -- if you were sitting up here, what would you do? he said that there was excess by the federal agencies. there was as much as $15 billion over three years. down on the data a the topic. out of those 14,000 properties, there are about 1800 that have already been disposed of. roughly 5500 were in the disposition process. i do not know if this position takes a month or a year. 1500 -- 5500 appear to be somewhere in the disposition process. how many excess properties are in the federal inventory?

ne idea how many excess properties are in the federal inventory? -- any idea how many access properties are in the federal inventory? >> we collect data on an annual basis. what that data represents is that at the end of fiscal year 2009, our inventory had 14,000 assets that were designated as excess. when we released that designation, we try to update that. 1800 have been disposed of. >> 1800 out of the 14,000? >> yes. our main emphasis on around the release of those 14,000 assets is a few things. one is transparency to make sure the public is holding us

accountable to get rid of them and the public can identify things that they think should be on the list. you should think about it as clearing the underbrush. we need to get a handle on the access and dispose of the more rapidly. in terms of the $15 billion opportunity, it does not exist within those 14,000. the $15 billion opportunities exist in the tougher to reach places that we have not been able to identify as access because we have been stopped by a variety of barriers. the board is intended to increase the number of excess so that we can move them off of our books. they are going to stay in our inventory unless we come up with a game changing set of policies to advance them will work. that is what we are here to ask

for your help to do. >> thank you. mr. wise. mr. wise man. [laughter] >> i will do the best i can. to answer your question, we are working with the committee to try to answer your question. we are working with you on excess property and leasing issues. we hope we can contribute to helping the congress make these kinds of decisions. we have had some experience. the gao has study being studied process-s -- the b.r.a.c. the early. i will let by and explain in more detail in response to your question. -- i will lead brian -- let

brian explain in more detail in response to your question. >> many stakeholders have a vested interest in these installations. we understand how that comes about. in places such as dover, these are major cities or minor cities in a committee. the b.r.a.c. process has created a system where we can review candidates using a consistent set of criteria and do it transparently. the chairman indicated transparency was important. the b.r.a.c. process has been pretty transparent. the b.r.a.c. may offer you a

model. it may not be a perfect model. the department of defense is a department under a single secretary. you have a department under various agency heads. there have been circumstances where you may be able to pull from that process. i think you had a lot of good ideas here today from the first panel and the second panel. the allies would be to pick and choose the best ideas. b.r.a.c. and all these other ideas combined can help you find a process to get this done. >> at the risk of making it ise's eyes glaze over, an important point. of the 14,000 assets described as excess, each asset is

categorized separately as and assets. if we get rid of a military depot, that could be 300 assets. taking a look at that list by itself does not get you to the $15 billion. we need the authority to get to some of the other properties. some authority that you will not see in the legislation is the authority to make use of private real estate brokers to help us do this. we have the authority to bundle properties, as one of the people on the previous panel said. there is a wall we are going to hit unless we get the authority to go out and vacuum up all of the excess property.

>> any other thoughts? >> i have one other observation. i served on the finance committee. we pull together a series of hearings where we had men and women to come and talk about ideas toward debt reduction. among the witnesses we had was the vice chairman of the federal reserve for a number of years not that long ago. one of the things he said was that the 800 pound gorilla in the room for debt reduction was health care costs. unless we got our arms around health care costs, we were pretty much doomed. it is not superfluous.

but it is smaller change. we had an opportunity to ask questions. i said, you have mentioned that unless we address getting better health care results for less money that we are still going to have a huge problem with the deficit. i said what advice would you have for us? he said, i am not an expert on health care. person, me say as ala lay i out what works. do more of that. -- find out what works. do more of that. we need to find out what works and do more of that. part of it could be of great spear is with b.r.a.c. part of it could be to learn from the va.

i am reminded of the fact that you have an imperative to meet the needs of the least of these. you are often held out as an agency that does a good job in these areas. senator coburn and i are not going away on this issue. this is something i would like to resolve during this congress. i am determined to do that. i am grateful to my colleagues and our staffs in preparing for this. i am grateful to you for the work that you have done and that is being done. let's continue to work together. we have to figure out how to deal with this. we need to stop spending that kind of money and to save it

instead. this hearing in is a-include- -- this hearing is concluded. we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> during the hearing today, you heard a lot of references b.r.a.c., the base realignment commission. we have covered a lot of those commissions. senate is the only body in session this week.

