the guy who played sam malone will talk to you about fish. they'll have buttons that they can push if i say something wrong. [laughter] you are in safe hands. i started out as an activist in california with a group called no oil, inc. in the pacific palisades. that is kind of how i started in this. what was hard for me was, even before the spill, the conversation of -- let's lift the moratorium that was in place for 25 years and let's open our coast to offshore oil drilling, are most sensitive areas. i know this is a sensitive conversation to have when so many people in louisiana depend on oil and a lot of people work for it. nevertheless, from my point of view, offshore oil drilling is

way too risky for us to be doing and the rewards are way too little. for me, it was more of a reminder of that. i also like to weigh in that i am surprised by what i hear tonight and not because i doubt it. i did not know it. perception is such a large part of it. you think about oil addiction and you do not even want to go there. i would hate to say that i am so happy that this is true and i will be up there eating a great deal -- actors and free food, we will be anything. [laughter] i would hate to have that be an endorsement that is okay to go

back to business as usual because oil does not harm the ecosystem, so it's ok to keep digging for oil in more and more dangerous places. ted the activist -- that is why one thing. [applause] >> jane, how did our contestant do? >> i am not sense rain ted -- i'm not censoring ted. i would be remiss to say that there were not long-term impacts. dr. boesch said that. i think we're saying two things. one, the seafood from the gulf is not contaminated by oil or dispersants. at the same time, we still do

not know the full impact of the spill on the animals and the ecosystem of the gulf. we will not know that for some time. even those tiny droplets of oil that were in the water while the oil was flowing, even very small drops can be very toxic to a fish egg or fish larva. there is very real concern that there are impacts that we will not see for a number of years. it's hard to quantify, document, see. one of the legacies of the exxon spill was a new knowledge about the impact of oil on developments of fish larva.

we know that they're very sensitive to oil. there are some real concerns about long-term impact that we will not know for a while. that's part of the natural resource damage assessment, to try to evaluate that and not to say that everything is fine now because it looks ok. there's a lot we do not know. >> there were fish populations that looked just fine for a couple of years and then crashed. you do not want to call the all clear to soon. >> there's a difference between fish you might be catching to beat that can -- to eat that can process hydrocarbons. that fish that was swimming the gulf, even if it encountered oil, but could be safe to eat now, but that's not true of the young, vulnerable stages of the larvae. it is very important when in the life cycle the impact was felt.

>> you have to understand how large the gulf of mexico is. 640 quadrillion gallons. there are trillions of gallons every year that -- every day that pour out of the mississippi and other areas. 640 quadrillion gallons. 600,000 square miles on land. if you believe the maximum, it would be 200 million gallons. it is the proverbial drop in the bucket in terms of the large ecosystem. i'm not saying this is not a

challenge. it was a challenge and it was responded to very well. you have to look at it in a bigger picture type of presentation. also, what type of oil was it? the exxon valdez was a heavy crude oil that was already partially refined and ready to move forward. you are talking about light, sweet louisiana approved -- louisiana crude. we have 40,000 offshore wells. we leak 50 to 100 million per year. i was raised in southern california. i would go to the beach in southern california and i would get tar balls on my feet. there's a lot of leakage there. >> yeah. >> absolutely, the numbers mean a lot. it is also true that the

natural seaps are a low rate and there is a natural ecosystem. this was a big hit all at once and we are now trying to understand how that sort out. let me turn to don. i imagine people not only care whether their food is safe, but whether it is sustainable and what is the overall health of seafood from the gulf. in answering that question, you could remind us this is not the only insult that has ever happened to the gulf of mexico. >> we have talked about the effects of the seafood we captured and enjoyed last year and its safety. those species, those populations, of those fisheries have a set of long-term problems they are trying to grapple with. first of all, like everywhere else in the world, we have

overfished some of those resources. we are trying to use the best science to manage that in a more sustainable way. noaa has played a large role in that in terms of the federal territory. in addition to that, some of the fishery methods we have used have caused all sorts of unfortunate side effects. for example, when they told shrimpers that captured lots of other fish -- captured and wasted. also, capturing things like sea turtles. we are in the process of trying to find a better way to do that. there has been a lot of effort and progress made on efforts to

avoid capture in sea turtles, but there are still mortalities due to sea turtles. beyond that, there are other challenges in terms of the rapid dynamic changes of that environment that have been unleashed by humans. the biggest of all that has affected everything is climate change. it will put us on a path of much more rapid sea level rise in the low-lying gulf areas. it will be a major challenge going forward. in addition to that, we have massive -- and the end of the 20th century, massive amounts of wetlands were lost along the coast, mainly in the mississippi delta as a result of our mismanagement of the river, but also the very oil and gas industry that we talked about sliced and diced that coastal area and exhilarated the -- and accelerated the loss of the wetlands. also, the result of high productivity industrial agriculture in the midwest. a lot of the fertilizer nutrients are applied to the

landscape and since it has caused a mass of dead some -- dead zone may be the size of new jersey or larger because of the flood affects. that's happening year after year. it is not an event like an oil spill. they have enormous consequences to the resources we are talking about, as well as the vitality of that system. the hope is that with the attention brought about by the spill, are commission called for a dedication of 80% of the recoveries of fines under the clean water act -- water quality violations as a result of the release of oil -- could be millions of dollars

dedicated towards comprehensive restoration of the gulf. >> not just mopping up oil, but looking for marshes and everything. >> restoring those wetlands. with that is tied to vitality of the various fisheries we're talking about. the president has charged administrator jackson, working with dr. levchenko and others in the administration to come up with a plan to use these resources for a comprehensive restoration. if there is a silver lining, hopefully it will draw attention to this that we can move forward. it is not however, a lead pipe cinch that this will happen. we have a lot of opinions about what to do with that money. there are fights about how much

their fair share should be. >> ted, is that something activists are dealing with? is that something you are pressing for? where do you work in this universe in trying to see changes in the way we deal with our oceans? >> i am certainly not an expert on the gulf by any means. the activist starts -- our fisheries around the world are in trouble. we do not over subsidized are boats. 30% of the world's fisheries have collapsed. 90% of those around when i was growing up in the 1950's argon. there is this much left. all the big fish is gone. at 90% is gone. >> what do you do about that?

>> well you start managing your fishery. >> what do you do about that? >> i go into ballrooms and i yack. i am talking. it is wrong. anyway, when i see after writing this book, or being part of this both is that my job is to create international ocean activists because these problems are so huge and they are international that people in need to take steps to and learn how to make sure you are not buying farmed salmon from chile because you end up killing three pawns of wild fish to make that one can't -- 3 pounds of wild fish to make that 1 pound.

you can do better different organization. i am here to sing the praises of osha. you need to do that. it is still out of sight, a lot of mind to 1% of of the money raised in this country -- all environmental money raised, when% goes to marine issues. we do not think about the oceans has anything but something we could put as much into as we want, and as much as we want out of it. my job is to get people to stand up and say this is wrong. >> patrick, you have a more hands-on approach. donald mentioned the turtles getting caught in traps and nets. talk about your efforts to reduce debt. -- and that. >> awareness is up.

i think the shrimp fishery that i am participating in has a good story to tell when it comes to turtles. a big time management action started in the mid-1980's, when we started looking at this problem on the decline and the mexican coast. it was in real trouble. in 1990, when we got over the hump, and got compliance issues out of the way, we were able to convince the fisherman that we could do it effectively. >> that is what? >> a turbo-excluder-device -- turtle excluder device. prior to when the catch is collected, we have an angled

grid that is designed to discharge not only ted, and amazingly, it was created to exclude jelly balls. it was called a cannonball shooter. they had a high rate. they would fill up the nets with a jellyfish in literally minutes. we got over the hurdles. we have the vast majority of fishman thinking they could pull this device -- device. we had a great compliance numbers by late 1990. if you look at the beaches in rancher and a wave all around 2000, you went from a straight line where you did not see a dip or a fall. after 2000, two thousand one,

-- 2001, we started to see an architect. today, other than last year, we sought a dip. the year before last, we're looking at 21,000. last year, some 13,000. we picked up quite a few in veracruz. through may 25, we are looking at 11,000 in what is expected to be a banner year. half of the texas coast, which is not a traditional beach, we are looking at record numbers this year. >> of our fishermen complain -- our fishermen comply in pretty well? >> they are now has redoubled their efforts. -- no one has redoubled their efforts. there reeducating fisherman. they have found compliance issues, but those things could

change overtime. it is not an intentional error on the part of the fisherman, but one thing that you have to realize as well, if you are in a conservation world, where a marine biologist, as you have stock of a particular animal you may have interactions with, as the overall recovery happens, you will have more interactions with them, and we will have thomas said, standing is because of that. -- we will have, sadly, strain indians because of it. >> -- strandings because of that. >> i think of the species, five of them lived in the gulf, and they're all in danger. what patrick has said about the

concerted efforts to address the problems we are causing, especially at times ripley, work,'s last year, very successful -- were, until last year, there is successful. this also protected nesting beaches in texas and mexico. this is an endangered species that is co-manage with mexico. last year, they said a serious hit, especially the one-year- olds and the two-year-olds, which were abundant. they were coming from deeper areas into more shallow areas, and i do not know the exact

numbers, but they were on the order of around 500 times grizzlies found -- temps grizzlies found stranded. one additional good news story is there was a concerted effort to go out and rescue oiled turtles. many communities and activists joined forces to rescue turtles, and brought them back into holding facilities throughout the gulf. they have been rehabs. almost all of them have been released. 400 were saved. this year, we are seeing a very large number of turtles that are stranded. we remain very concerned about the causes of the current week, at noaa are working closely to understand what is causing this, and we will remain concerned. if it is an endangered population, so we will continue to work actively to try to

address the causes of those mortality's. >> we have a microphone here. i'm not sure there is one in the other file, but i will open this up for questions. if you would like to, and anyone come to a microphone and i would recognize you can -- recognize you. i ask you introduce yourself and ask a question to the >> my name is just. -- question. >> my name is jeff. as you might guess by looking at me, i am a friend of seafood and would like to see it sustained we have been talking about the facts of this bill, but one thing this group has not addressed is what has been done to make sure this will not happen again? i know the minerals management service which regulates offshore oil and gas drilling has been divided into three units. is that the answer for

protecting the gulf -- to protecting the golf from this happening again? >> that is a very good question. another part of this issue is to make sure we do everything we can to make sure this does not happen again. as much as. might like to have offshore oil -- as much as ted danson would not like to have offshore drilling, our country is dependent on it. this will take time, and we have limited new production opportunities on land. the other alternative is to become more beholden to other nations holding oil. we have to grow our domestic oil production. you have for the president make announcements about that. a good part of that will be the gulf of mexico. the question is, if we are going to do that, let's do it safely.

