mr. sherman: this bill defunds libya unless authorized specifically by law. if it passes long before it's passed by the senate the president will come to us and ask for authorization. and i for one would want to grant limited conditional authorization. . we just rejected a limited authorization. all authority and no limbation. that's how it would be interpreted by the white house legal counsel given how it was drafted. the house should consider real binding limits and conditions. because democracy and rule of law for the people of libya is important, but democracy and rule of law for the people of the united states is more important.

there are those who regret they cannot offer an amendment to this bill. yes, they can. the motion to recommit will be in order just as soon as we end debate. i know that we have had important resolutions from the arab league, the u.n., and nato. those are not substitutes for congress. the war powers act is the law of the land and if we don't stand up for it now, when will we? and if this president won't obey it, which president will? the speaker pro tempore: the gentleman's time has expired. the gentleman from washington. mr. smith: thank you, mr. speaker. i yield one minute to the gentlewoman from georgia, member of the foreign affairs committee and also a member of the nato parliamentary assembly, mr. scott. the speaker pro tempore: the gentleman from georgia is recognized for one minute. mr. scott: thank you very much. thank you very much, mr. smith. what we have here is two essential arguments. one is more of an intramural argument between congress and the white house. but it is a misplaced argument because there is no president that's come to this congress for

a declaration of war since world war ii. and granted we have been in seven or eight major conflicts. so this is much greater than this conflict between the white house and this congress. unfortunately i believe that this measure is just an attempt to rather in a strong way get the attention of the president. maybe to chastise the president a bit. so surely. but i think if you look at the record there were communications here, but there is a larger profound message here. it's not a message that this is to send to the president. this is a bad time piece of legislation because it sends the wrong message to the world. ladies and gentlemen of the congress, we are the leaders of the free world. america is a great country and our standing is at stake and this move, this bill will pull the rug out from under nato at

precisely the time when we need to be sending a strong message of encouragement. the united states is in a support role here. so it is very important that we defeat this amendment and make sure that we send the right message to our allies that we will not pull the rug out from under them. the speaker pro tempore: the gentleman's time has expired. the gentleman from florida. mr. rooney: mr. speaker, i yield one minute to my friend from massachusetts, mr. frank. the speaker pro tempore: the gentleman from massachusetts is recognized for one minute. mr. frank: mr. speaker, i want to send a message to our allies, and i don't think we are pulling the rug out from under them. look at these wealthy populous nations of western europe. i believe it's a good thing to get rid of gaddafi. does america have to do everything? people say we are the indispensable nation. that's a terrible burden to impose on ourself. we cannot afford it and it cannot be done effectively. let's get people who can dispense with it. my friend, the ranking member of

the appropriations committee said, we have to do this because nato can bomb but they can't suppress. what a great bunch of allies, they can bomb on armed people but if they shoot back they got to come running to as you. yes, i want to send a message to nato. gaddafi's a bad guy. if england and france and italy and germany and spain and the netherlands and scandinavia can't together muster the military force for this weakened poor nation, then let's re-examine the value of this ally. there was in the "king and i" when he says, if the allies are weak might not -- it's time for them to step up. this is not to protect gaddafi. it's to say that america can no longer be asked to be the one that does everything, everywhere, every time our allies have to step up. the speaker pro tempore: the gentleman's time has expired. the gentleman from washington. mr. smith: thank you, mr. speaker. i now yield two minutes to the gentleman from texas, mr. paul. the speaker pro tempore: the

gentleman from texas is recognized for two minutes. mr. paul: i thank the gentleman for yielding. i really speak on the house floor -- rarely speak on the house floor and almost never have i come to the floor two times in one day to speak on one issue. but this is my fourth trip to the floor today on this issue because i consider it so important and so serious. if i could rename this bill i would call it a bill to authorize the use of force in libya. that is what we are doing. we should not kid ourselves. we are authorizing the use of force. we are endorsing the obama war in libya. some see this as weakening our presence over there. but there is no doubt if you read it carefully we are expanding and giving authority because of the exceptions. the exceptions include search and research, intelligence, surveillance, reconnaissance, refueling, planning, contract labor can still go in, the c.i.a. is in there already, special forces. and paying for it.

how can you do that without paying for it? we are there, this will be the first time the president will have received any information from the congress that it's ok to pursue what we are doing. we are supposed to be sending the message that we are in charge of when we go to war an when we pay for this war. we are not supposed to lie over and capitulate to what the president wants as we have been for too many years. so there is no doubt that i think the proper vote here, the proper constitutional vote, the proper vote for the best of our national interest, the best vote for peace is to vote this resolution down just as we voted the previous resolution down. we should prohibit the use of funds. a lot of us complain on this house floor because of the way the president went to war. he didn't come here, he went to nato. but this supports nato. one of the arguments in favor of this bill is we have the exceptions so we don't want to break ties in our aleaningance to nato -- allegiance to nato.

that's what we are supposed to be doing. we are supposed to be claiming the sovereignty and responsibilities in the house. we are not supposed to roll over for nato and us united nations. we are supposed to stand up for this country. we are not supposed to go into war under these conditions and under those circumstances. i strongly urge a no vote on this resolution. the speaker pro tempore: the gentleman's time has expired. the gentleman from florida. mr. rooney: mr. speaker, i yield two minutes to my friend from indiana, mr. burton. the speaker pro tempore: the gentleman from indiana is recognized for two minutes. mr. burton: somebody said a while ago we ought to be supporting the arab spring because there is movements towards democracy over there. we went into libya to help in a humanitarian effort and get rid of muammar gaddafi. who are we supporting? nobody at the white house has come down here and said we are supporting this group of people. we don't know if it's the muslim brotherhood. we don't know if it's al qaeda. we do know there are al qaeda operatives that came from

afghanistan fighting with the rebels in libya. are we supporting al qaeda? are we supporting the muslim brotherhood? the muslim brotherhood in egypt has opened up the border, the government of egypt, whatever that is right now, has opened up the border between egypt and gaza. which provides a mechanism for weapons to get into gaza to fire on israel. so before we start supporting a rebel movement and going after somebody like gaddafi, we ought to find out who we are for. we are spending billions of dollars before this is over in a war where we don't even know who we are supporting, and it's in violation of the war powers act in the constitution. this is something we should not be doing. the president should have come down here and made his case. he should have said what our goals are. he should have said who we are supporting and why are we supporting them? we are in a war against terrorism and we may very well end up with terrorists controlling libya and egypt. and that is a tinderbox we don't

want. we get about 35% of our energy from that part of the world and if all hell breaks loose because we have gone with the wrong guys, we've got a real problem in this country economically. and the president ought to be thinking about all that and making his case to the congress in accordance with the constitution and the war powers act before he does it. i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. the gentleman from washington. mr. smith: thank you, mr. speaker. i yield one minute to the gentleman from california, mr. mcclintock. the speaker pro tempore: the gentleman from california is recognized for one minute. mr. mcclintock: i thank the gentleman for yielding. mr. speaker, this bill purports to cut off funding for combat in libya. in doing so it simply forbids what the constitution already forbids, the waging of war without explicit congressional authorization. but then it specifically grants to the president what up until now he has completely lacked. congressional authority to engage in every conceivable belligerent act short of

actually pulling the trigger. refueling bombers on their way to targets. identifying and selecting targets. guiding munitions to their targets. logistical support. operational planning. these are all acts of war in direct support of belligerence at war and this bill authorizes them. the house has just considered whether to authorize war with libya. it has specifically, categorically, and decisively rejected it. the president's now on notice that he is in direct defiance of congress. that is the message we need to send today. let's not enter a war through the backdoor when we have already decided not to interer it through the front. the speaker pro tempore: the gentleman's time has expired. the gentleman from florida. mr. rooney: mr. speaker, i yield two minutes to my friend from texas, judge gohmert. the speaker pro tempore: the gentleman from texas is recognized for two minutes. mr. gohmert: thank you, mr. speaker. it is true gaddafi's a bad guy. he needs to go.