the senate, earlier today, rejected an amendment as part of thereauthorization -- of the re authorization -- reauthorization of the -- the vice president has been meeting with a bipartisan group. their sixth meeting on the debt and deficit reduction plan. vice president joe biden has left capitol hill with no word from reporters. the meeting continued for a bit further. negotiations continue on capitol hill. also on capitol hill earlier today, cia director leon panetta answer questions during

a confirmation hearing. >> this weekend on american history television, more than 20 years after the end of the cold war, a historical panel reflect on ronald reagan and mikhail gorbachev. and the civil-rights movement and the promise of suburbia. and restoring civil war photographs from charleston, south carolina. get to the complete schedule on c-span.org/history. >> this weeks and on "book tv," the role of fannie mae and freddie mac in the 2008 financial collapse. and whether it is possible to form a partnership with china

with henry kissinger. and paul allen talks about his memoir. sign up for "book tv"alerts. >> earlier today, president obama established a white house counsel on rural issues. members spoke to reporters after the meeting. >> i am the director of the policy council here at the white house. this morning, we believe something significant had been for individuals, families, and individuals residing in rural america. the president signed an executive order. this is an historical effort.

the president wants to build on his commitment to rural america and that he talked about during the campaign that has been built upon during the first two years of our administration. we have done important things trying to stabilize and create thriving economies in rural america to improve the quality of life and to focus on innovation and build out the infrastructure and whether it is growth or broadband, access to health care. we believe a lot more has to be done for americans resided in rural communities all over the country. that will be the work of the council. it will be led by secretary vilsack and coordinated by the national economic council. you will see a lot of activity in the weeks and months to come as we go out around the country and coordinate across agencies in washington, d.c. i will turn this over to

secretary vilsack, who will talk about the work of the council and why it is so important. thank you. >> this is an important day to people who live and work in rural communities across the country. we appreciate the present pope is -- the present's focus on rural america. it is the -- the president's focus on rural america. it represents 16% of the population. the rural council will give us a coordinated effort among all agencies of government so that people can see progress. i know that folks in rural communities see progress when they drive by gas stations and they see that ethanol and renewable fuel is less in cost. that is something they can see.

what they want to see more of in the store fronts filled with jobs. we are going to help expand small business development. we are going to figure out ways to provide more investment in rural america to spur innovation to help economic growth. we will work on that working in the federal government and figure out ways we can develop the new partnerships with the private sector that operates in rural communities. it is an opportunity to celebrate a sense of place. mr. salazar will speak about private assets. we will remind people of the economic opportunities they

represent. he also excited about this effort. i appreciate the president's direction and his commitment. he agricultural economy in this country is in better shape than other parts of the country. we are seeing record exports and record income levels. we have to expand that to other parts of the world economy, which this council will focus on -- parts of the world -- of the rural economy, which we will focus on. i will turn it over to secretary salazar. >> the president has given his cabinet the direction to make sure we are doing everything we can to help rural america with the challenges it faces. the department of the interior will work closely with this council to make sure we are focused on the great outdoors,

that we help preserve the rural landscape and all of the places where we have great assets like national parks. secondly, renewable energy and energy are big issues for us all over the country. we have worked on it for a long time. we will continue to press forward on renewable in energy initiatives. the place where shaun donovan and others have been leading the effort, we have done a lot in indian country over the last couple of years. we are going to be doing a lot more of that and moving around the country as we address the issues in indian country. with that, i will turn it over to shaun donovan. >> you know the president is serious about his entire cabinet when urban development is part of the world council -- rural

council. at fha, 1.5 million rural residents depend on us. we ensure hundreds of millions of dollars of private capital that goes to rural health centers that have been critical to meet the health needs of rural residents. the president signed an act that created the first-ever program that focuses on rural homelessness, which has been the fastest-growing part of our homeless population. we have been focused already in making a difference. we will use this council to expand those efforts.

we will expand the efforts to create jobs. he's smart kind of innovation we are making, our rural innovation fund has improved house and inrural -- in rural areas. in south dakota, they are building a plant that lowers transportation costs and they were able to put local residents to work in building those homes. on the pine ridge indians reservation, we have been able to create a factory that is building solar heaters or water for the homes in that area. it is lower cost for those who live on the reservation. people have been put to work where there has been at 80% unemployment rate.