this is essential to what are commission addressed. the secretary of the interior has put in new regulations that are required now to permit and regulate deep water drilling. 15 or so new permits have been issued under that new standard. they every door to reorganize. our commission recommended going further than what they have been able to do thus far. some of that takes legislation. we had a discussion of either drill, the drill, or get out of my way, or not, and i think there is a reasonable middle ground. if we need this resource, and we need to find it in deep water, we have learned a lot, and we should hold the companies to high standards. they need to operate under those

standards. we need a better capacity to monitor those activities. these common-sense solutions are what we recommended, and are still pending in congress. >> if you are a concerned citizen, you can make sure your congressman knows your views. >> >> i think one of the questions i have in the natural resource damage assessment, are we going to look at disburse ant use on fish larvae and will it have any effect on ocean acidification or is that separate from emissions and crude oil? >> ocean acidification is that the oceans are getting more asidic as a result of carbon dioxide and the more oil we burn, it goes into the

atmosphere. as in terms of the spill itself -- >> i could address the disburse ant issue. the total amount of oil spilled is 196 million gallons. of the amount of disburse ants used, 1.9 million, so 1/100 of the amount of oil was used as a disburse ant. with that said, the the chemicals -- that is food approved ingredient, food grade was used in this spill. it dissipated fairly rapidly and if it is taken up in the flesh and the food and drug administration lab in alabama did some very nice work with this, where they showed various

species and amounts 100 times the amount used on the spill. and they showed that seafood could take it up but rid themselves of it very rapidly at that 100 times use within 72 hours. >> when you were making chemical screens -- noaa does surveys, you go out there and continue to catch fish and check them out and so on. >> the test that we developed during the spill were to test for this compound that she was speaking of. and so all of the seafood -- seafood was tested for that and it is free from those. the question -- is the natural resource damage assessment process looking affects of

disbursnt on larvae. the assessment process is a very comprehensive process that looks at damage from anything including the efforts to minimize the impact of the spill. it looks at everything that can possibly be quantified with the idea of evaluating the impact of the spill on natural resources and the public's access to those resources, figuring out, building the best possible case against the responsible parties and then, you know, to hold them responsible, and then the final part of the natural resource damage assessment process is to do the restoration required, paid for by the responsible parties to make up for that damage that was done, whatever

that looks like. so it's a legal-scientific-economic process to really focus on natural resources. so yes, it will be part of that. putting on my reporter hat for a minute, i have been trying to do stories about asking questions how bad is the damage in the gulf and scientists say it is part of the damage assessment process and it's a legal process and they're not at liberty to say everything. so there is frustration about not having full information about what's going on in the gulf as it goes through this process but we are assured they are doing this to make the best case against the responsible parties and ultimately, we will hear what the resultsr but it's a bit of a frustrating time -- i call it to say what is happening with such and such? sorry, that is part of the process. but call back in 2015 and --

>> i totally share that frustration, but i think you understand and i think everybody understands that it is not a -- we're not going to tell you, but going to build the best responsible case against the responsible parties. if you tip your hand then you risk undermining your case and everyone wants the responsible parties to be held accountable and this is the way to do it. >> thank you for being here tonight. my question is primarily for the industry owner operators and the federal perspective a and an effective response in recovery in the gulf relies on industry working closely with the government. and are there any lessons learned that came out of the deepwater horizon's response and the market recovery that can be held from the federal perspective and the owner-operator perspective.

>> this is the industry? >> both the industry -- oil industry or seafood industry? >> seafood industry. >> mike, do you want to -- >> i think, as i said earlier, the best cooperative response from the government at the federal, state, local level with the seafood community. we dealt with -- normally we deal with about three, four closures in a year based on fecal pollution. last year, we had 38 closures and the seafood supported noaa in their closures. and we supported them in their closures and the states in their closures. and there has been a great cooperative effort between noaa, the states and other federal agencies and other industries to accomplish making sure we are not only providing safe product

to the public, but also that we're going to have sustainable, which i do believe we have seafood for the long-term and we are expending our dollars in doing the research hand in hand with noaa and state. do you have a comment on that? >> i think one thing that came out of this is that a realization by oil companies and the government that the fishing industry itself could be used as an effective response tool in situations like this. and that -- i mean, you saw the vessels opportunity program work and various activity in what it did and going forward, it puts an asset in place that many didn't realize they had in front of them. and at very little cost. we are doing our thing and various fisheries and at a moment's notice can be called

upon to act as a potential safeguard between short line and the problem offshore. pretty good light bulb going off there. >> i'm curious to what extent the seafood and oil industries have changed so people are now saying we have to get the oil industry out of the gulf? they are interwould he haven in terms of the economy of the gulf coast. but how do you handle your relationship with the people in oil? >> they are us. half of my family that came from france and ireland is in the oil and gas business. half of us are in the seafood business. i guess they couldn't make it in the harder of the two businesses, but they are who we are. and the real tragedy in this is the 11 lives lost and the 17 people injured and i can't imagine what they had to do

evacuating an oil rig. i can't imagine it. we have worked hand in glove. they harvest the resource below the ocean floor and we harvest above the ocean floor. there are challenges and conflicts. but we have been able to work those conflicts. we are a user of what they harvest and they are a user of what we harvest. we want it to be done correct. don and the commission did an excellent job in preparing a report that gave suggestions that would be able to improve the safety of offshore oil and gas drilling. the oil and gas community came out with a great response, put $1 billion in a response program. and as patrick said, one of the most exciting things that i heard during all of this challenge, when they started using the programs, the fishermen, they were out there because they hired contractors and outpaced the contractors about 20-1 because they were

protecting who theyr their long time abilities to be successful. i'm seventh generation in this and my sons are in this and i have grand sons that i hope come into our business that will be the ninth generation from france to be able to accomplish and continue to apply the seeds in south louisiana. >> question? >> my name is sharon hayes and i work in the federal government here in washington, d.c., and i don't have a very articulate question, but more of a plea. i'm not a scientist and i want to put a human face on this. i moved down to the gulf coast, mississippi gulf coast right after katrina and helped out with the recovery and if anyone down there has spent a significant amount of time on the gulf coast, you know how close to the edge people live. and today, i was talking to a friend of mine who directs the

nationales tu area program down there and he was mentioning that there is just a lot of money flowing around and it's nice that bp wants to do the right thing and make people whole after the oil spill, but i'm very concerned about the wetlands and the restoration and i was going to make a plea that you all use whatever power you have to make sure that the money goes to the right people and the right places so we can get the restoration we need. none of the money was actually coming to the people who were doing the restoration right now. and i know there are reasons for that and it takes a long time. i know permly having worked in government -- personally having worked in government and that's just a request that i had. >> thank you for that very heart felt comment and plea. i think you are absolutely right. the restoration will be really

key. a few weeks ago, noaa and the other federal trustees and the state trustees who oversee this assessment damage process announced that bp had agreed to set aside $1 billion for early restoration projects. this is restoration that will be part of the natural resource damage assessment process. and it is early restoration, because we don't have to wait for the whole natural resource damage assessment process to come to conclusion. everybody wants to start doing some restoration now. so this down payment from bp of $1 billion allows that to get under way. and there is a public process for soliciting ideas about the best restoration projects.

we have held 10 open sessions in the gulf and additional ones here in washington. and those ideas about what to restore and where are being folded into the process that will play out over the next couple of years in terms of the allocation of the funds. i think there is a lot of interest in getting on with the restoration, starting with the projects that everybody thinks would be important and that money will be allocated to each of the states in part and to the two federal trustees for projects not only along the coast, but also in the open ocean. so there is now a formal process for funneling money into the early restoration. and i echo your hope that it will go to the right things and right people. >> with the exxon valdez spill, they were steam killing the rocks and killing -- i mean they

looked busy, but -- so your point is well taken you want to make sure you are doing something that just doesn't look good but makes sense. >> i'm dawn martin. and i want to thank you for being here. it's a terrific conversation and you are busy doing good stuff. i have a good news-bad news question for you. clearly the bad news was the spill in the gulf. no one wanted that to happen. the good news is some of the stuff we are hearing tonight. so i have a question about human nature and i wonder if you could reflect on your experiences about communicating around some of these issues. clearly when we have a crisis, it's so easy to get the word out that there is an oil spill, some explosion some where. when we have good news stories to tell about things are not as bad as you might think theyr it

seems it's really to get through the surface to be able to talk about those things. it's interesting when you look at science and social marketing and human behaviors, because we all say, all of us here, we want good news and want to hear the good news but when we try to communicate and get that out, it is one of the biggest challenges, your reactions and advice would be much appreciated that. >> thank you for that question. we had a lot of people come down to the gulf coast that were sincerely concerned and they would -- how many of you have ever cleaned a shrimp, the whole form? this is remarkable. we would have people come down, buy shrimp off the boat and would say i took the head off and it had this black streak of oil running out of it --

[laughter] >> that is the scrap, that's the vein that needs to be removed. >> you aren't talking about the intellectual capacity of americans, are you? >> is that something you know about? [laughter] >> another fact we know from the oil spill, i talk about testing, a rap i had method for screening. after the screening, then the seafood went to the lab in pascagoula where trained people would under control conditions, freshen their nose and pallet

and that sample was -- >> that is little off the topic of the question and you were on the topic a second ago. >> of that formal testing, of the levels of the cash bons, they have only shown to be 100 to 1,000 of the level of concern. if we take it one step further, f.d.a. came out two weeks ago and said we did the calculations and you have to eat 60 pounds of gulf shrimp a day for five years to approach the level of concern. we are trying to get americans to eat two seafood meals a week. >> do you think we should be eating 60 pounds of shrimp? >> yeah. just let me know where you want me to ship it.