but the problem is for those who say will this mean the end of the bush doctrine? i don't know this president's been enforcing the bush doctrine, but the problem is as my friend, mr. burton, pointed out, we don't know who is going to replace gaddafi. it's not in our national interest to help what may be another iran with khomeini and ahmadinejad come to power. and especially when we are releasing oil at a time when that oil should be saved in case it all goes to blazes in the middle east and we don't have any coming from there. now, i'm not crazy about the exceptions, either. the search and rescue, intelligence surveillance, and reconnaissance, aerial refueling, operational planning because this administration is probably going to describe everything they do as falling into those exceptions, but it's a step in the right direction. and some have said, and i know their hearts and i know they mean well, we want to support

our troops and i don't like it when people say let's back out and cut funding when troops are in harm's way. i have talked to enough troops who want somebody in washington to say, this is insane. don't get us involved. because they are good soldiers and when they get their orders, they are going to salute and go follow through on the orders. we are the body that must step forward and say, enough. mr. president, we are not responsible to the arab league, to nato, or to the u.n. we are responsible to the american people. so though i don't like the exceptions i will vote for this. it's taking a step in the right direction. i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from washington. mr. smith: thank you, mr. speaker. i yield one minute to the gentlelady from michigan, mrs. miller. the speaker pro tempore: the gentlelady from michigan is recognized for one minute. mrs. miller: mr. speaker, i intend to vote no on this resolution. we just voted on a resolution on whether or not to authorize in libya and this house

overwhelmingly voted no. no to authorizing that. i have been opposed to this action in libya. i have not been persuaded the u.s. has a vital interest there. by the way we were not attacked by gaddafi. i spent two hours in a tent with gaddafi in 2003, we were the first congressional delegation, over 38 years, to be there. in fact we were there because he was voluntarily giving up his nuclear arms. i will say there are probably few dictators who are going to do that again after watching what's happening over there. he is a bloody dictator. one of the things i learned, he hates al qaeda. i also think this action vividly demonstrates the weakness of nato, quite frankly. it's a great organization. we appreciate their partnerships, of course. they are our allies, but it's an antiquated organization. the united states is paying 75% of the cost of nato and nato can't even take out a two-bit dictator like gaddafi? why. because we have enabled our allies, providing their defense for them, for decades. and instead of spending money on their defense as they said 2% of their g.d.p. they are spending

the money on social programs, their money on lower corporate tax rates, etc. i would say yes, gaddafi is a bloody dictator. he's a terrorist. he did not attack us. let us remember who left the lockerbie bomber out early as well. we need to get out of libya. the speaker pro tempore: the gentlelady's time has expired. the gentleman from florida. mr. rooney: i yield one minute to the distinguished gentleman from ohio, the speaker of the house. the speaker pro tempore: the gentleman from ohio, the speaker, is recognized. the speaker: let me thank my colleague for yielding. let me say that i'm disappointed that we have reached this point here today. mr. speaker, it didn't have to come to this. nearly 100 days ago the president initiated a strike against libya. went out in consultation from -- without consultation from the congress and without prior explanation to the american people. then as now we all supported the removal of the regime of libya, a regime that was slaughtering and is slaughtering its own people. yet rather than seek regime change from the start, the

president chose to follow not lead. and pursued a strictly humanitarian mission under the banner of the united nations with no plan for colonel gaddafi's removal. so at the outset we asked some very straightforward questions of the president. why is it removing can caffey a part of this mission? what if he doesn't leave? . who are the rebels that we're there helping to fight? how long is this going to last and at what cost and what does success look like? these were questions that the administration would not or could not answer. under our constitution the commander in chief has authority to take actions necessary to protect our national security. this is an authority of which i in this house respect. but it does not free the president from accountability

to the american people, to this congress or to the rule of law. now, whatever your opinion of the war powers resolution may be, the fact is it is the law of the land and simply cannot be ignored. so three weeks ago this house overwhelmingly passed a bipartisan resolution asking the president to explain how this mission is consistent with our national security goals, to justify continuing this operation without authorization. he responded by telling us he didn't need congress because there are no, quote, hostilities taking place in libya. well, we soon found out that even his own lawyers don't buy that argument. now, if the commander in chief is going to take our forces into war, he must take ownership of it. if a president believes that missile strikes and drone operations taking place in libya are critical, it's his

responsibility to explain to the american people and to seek authorization from this congress. because the president has failed to do that, because he's failed to fulfill his obligations, we are here today. now, make no mistake. i support the removal of the libyan regime. i support the president's authority as commander in chief, but when the president chooses to challenge the powers of the congress i, as speaker of the house, will defend the constitutional authority of the legislature. this bill represents, i believe, a reasonable approach. by allowing our forces to continue playing a limited support role, it would not undermine our nato partners. it would, however, prevent the president from carrying out any further hostilities without congress' approval, and it would exercise congress' constitutional power to provide

some much-needed accountability. i believe this is a responsible approach, and i believe this house should support it. i yield back. the speaker pro tempore: the time of the gentleman has expired. the gentleman from washington. mr. smith: thank you, mr. speaker. i now yield three minutes to the gentleman from california, the ranking member of the house foreign affairs committee, mr. berman. the speaker pro tempore: the gentleman from california is recognized for three minutes. mr. berman: thank you, mr. speaker. the speaker of the house has made some very legitimate points, but then his conclusion is so contrary to the points he made. the proposition before us today, mr. mcclintock is right. it is an authorization of a series of acts of belligerence, acts of war that by their own definition cannot possibly help us either achieve the humanitarian goal of this mission or achieve the goal of

the true humanitarian goal of removing gaddafi from power. we are authorizing intelligent-sharing, aerial refueling, operational planning, intelligence gathering, but we are denying the only aspects of this operation that can allow us to achieve that goal, the suppression of air defense systems and the utilization of drones with missiles to stop gaddafi from resuming his effort to massacre his own people. i understand the argument, you don't buy my notions of our national security interests, you don't see the context of bringing this -- operation to a halt in terms of what it does to the stability of the democracy movements in egypt, in tunisia. you don't see any consequences in terms of syria, the larger middle east, or the damage to the alliance.

i understand and accept that argument, but mr. rooney doesn't -- he tries to have it both ways, but he comes up with a proposal that ensures that the mission is allowed to continue but by definition cannot achieve its goals. it is the worst, it is not the reasonable proposal, it is the worst of all solutions. if you're going to authorize an operation that hopes through airpower and other methods, you don't exclude the only parts of that that could possibly achieve this success. if you're against the operation you stop the funding of the operation. mr. rooney and apparently a number of other members of the majority want to have it both ways. we don't like gaddafi so we want to do something, but we don't want to do anything that could work but we don't want to come against the operation. but the fact is you're ending the operation if this were to become law because our european

friends have said very clearly that those parts of this operation that this amendment prohibits, those parts of the operation we cannot undertake if you are not doing it. so why not be straightforward? why not do what a number of colleagues on the other side have called for, stop funding the operation, don't try to have it both ways, ensure the operation defeat and end the operation while still being interested in seeing gaddafi go and the operation succeed? i urge a no vote from anyone who cares about consequences of what they vote on. the speaker pro tempore: the time of the gentleman has expired. the gentleman from florida. mr. rooney: mr. speaker, i yield three minutes to my friend and colleague, the chairman of the committee on armed services, the gentleman from california, mr. mckeon. the speaker pro tempore: the gentleman from california is recognized for three minutes. mr. mckeon: thank you, mr. speaker, and i thank the

gentleman for yielding. mr. speaker, i rise in support of h.r. 2278. my colleague has set forth the responsible plan that would effectively limit the united states' role in libya. this bill would allow u.s. forces to continue to conduct search and rescue missions, aerial refueling, intelligent, surveillance and reconnaissance and provide operational planning assistance. mr. speaker, this is what nato has told us would allow them to continue to carry out the mission. these are very critical functions. that is all that they have asked us to do as we move forward, and it helps the president be truthful in saying that we're not engaged in hostile actions. this bill would clearly end funding for all other military missions in libya. of particular concern to many members is the united states' continued engagement in strike and suppression of enemy air defense missions.

the president has repeatedly stated that the u.s. is not engaged in hostilities, and the congressional authorization is not necessary to continue our role in this operation. i share with many of my colleagues the view that firing missile at a target in a foreign nation does indeed constitute hostile action. this disagreement is at the root of the issue at hand. h.r. 2278 would put an end to that debate by explicitly defining the connelly authorized scope of the u.s. military mission in libya. the administration has yet to present congress and the american people with a clear strategic objective for our involvement in libya. furthermore, to date we have not been informed of a specific end goal under which the military operations would cease. this threatens the effectiveness of our mission and could soon create an unjustifiable strain on our military. while they remain engaged in two other theaters of operation

critical to our national security interest. mr. speaker, i urge my colleagues to join me in support of this bill, and how much time do i have left? the speaker pro tempore: one minute remains. mr. mckeon: how much do i have left? the speaker pro tempore: the gentleman has one minute remaining. mr. mckeon: i'd be happy to yield. mr. dicks: wouldn't you feel better if we could add as the fifth item in this list of things suppression of enemy air defenses? the reason i say that is i think we're going to have a difficult time doing any of these other missions unless we have suppression, and the -- i was just over there and we were told by the navy that the allies do not have enough suppression to deal with continuing to do these bombing missions without u.s. help.