those are investments that improved housing and put people back to work. those are the efforts we will be building on an expanding on in this rural council. >> can you provide any more details about the other members of the council? who was going to be part of the discussion? have you decided on any names yet? >> the council will be made up of every cabinet level agency as well as a number of agencies that support the president's agenda. we will have a series of work groups that focus on economic growth and quality of life in rural communities. we will be traveling to rural areas in rural america. we want to hear from people.

we know what they are seeing. we know what they are feeling. we know they have solutions that will help us leverage our solutions more effectively. they want government to work smarter. we are working hard to listen to them to find out how bad can happen. there will be an opportunity to showcase what the administration has already been doing across the effort. >> will investment in rural america get more bang for the buck than in urban areas? >> the return on investment is equal to that which is an invested in urban areas. we will get you the study. we also found that the steps we are taking are already making a difference.

there was a study in iowa on broadband expansion that shows that small band -- shows that small business is that have broadband will have greater sales than those who do not. it is so critical in establishing networking opportunities. the administration has made any historic commitment to broadband. >> one of the things we have also found is that what can we can do is get more bang for the buck for our federal investments. what we found before we came into office is that in rural areas we would be making transportation investments disconnected from where we would be making housing investment

where people live. the average american family is spending 52 cents of every dollar they earn on housing and transportation. those numbers are before gas prices and went to $4 a gallon. what we have been doing is bringing together those investments so that we better coordinate them, shorten commutes, give families more time with their children at home rather than in the car. the interest in rural communities has been beyond our expectations. we try to coordinate these investments. 50% of the winners and applicants have been from rural communities. we get more than one been a -- more than one benefit from

an investment we are making. >> rural communities are not in this alone. he may not have the human capital necessary participate . it is not just martyr -- just smarter government at the committee level. it is an opportunity for us to get leverage and synergy. >> thank you all very much. >> comments from the white house earlier today. also today, fema administrator said the government is examining its disaster relief fund. speaking before the senate banking committee, this is one

hour, 30 minutes. >> south dakota is dealing with some of the worst flooding the state has ever seen. i spent some time talking to

homeowners and business owners in communities that are anticipating some of the worst damage. they are working hard to minimize harm to people and property. they are concerned about short- term displacement and long-term recovery. i will do my best to see that they along with their neighbors and fellow americans who have had their lives turned upside down by a devastating storms probably provided for with disaster relief that they need. i would like to applaud the administrator and his staff at fema or how they have responded to the flooding in my state so far. i hope it quick response we saw during the recent sudden storms continues. the nfip health committees --

helped communities. we now face several challenges to the long-term viability, including an $18 billion debt to the u.s. treasury. over the past year, we have faced several lapses in the nfip. the lapses have an effect on the insurance and housing markets. this program provides over $1.20 trillion in coverage. it is my hope to provide this through a long-term extension. as the people of south dakota and others have seen firsthand, flooding is responsible for more damage and economic loss than

any other type of financial disaster. it affects people across the nation of both parties. that is why i believe that the senate was able to come together in 20008 to pass the -- in 2008 to pass the reauthorization bill. the recent flooding has made it clear that congress must re authorized and reform the nfip, which is scheduled to expire in september. hopefully we can build a future for the program and the american citizens.

i will turn to senator shall be. -- shelby. >> the national flood insurance program was designed to relieve the burden on citizens who were victims of floods. by providing flood insurance for properties in high risk areas, it was hoped that insurance premiums could be used to cover the cost of flood damage. since hurricane katrina, the program has struggled to remain financially viable. since early 2006, the gao has targeted the program as high risk because of its mounting debt and structural flaws.

the program is $18 billion in debt and has problems servicing that debt. the program's debt is only one of many difficulties facing the flood insurance program as it is constituted today. every aspect of the program must undergo significant revision for it to survive and continue on a sustainable path. this committee approved unanimously and the senate overwhelmingly passed legislation that addressed many of the efficiencies of the program. that legislation would be a good starting point for this committee as we move forward toward reauthorizing the flood insurance program. several issues deserve a close examination by this committee.

we should examine the the nation should between the program and the insurance companies. "write your own" companies may be receiving excessive bonuses from the program. the committee should also examine the types of property the flood insurance program is covering to ensure its resources are being spent effectively. the congressional budget office has determined that 12% of the homes covered under the program are worth more than $1 million. i believe we must ensure that the program requires will the participants to pay the full cost of their insurance. the committee should also examine the program's map

modernize asian process. -- modernization process. updated maps are important for two reasons. they warned homeowners about the risk of developing our living in a flood plain. they sure participants are paying full price for flood coverage. some have argued that they have been excluded from the mapping process. this process needs to take place rapidly to ensure the risk is accurately reflected and that committees are fully informed. many of the existing maps are several decades old and do not accurately reflect the cost and risk of living within a flood plain.