[laughter] [cheers and applause] >> what about the question? i know you guys have thought about this. how do you communicate when things have changed, how do you convince people that things have changed? what do you do? >> if i could just one second, i want to thank the lady who said she came up after katrina and thank you for coming to help. it's very much appreciated. that is a great challenge. how, in this situation, how many of you were around when the tylenol scare occurred. you probably remember it, it was a small isolated incident but changed marketing forever. and today, i can still about it. you were branded last year by seeing oil george bush out of a pipe below -- oil gushing out of

a pipe below. how do we change that? media, the evening news, and you have to remember during valdez, you had the evening news and newspaper, morning, evening and newspaper. today, you have the internet. what we are going to have to do and bp has contributed to this, what we have to do is understand what are connected in the consumers' minds and message them where we can change it. we will never forget about the tylenol scare but we have to convince them through federal agencies, the work that is done at the universities, that what they saw isn't what is happening in seafood that the plaque streak on the back of the shrimp

is not oil. it's not going to be easy. we have to do paid media and stand up in front of everybody and say it 100 times. >> we worked together for many years. i think part of the problem is we have gone -- we have come out of an era where science without being partisan but science wasn't on the throne or leading the way, so you have people whose self-interests -- we are all full of our self-interests and every industry wants their way so science started to get downplayed and you have -- you lost trust that people would say something and it would be true. and if we let science lead the way again so we can all go ok

and the industry saying something or other, but science, people who are there to protect us and letting science lead the way, i think we will rebuild trust and then you can start -- people will allow the positive message to come through. now we are so conditioned to go agh, i don't really know if that's true. i'm grateful for what you do and how you restored the faith in science again. thank you. [applause] >> we have time for one more short question. short question. and i promise to get you out of here on time and the hour is nearing, warm up your wine glass fingers. >> i went to school down south and transferred back up north to do environmental studies and all my friends from new orleans said

it was really bad and were affected by it, including their dads who were fishermen. and i'm sitting up here and i'm confused as to if it was that bad, why are you sitting up there saying ok. million dollars here and there from bp, i don't know how that's going to help as much as people say it is. there are a few billion dollars in order to fix the damage ta was done. what are the industries doing to make sure this doesn't happen again? we have these p.s. announcements and make sure this doesn't happen again. >> first of all, about the impact, i think we talked a little bit about the environmental impact and specifically, we were focusing much of our attention on the impact on seafood.

so i understand that -- the thing from the oil spill commission is how devastating this oil spill was to the communities in the region, the economy, the seafood industry, and it was remarkable about how it affected the -- what the experts called the psycho-social effects. there were people who were anxious about things that translated to child abuse and it was a crime, all of those things. this is coming on the heels of hurricanes and this sort. just because we talked about the ecological of the spill, this was a devastating, devastating event. we should take every step, we, meaning citizens, the industry, that it doesn't happen again.

our recommendations are to help point the direction to that not only for the government, but for the industry. we recommended that the industry establish a safety institute, much like the nuclear industry did after three mile island, where they actually got experts and self-police. they hold each other in high standards. we see no reason why we shouldn't expect that of this industry. >> thank you very much. we do have food and wine awaiting us. [applause] >> let me give you a quick note, if you look in your bag if you haven't already -- i guess everyone has figured it out. go out the doors, run for the food. ted danceon will be going up to

sign books -- ted danson will be going up to sign books. so any way, have fun. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> on sunday, oral argument challenging the new health care law, a three-judge panel at the 11th circuit court of appeals hears argument in florida versus the department of health and human services brought by 26 different states which oppose the law. the states argue congress exceeded its authority and infringing on states' rights. we'll have orally argument sunday at 10:30 a.m. eastern on

c-span. >> the c-span networks, provides coverage of politics, public affairs, nonfiction books and american history, available to you on television, radio, online and on social media networking sites and find our content any time through c-span's video library and we take c-span on the road with our local content vehicle bringing our resources to your community. it's c-span your way, now available in more than 100 million homes, provided as a private service. >> on thursday, fema administrator, -- fugate said the government has prompted a look at the disaster relief fund. he testified before the senate banking committee on the government's national flood insurance program. this is an hour and 35 minutes.

>> currently, constituents from my home state of south dakota are dealing with some of the worst flood that the state has ever seen. i spent some time talking to homeowners and business owners in the communities that are anticipating some of the worst damage. while they are working hard to minimize harm to people and property, they are understandably 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 tuned upside down by steff devastating storms are provided with the disaster relief that they need. i would like to applaud administrator fugate and his staff at fema as to how they have responded to the flooding in my state so far. i hope that their quick response that as a result of the recent storms continues when addressing the ongoing flooding in south dakota and around the country. the nfip was created to help communities to speed recovery from flooding disasters. however, it now faces several challenges to its long-term

viability, including $18 billion debt to the u.s. treasury. over the past year, we have also faced several lapses in the nf inch p as many stake holders have noted, lowestes have effects on both the insurance and housing markets. this program, which provides over $1.2 trillion in coverage and it is my hope to provide this through a long-term extension. as people -- 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 natural disaster. it affects people across the nation of both parties, which is why, i believe that in 2008, the senate was able to come together across the aisle and pass a

bipartisan reauthorization bill on an overwhelming vote of 92-6. unfortunately, we were not able to come to an agreement with the house. the recent flooding which congress must reauthorize which is set to expire on september 0. as we move ahead, hopefully can once again come together and pass a bipartisan bill that will build a sustainable future for the program and the american citizens. i will now turn to ranking member shelby and then we will open it up to all committee members who wish to give an opening statement. senator shelby. >> thank you, mr. chairman. the national flood insurance program was established in 1968, and was designed to reduce the

burden on taxpayers stemming from federal disaster relief from floods. by providing flood insurance for properties in high risk areas, it was hoped then that insurance premiums could be used to cover the cost of flood damage. since hurricane katrina, however, the program has struggled to remain financially viable. in fact, since early 2006, the g.a.o. has targeted the flood insurance program as, quote, high risk because of its mounting debt and the structural flaws. today, the program is nearly $18 billion in debt and has problems even servicing that debt. unfortunately, as the g.a.o. has shown, 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 i believe must undergo significant revision for it to survive and continue on a sustainable path. during the 109th congress, this committee approved unanimously and the senate overwhelmingly passed legislation that, while not perfect, addressed many of the core deficiencies of the program. that legislation would be a good starting point for this committee as we move forward toward reauthorizing the national flood insurance program. but as we begin this process, i believe several issues deserve a close examination by this committee. first, we should examine the relationship between the program and right your own insurance companies. according to the g.a.o., write your own companies may be receiving exceedingly high

bonuses from the program. the g.a.o. recommended that the write your own program have more transparency than accountability. this is something we should pursue. the committee should also company the types of properties the flood insurance program is covering to ensure that its resources are spent effectively. for example, 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 wealthy participants to pay the full cost of their insurance. the committee should also examine the program's map modernization effort that we have been working on. the map modernization process has been ongoing for several years and it's crucial for the long-term success of this program. updated maps are important for two reasons. first, they warn developers and

homeowners about the risk of developing or having or living in a flood plain. second, they ensure that participants are paying fair prices for flood coverage. some communities have called into question the validity of the maps and others have argued that they have been excluded from the mapping process. community participation, i believe, is crucial, but this process needs to take place rapidly to ensure that the risk is accurately reflected and homeowners and communities are informed. many of the existing maps are several decades old and do not accurately reflect the costs and risks of living within a flood plain. i think we should also -- i would like to see a simple definition of the phrase acktu arly sound. this act will state our intent

to make this program self-sustaining. finally, i believe this committee should consider ways to privatize portions of this program. we should transfer risks from the program to the private sector to the maximum extent possible. if we are able to accomplish these objectives, we may achieve the original purpose of the flood insurance program to reduce the escalating costs of flooding to taxpayers. thank you, mr. chairman. >> senator. >> thank you for holding this hearing on the reauthorization of the flood insurance program. it is a very important program and need to get a long-term solution on this and hopefully we can make that happen, because this is very, very important. i say that because the state of montana isn't exactly a flood state but a head water state that is under water right now. i should back up, good to have

here, senator wicker, and appreciate your work. we have seen record precipitation. we have record snowfall still up in the mountains. i had talked to craig fugate yesterday at a hearing and we will follow up on that conversation. we have many, many challenges across this country when it comes to disaster and water is one of them apparently this year. so with that, i want to thank you for having this hearing and i look forward to the opportunity to -- for questions and interchange between myself and mr. fugate. thank you. >> i would like now to welcome senator roger wicker from mississippi, our banking committee colleague to the committee. senator wicker has switched seats temporarily to testify before the committee. senator wicker, welcome. >> thank you very much, mr. chairman and mr. ranking member and senator tester.

i have a a written statement, which i will not read in its entirety and ask that it be included in the record at this point. >> thank you. >> i would also notice that the states of montana and south dakota have sent a great deal of water down our way this year which we are experiencing right now. only enforces the fact that we are all in this together and we need a multi year reauthorization and i'm here today to agree with members of the committee in that respect and to speak for a few moments about my proposal, which i'm calling the coastal act. you were kind enough to let me testify last year before i became a member of this committee, to sort of talk about the unique perspective we have

and people in the state of alabama, louisiana and the gulf coast have with regard to flood insurance and the way it interplays with wind insurance. at that time, i spoke about three reforms that i advocated. number one improving enforcement by fema and lenders with respect to those required to purchase and maintain flood insurance. i don't think we do a good job. number two, charging rates that are sound, as the ranking member just noted. and number three, updating fema's flood insurance maps so those in areas are aware of the risks and obtain proper insurance coverage. it has been six years since hurricane katrina devastated the gulf coast. while we have made significant progress in rebuilding our communities and businesses for many, recovery is not complete and one of the biggest impediments is the lack of

affordable property insurance. the availability and affordability of wind insurance. vast property owners, private insurance coverage for wind damage has not been available in the gulf coast since the aftermath of the 2005 hurricane season. hurricanes, as we all know present a unique problem for coastal property owners because damages can be caused by by multiple peril, including high winds and devastating storm surges. currently homeowners cannot purchase a single policy that covers all hurricane-related damages. wind losses are covered by private insurers or state-run pools and damage by hurricanes are backed by the federal government. as i testified before, many property owners who suffered severe property damage from hurricane katrina were forced to go to court to determine which

insurer was responsible for damage in wind versus water dispute. now i want to also quote from the government accountability office, which issued a report in 2007, which called for greater oversight of wind and flood damage determinations. in that report, g.a.o. found that claims information collected by nfip did not allow fema to effectively oversee damage determinations and a portionments after hurricane events. these are the worts not of senator roger wicker, but of the government accountability office, and i quote, for a given property, fema's ability to assess the accuracy of payments for damage caused only by flooding is limited, because nfip does not know which portion of the total damages was caused

by wind and what portion was caused by flooding. the report goes on to say, because both homeowners and nfip policies can be serviced with a single write your own private insurer, a conflict of interest exists during the adjustment process. the words, mr. chairman, of g.a.o. now to help resolve these issues, i have recently introduced the consumer option for an alternative system to allocate losses act, the coastal act. this legislation, s. 1091 addresses several problems that arose in the aftermath of katrina. these problems include, number one, dispute and costly litigation between consumers and insurers over the wind versus water claims. number two, inherent conflicts of interest as g.a.o. pointed