if we could clarify -- mr. mckeon: you just about used up my whole minute. there are -- my good friend from washington, there are a lot of things that would make me feel better. if we could go back and start this whole thing over, there are a lot of things that would make me feel better, but the president has said we are not engaged in hostilities. i think we would agree that when we're firing missiles, when we are having -- 30 seconds? missions with our fighter planes suppressing ground fire, i believe that would be -- most of us would agree that is hostile. and the nato people, we met with the military from great britain, they told us what we have in here would allow them to continue successfully their missions. so i would -- the speaker pro tempore: the time of the gentleman from california has expired. the gentleman from --

mr. mckeon: i ask my colleagues to support this bill and i reserve the balance of my time. the speaker pro tempore: the chair recognizes the gentleman from washington. mr. smith: may i inquire of the sponsor, mr. rooney, i am the last speaker. then i will yield myself the balance of my time. the speaker pro tempore: the gentleman is recognized for four minutes. mr. smith: thank you. there are a number of arguments about this issue, arguments in favor of ending the mission in libya. and i think the speaker articulated one which is basically we support the idea of the removal of gaddafi and they support the idea of supporting the people in libya who are asking for a representative government. they just don't like our present process. but that argument really doesn't make sense because if in fact their big complaint is that congress hasn't had the opportunity to authorize this, then the speaker of the house has had by his own admission

100 days to offer that voice, to come up and say, no, we support the mission but here's how we want to limit it and they have not done that. and i agree very strongly with mr. berman's statement, you can't have it both ways. you can't say we would like to remove gaddafi, we'd like to support the libyan people but we are going to offer up resolutions that's going to stop that from happening. now, we can argue back and forth about that process, but clearly the speaker of the house had an option in front of him to deal with that process issue. and this isn't it. as has been pointed out, this will stop what we are doing in libya. if you support that -- let me just say, i support mr. kucinich in the sense that he's very honest. he don't like what's going on there. he would like it stopped. that's a legitimate position. to stand up and say, yes, we have to support the libyan people, yes, gaddafi should go, we are just going to cut the legs out from underneath the efforts to do that because of a complicated process argument is not a legitimate point.

i want to point out, people are legitimately concerned of the u.s. being too militant in our approach. i agree that. we cannot be the policemen for the war. we should not always carry the load. but in this case it is a very, very limited mission that we have. for once, nato is actually carrying the balk of the missions. while i agree with one statement that nato should step up and do more, nato is now stepping up and doing more and we want to pull the rug out from the tiny piece we are giving to help to make this mission possible. this is a limited role and we must recognize that. the speaker also emphasized we would like to have all the answers going in. we want to know what the mission with gaddafi is. initially our mission was clear, stop gaddafi from crushing the forces who were trying to rise up and have a voice in their own government and we did that. incidentally we do have some answers about who these rebels

are. you want to know who they are? look at benghazi. the place that's controlled by the people in opposition to muammar gaddafi. it's not the muslim brotherhood, it's not al qaeda. it's the people of libya who wants a representative government who is running that place. so let's stop acting like we don't know who these people are. we do have a very good idea who they are and they are deserving of our support. we have a clear limited mission. if we vote for rooney we pull the rug out from under that mission. we put gaddafi in a position to stay in power, and we undermine a group of people who are asking for a legitimate voice in their government. and keep in mind, again, this is a very limited use of u.s. power and in a very positive way. whatever the process arguments are that brought us to that point, don't let them have an united states look like we don't support people, standing up for the very values that we tunally espouse throughout the

world. i urge defeat of this resolution and support what we're doing in libya and with that i yield back the balance of my time. the speaker pro tempore: the gentleman from washington yields back the balance of his time. the gentleman from florida. mr. rooney: mr. speaker, can i inquire of the time remaining on our side? the speaker pro tempore: the gentleman from florida has four minutes remaining. mr. rooney: mr. speaker, i'd like to yield one minute to my friend and colleague from nebraska, mr. terry. the speaker pro tempore: the gentleman from nebraska, mr. terry, is recognized for one minute. mr. terry: thank you, mr. speaker. and i have during my tenure here voted twice to empower our military to take action. the first time was with afghanistan, and the president came to the congress and made a powerful case that it was in our national security interest to do so, and i supported that. . then with iraq, the president came to congress, spent a significant amount of time providing evidence, making a case that there was a national security interest. this time however, it was a surprise to me and most of my

colleagues that this mission was occurring. there's been no attempt to define what the national security interests are, the united states interest in this military action. and so without that, i can't look my constituents in the eye and tell them why we are in libya right now. and active in military strikes against that nation state. so, the one constitutional power that congress has explicitly is the pursestrings. we are exercising that right. i support that effort to hold -- pull those strings tight and let's stop the flow of money into this action. the speaker pro tempore: the gentleman from florida. mr. rooney: mr. speaker, at this time i'd like to yield one minute to the gentleman from ohio, mr. kucinich. the speaker pro tempore: the gentleman from ohio, mr. kucinich, is recognized for one minute. mr. kucinich: i want to thank mr. rooney and thank my colleagues. i think this has been a very

important debate for this country and for our constitution. i'm opposed to this war and want to end it. i think mr. rooney's bill is a powerful stp in the direction of ending the -- step in the direction of ending the war, but it's not the only step we should take. it's the purse step. the first step is a vote for mr. rooney's. you limit the war, stop the combat ops. then the second step would be to vote on a defense appropriations amendment that would strike all funding for the war. so we take two steps here. the first step today. and we have some of the best people in this congress have been in this debate today and they don't agree with mr. rooney's bill, but what they have said is that this bill would end the mission in libya. and it's said if you don't have the ability to suppress, you couldn't continue with the bombing campaign. so these are people on our side of the aisle who want to defeat this bill. they have made the argument, i

think, as to why we should pass it. i want to thank mr. rooney for his leadership and i urge a vote in favor of mr. rooney's bill. the speaker pro tempore: the gentleman's time has expired. the gentleman from florida. mr. rooney: mr. speaker, i yield myself the balance of the time. the speaker pro tempore: the gentleman is recognized for two minutes. mr. rooney: mr. speaker, we have heard a lot argument today and we had the great debate. a debate we should have been having over the last 100 days or so. one that could have been spurred on by the administration for coming here and making the arguments why we should authorize or should not authorize hostilities -- >> the house is not in order. the speaker pro tempore: the gentleman is correct. the house is not in order. those members in the back of the chamber please discontinue your conversation so we can complete this debate. the gentleman from florida. mr. rooney: the president had the opportunity to come and make the case to this body and chose not to. the war powers act is clear, he's violated that law.

some have said it's unconstitutional, but the courts have never weighed in on it. so it is the law of the land and one we have to abide by. but we can send resolution after resolution to the senate saying that we don't agree, we don't authorize, in the end the power that we have is the power of the purse, as mr. terry just said. we have to exercise that power in this house and say we aren't going to spend money for hostilities in libya. we heard the mission, if you want to take out gaddafi, or if you want to free the libyan people and give them the liberty we deserve, number one, it was never the mission to begin with to take out gaddafi. that has somehow mored of -- morphed over time. we don't even know who the people are that we are supposedly setting free. without that debate and without that argument the president has failed to make, and i appreciate the debate we have had today because i think it's been very helpful. all we can do is say until the president comes and makes that

case and gets authorization, he won't get funds. at the same time, responsibly saying to our nato allies, we'll support you in the rear, but we are not engaging in hostile acts. with that, mr. speaker, i reserve the balance of my time. -- yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. all time for debate has expired. pursuant to house resolution 328, the previous question is ordered on the bill. the question is on engrossment and third reading of the bill. so many as are in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. third reading. the clerk: a bill to limit the use of funds appropriated to the department of defense for united states armed forces in support of north atlantic treaty organization operation unified protector with respect to libya unless otherwise specifically authorized by law. the speaker pro tempore: the question is on passage of the bill. so many as are in favor say aye. those opposed, no.

in the opinion of the chair, the ayes have it. for what purpose does the gentleman from washington rise? mr. smith: on that i request a recorded vote. the speaker pro tempore: a vorded vote has been requested. those in favor of a recorded vote will rise. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a 15-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the speaker pro tempore: on this vote the yeas are 180. the nays are 238. the bill is not passed. without objection, a motion to reconsider is laid on the table. for what purpose does the gentleman from new jersey rise? >> mr. speaker, i present a privileged report for printing under the rule. the speaker pro tempore: the clerk will report the title. the clerk: report to accompany h.r. 2354, a bill making

appropriations for energy and water development and related agencies for the fiscal year ending september 30, 2012, and for other purposes. the speaker pro tempore: referred to the union calendar and ordered printed. pursuant to clause 1 of rule 21, points of order are reserved. . the house will be in order.

the speaker pro tempore: the chair lays before the house a communication.