i think we should also -- i would like to see a simple definition of the phrase -- the committee should consider ways to privatize this program. we should transfer risk from the program to the private sector to the maximum extent possible. if we are able to accomplish these objectives, we might achieve the original -- original purpose of the flood insurance program. thank you, mr. chairman. >> thank you for holding this hearing on the reauthorization of the national flood insurance program. hopefully, both sides of the aisle can make this happen.

this is important. i say that because the state of montana is not a flood stage. underwater right now. we have seen record precipitation. we have record snowfall in the mountains. i talked to craig yesterday and we will follow-up on that conversation. we have many challenges across this country when it comes to disaster. water is one of them this year. i want to thank you for having this hearing. i look forward to the opportunity for questions and interchange between myself and the director. >> i would like to welcome roger

wicker to the committee. he has switched seats to testify before the committee. senator, welcome. >> thank you. i have a written statement, which i will not read in its entirety. i asked that it be included in the record at this point. i will also notice that the states of montana and south dakota have sent a great deal of water down our way, which we are experiencing right now. forces the fact that we are all -- it only in forces -- it only enforces the

fact that we are all in this together. i would like to speak about the coastal act. you allowed me to testify last year before i became a member of this committee to talk about the unique perspective we have, and the people in alabama have with regard to flood insurance. at that time, i spoke about the real reforms i advocated. improving enforcement by fema to purchase and maintain flood insurance. i do not think we do a good job there. charging rates that are sound, as the ranking member just noted. and updating the fema flood insurance maps so that people are aware of the risk in obtaining flood insurance. it has been since that is -- it

has been six years since hurricane katrina. we have made progress, but the mississippi recovery is not complete. one impediment to our efforts is the lack of affordable property insurance. the availability and affordability of wind insurance is important when there is coastal danger. damages can be caused by multiple peril, including hawaii winds -- high winds. hall is cannot purchase a single policy that covers all

damage. flood damage is backed by the federal government through nfip. many property owners suffered severe property damage. they were forced to go to court to determine which insurer was responsible for damage in the wind versus water disputes. i want to quote from the government accountability office. it called for greater oversight of the wind and flood damage to terminations. gao found that claims information did not allow fema to effectively oversee damage determinations and apportionments after hurricane events. these are the words of the government accountability office. "for a given property, fema's

ability to assess the payments for damage is limited. nfip does not know what portion of the total damages was caused by wind and what portion was caused by flooding. " the report goes on to say that because homeowners and nfip policies can be serviced by policies can own" have a conflict of interest. i have developed a system to allocate losses. i invite each of you to co- sponsor it. it addresses several problems

that rose in the aftermath of hurricane katrina. these problems include costly litigation between consumers and insurers over the wind versus water claims. inherent conflicts of interest and the lack of oversight with respect to the adjustment process and claims paid by nfip. the coastal act is a common- sense approach to addressing these problems. we would use data currently collected by noah to allocate property damages following significant storms. a formula would be established that utilizes storm information provided by noaa to allocate losses caused by high winds and

storm surges from hurricanes. this would be based on the timing, location, and magnitude of winds and before and during hurricanes. all the properties completely destroyed by hurricane would qualify for this system. there is little or no evidence left behind. this is not a silver bullet. it is a fair and objective way to provide more certainty to the claims process, which is costly and a costly piece of the flood insurance program. the advantage of my proposal is that it is based on activities that noaa already carries out,

extensive storm data that is currently collected due out each storm that threatens the coastline. each storm that threatens the coastline. it use this information we currently have for the purpose of better allocating the responsibility for wind versus water. this proposal will provide more structure in the marketplace that will increase the availability or insurance and competition, driving down premiums over time. i also believe this system will help us hold insurance companies accountable for covered losses rather than forcing taxpayers to foot more of the bill through

the deeply indebted national flood insurance program. congress has an opportunity to make wind and water coverage available and affordable while putting the national flood insurance program on a sustainable path forward. i will continue working with each of you to pass a multi-year reauthorization bill that can be signed into law. thank you. >> thank you, senator, for your testimony. i would like to invite craig, administrator of the federal emergency management administration to the table for his testimony. prior to his 2009 confirmation as the law admin