out. and number three, the lack of oversight with respect to the adjustment process and claims paid by nfip. i believe the coastal act is a commonsense approach to addressing these problems. the legislation would use data currently collected by noaa and other participating entities to allocate property damages following significant storms. under the coastal act, a formula would be established that utilizes storm information provided by noaa and its partners combined with structural information for each property to allocate losses caused by high winds and storm surges from hurricanes. this alternative loss allocation system would be based on the timing, location and magnitude of wind speeds and the storm surge before, during and after major storm impacts the

coastline of the united states. only properties completely destroyed by a hurricane would qualify under this loss allocation system. lab cases have the greatest uncertainty because there is little or no evidence left behind. the coastal act is by no means a silver bullet for all the problems associated with flood insurance and nfip. however, it is a fair and objective way to provide more certainty to the slab claims process, which is very costly -- which is a very costly piece of the greater flood insurance program. the advantage of my proposal is that it is based on activities that noaa already carries out. extensive storm data related to wind and storm surges are currently collected throughout each named storm that threatens the coastline. this is done primarily now for

the purpose of informing emergency managers. i would emphasize that the coastal act does not create a new program. it rather uses information that we currently have to -- for the purpose of better allocating the responsibility for wind versus water. i believe this proposal will provide more structure in the marketplace, which should increase the availability of insurance and competition thus 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. in conclusion, mr. chairman, i would say, congress has the 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, my colleagues on the committee, to pass a multi-year reauthorization bill that can be signed into law. and i urge all of my colleagues to join us in this effort. thank you. >> thank you, senator wicker for your testimony. and now i would like to invite craig fugate, administrator of the federal emergency management administration to the table for his testimony. prior to his 2009 confirmation as fema administrator, mr. fugate had a long career in emergency management at the state and local level, including serving as a long term firefighter. welcome administrator fugate. you may proceed with your

testimony. >> thank you chairman johnson and ranking member and members of the committee, i have submitted written testimony if it pleases the chairman, we'll submit that for the record. and i'll proceed with a brief statement. i think senator shelby summed up really the structural issues we are faced with the flood insurance program. one of the things i would like to emphasize here is as the program exists now, it is unlikely we can retire the $18 billion debt. i also see the risk that would substantially increase in either a large-scale hurricane or tsunami event. we do a much better job with rivering flooding and making the determination in how to manage that risk. but in these larger scale events, there are structural issues within the flood insurance program that produce high vulnerabilities that are not addressed in the current

system. how do we address that risk? i think one of the issues we see and we agree with, this risk should be better shared with the private sector versus strictly looking at a taxpayer-run system. i believe there are policies that could be moved to the private sector that there are incentives that could be determined. i think there are going to be those policies that are such high risk that the private sector will never be able to manage that risk and that will continue to be something we will have to look at as to what will be the federal share of managing or subsidizing that risk. i also believe that the efforts to go forward in the reauthorize ace needs to take a -- reauthorization needs to take a longer time. in our listening sessions with constituents as well as the industry, they have informed us

it's very detrimental to have short-term authorizations, especially in a real estate market that is trying to right itself, in that it makes it difficult for them to do closings and write your own companies to be able to manage their portfolios and continue to offer those services. i think again, we believe to need to look at reauthorization, how do we incentivize the program to encourage the private sector to participate, but also recognize there are going to be higher risk policies we will need to look at how the federal government does that. we need to look at a longer reauthorization to provide stability as we go forward with these improvements, even if we don't have all the answers today. the stability is the one thing we heard loud and clear that we needed to address. and finally, the last piece of this that i think we need to look at is how do we deal with

making this insurance more actuarily based upon the risk that encourages the private sector. and i'm not opposed and i heard this term, why we would let them cherry-pick and we keep the most toxic policies. the answer is, the best market out there getting this out of federal is to take those policies that they can manage the risk now. those people don't buy flood insurance any way because it is mandated, but any time there is a disaster, we have to provide assistance. i'm not opposed to the program writing policies if it increases the amount of protection. but it comes back to something we are struggling where we change the risk, when people find their risk has increased and they are required to purchase flood purchase because they are in a high risk area, the price of that oftentimes becomes a detriment to people

and a brand new cost they had not anticipated in their mortgage or in their budgets. so i think we need to look at as we change these designations, how do we do a graduated increase in these policies and help people to be more sound but recognizing for low-income areas, there may be a need to provide additional assistance or give more time before we get to a full adjusted rate more closely reflecting actuarial. i gee with the concept that we have to get the private sector engaged in providing coverage in the flood insurance policy, and that can be through various models. but we still have a significant number of policy holders that it will stay require some sort of federal support to make it affordable and continue to provide that protection from these risks. again, i thank you, mr. chairman, for the opportunity to testify. and i look forward to the

questions. >> mr. fugate, some citizens of south dakota have been told to evacuate for as long as two months. can you tell me what actions you are taking in south dakota to assist our communities and residents in this disaster. can you also tell me what resources are available to the people of south dakota while they are displaced and during the recovery phase. >> we are working with the governor and team there as we are getting more and more flooding, looking at the assistance. there are two pieces of the assistance that can be provided. people with flood insurance would have that. but we provide through other programs and a declared disaster that includes individual assistance. we provide housing assistance to

the survivors in the ent of a flood. as we continue to work with south dakota and as we go through the requests from the governor, those areas that do have individual assistance, that assistance is being provided for housing and other assistance based upon the impacts to their homes. >> in your testimony, you have outlined several far reaching nfip policy initiatives in in the working group has been discussing. when do you plan to publish some of these alternatives? >> again, we looked into some broad areas. in doing this, we found there was no consensus or single idea. but when we looked at both constituents, industry, we found there were four areas there seemed to be centers of gravity of interest. as we have done that and looked at that, we think some of those may not be the best way to go.

i think we're probably now looking at focusing on a system that utilizes the federal programs, but with a greater participation of the private sector and how we do that. as we continue to work through the summer, we are looking at later on coming up with a more consolidated recommendation in coming forth with the consensus report. >> as you know, we are facing a september 30 deadline for reauthorization. in the past, many in the senate have been reluctant to extend the program without reform. one of the nfip policy options you mentioned is program administration. in this area, what are some of the most important reforms congress can make in the near term? >> i think one of the limiting

factors in being sound is that we are currently held to a 10% rate increase per year in moving people that can afford the insurance to being more actuaril-based. those that can afford the higher premiums, we need to move them to those but we have to understand that people with limited means, that creates a double impact in that we may actually be forcing them to make hard decisions about how they are going to pay for flood insurance. the ability to move towards where people can afford the flood insurance to pay the rate without any reductions or frames in time frames would be the first step and how we take communities that because of the economic structures we phase them in more gradual. but as it is now, we are still having to move slowly even for those people who can't afford a higher premium. >> in your testimony, you

mentioned the current nature of the flood insurance areas and sometimes gives citizens the impression they are inadequate. do you have recommendations for how rates can be set in a more granular fashion? what resources do you need to achieve this? >> well, right now, we deal with everything outside of a 1% flood zone as a preferred rate and if you are in the 1%, which is another challenge, how do you explain the risk of where we actually require the flood insurance, a chance of a one in a every 100 years flood. and i think the question is where we see an increased risk but below a 1% or that higher level, do we still do preferred risk. preferred risk is actually, i

think in some cases, probably below what the market would actually insure at. in some ways, we have created a structural imbalanceance because the risk is much lower but writing it be low what the private sector would be comfortable writing it as. and in effect, and particularly in large-scale events like hurricanes or tsunamis we are subsidizing a greater risk and suggest that that risk isn't as great. >> senator shelby. >> thank you, mr. chairman. the program's goal of fiscal solvency is defined as charging premiums that will generate enough revenue to cover historical average losses. how does the program's rate-setting policy compare to that of private sector insurers?

in other words, would it meet the definition of actuarily sound? >> i think we do a better job on the river flooding and it is not sound when you look at hurricanes and tsunamis. >> but if we don't get first define what is actuaril sound is and get to this, it teams to me every time there is a catastrophic event and you're hit with everything that it's leading the fund toward bankruptcy, you know, rather than actuarily sound, is that fair? >> that's fair but asks another question. it would be difficult to do that at a current rate unless we had another way to distribute that risk and since we are only writing that one hazard without private sector engagement --

>> how do we distribute change and distribution of the risk, do we do that by mapping and identifying and broadening the amount of money coming in? how do we do that? >> one part would be to better reflect those areas and their risks and then have greater participation in the flood nurns program based upon that risk. the other challenge would be, this is one risk. every time you have significant floods, you aren't able to balance that against other risks and other markets and the private sector would give us more flexibility to share this risk against other risks so it is more distributed versus all concentrated that year to year we would probably do pretty good until we get a big hurricane or tsunami and we are looking to taxpayer dollars to pay out claims. >> where are we in our mapping as opposed to four, five years ago? >> i would like to give you that in writing.

>> can you do that for the record? >> we have made significant improvements. however, as we have gone through this, we have learned valuable lessons, one of which is to provide a technology type review where we have dispute over our process. and so that's building a little bit more time in. >> what is the impediment there or the challenge there? >> as we go through, because the funds that are available to do this and as we hire the contractors, we find ourselves from time to time dealing with technical issues in dispute resolution of using data that we have versus the local data or state data. previously, we never had an impartial way to do the dispute resolution so we set up a model after other processes that uses scientific advisory panel to review our data and the local and state data and give us a better resolution that helps move that along.

. . >> it is my understanding that fema has created a new category of what you call grandfather properties for homes that have been found in riskier areas. they enjoy subsidize tax payer insurance programs. discuss how this new category works. do these grandfather properties undermine your efforts to place at the flood program on a more actuarially sound basis? >> i want to respond in writing to give you more details. this refers to as we know we are having designation changes, prior to the outdated maps, people did not either have a mandatory purchase requirement or had preferred to risk. as you go into the higher risk, the amount that they would be required to pay has produced economic hardships. but what we do is work with the

local communities where people will purchase insurance before going into that, maintaining a preferred status. again, it is an economic hardship -- these are not, in many cases, -- oftentimes, we find these are working communities and it is a sudden and dramatic increase in their insurance premiums for flood insurance. >> write your own program -- the gao has uncovered several problems with participants of write-your-own programs. do you agree with this finding? if not, where do you differ? >> we continue to look at that but it is a question of incentivizing the private sector to write those policies.

these are rates that we negotiate. we continue to look at the cost effectiveness of that, but it comes back to if the industry is now willing to do that at a rate that we can pay them, then we end up doing it ourselves. >> could you comment briefly on the risk that exists for communities that are located behind levees, flood walls, and dams, and where there should be a mandatory purchase requirement for people living in these residual risk areas? are they risk areas or residual? >> they are not required to purchase insurance because the protection of those structures reduce their risk below 1%. if there is a failure, it is oftentimes catastrophic, and many of those homeowners do not have insurance.