the clerk: the honorable the speaker, house of representatives, sir. pursuant to section 194 of title 14 united states code, as chairman of the committee on transportation and infrastructure, i am required to designate three members of the united states coast guard academy board of visitors. i designate representative frank guinta of new hampshire, representative andy harris of maryland, and representative rick larsen to serve on the board of visitors. since the founding in 1876, the coast guard academy has accomplished its mission of educating, training, and developing leaders of character who are ethically, intellectually, professional, and physically prepared to serve their country. the board of visitors meets annually with staff, faculty, and can ditz to review the programs, curricula, and facilities to assess future needs. the board of visitors plays an

important supervisory role in ensuring the continued success of the academy and tradition of excellence of the u.s. cog. you for your consideration in this matter. signed, sincerely, john l. mica. chairman. the speaker pro tempore: pursuant to 20 united states code 4303, and the order of the house of january 5, 2011, the chair announces the speaker's appointment of the following members of the house to the board of trustees of gallon ewe debt university. -- gallon debt -- galludet university. the clerk: ms. woolsey of california. mr. yoder of kansas. the speaker pro tempore: pursuant to 44 united states code 2702 and the order of the house of january 5, 2011, the chair announces the speaker's reappointment of the following member on the part of the house to the advisory committee on records of congress.

the clerk: mr. jeffrey w. thomas of columbus, ohio. the speaker pro tempore: the chair lays before the house a communication. the clerk: the honorable the speaker. house of representatives, sir. under clause 2-g of rule 2 of the rules of the u.s. house of representatives i herewith designate robert reeves, deputy clerk, and clerk boil, legal counsel, to sign any and all papers and do all other acts for me under the name of the clerk of the house which they would be authorized to do by virtue of this designation except such as are provided by statute in case of my temporary absence or disability. this designation shall remain in effect for the 112th congress or until modified by me. with best wishes i am, signed, sincerely, karen l. haas, clerk

of the house. the speaker pro tempore: at this point the chair will now entertain requests for one-minute speeches. for what purpose does the gentlewoman from ohio rise? >> i request permission to address the house for one minute. the speaker pro tempore: the chair recognizes the gentlewoman from ohio. will the house be in order. the gentlewoman from ohio. ms. sutton: thank you, mr. speaker. i rise today to applaud the efforts by the national labor relations board to modernize their rules to promote efficiency and fairness in the labor organization process. the charge of the nlrb is to ensure our workers get a fair shake. for far too long working men and women have had to deal with its

outdated and lopsided system that puts the wants of big corporations over the needs of employees. at a time when our middle class is consistently under attack, these new proposed rules represent a positive step in restoring a more level playing field for workers. our workers deserve a fair system. those who work to make our world turn deserve the opportunity to make a living for themselves and their families. i look forward to the nlrb adopting and implementing these new provisions to bring their roles into the 21st century and give our working families a fighting chance to strive and achieve the american dream. i yield back. the speaker pro tempore: any further one-minute requests? for what purpose does the gentleman from louisiana rise? the chair recognizes the

gentleman from louisiana. mr. scalise: thank you, mr. speaker. yesterday the president made a decision to raid 30 million barrels on the strategic petroleum reserve. one thing the president did in that decision was he acknowledged that supply has an impact on price, which is a reversal of his previous statements. the problem is, rather than actually opening up known reserves of american oil where we can go and create tens of thousands of american jobs and get rid of some of this dependency on some of these middle eastern countries, what the president said he's going to raid america's, our safety netanyahu. the strategic petroleum reserve is there for national emergencies. not there just because maybe the president feels it would be politically popular for a couple days to do something. doesn't get us past two day's worth of american supply. we have known reserves this president is shutting off across this country and we can actually reduce our dependence on middle eastern oil if we create those jobs, create that american energy rather than raiding our

savings account for oil. so the president's decision was a failed policy that doubles down on his previous failed policy on energy that has gotten us to skyrocketing gas prices. of course we'll be back here in a couple days when this short-term fix runs out. instead we should put a real energy policy in place that reduces our dependence on foreign oil. yield back. the speaker pro tempore: for what purpose does the gentleman from oregon rise? without objection, the chair recognizes the gentleman from oregon. mr. blumenauer: thank you, mr. speaker. yesterday we had the inaugural briefing of the congressional neurological science caucus. the caucus seeks to involve and inform people on capitol hill about the advances, opportunities, and challenges that face us with neuroscience. i appreciate the leadership of my colleague, katherine mcmorris rodgers, who is founding co-chair of this effort and someone who cares deeply about neuroscience issues, achieved in part through difficult personal

experience. i admire her courage and appreciate her adding to this important agenda. we are discovering so many areas related to the brain and so much about how the system works. how it's damaged, how it recovers, how the brain responds to our environment, understanding interrelationships between traumatic brain injury, dementia, alzheimer's. we stand to gain so much from this research. developments in neuroscience offer the greatest opportunity for the 26% of american adults who suffer from mental disorders to reduce and perhaps avoid dysfunction, disease, to live better, healthier lives. the tremendous toll on victim and their families, their employees, employers, and friends the federal government needs to be aggressively involved and engaged. we hope the neuroscience caucus can help do just that. the speaker pro tempore: are there any further one minute requests?

the chair lays before the house the following personal request. the clerk: leave of absence requested for mr. bachus of alabama for today. the speaker pro tempore: without objection. the request is granted. under the speaker's announced policy of january 5, 2011, the gentleman from texas, mr. poe, is recognized for 60 minutes as the designee of the majority leader. mr. poe: thank you, mr. speaker. it was said from this day to the ending of the world we and it shall be remembered, we few, we happy few, we band of brothers

for today, he that sheds his blood with me, shall be my brother. shakespeare penned this hundreds of years ago in henry the fifth. it represents the unfailing commitment a warrior has for his fellow warriors. since 2004, 36 men and women from the second congressional district area of texas that i represent have served honorably for this country, the united states, and they gave their lives for the cause of freedom in iraq and afghanistan. their photographs are over here to my left. you notice, mr. speaker, they are of all races. they are men and they are women. they are from all branches of the service. they are enlisted personnel and they are officers in the united

states military. i'd like to honor each of them today by name and rank and branch of service and a comment or two about each one of them. these are the sons of liberty, the daughters of democracy of america. they are our heroes. as we approach july 4, the fourth of july as we like to call it, where america celebrates its independence and we celebrate not only our independence but our freedom and our liberty, we wave the flag, we atnd parades, and -- attend parades, and all of those are good things about america. see, it's ok to be a patriot. and it's ok to show our patriotism as a nation. but as we approach july 4, that important day in our history, i believe it's equally important that we remember that our freedom and our liberty has

always cost america, and it's cost america its finest. its youth. these men and women like patriots before them gave up their youth so that we can have a future. patrick henry, the great orator during the revolutionary time, said that the battle, sir, is not to the strong alone, it is to the vigilant, to the acted, to the brave. we are fortunate those words still ring true today, mr. speaker. and american warriors overseas carry those values into battle. and these are 36 of them. the role call of the noble 36. each of them have connections to southeast texas, and i'd like to mention each one of them. because they deserve our recognition, but we also need to

always remember them and their families. because you see, when these young men and women went off to war, their families went to war, too. but their families stayed stateside, and they were ever vigilant while their sons and daughters and husbands and wives went overseas. the first individual here, mr. speaker, is staff sergeant russell slay. united states marine corps from my hometown of humboldt, texas. he was killed at the age of 34. he was killed on november 9, 2004, and when russell told his mother, peggy, that he was joining the united states marine corps, after finishing high school, he told her that she knew he would not like it, but he was going to do it anyway. and he did. and he joined the marine corps and he was killed in action. peggy, his mother, who i have

known since russell's death, has become very active in the blue and gold star moms in southeast texas. to refresh your memory, mr. speaker, a blue star mom is an individual who has a son or daughter overseas. and they carry a flag or they have a flag on their window at their home that has a blue star in that flag. . gold star moms are ones who lost a daughter or son. peggy is a gold star mom in southeast texas. next to help is lance corporal lessry cannon, united states marine corps, friendswood, texas. he was killed on november 10, the day after russell was killed. he was from -- he is from friendswood, texas, and he told his dad he always wanted to be

a marine and he had that ambition to serve as a marine for 20 years. he was a proud texan and when he was home on leave he bought a new pickup truck so he could show his marine buddies his new bumper sticker that said, "don't mess with texas." he was that kind of individual that loved texas and loved his country. the third individual, lance corporal fred lee massel. fred was killed on january 26, 2005. he also a member of the united states marine corps. he was from spring, texas, and he was killed in a helicopter crash in thal an bar province on his way to -- al anbar province on his way to go to the iraqi elections in 2005. later, those four days later i was in iraq to witness those successful elections.