>> what happens -- there was a levee recently breached. what happens there? >> that is a design the system. residents in that floodway were notified, and they are required to purchase flood insurance. >> thank you. >> i appreciate mr. fugate's recommendations on the flood insurance program, and i particularly appreciate the short-term versus long-term argument. this is critically important. i want to talk a little bit about a couple of other issues. on june 1, our governor asked the president to declare a disaster for the state of montana. can you give me any insight how close we are getting to this declaration from your level?

>> we got the information, and is moving in the system. it is our level to be worked on. >> so, you know i am going to ask a follow-up. can you give me an idea of when we could expect this declaration? >> we want to have the best possible data to make a recommendation to the president, and then we will await his decision. >> can you give me an idea of when that date might be? >> it is moving through now, sir. i would say weeks, not months. we want to make sure we have all the information to make a recommendation. >> good enough. the disaster relief fund, very quickly. it is a follow up that we talked about yesterday. are you confident that the disaster relief fund will not

be depleted in this fiscal year? >> based upon what we have right now, i think we will make it to the end of the fiscal year, but we have some costs that have come in on the most recent flooding and the recent tornadoes that we are having to evaluate, and we hope to have some answers on that. particularly in mississippi, we are adding those in and taking a look at those costs. >> we will need to stay in touch on that. levee certification, it is a difficult problem. it is across the country, almost every river drainage. the army corps periodically inspect levees constructed, but the standards for the certification are incompatible with fema. it is a fact.

has there been any discussion with the army corps to develop a common set of standards that would allow the data collected by the army corps would satisfy your certification requirements in fema? >> we are working with the army corps. the answer to that is in the short term, yes, but i think there is another piece of this. when we do our maps, we only looked at previously credited levees. it did not reflect any prediction. we are currently working on and are submitting for review an ability to actually met the existing structure as is so that where we have structures that may not be accredited but are there, we will no longer take the position that we are going to zero them out and map the structures. the process will be going out to the internal review, and then

in another 45 days, it will go external. we are moving toward using what is there -- unless you have an accredited levee, we will only look at the structure. after the process, we will look at the structures that are there and then map with a look like. >> what about the ones that were previously certified? i appreciate that answer and of the work. what about the ones that the been certified before? in my particular situation, some of them fall under the first answer and some of them will fall on to the answer that they are certified from the army corps, and now the certification either does not work or the army corps says they cannot certify any more.

can you tell me what about the levees that were previously certified by the army corps? >> as the army corps look at what happened to failures, and we continue to see failures this year, they revise the standards so that is what an accredited levee becomes. many do not me that because of design issues, but they offer protection. as we move towards -- we are looking at what is there. we will respond back in writing on where we are at -- >> you know the issue. what we have done through map modernization or whatever, through the army corps and fema not having the same standards or whatever it might be. when we put communities in a

situation where, and i have said this before, where the folks that your going to do this certification -- the errors and omissions are so huge, it puts communities in rural america that are not exactly a fluent real problems with flood insurance. i look forward to working with you on this to try to get this done. this index almost every community in this country -- this affects almost every community in this country. i think you for being here. >> senator wicker. >> thank you, mr. chairman, and thank you, administrator, for your work and including the recent mississippi river flooding which impacted many state, including louisiana. i agree with virtually all of your comments. i want to underscore something you said, which is the need for

a full-blown, longer-term reauthorization. this reauthorization or extension in tiny increments have really not served our communities or the economy well at all, and i know you know that, and he reflected that in your testimony. according to the testimony terry sullivan, the last lapse we had of the program in june last year led directly to the cancellation or delay of 47,000 home sale closings. this was at a time when we need every closing in sight in terms of trying to revive the economy and the real-estate sector in particular. for no good reason, we shut down permanently or temporarily 47,000 the closings.

my first goal is a full-blown, long-term real authorization. i know it is shared on the committee, and i certainly hope we get there. let me go to some particular issues of how we do that reauthorization. oen is the -- one is the current coverage limits which have not been changed at all since 1994. that means the coverage limit the amount is a fraction of what it was in 1994. do you think it is appropriate that we would look at that and i just that in the context of moving the whole program to a much more actuarially sound footing? >> senator, i had some conversations with folks who have a coastal properties and as their homes may have been worth $200,000 in 1994, but

they're a prisoner costs would be a quarter of a million dollars or higher. we have had these homes that have appreciated so much, the insurance is not replacing what they have it. coming back to what senator shelby said earlier, is it best that we do that through the flood insurance program? or do we look at it as a base level coverage? i may be able to afford more than a working-class a fishing family that does not have an expensive property. as we look at those higher levels of coverage, do we do that as a full value with a federal backing, or is this an area that the market might be interested in participating? i agree. we have property out there that we do not cover the replacement costs because of its caps.

in many cases, the way to go forward may be one of those opportunities of how we engage the private sector. >> i am certainly completely open to that as long as there is a path forward. right now, that opportunity for additional coverage is either not widespread or certainly not widely understood or taking advantage of. i do not think it largely exists. i want to go back to back towhich was about levee recertification. in louisiana, a big issue is the fact that the army corps has basically walked away from their historic role in research and fighting levees which they designed and built. after hurricane katrina, they basically said we are walking away from that. as a practical matter, it just

proved unworkable. we are talking about jurisdictions and entities in which 99% of the cases do not have either the expertise or the resources to handle that. again, i am talking about levees that the army corps designed, built, and checked on. the army corps is the logical lead agency can at least, in that ongoing recertification. can you comment on that and how we can make progress on solving that issue? >> what we have done is i think moves us beyond only looking at a levee that the army corps has accredited for those standards. we are working towards looking at levees as built and using those to determine risk. that is that number one. >> let me interrupt. thank you for that policy change. that is enormously important as

you indicated before you all made that major policy change. if it was not up to the 100- year standard, it did not exist on fema maps and did not provide any protection. thank you for that change. as you know, my question still remains. >> we continue to work with the army corps on that. this is primarily with the ownership of the levy has transferred and how they maintain that accreditation. that is something we continue to work with our partners, but i know it is a financial difficulty for local jurisdictions that have those levees to maintain those standards. in many cases, it is the cost of having engineers come out and review the levees which is why we are hoping as we go forward looking at those levees that might not be accredited but are providing significant protection, how we met them -- how we map them. stayd encourage you to

involved in that because the post-hurricane katrina system is not working. in my opinion, it is the army corps trying to cya frankly so they can point to somebody else rather than somebody else. we need a workable system. thank you. >> thank you, mr. chair, and thank you for your testimony, administrator. i want to echo what my colleague has just said, that it is the sense of the many communities that the army corps has walked away and left them in an almost impossible situation in which they cannot afford the private certification, but without the certification, their business districts and their housing districts are decimated.

i just want to make sure that those concerns of communities being decimated by this change of policy is getting to your ears. i am not sure if you have been out to these communities and understand how this affects everything. homeowners who were not in a flood plain who are now in a flood plain, and their mortgage company demands that they now get flood insurance, businesses that cannot locate in the business district because they cannot afford the policy, a community hit hard by the recession on able to fund the private certification process -- that is assuming all they have to do is get the certification. the world has changed. it is a huge additional cost on top of the certification itself. i want to make sure that this incredibly important issue for economic development in the success of our communities is

making it to your ears and you are out talking to communities that are affected. >> senator, yes. in fact, i personally dealt with lake okeechobee when the systems are around that were not certified and we had to deal with insurance premiums for rural agricultural communities. at that is why i think our plan to move forward is to look at existing structures and map those existing structures. >> let me interrupt you there. i was one of the senators that advocated fears the for that change. -- fiercely for that change. i do praise you for responding to our please. let me give you an example of a

community in my state, the community of warrenton. it was a situation of having to adopt the new flood zone before your change in policy, and they had to do that because people could not afford a flood insurance without adopting the new flood zone policies or the new flood determinations. they are now in this situation that that plan did not take into account existing structures. how about for these communities that did not benefit from what is really a more accurate appraisal of a flood risk? would it be possible to go back and rework it with those communities that were unfortunately hit a little before the change in policy? >> absolutely, senator. as we go through our process of doing the internal review, and now and about 30 days to 45 days, we are going to put this out for comment.

once we are able to implement the rule, we will go back and work with trinity's to update their maps based upon the new process. it is not -- it will not go as fast as many communities would want, but it will go back and look at those communities where they did not have a certified levee. >> i think that is great news. thank you. do you anticipate, for example, with a community like warrenton, is that a year out or a couple years out? " senator, can i respond back in writing? we are still going through the methodology. i think when we have that, that will be about a 60-day process. we will have to adjudicate in the sea. -- and see.

my staff feels like we have an 80% solution. i'd like would -- i would like to respond back in writing. >> i would appreciate that, and i understand it is a complicated process. you are trying to address it in a thorough manner, and that would be very helpful. in terms of the role of certification, the army corps has continued to play a role when there is a federal structure involved. i can assure you that we have been working with our communities to try to make sure we know about every federal structure that could possibly trigger this policy. is the current policy the one from here into the future? vitters senator bitte

mentioned, is it possible to embrace it in a wholehearted fashion? >> we do work very closely with them over the certification process, those that are still federally managed. this is going to be a resource issue in that how we pay for or maintain the levees that are not federal, and understand that is a tremendous burden and cost for many local communities. >> i have a couple of specific questions i would like to run by you. the state of nebraska is bordered on the east side by missouri, and we are now in this ramp up where historic amounts of water are headed into the

state, beyond anything the levees have ever had to endure. about twice as much water. there appears to be three events involved that caused this issue. even a number one was rain in montana, a historic amount of rain. even no. 2 is snowmelt. event #3 is the release that necessarily has to occur by the corps of engineers to avoid dam failure. as i understand the rule relative to flood insurance policy, you have to have it in place 30 days prior to the event. so how you judge in this case when that 30 days starts to run? >> that has been a very

challenging question. does the bloody events start when we start seeing actual damages, or is it because we know the event is coming? -- does the flood yvette start when we start seeing actual damages. when does a blood occur by the legal definition? the challenge is, that is when we start writing policies. even if people purchased the policy, if they get flooded within a 30-day period, it would not be in effect. i would ask that we respond back in writing the specific details of how we go about that because it does involve measuring certain things and going out and sending out adjusters to look at what is going on. >> if you could do that i would really appreciate it. we have many people, not just in

nebraska but all along the river system that have this problem. the second question is no less challenging. in a situation where you have the corps come in and they certify a levy and as a result of that, people are in the flood plain or out of the flood plain , people find themselves out of the flood plain and they don't need flood insurance for their mortgage, they are not worried about a flooding situation, and all of a sudden, caught in this historic situation again. what happens to those people? are they treated any differently? can they buy flood insurance? what is the situation for them? >> up until the point where a flood is occurring and we are still providing flood insurance,

if the flooding occurs outside of their purchase window, the first 30 days, they would have flood insurance protection. but this gets back to a very common issue we face. even though you are not in the 1% or greater risk, it does not mean you will not flood. the reality is, if you leverage all the individual assistance programs that fema provides to a homeowner in an event where there is a flood, the governor has requested a disaster declaration and the president has granted individual assistance, it is a little less than $30,000. people in up losing everything. the cannot cover their mortgage. they cannot replace their home. for many people in the middle class, it is their most significant personal holding, and they are totally unprotected without flood insurance. again, but this gets back to the root issue. as people who do not have flood insurance are flooded, even when

we provide federal assistance, we do not make people whole. it is a program that was designed to prevent those kind of losses, but because people are often misinformed about their risk, they find out unfortunately, and we see this time and time again, where it is not on the impact of the flood, it is the financial impacts that are difficult to recover from. >> i would just wrap up with this, mr. chairman. this is a tragic situation. the average person just simply would not go out and buy flood insurance if no one has advised them it is necessary. if they are not in the 100-year flood plain and the bank is not requiring it on the mortgage, the average person would look at the cost of it and say why would i? then you have the historic

event, and they are just out of luck. if you could get back with me on the issue i raised, i would appreciate it. because this water is headed our way now, and next week i think we reach that maximum level of discharge by six corps, then it holds into august or all through august big i am going to guess i will have to get to know you a lot better in the months ahead, and probably a lot of other senators will, too. >> senators schumer. >> before i get into the substance of my remarks, i want to thank you for being always responsive. we have had a number of disasters, unfortunately, in my state during your tenure, and you have always been there and your folks have always been

there, and i appreciate the hard work they do. we have a huge issue on long island. it is one of the most important issues that long island faces. people whose homes have never been flooded, who are as much as 5 miles inland, are being told that they need flood insurance, and it cost them up to $3,000. these are middle-class people. this is not a form community or a community by a river. these are suburban blocks, and they are befuddle. it is what makes people hate washington, because they say, i am being a mandated to pay $3,000 when i have never had a flood and i am not here in the creek or stream or water? we look into this, and is tens of thousands of people, not a few idle homes. what we found was, fema use information gathered by the army corps in suffolk county, where

there has not been as much of a problem, to draft nassau county's new flood maps, and they raise the level as to how high the house had to be above sea level. when you do that in a relatively flat places like long island, i cannot imagine a storm that would let things 5 miles inland from long island sound or the atlantic ocean. they used that to save money. instead of doing remapping in a community of 1.4 million, not a small, little area, at nassau had unique geography, at different coastal and title -- tidal characteristics and should have been subjected to a different study. imagine that you are a

homeowner making $60,000 per year, the average income in new york which is not high, as you know, and you are told that you have to pay $3,000 because you may be flooded, known -- no if's, and's or but's. what i am asking is two things. first, the best science was clearly not use in nassau county to use the information from the county 30 miles away. but you support starting the remapping process over so we could get an accurate look at nassau county? it is not fair. no one revealed the to west. we found it out ourselves but the army corps of engineers has confirmed it. >> we have new updates for other parts of the basin and we will respond back in the riding and

we will respond with how we will address the issue including other areas. we are working on that. >> other areas in nassau or in general? >> in both the. we will focus on the areas you have the identified. -- both. >> will i be happy with this letter? >> it will be responsive and we will continue to work with you. >> i will not be happy unless we really deal with this problem. said that something will be done. the men decided to extend eligibility -- fema decided to extend eligibility for the policy. could you please address if we

can extend that beyond the two years until we get a fair adjudication of what is happening in nassau county because it may not be solved within two years, extending the insurance, which as i and stand is totally in -- understand is in fema/s discretion. >> i would have to defer back to the chief counsel to make sure we are giving a chief answer. >> i feel very strongly about this. i am prepared to do whatever it takes around here to get fair treatment for these 40,000 homes because they have not been treated fairly by fema. to save $1 million and use a different place and drafted on

to nassau county and tell them that they have to pay so much more in a place that has never had a flood since it are known history, 5 miles inland with no streams, no creeks, no rivers,, we need to do something about this. >> i understand, senator. >> thank you. senator kirk? >> thank you, mr. chairman. i will be much easier on you. you did a hell of a job in illinois. i just checked with my team in southern illinois and very high marks. i want to thank you for working with me and mr. castillo for not recognizing any levy at all. i appreciate the comeback. i want to talk more generally

about the program. my understanding is $18 billion right now and this has been growing since 1973. we have a policy of repetitive loss which is now 33% of all of your losses. anyway we could not authorize this, kind of like three strikes and you are out rather than being taken to the cleaners over and over again? >> i defer to this body. on one hand, yes. we do have lost properties and how long will we continue to subsidize the risk? then we have a situation where we've provide the same assistance. >> i & everyone is asking you for money, but you would not have the constraints that require you to lose that money. >> again, this is often times a

preferred course which is to buy out the properties which is done with state and local governments. some of this has been less severe because some of the previous homes have been bought out. what is the appropriate level to subsidize the rest and how long should be subsidized before we say it will no longer be managing that way? >> i am worried that government always makes the wrong decision because they always lose money compared to a private entity because they would not read the policy after the third loss. what about not setting preferred? at least we are making the

decision on vacate -- vacation homes, but what about the whole plan so we can not determine the risk? >> for those who could afford it, it would be a shock and a somewhat painful, but did not result in them losing their homes. there are real issues with lower-income and fixed-income people that a sudden increase in premiums, such as several thousand dollars, would nbe extremely detrimental. should we look at some way to continue to support those that this would create a hardship that would actually result that in them losing their homes? >> we just had news crossing the wire that the treasury has now said that our debt will now exceed our national income this year rather than three years from now.

since we have an underwriting these guys since 1973, perhaps it may be the time to stop of. >> this is the body that can make that determination. >> the senate made this decision in their legislation. >> the program will go as directed. this was a request that was put in to minimize the impact and this is something that this body can do. i would caution the unintended consequences and we could result in impact of those who cannot afford this and it could cause adverse risks we did not anticipate. >> we're subsidizing people building in one plane and getting wiped out periodically. >> those who want to build

should take on the full risk. we are concerned about the local economies if we price people lot of their homes because of insurance costs. >> so there is a growing concern that they should be allowed to recover their own costs. i think congress is the problem, not you. the direction i hear that you want to take is that we would be far more sound in the running of this program if we were allowed to let you make these decisions. for a program that is a significant drag on the treasury, it seems operating in that way, as we just heard the news, that we have a debt that has exceeded the national income may be the way to go. >> the new move toward an actuarially basis. i think we will still have the higher risk properties in some sort of a federal program.

as we move to looking at this and the private sector market. >> maybe we could give you one overarching authority to say not understanding that you have overarching authority to waive the requirements of congress so that the program can be run without the cost the taxpayer. thank you, mr. chair. >> senator menendez. >> thank you, mr. chairman. what happens when this program ceases to exist? what will happen to the real- estate market? >> you would have but the federal government and any hope of getting the private sector back into underwriting mortgages walk away from all properties because of flood risk. this happened in the 1960's when they determined it would no longer cover flood as a risk. it could the taxpayer in an

uncovered risk -- it puts the tax payer in the u.n. career risk. what happens there is this is a hazard that currently the federal government is the primary provider of that coverage. without that, those people in the high-risk areas may not be able to receive financing for their homes. the original tenants of the program to protect the mortgages would come back and, i think, it is a great housing market even more than we have seen. >> with that as a promise, it seems like we needed to act. so the question is what do we do? in my state of new jersey in march, the governor filed a request for a federal disaster

declaration and fema and the night it -- denied it. is that not a perverse disincentives? the reality is that it seems to me at a time when we're trying to encourage people that it is in their best interest to participate in the program, does make sense to penalize people who have been successful in getting their residence to purchase insurance? >> where we administer the individual assistance programs would have come to bear with the insurance programs, i feel that way many days. i realize the programs will not make people whole. the most we can ride to a homeowner in the qualify for everything would not even begin to cover their mortgage or replace their homes. in the tennessee flooding, the

average amount was less than $7,000 per family. going the route of individual assistance in a new has not worked. >> i agree with you on that. here are communities that, have the most part, having trouble raided their participants, yet they get punished. certainly that would be helpful to them to have assistance to be able to meet the challenge of their families, yet those committees to do not participate to the level that many in new jersey do, they get the benefit in the communities that do participate getting negative. it seems to be a perverse this incentive. >> this is the one hazard where that situation exists. >> let's talk about another hazard. with billions of dollars being

spent on disaster assistance, many of which going to communities who are uninsured, do you believe it would be cost- efficient to provide doctors to help low-income families especially those who are now faced inside these set of circumstances? >> that is one option. we have tried to move to a more actuarially-based to increase participation through a voucher system. the question is if it will be sustainable. either we would do vouchers or some sight of adjustment based on the and come to continue some level of participation. those have desired outcomes. it would have to be something to sustain. what we do right now is if we do have a flooding and get individual assistance, we require you to purchase flood insurance for the first year.