lance corporal made those first free elections for the iraqi people possible. and those elections were important for the history of that country, but lance corporal was one of those individuals who gave his life so that another country, another people could have those elections. the fourth individual that is on this poster board is first class -- private first class leslie riggs of the united states army. he was killed when he was 19 years of age on may 17, 2005. he was from baytown, texas, or beach city, texas, both towns claim him. he graduated just three years from high school and he loved agriculture. the fifth individual is sergeant william mussin. sergeant william "bill" mussin is from kingwood, texas, near my area of where i live, and he was a member of the united states army. he went off to texas a&m

university, but he dropped out of school and enlisted in the united states army because of 9/11. amazing individual these people who left their careers after 9/11 and joined the united states military to protect the rest of us. over here on the far left is lance corporal robert "robby" martinez. united states marine corps. he was killed at the age of 20 on december 21, 2005, from a small rural community called cleveland. cleveland, texas. he dreamed of getting a degree in education and becoming a baseball coach after his career in the marines. today, there is a post office in cleveland, texas, named in his honor. when we dedicated the post office for robby martinez in cleveland, texas, the whole town turned out for it. in fact, the united states air

force had a flyover during that ceremony and that dedication. the people of cleveland loved robby martinez and his family and appreciate his sacrifice for america. the seventh individual is staff sergeant jerry michael durbin, united states army from spring, texas. he was killed on january 25, 2006, at the age of 27. he's from houston, texas, and he was a gifted artist. and the day he was killed he called his wife to tell her he loved her. and shortly thereafter he was killed in action. the eighth individual is tech sergeant walter moss. tech sergeant walter moss was a member of the united states air force. he was 37 years of age and he was killed on march 30, 2006. he also is from houston, texas. he joined the air force after

high school and he served in operation desert storm. he specialized in detecting and diffusing makeshift bombs, and he was killed while diffusing an i.e.d. i repeat, he was killed while diffusing an i.e.d. an i.e.d., mr. speaker, that is the way that the cowards we fight fight us. they don't come out in the open. heavens know they won't do that. so they lie away in their holes and caves and they put land mines, i.e.d.'s as we call them, where they know where our troops will come by and they remotely get one off. one was exploded while he was trying to protect other warriors. the ninth individual is private

first class kristen menchaca. he's from houston, texas. he was killed at the age of 23 on june 16, 2006. he is also from houston, texas. and when he joined the united states army he wanted to be in the infantry. christian's wife said being in the military is what he always wanted to do. he was kipped and tore turd and murdered by enemy forces. his murder made national news because of the brutality of the people we fight against after they captured christian menchaca. number 10 on this poster is staff sergeant ben williams of the united states army. rather the united states marine corps. he was age of 30 years of age

when he was killed on june 20, 2006. he's from orange, texas, down in the refinery area of southeast texas. he joined the united states marines right after high school and he served his country for 12 years. he was serving his third duty in iraq when he was killed on june 20, 2006. lance corporal ryan miller, right here is his photograph, mr. speaker. ryan miller at the age of 19, member of the united states marine corps, was killed on september 14, 2006. he's from periland, texas. he's a third -- pearlland, texas. he's a third generation marine. he joined the marines so he could follow in his father and grandfather's footsteps. he wanted to become a houston police officer just like his

parents who are houston police officers. staff sergeant edward reynolds jr. over here, mr. speaker. united states army. he was killed at the age of 27 on september 26, 2006, just a few days after lance corporal ryan miller was killed. he's from port arthur, texas, another refinery area in southeast texas. he was looking forward to new year's eve because that's when he was going to get married. and he was a man that pushed, as his fellow warriors say, pushed others to succeed in what they do. next is captain david frazier, 13th individual on this poster. he was a member of the united states army. he was killed on november 26, 2006, at the age of 25. he was from spring, texas.

and you might notice -- you can barely see it but you might notice his uniform, mr. speaker. he was a west point graduate. he wasn't just a regular cadet at west point. he graduated top student in civil engineering. captain david frazier gave his life at the age of 25 for america. lieutenant -- lance corporal luke yepson, member of the united states marine corps. he was killed on september 14, 2006. and he was from wing -- kingwood, texas. he was at the age of 20 when he was killed. he also attended texas a&m university after high school and dropped out to enlist in the united states marine corps. just like staff sergeant bill mussin, left texas a&m during school to fight for america.

specialist dustin donica, united states army. at the age of 2 2 --2, he was killed -- 22, he was from spring, texas. when he was asked why he joined the united states army, here's what he said, mr. speaker, most people in my generation want something for them. i just wanted to give something back. that's why i joined the united states army. 15th individual of our roll call of the noble 36 is specialist ryan burg. here's his photograph, mr. speaker. he was a member of the united states army. he was killed at the age of 19. he's from sabine pass, texas. you probably never heard of that place. sabine pass is a very small community. it is on the furthest southeastern point of texas. right next to louisiana. he joined the army on his 18th birthday and he was the first soldier from sabine pass to be

killed in operation iraqi freedom. staff sergeant terrence dunn, united states army. here's his photograph. at the age of 38 he was killed on february 2, 2007. he was from aposccidas, texas. he was known as dunnaman because he could get anything done. and the next is lance corporal agary. he was a member of the united states marine corps. at the age of 20 he was killed on february 22, 2007. he was from channel view, texas. he entered the united states marine corps because he believed, like a lot of other people believe, it was the toughest branch of the military. you got to love those marines, mr. speaker. over here we have private first

class brandon boggs, united states army. he, like i, was from port artur, texas. he was killed in 2007. he was always cheerful and was a soldier others looked to for support and to lend a helping hand and he was always looking out for somebody else, according to his buddies in the military. number 20, private first class zachary hensley, united states army. age 21. killed on july 23, 2007 from spring, texas. you might notice, mr. speaker, there's a pattern here. 18, 19, 20 and 21-year-olds, america's youth go to war to represent the rest of us. but zack was a appreciator of the arts. he enjoyed drawing and playing his guitar. it was his drawing ability that

stood out in high school. he entered and won a poster contest with his design. but after he joined the army he was killed at the age of 21. number 21, army specialist kamisha block. she was a member of the united states army. she was 20 years old when she was killed. she was from vider, texas. she was killed on august 16, 2007. her best friend, amanda buck, they grew up together. and amanda says, we rode the school bus together from kindergarten all the way through high school. amanda said kamisha knew where she was headed in life and had a big heart and wanted to help people and that's why she joined the united states army. number 23 -- or 22 -- specialist donald evaluate iii, united states army. 21 years of age.

he was killed september 18, 2008 from houston, texas. the official status on his death. donald touched the lives of so many with his big heart. we will cherish those beautiful memories we shared with him. he made us very proud. now, heaven has another hero and we continue to watch over -- that continues to watch over us as an angel in heaven. remarkable person, specialist donald evaluate iii. number -- -- valentiniii. united states marine, age 22, killed in action on october 28, 2007. he's from liberty, texas. liberty, texas, according to folks in liberty, they claim that's the first settlement in texas before texas was even part of the united states or even a republic. liberty, texas. an interesting town for a

warrior to be from. he was an unapologetic person of religious faith and he attended the nondenominational cornerstone church where he led worship and praise services. his church pastor said at the funeral, no one had better say anything negative about his home state of texas. mr. speaker, you got to love those texas boys. they love our state, they love america. number 24 is staff sergeant eric duckworth. he's the last photograph on this row, mr. speaker. . he was a member of the united states army. he was killed at the age of 26 on october 10, 2007. he was from houston, texas. his father, michael, described him as an outgoing and good humored son. he further said, eric was full of love and laughter and a godly spirit, but above all he was a true soldier and proud warrior for the united states.

number 25, corporal scott macintosh. he was a member of the united states army. he was killed at the age of 26 on march 10, 2008. he was from humboldt, texas, my hometown. his mission in life was to meet and make friends with every person he came in contact with. he shared his hardy -- hearty laugh and always had a smile to give to other people he came across. scott always had a positive outlook on life. he loved to hunt and fish. but most of all he loved his family, the army. and the country he lived in and his life. staff sergeant sean tuschan. number 26 on this poster, mr. speaker. he was a member of the united states army. he was killed at the age of 30 on april 9, 2008. he was from a little small town called hull, texas.