then you have to maintain it for a future years. oftentimes we will go back later because they did not want to or could not continue to pay for flood insurance. >> it seems that we need to do something to help those individuals caught in those circumstances, on with. is sticker shock. i was a mayor at one time. the nature of the resources is the tax base. in our effort to eliminate properties, should we may be be considering, as a way of incentivizing in those communities that face this, 33% of all flood insurance plan claims are made about 1% of these types of properties. should we be looking at looking at a way to off weight some of

that loss that would incentivize the rate of this base? >> our current buyout programs, we hear about a cost share. they want to get those properties out of the rating systems, how much money do we have? how many properties can we buyout? >> the buyout program, about how much will it cost? >> there will be many municipalities 33% of your claims are over those repetitive losses. it seems to me it it makes economic sense to deal with those 1% in the worth of losses

on those properties. >> thank you, mr. chairman. rator.you, administe i appreciate the conversation i have heard. i would ask you to include me in the letter you will been sending about flooding. that is the one that will affect the northeastern border of kansas. i also wanted to see if you had any sense that there was a need to address what i see as perhaps a bias against rural disaster with fema assistance. beam lowerets to

populations, they can be just as damaging, but we do not reach that threshold necessary for a presidential declaration. just recently, one of our counties had 100% damaged by flood, but the value did not meet that. in writing, kan., there was a tornado -- redding, kansas, and it was almost totally devestated and would not meet the threshhold. i do want to make certain that we do not have a formula that unnecessarily excludes people who happen to reside in the world florida -- in rural areas. >> i come from a small part of the state with small world communities. the stafford act is judged

against the state and population. it does put a disadvantage to smaller communities and the theory being that the state does have the resources to support those communities. it does look at the impact to this date per-capita and then we look at the per-capita impact in those communities. we do look at the severity of the impact particularly in determining what counties to include in the initial declaration. it does look at the state resources verses just looking at the community impacted. >> when you say you look at the community and the damage per- capita, is there a way to override that in our state to receive that designation? >> there is a time when a severity would not reach a per-

capita but it would warranted decision to support a declaration. that is why fema does the ride up to but ultimately it is the president's decision. we have had intensity of impact were you did not meet that threshold, but the impact was so catastrophic to warrant that assistance. >> it is my experience that many of those smaller rural communities have the least amount of preparation expertise responsibility as compared to a larger community that has more professional ongoing planning in response to that kind of disaster. with your help, i would welcome that. one of the things that made sense to me, you talk about the

insistence of the affordability of coverage. i'm interested to know what it would take in order for premium studio in escrow. -- in order for premiums to be put in escrow. do you have the authority to escrow payments? >> i will respond in writing because there is another piece of that that we are exploring. just like your property taxes and everything else to be put in your payment rather than have this being another payment. we have also been asked to look at quarterly payments. i am principally in favor of looking at making this fit the other insurance models and fit the escrow model, but allow people to do quarterly payments of people understand they just do not by a quarter when they think they will flood of buy

the year's worth of insurance. we are looking at how to do that. i will have to respond back in writing. if you can build this into the reoccurring cost where people may want to buy this as a separate policy. right now, it is a lump-sum. we look at how we will provide this. >> if you have concluded that this is an appropriate opportunity, do you have the authority to allow escrow or quarterly payments in? >> we will respond back in writing in what we can and cannot do. >> thank you. >> senator reid. >> thank you, director, for your assistance last year in the floods in rhode island. i have repeatedly been stopped by my constituents who went out of their way to command fema -- commend fema for their efforts

and going above and beyond. thank you for that. i think ethics begins at the top, so thank you very much. well done. a lot has been discussed about mapping and your risk mapping program designed of 80% of the nation's flood hazard data will be new or updated. my sources indicate we are at about 55% at the end of 2012. how will we go from 55% up to 80% particularly with constrained budgets? >> senator, we will not come to be honest. we have to make targeted reductions in our budget and we have looked at reducing budgets for map modernization. it will take longer to complete the work. >> how does that play out now?

my colleague senator schumer was talking about colleagues in his part of the country and we have various that are not in flood zones and banished -- and then some that should be. how does that work today when floods are raging to the country? i would think maps would be the first priority because then you can decide who must have insurance, who does not need it, and right now that is all based upon 35-year-old the data from a geological survey. >> senator, it is not an easy or prefer will choice. the best data we have, and part of this has been often times challenges to the data we have produced, having to go back and validate, and oftentimes restudy because the outcomes of

the data were not what people thought it should be. that increases the cost. i do agree that the best way to start is to always know what your risks are and have accurate maps, not only for the purposes of insurance but for a zoning and development so we can make better and wiser choices that we build in places that have the least amount of risk and we mitigate against risk where we know the hazards. >> has there been any discussion about trying to develop a joint enterprise to do this with the private sector, state and county governments, which i think would also have a vested interest in not writing policies that they know is wrong? >> speaking from experience, there are two cases where i know this was done successfully. one was in north carolina after the aftermath of hurricane floyd. they had mitigation the aftermath to produce very

high-resolution flat maps. my experience in florida at been coastal communities to get high- resolution maps and then applying that for future map development, but i think you point out a key issue. much of what we are doing is establishing the digital elevation maps. there is a significant economic advantage as we build, whether this flood insurance, highway, water management, state or local programs to be able to integrate all this digital elevation data into annapolis. not only does it provide as tools for flood insurance, but it is significant to have the best available data for people planning and looking at future growth and construction all the way through agriculture. i am firmly committed that as we do this mapping that the baseline data, as much as we can leverage what other people have done or to fill in gaps, we are working more with interagency in the federal programs to make sure we are identifying where we

are doing mapping if other people are doing similar work to make sure we maximize investment. >> a final point on this, and i agree that this is a very difficult judgment you are making. you have been given this responsibility and you are providing a general good, a social good that a lot of other people depend upon. if they could be encouraged and in fact could see the wisdom, that it would make sense for them to bridges to pay to help us. it is not just states and localities by private entities. with the technology today and the ability to map things from the sky quite accurately, i think that maybe an approach that would take some of the burden off of you. once again, let me conclude by thanking you for the great efforts last year in rhode island. >> thank you, senator. >> i would like to thank earwitnesses for being here

today to contribute to the reauthorization discussion. the nfib has an important mission. today's discussion will assist us as we charge a sustainable future for the program. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> tomorrow, a round table with zornick.urt and georgie karen elzey will talk about the expansion of job training and kevin vote of clear energy partners discusses the future of opec. "washington journal" at 7:00 a.m. eastern live on c-span. connect with c-span on line with the latest schedule update and video on twitter. continue conversations on facebook. political places in washington and beyond with four square. highlights on our youtube channel. c-span and social media -- connect today. the u.s. economy would have to create 21 million jobs by 2020 in order to get back to pre- recession employment levels according to a new study by mckinsey and company. yesterday, outgoing economic adviser on istanbul's been --

austan goolsbee talked about this at an event on economic development. here is a portion of his remarks. [applause] >> thanks and we'll look forward to an interesting dialogue for today's important topic. i'd also like to of knowledge trustee bill lewis there was the founding director of mckinsey global institute 20 years ago, so good to see you here. [applause] before i introduce our honored guest speaker, i would like to take a few minutes to talk about what motivated the mckinley group to publish today's report. one of the most troubling

issues, as we know, on the minds of business and policy leaders in the u.s., and not everyone in this room is how will we drive growth in the united states after the deep recession that we have been in? we at mackenzie have been thinking a lot about this challenge and embarked on a multi-year and a multi-faceted approach. we have written two reports right now, one on the role of multi-nationals and one on the success and productivity in today's economy. we will be following up today's report with the one on the importance of solving the debt and overhang issues in the u.s. and finally won on u.s. sector productivity. today, what we want to talk about is jobs. we do not have all of the answers to this or the other challenges that we are exploring, but we think we could help bring the fact basted this to frame the discussion to get a focus on the most important

issues that will help drive creation after this difficult recession. that we introduce our honored guest. -- let me introduce our honored guest. austan goolsbee will give us some numbers and his thoughts on the report. i think you all know him committee chairman of the council of economic advisers and a member of the cabinet for the president. he is on leave for a little bit longer from the university of chicago's route school of business where he researched tax policy, american industry, technology, innovation, and a lot of other topics crucial to today's economic challenges. he was an economic adviser to president obama in his 2004 senate campaign and a senior economic adviser during his 2008 presidential campaign. prior to joining the administration more formally, he was a member of the panel of economic advisers to the congressional budget office, a

research associate, and a research fellow at the american bar association. he's also a member of the u.s. census advisory committee. he is a former fulbright scholar and offered peace longfellow. he was selected as one of the six and gurus of the future, the best under 40, and named a yawn local leader at the world economic forum. he is a frequent columnist when he is not advising the president. and pour in, he is a winner of the dc's funniest celebrity contest. with that, it is my pleasure to introduce austan goolsbee. [applause] >> thanks, everybody. i will just speak for a little

bit. you kick this off with a note of optimism. we started from crisis and we ended when the lights went out and no one was heard from again. that, i would suggest, in my reading of the report, was not the main message i took from the mackenzie report. i would say that is not the main message of the administration either. charlie, you're speaking for yourself only on that one. i thought i would just talk about three general points and why i like the report. analytically, there are certain parts that i argue with, but the effort is exactly what we should be doing because my first point is that the nature of the recovery, where we are in the crisis-recovery has changed quite a lot. we go through the first 1.5

years, really, and we are in the outright rescue mode. the private sector is in freefall. in my view, anyone saying that what we should have done at that time was to just get out of the way and let the private sector solve the problem itself was not really paying attention because that was not in the cards. we're losing 750,000 jobs per month. the gdp is shrinking at a 6% annual rate and we are in the steepest decline in, really, most of our lifetimes. i will not mention any one's age in this audience, but the depression days, before we saw anything like that. we have now, over the last 6-12 months shifted out of rescue mode and into something like a transition. we are trying to transition back to a growth mode where private

sector companies start getting money back on their balance sheets. they returned to profitability. output growth exceeds productivity and so they actually start hiring. the last 15 months, the private sector adds more than 2 million jobs. the last six months, 1 million of those jobs. we do have a negative jobs report for this last month. no question. it follows three quite excellent job reports in the months previous to that. i do not think, just in terms of the economic prospects that it is a secret to anyone that we have a series of tragic disaster is both natural and man-made in japan which have a clear negative impact on the supply chain of manufacturing and really around the world not just in the u.s.. you have the events of the

middle east and the gas price shocks. you have these european financial issues. those headwinds are slowing us down. i learned for many years in academics that economists have a vehement arguments about predicting the past so stay out of the business of predicting the future. i will just simply note that the private sector forecasters and the fed are saying they expect that many of those forces were temporary/partial and expect a rebound in the second half of the year going in to 2012. the labor market remains heavily damaged. but, it is on a trajectory and of improvement. my first point is the nature of where we are in the business cycle is shifting.

my second point is a where to expect recovery to come from is also changing. the correct policy when you are in the death of a rescue mode is all about government directed stimulus. it is not sustainable. that is not a critique for someone to say that it was not sustainable. and was never meant to be sustained. the government involvement when we are teetering on the edge of the great depression is because the government is the primary, and in many cases the only come engine of recovery. as you shift it to better conditions, that is no longer true. it becomes things the government can do to facilitate the standing up of the private sector. the nature of where you would see that growth before people become too directed to if we cannot get back to the housing growth that we had in the

2000's, if we cannot get back to the consumption spending that we had in the 2000's that we can recover. that is the underlying premise of a lot of what you hear in the media. think for a moment about the 2000's compared to all previous expansions in the united states and compare them to international expansions in the 2000's. they looked extremely different because it is heavily weighted to consumer spending faster than income growth and to residential construction in the housing market. neither of which were sustainable, both of which fueled by a bubble, and are not, i would argue, a healthy model of what we want to return to. the healthy model that the president has outlined repeatedly, when i was on jon stewart about 'winning the future" and it's now the

agenda formerly known as "win the future" is that we need a broad-based growth. we need export expansion. we need business investment to be a driver. we need research, development, and innovation and small business to be the drivers of growth. we want this to be spread across a lot of industries, not just in the few that are in the direct spillovers of bubble-fuel the recovery. as a result, analytically, in looking at the report, what i like a lot about it is that it is engaged in the efforts of the private sector thinking about where we view the opportunities for growth going forward. let us not forget that the u.s. remains the richest country in the world with the most productive workers in the road.

they say we need to stop telling the president that. why? it is true. they say the purchasing power adjusted basis that the base -- the government of luxembourg is richer than the u.s. except for 300,000 people in luxembourg, we remain the most productive in the world. for all of the talk about china, let us not forget we are some 7- 11 times richer than them. in the same way that in my household our three kids share of our growth is 100%, but that does not make them richer than us and we should not forget that. we have extremely productive industries. we have gotten substantially more competitive relative to

other countries over the past two years now going through this wrenching downturn. one critique i would have of the analysis, however, in the mckinsey report is the notion of a jobless recovery as applied to now in some way compared to 2001. it makes the argument that there has been a secular change in business cycles that it takes longer and longer to recover. 2001, there is no question that is true. it is almost two full years from the end of the recession before we generate any jobs in 2001. that is, in my mind, totally different than the business cycle we had just gone through. if you ask how long it will take to get back to where we started, yes, by that measure, it looks like it will take a long time. there is a major difference between down somewhat and

remaining stagnant and plunging the most you have ever plunge in 75 years and working your way out of it adding 2 million jobs over 15 months. that is not a jobless recovery. and in my view, that is an incorrect definition. in 1991 and in 2001, both were mild recessions. the 2007 recession which began in the end of 2007 is intensively deep. let us not confuse the rebuilding with what is stagnant. in the rebuilding, my fourth point, the mckinsey report, and i commend everyone to look at the job council meeting coming on monday because they are thinking about a lot of these similar issues and have been working with mackenzie on the factual basis, but the efforts that the private sector identify

what parts where there will be opportunities and we make sure that we get our workers train the today to be filling the jobs that we are expecting in one year, five years, 10 years down the road is critically important. the jobs council probably has a slightly different view of what are our areas of expansion. in the mackenzie report, it foresees a broad based growth, but it is somewhat negative on the prospects for employment growth in manufacturing over the medium term. i think the administration and the jobs council are more positive on the prospects for manufacturing job growth because, i think, we anticipate a significant expansion of exports. because of some national and international imbalances that will have a tendency to close, i

think the prospects for manufacturing growth are fairly decent. we go way down and we started coming back out of the whole and in this part of our coming back, we are still at a trouble spot with a long way to go, but of the 15 percent that has recovered, let's call it, that looks pretty good. it has been quite broad based. manufacturing is having the fastest employment growth in 15 years. we have seen the health-care sector, leisure, entertainment. we have seen retail trade growing. it has been far more broadbased than anything we saw in the 2000's. the effort is we need to get the growth up and it needs to be powered by the private sector. things like investment incentives to the tax code for business that builds in the united states was an

inconceivable policy. that would not have worked, we could conceive of the policy, but it would not have worked at a moment when the private sector was in free fall. we could have passed an investment subsidy and the march 2009, but few in the private sector would have said, "i think it is a great time to build a factory and buy a lot of equipment in the u.s." broadbased growth, whether from mckenzie, the jobs council, or others, let us think about what these areas are where we have the opportunities. the last point i will say is that we have to live within our means as a government and in the

private sector. on the budget, we have not about the long term fiscal challenges facing the country for 40 years, and that problem has not got a materially worse in the last two years. it is rooted in the aging population, the acceleration of health care costs, and i regard you, some of the policy choices made in the 2000's. those issues are long standing and we should and must address them. let us not forget that it is not the number one issue facing the country. we must deal with that issue and live within our means. we remain the richest, seconded to 300,000 workers in luxembourg, the most productive in the world going five years from now and 25 years from now. that mean that as we think

about what must be cut, in many ways, the whites becomes more important than how big. it is not argument like in 2009 about how big the stimulus is and the contraction. the question is it does really make sense to cut education and training spending at a moment when we know that over the next 6-18 months that there is every possibility that companies will say that they wanted higher than they need people with the following -- they want to hire, but they cannot find people with the right skill sets. we have training programs to have them ready to build those programs as we come out of the downturn but it is important that we not scamp on the main drivers that have it made us the richest country in the world, the skill of our workforce, the investments in innovation and r&d, and the kind of public- private investments in infrastructure and capital that

have kept us in those situations. thank you for your time and i envy you and the panel and research you are about to hear. thank you. [applause] >> on "newsmakers," senator lamar alexander talks about democrats and republicans in congress trying to come to terms on the debt coming tax, and spending. and that developments in the 2012 presidential campaign. 2012 presidential campaign. >> i am wondering about how you think republicans are taking about the prospect of taking on president obama right now. to do you see in the field, who has the best ability to do that , and what is the process that people like yourself go through when you think about about possibly jumping in the fray? what are they thinking right

now? >> if you are thinking very long and hard about whether to run for president, you probably will not. my rule of thumb is, number one, the requirement for a well qualified person is 90% of it actually announcing and finishing the race. if you think about it, we have this great big, complex country of ours and other republican side, we will probably only in the but two or three people we take seriously as competent to be the next president and likely to do so. that is already about the case. i had dinner with one of the candidates the last night. they had been up to new hampshire where they have the midnight voting. i know something about it. >> can you tell us to? >> governor huntsman. i think he and gov. pawlenty and romney are all 3 former

governors with strong prospects in our country. >> did you give any advice to governor huntsman and his family? >> bayh was that smart, i would be in the white house. >> what about taking on president obama? his approval ratings have been up and down lately, and but he has the position of being the sitting president. >> no one should underestimate president obama. i went with him to broker to washington high school in memphis about one month ago. he made a beautiful talk to the students there who come from families among the poorest in the country and it was a great example of how he can speak directly to them. he will not be easy to defeat. i worked for a very good president one time, the first president bush, who lost after

one term and he lost because democrats said the economy was stupid. the vulnerability president obama has is the republicans may be able to say that two years from now he made it worse. 9% unemployment, food prices, gas prices, health-care mandates, health care costs, slow working trade agreements, undermining the right to work laws. this has been a blanket over private-sector job creation. if they can say that they will not blame for problems that you inherited, but we will give you credit for having made it worse. he will be vulnerable to a stronger republican nominee. >> again see the entire interview with republican conference chairman lamar alexander on "newsmakers," sunday at 10:00 a.m. and 6:00 p.m. and available online at c- span.org.

on monday, president obama travels to north carolina to meet with his jobs council to discuss ways to increase private sector hiring. he spoke about this in his weekly address aimed at helping workers develop skills and training to succeed in the workforce. this is followed by the republican weekly address. he also focuses on job creation by discussing the house gop plan and the administration's failure to reduce unemployment. >> hello, everyone. i want to spend a few minutes talking with you today about our economy. we have come to the worst recession since the great depression. while our economy as a whole has been growing and adding private- sector jobs, too many folks are still struggling to get back on their feet. i wish i could tell you there's a quick fix to the economic problems, but the truth is we did not get into this mess overnight and we will not get out of it overnight. it will take time. the good news is when it comes

to job creation and economic growth, there are certain things we know we can do. government is not and should not be the main engine of job creation in this country. that is the role of the private sector. one thing the government can do is a partner with the private sector to make sure that every worker has the skills they need for the jobs they are applying for. on wednesday, i announced commitments by the private sector, colleges, and the national association of manufacturers to make it possible for 500,000 community college students to get a manufacturing credential that has the industry stamp of approval. if you are a company that is hiring, you will know that anyone who has disagreed has the skills you are looking for. if you are a student considering community college, you will know that your diploma will give you a leg up in the job market. on monday, i travel to north carolina to meet with my jobs council and talk with -- and talk about additional steps we can take to spur hiring and make

sure our workers have the skills they need. there are a few things will help grow our economy and the support a middle-class lifestyle. quality education is a prerequisite for success. we're challenging states and school districts to improve teaching and learning by making it a national goal to once again has the highest proportion of college graduates in the world by 2020. more and more jobs are being created in the clean energy sector so we are investing in wind power -- solar power and biofuels to make us less dependent to clean up our planet for our children. these are steps we now will make a difference in people's lives not just 10 or 20 years from now, but now and in the months to come. in the end, the people i hear from in letters and meet across the country are not asking for much. they artist looking for a job that covers their bills. they want a little financial security. they want to know that if they

work hard and live within their means that everything will be ok. they can get ahead and give their kids a better life. that is the dream each of us has for ourselves and for our family. so long as i have the privilege of serving as president, i will fight but that dream within the reach of all americans. have a great weekend, everybody. >> hello. i am congressman adam kinzinger. by a mayor representative of illinois 11th congressional district. -- i am a representative of illinois. i can tell you that in the president's home state, every day we hear about a company that is looking to leave or is already on their way out the door. why? taxes are too high. regulations are too burdensome and the government will not stop spending money it does not have. my constituents have the same questions many americans do. where are the jobs? what happened to the stimulus we

heard about? like you, i remember the chart that the economic team put out the predicted that with stimulus unemployment would never go higher than 8%. i remember the press conference for the president said 90% of the jobs created by the stimulus would be private sector jobs. there is the interview on cnn when one of the top economic advisers said that jobs be created immediately. none of those promises panned out. if anything, things have gotten worse. unemployment is over 9% and the share of americans out of work for more than six months has surpassed great depression levels. these broken promises speed to a much bigger problem, a government arrogant enough to think it can simply spend, borrow, and tax are nation back to prosperity and job growth. we cannot continue to follow the same failed agenda that has driven job seekers further into

doubt and uncertainty. the road to refueling our economy and tackling our debt head on, simplifying the tax code, rain in the washington red tape factory, pass impending trade agreements columbia, and increasing energy production making in our nation more energy secure which would help lower costs at the pump and create jobs here at home. these are some of the steps we need to take to get government out of the way and let our out of the way and let our economy