as a teenager sean played football and like texas rural boys he loved it. he played it all through high school and he liked to ride horses. he considered himself a cowboy. he liked to bull ride. he was a man from smalltown america, and he had a playful heart. he made a big impression on everybody that he knew growing up. and that was a positive impression. number 27 on here, lieutenant colonel mark straton ii. lieutenant colonel mark stratton is the highest ranking officer that was killed, has been killed from our congressional district area. he was a member of the united states air force. at the age of 39 he was killed on may 26, 2009. he was from houston, texas. he was remembered as his -- by his friends as a man of unquestionable character and total loyalty to the people he loved. he was a patriotic american who

exemplified the very best that american airmen have to offer. number 28, this individual with the big grin on his face, specialist garrett grimmle, united states army. he was killed on june 3, 2009, at the age of 20. he was also from a little small town, la port, texas. he was a member of the swim team and surf club while he was in high school. he loved the outdoors and he of course loved the beach and the surf which were nearby in la port. he spent his spare time parachuting and cliff diving. jere rhett lived his life to the fullest, but like the others i have mentioned he loved america and he loved to excel and do what he could do to be all he could be. he loved his family and his family says that they will be forever cherishing the memories

that he gave them because he touched every one of their lives. the fifth row here jeffrey johnson, still over here to the far left, he was a member of the united states marine corps. age 21 when he was killed on may 11, 2010, from tomorrow ball, texas. corporal jeffrey johnson's funeral, at his funeral his family remembered him as a son, grandson, brother, and hero. his vehicle commander said, johnson was different from most of the fellow marines because, to sum of his commander, war shared misery and the four of us in that truck because of his jeff and humor were uplifted all the time. corporal johnson touched everybody and the lives they lived with his life. the 30th individual is this

sailor over here on the far portion of this poster. petty officer zarin wood. he went by z. member of the united states navy. he was from houston. he was 29 years of age when he was killed in combat. he was on his second tour of duty when he was killed. he graduated from south houston high school in 1999 and after graduation he worked as a youth pastor and tutored children. he enlisted in the navy in 2006 and on his second tour of duty he was killed in combat. the last group of individuals are the most recent individuals. all of these people, all of these individuals are put on this poster in the order of their death in iraq or afghanistan. in my office here in washington, in my office in humboldt, and beaumont, texas, we have larger photographs of all of these individuals. and you'll notice, mr. speaker,

as you go through the halls of congress, and the offices of the house, you'll see many such posters as this. listing those who have given their lives for america in the war in iraq. but next on this list is sergeant brandon bury. he was a member of the united states marine corps. he was killed at the age of 26 on june 6, 2010. june 6. d-day. he was killed on the anniversary date of d-day. he was from kingwood, texas. he was a big guy. he was 6'6" and he was all marine. he was an impressive individual and his friends say even back in middle school he knew what he wanted to do. he wanted to be a million of the united states marine corps. next to him, number 32, specialist matthew catlett, united states army. at the age of 23 years of age --

23 years he was killed on june 7, the very next day, after sergeant brandon bury was killed. he was from houston, texas, and he fought for liberty, he fought for people he did not know in a land that he had never been. he was an american. that rare breed that gave his life for people far, far away and for americans in this land. staff sergeant eduardo laredo, 34 years of age, member of the united states army. he was killed one day shy of his 35th birthday. he was from houston, texas. killed on june 24, 2010. his family says that eduardo was an adventurerer. he adored his wife and his family and he loved to cook for his neighbors and his family. mr. speaker, we are blessed to have such rare breed of people

as staff sergeant eduardo laredo and his fellow patriots and warriors. 34, staff sergeant jesse ainsworth, member of the united states army. 24 years of age, killed on july 10, 2010, from dayton, texas. another small town in southeast, texas. jesse's mother said he was herzegovinao and he was her only son. she said she used to pick him up when he was a little kid from kindergarten and every friday they would go to wal-mart and buy some toy. she said ever since jesse was, i quote, an itty-bitty fellow he wanted to be a soldier in the united states army. and he gave his life when he was 24 years of age for the rest of us. number 35 on this poster of the noble 36 is staff sergeant lesston tony winters, united states army, 30 years of age,

when he was killed on july 15, 2010. he was from sour lake, texas. once again small town, rural america. in 1998 he graduate interested harden jefferson high school and winters had already completed two tours of duty in iraq and on february of 2010 to leave his job and return to battle once more. he told his family that he felt compelled to be there with his buddies. even though he had a chance to stay home in texas. he left behind after his death his wife, elizabeth, and their three children, jonathan, remington, and emma. staff sergeant first classical vin b. harrison, this individual over here, in the bottom right-hand corner, he was killed at the age of 31 and he like several of the others i have mentioned was from cleveland,

texas. he was killed on september 29, 2010. after he graduated from high school in 1998, he enlisted in the army following the path of his grandfather. his family said that he loved being a soldier and serving his country. he is survived by his two daughters, azalea and iliana. it's interesting about his funeral, mr. speaker. that i attended. the whole town of cleveland, texas, and nearby towns turned out for the funerals. flags from hoisted all up and down main street in cleveland, texas. the businesses shut down. the school closed. as the funeral procession came through cleveland, texas, honoring sergeant first classical vin harrison. and -- calvin harrison. that ceremony and processional

with hundreds of people, young and old, showing praise and honor and respect to calvin harrison for his sacrifice for america. it was led by the patriot guard, those patriots that ride the harley-davidson motorcycles, most of them from the vietnam era, who show their appreciation for the sacrifice by watching over the funeral procession and the funeral by riding those motorcycles with an american flag on the back. these are the 36, the noble 36, from southeast texas, just a few of the people who have given their lives in iraq and afghanistan. and i mention these individuals because they, like all americans that have been killed in iraq and afghanistan, are important to america.

they are important to our history. because freedom is not free. and that is not a trite expression. it's not free. it has always been expensive. going all the way back to the revolutionary war. we are going to celebrate july 4 next week. and that war cost american lives. as does every war because freedom is expensive. and it's our young people, men and women, who go and serve. and, mr. speaker, just like everybody serving today in iraq and afghanistan, every one of these people, every one volunteered. they raised their right hand and they stood forward and said i will serve. i will go. call me. and they went. and we are to admire them for

what they have done. they have gone down into the valley of the gun and desert of the sun and they have sacrificed their lives. last week i happened to be in iraq with other members of the congress. it's not even summer yet in iraq. but we got off of that blackhawk helicopter and it was 120 degrees in iraq and there they were. the american warriors. with their warrior uniforms on. and all that equipment they carry, how hot they were. 120 degrees in afghanistan and iraq, it gets hot in the summer. and those days are coming. we should always appreciate them. we should also appreciate the ones that serve in other places in the world. on that same trip members of congress had an opportunity to go to -- near the south china

sea and see some of our warriors on some island i'm not sure i could find on a map. but there on this remote island were our navy seals, our special forces, our marines, and our soldiers. they were doing an operation, protecting the united states. representing the rest of us. so we should be proud of those that go and serve. those that volunteer. and those that are still there. we should appreciate the families that have stayed home while their loved ones go across the seas and represent this country. july 4 is coming up. it's a great day in our history. i hope americans fly the flag. i hope americans tell their kids

about our country and our history. that we should tell american children about these young people and others who every day raise their right hand and go off to war representing the rest of us. one of our former presidents once said, i like to see a man proud of the place in which he lives. and i like to see a man live so that his place will be proud of him. . all of these were proud of america, and america is proud of all of them. and the rest that continue to serve. these noble 36, we are proud of them. mr. speaker, these are the few, the bold, the brave, the

courageous. these are the americans. these are the sons and daughters of southeast texas who have fallen in battle for their country. we are forever grateful for their sacrifice, and we are grateful for every man and woman in uniform today. somewhere in the world representing the rest of us. and that's just the way it is. i yield back.

the speaker pro tempore: for what purpose do you rise? mr. king: mr. chair, i ask unanimous consent to speak for the requisite number of time. the speaker pro tempore: without objection, the gentleman from iowa is recognized for 30 minutes. mr. king: it's my privilege and honor to address you here on the floor of the house of representatives. i would say at the outset that it is also my honor and privilege to have been seated here on the floor of the house of representatives and i listened to congressman and judge ted poe address you on the brave patriots from texas that were on the poster. as he went through, i'll a-- say a choice more sell of their life and talked -- morsele of their life and talked about the values that they defend and the

reasons they put their lives on the line, i'm impressed by the honor that ted poe did to those who have given their lives from texas. and i'm very convinced that he would agree with me that he'd appreciate it if that honor could be reflected across all of the brave patriots who have given their lives in defense of this country in this conflict and in past conflicts. we pray there be no future conflicts. mr. speaker, i came to the floor to address a different subject matter. perhaps i'll digress in the national security side of this, but i find that i don't believe any member of the -- any delegation has yet come to the floor to talk about the natural disaster events that have been taking place in the midwest and in particular in the missouri river basin area. and i'm one who has grown up in that drainage basin area. i lived there on the great

divide for most of meyer life. we've eclipsed the 500-year flood event in 1996. in 1996 more water came down the missouri river than ever before and it was the largest amount of cubic feet per second and the largest amount of a million acre per feet. i'd say there was a couple of events that would compete with that depending on how you define it, mr. speaker. one would be a flood in 1943 that brought the attention of the world and we were in the middle of a world war. we didn't get to addressing the massive runoff in the missouri river from the 43 flood events. in 1952, the huge floods came again, and more water for a single month came down the missouri river than ever before or more since and that amounted to a discharge -- excuse me -- in million acre-feet of 13.2 million acre-feet of water came down in the single month of april in 1952. that, of course, flooded everything.

it put the higher of water than ever. it brought attention to the congress. this congress, paying particular attention to what happened in the flood event in 1952, followed through on some plans that had been discussed after the 1943 flood, and they began to take action and move forward for the construction of what we now known as the picks loan program. it's a construction of six large dams on the upper missouri river, and it starts at gavins point dam in south dakota and goes up to fort randall dam, ouahee and on up into north dakota where you see garrison dam in fort peck. i left out big bend. we have these dams that are all built on the main stem of the missouri river, but they collect water from all the trish tears. and the -- tributaries and the

water we have coming down through the midwest without a -- out of montana into north dakota where it's flooding now and flooding also across south dakota all across the bottoms and spilling out of the six dams one after another at discharge rates than we've seen never before. the highest most water to come down the river since the six dams were built starting in the 1950's and finishing in the early 1960's. the discharge level at gavins point dam, the lowest one, in south dakota, is now approaching 160,000 cubic feet per second. that's more discharge we've seen before. the result is we're in a flood stage all down this river in the areas i mentioned and from below the dams we also the missouri river is at flood stage. some of it has not arrived at st. louis in its peak form.

because of this it has flooded some of our communities and it has flooded hundreds of thousands of acres of our farmland. it's caused us to build many miles of levees that some design is temporary and some would describe as permanent and some i hope do stay permanent because the water will be semipermanent. this is not, mr. speaker, a short-term flood event that just happened because the clouds opened up and it gushed down into the river and it's going to wash by us and be gone in a few days like many floods are. this is a long-term national disaster flood event for the entire missouri river basin all the way from montana to st. louis, missouri. this is the highest water level that we have seen since the picks loan program was built and in some places it's the highest water we've seen. it will certainly be the longest term that we'll be underwater that has ever been. and so as i travel up and down the river, and i have the

privilege, mr. speaker, of representing all of the missouri river that iowa touches. that would be from the sioux city area where the missouri river comes out of south dakota and joins us and providers the western border of iowa between iowa and nebraska is all missouri river. nebraska's on one side, iowa is on the other side, both of us underwater on both sides of the river. it's also true in south dakota. but the water that's coming down the river in this massive quantity has brought about a lot of criticism and a lot of scrambling. first, i want to say, mr. speaker, that the events that brought us to this are unprecedented in modern recorded history in this that of all of the area that the picks loan program has, all of the drainage of the missouri river and upper missouri river, in particular, the corps of engineers watch the precipitation, they watch the snowcap and anticipate how much water they'll have. we've had an eight-year record

drought in the upper missouri river. so these reservoirs, these six huge reservoirs that were not designed for the primary purpose at all of fish and recreation but were designed for navigation and electrical generation and cool the generators for coal-fired generators, these reservoirs have been very, very valuable to the states, south dakota, north dakota and montana because the tourism industry for recreational and fishing has so high grated to those beautiful areas that they have. when they're out of water, when the pool drains down during an eight-year drought which they had it might be three quarters of a mile from where your dock was, where your boat was tied up to where the water actually is. we've engaged in a struggle on the floor of the house of representatives about who gets the water when there was a short water supply. congressman danny rehberg has tried to keep as much water up

in montana. i found myself in disagreement trying to get the water down the river so we had enough to cool our generators, float our boats and bring some barge traffic up and provide for flood control and so the eight-year drought is over, mr. speaker. it's completely over. and it was actually over the last year and a half or so as the water levels in these six dams that thinking of them as six huge bathtubs that are nearly dry, the water level in the six huge dams have been coming up in the last year and a half or more. and in the last year it's caught up to the designed pool elevations and then they had enough rain in the upper missouri river that it overfilled the six dams. the corps of engineers, operating under the master manual guidelines, which is the playbook that they have to manage these six dams by, lowered the pool elevations in the dam so they had storage to be prepared for any future flood.

they're required under the master manual to manage these levels so they have 16.3 million acre-feet of storage capacity to manage the flood. they drew it down to that level, both normal pool elevations, i will call them. they did so over the wintertime and that was fine. oh, throughout november, december, january, february and early march, stability within those pool levels, storage capacity of 16.3 million acre-feet, they're prepared for spring rains, they're prepared for the snow runoff. that's manageable. then in very, very late march and in early april heavy snows in the mountains began and the snow pack began to build in the mountains and they couldn't have been anticipated to 140% of the anticipated volume of snow that would have to, of course, melt and come down the missouri river. in addition to that, they had spring rains across the upper missouri basin, across the plains and the foothills of the mountains and those spring rains flowed down into the

reservoirs and overfilled them as well. and once that had happened it was a situation where the storage capacity and the reservoirs was diminished significantly. and an unusual event took place on may 22. that's when buildings, montana, got eight inches of rain and some of the other areas got 10 and 12 inches of rain. it was across the vast area of the upper missouri basin. as that water came down into the vezzvors, the corps of engineers -- reservoirs, the corpg of engineers began to watch the runoffs and declared they had a rare event, an event that the program was not designed to handle with ease and they announced to us on that day, may 22, they would open up the gates of the dams so that the lowest one at gavins point in south dakota which is the one where we watch the flow for the rest of the river they would be flowing at 110,000 cubic feet per second.

that was may 22 or early may 23. by the 26th of may, the corps of engineers had evaluated the flow rate in the tributaries and the rain reports that they had and the forecast and announced they had to increase that flow to 150,000 cubic feet per second. that makes a tremendous difference, mr. speaker, because the result of that, necessary decision that the corps of engineers made, was that the water tables would go up, the water levels would go up in the river above flood stage for what turns out to be almost the entire flow and maybe actually the entire flow of the missouri river downstream from the dam and also the flow that's coming through upstream for the dam that's flooding significant areas, residential areas, commercial property areas, ag land, to vast -- in vast amounts all the way up through the dookts and nebraska, iowa, -- dakotas, nebraska, iowa and

flowing into kansas. that's the situation we have. when i go back and look at this -- and i should say, mr. speaker, that my life's work has been the earth-moving business. we've gone in and built levees and dug ditches and built terraces and waterways and dams. we bid work on the missouri river, flood control work on the missouri river. i watched the flows, studied the flows, floated the river for recreational purposes and for engineering reasons and i dealt as a state senator in iowa for six years and now a member of congress into my ninth year with the public policies that have to due with the water coming down the river and the species that are affected by it. all of this together, if i look back upon it and try to become a monday morning quarterback, mr. speaker, i'll come to this conclusion that, yes, knowing what we know today it would have been possible to prevent this long-term flooding that we have in the missouri river bottom. but that's knowing what we know today.

corps of engineers could not have known that they were going to get the heavy snowfalls that would come down on the mountains, that would be melting even now. perhaps half of that snow is melted today and the balance still has to melt. they couldn't have known that until the snow actually arrived in late march and earlier april. neither could they have known there would be this huge unseasonal rain that would run off to the extent it did and saturate the oil so that the big rains that hit billings, as i mentioned, would run off to the extent that it did. but once they knew about the flows coming in they made the decision that they had to make, mr. speaker, and we are where we are. now, we're watching 160,000 cubic feet per second come out of gavins point. that's more than ever before. the water table is above the flood stage all the way along the missouri river from below gavins point and i presume that the gentleman that represents north dakota and the gentlelady that represents south dakota can speak to those issues up there and i imagine that they can say they have floods all

the way up and down the missouri river bottom completely from throughout the dakatoas and likely montana. but, mr. speaker, these water levels are going to stay and they are going to stay for all of the rest of june, likely all the rest of july and partway into august, most likely, and in fact these water levels could stay into september or october, depending on whether we get unseasonally high rains. if there's additional rains, then these water levels or even higher levels could be with us for a long time to come, on into the fall. the people that live in these states i have mentioned have to live with high water for a long period of time. not like a tornado that comes and blows away your homes and businesses and allows you to go back and -- when the sun comes out and go back and rebuild. this is not like a tornado, not

like a hurricane, not even like a flood a normal flood. a normal flood will come up and wash over you and wash away some things and soak the rest and the water table will go down. even on the mississippi river where the water comes up slow and goes down slow, this eclipses the duration of any flood that i know in that the corps of engineers, without a lot of choice, by june 14 of this month had opened up the gates to 150,000 cubic feet for second and now about 160,000 cubic feet for second and that discharge, the watter that floods the missouri river bottom completely will continue to be with us for two months, perhaps, perhaps more. that's unprecedented in duration. it's unprecedented in volume. this is more water than has ever come down the missouri

river in a year that we know of since we've been reporting these records. i said 16.43 million acre-feet of storage capacity they have, but the projected flow out of the missouri river for this year is 54 million acre-feet and that's more than even came down in the 1993 floods, which was a 500-year flood event or at least described to be the same. it flooded four of my major projects and changed my life and the long story i won't tell here, but i might not be in this congress had it not been for the 1993 flood which compleektly redirected my life this flood is redirecting the lives of thousands of people up and down the missouri river bottom. it's changing businesses, it's changing residences. i'm convinced, mr. speaker, that we will lose businesses over the long-term and we'll lose people over the long-term who can't get back into their homes. to give an example, and it's a

south dakota example in the dakota dunes. it is a region built around a golf course, the dakota dunes golf course, just outside of iowa, outside of the north hsu city, which, some -- north sioux city which some might call it a suburb of sioux city, but people with wherewithal and vision developed an area there for residences. it's close to the river. when the corps of engineers announced that these discharge levels would be coming down the river they went about protecting their homes by building a levee with private funds. this is a community coming together to protect their homes.

and the corps of engineers protects about half the homes in that area but it is not stable enough for them to build the levee to protect all the homes. you have two levees, one private money, good homes protecting themselves, another one, corps of engineers money to protect the balance of those homes. if we lose the levee near the river about half the homes in the dakota dunes and probably the nicest homes will be under a massive amount of water and as i was up there to visit, they were building a temporary levee and mr. speaker, i spent my life in the construction business, specifically the earth moving business. we have had a fair number of our own machines running at a single time but this operation in the dakota dunes had 170 trucks hauling dirt into these temporary levees, about 50 trucks hauling in to the corps of engineer levee, about 120 hauling in to the private money levee that was there, most of them belly dumps and side

dumps, not straight truck bus big trucks with a full load of dirt on each one of them, building the levee as the river comes up. they've done that in south dakota, they've done it in the iowa side and nebraska side of the missouri river where we built several miles of levees around critical companies and infrastructure. c.f. industries, which is a fertilizer industry, built a levee about 8/10's of a mile long and they put pumps to dewater the inside of the levee as the river runs around the outside. that's true with the other company there, they have been protecting the power plants, nebraska has its story, omaha has its story, they're propected by a pretty good corps of engineer levee but the

water is high is the levees are not built for two months of high water and fast flow turbulence so they have to be monitored 24/7 all the way through until the water goes down. if there's a problem, they have to have somebody there to fix this that or we can lose a levee in a matter of a minute or two. i know there was a levee that ended up, that almost spontaneously had a 30-foot boil in it where the earth just disappeared. then a little bit later, it was 200 feet long, then 300 feet long, then it couldn't be repaired any longer and the backup levee is protect pro tecting the city of hamburg right now. there has been a courageous effort on the part of mid westerners to build the temporary facilities they could, in the short notice they had, when you think that the thursday before memorial weekend is when the word came from the corps of engineers that these historically high flows would be released and it

takes a couple of days for the water to get down, they weren't going to peak out on this until june 14, but they had two weeks to be ready for the highest water and they had to get ready while the water was coming up, sometimes a foot a day. they've done a phenomenal job. as i go into the emergency command centers in places like sioux city and council bluffs, iowa, and glencoe iowa, 270 people there in the flat bottom of the missouri river who had been told they'd see two or three feet of water everywhere in their town and there wasn't a way to save the town they said do, we let all our property flood and stay under water for a couple of months? five contractors came together, put 11 machines on the job and a few days later, they had five miles of levee that goes around the city and ties it back in together and they have pumps sitting there and they're

protecting themselves from the flood. they don't need to be the alamo to the flood of 2011. they can fight this flood off and we want to be there to help them all we can. i have a business owner that builds trailers in missouri valley, iowa. he had gone in and bought a business in downtown missouri valley a few years ago and because of the floods from the 1990's, built a new location above the floodplain on the outside of town by the interstate, interstate 29, which is closed today because of the flood waters covering the interstate highway. mr. speaker, he built a new plant above the floodplain so he didn't have to be flooded out again. and about three years ago, there was a quirk of weather and one of the major streams backed up and flooded his new plant. he's one of the top trailer sales people in america. flooded his new plant with about four or five feet of water and destroyed some of his property that was in there. he picked his chin back up, went to work, cleaned up the

mess, fixed the trailers he could fix and junked the rest and put a smile back on his face, and said, that's life, isn't it? and went to work in a courageous american way, now his plant that is built above the flood stage and was flooded two or three years ago is back under -- i can't confirm today that it's under water but they predict it will be four feet of water, he's moved back to the old plant, he moved from the nonflood zone to the flood zone because they predict that one won't be under water. his new plant that is out of the flood stage is going to be under water. the irony of this is not lost on him nor on me. sometimes whatever you do it's going to end up to be wrong. this time, we have a lot of people suffering that maybe have done everything they can do to protect theps. we have farm steds, mr. speaker, that are completely flooded and we have hundreds of them that are under water. the up and down on the west

side of interstate 29 and the southwest corner of iowa, we've evacuated some 600 homes because they're all going under water. the town of percival and two other small towns are now being announced they will be under water and flooded and i hesitate to report exactly where that water is now. i'm going tonight and by the weekend i will have looked at that all again, mr. speaker, but the water we have is unprecedented. it's strange in its nature in that floodwaters we see as silty, muddy water full of mud and silt and junk. some of this is. maybe 40% of this water is silt-laden water. but more than half of it, perhaps 60%, mr. speaker is clear water. when you ply over it and you look down, you can see through that water and you can see the striping on interstate 29. you can see corn stalks, corn stem, little sprouted plants that grew up about this far before the water flooded them

and they're standing there underneath a foot and a half or two feet of clear water. it goes on and on. you'll see irrigation systems standing out in the water in eight felt of water an irrigation system standing there. but this clear water that has emerged comes because the pressure from the river, the hydrostatic pressure of the river pushes down on the entire aquifer around there and as it pushes down, the weight of the water, the silt and floodwater pushes down into the soil and water equalizes and comes up out of the ground, sometimes on the other side of the levee, on the east side of the interstate in my case, where clear water, the kind of water you'd find in drain edge tile or well, sits on the surface everywhere. clear and clean as can be, shutting down transportation units, interstate highway, and flooding family farms and

businesses all up and down this river and most of it has yet to reach st. louis. this is a problem for all the way across missouri from st. louis all the way up into st. joe and north, it's a problem for the entire missouri river bottom, iowa, north dakota, south dakota, and montana. to put it in perspective also, mr. speaker, the flow coming down this river, when people think that the corps of engineers could have done something different, marginally they could have, but they would have had to have been clairvoyant and violate the terms of the master manual. but the flow coming down the river happens to be the amount of water that's just coming out of the yellowstone river to itself. so those people that want to turn these american rivers back to what they were before we managed them and criminaled -- controlled them and built the program, i'd ask you all to think if 150,000 cubic feet per second is flowing out of the

yellowstone river, and it is, and 150,000 cubic feet per second is flowing past out of gavins point and down through sioux city, if we had no dams in the missouri river if all the tributaries of the missouri river were completely dry except the yellowstone river, that tributary up there in montana, we'd still have the same amount of water there right now. it wouldn't last as long but it would be as high as the levels we have today. that's how much this helps us. we know those tributaries are flowing a lot of water. there's a massive amount, more than ever before, 54 million acre-feet for this career and it was a 500 year event in 1993,s that 550 year event today. i have called upon the president to the claire this entire area a national disaster area. i i know the governor has made that request. i know the governors in some states such as nebraska and montana have made the request.

i believe that that request has been granted in a couple of cases. not yet for iowa. i know that governor bransted has made this request for iowa. i thank the entire iowa delegation for joining with me in a letter to president obama in making the request that he declare this a national disaster. we have a long time to working with this water a lot of sandbags have been filled, more will be filled, many have to be emptied when this water goes down. the quality we're going to need the most is the prayers of the american people and perseverance. and so, mr. speaker, i appreciate your attention to this matter. i appreciate the iowa delegation for standing with me and the dell gatheses up and down the -- delegations up and down the river who have stood together. we need to stand with the people whose property is under water and help them get through this. they are stoic peerm people, they're determined people. they're not going to be standing

there complaining, they're going to be doing all they can to help themselves and to honor their effort, i and others are determined to do all we can to help them. so that is the update on the 2011 flood, mr. speaker. i appreciate your attention and i yield back the balance of my time. the speaker pro tempore: the chair would be pleased to entertain motion. mr. king: mr. speaker, i move the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is adopted. accordingly the house stands

>> who would think a youtube rap video on economics would become popular? ♪ here i come.

we brought out the shovels we are still in the ditch do you not think it is time for a switch >> we will talk with the creators of "fight of the century." >> we are trying to reach people that are interested in how the world works, everybody from a high school student, to a person that is trying to make a living and is worried about what is going on in washington or the country. >> sunday night, at 8:00 this weekend, a gettysburg professor discusses prostitution and the civil war. then, at work talks talks about his father-in-law, president richard nixon. but the complete weekend schedule at c-span.org or have

it e-mailed to you. president obama traveled to carnegie-mellon university in pittsburgh today when he launched the advanced manufacturing partnership to encourage investment in emerging technologies. surely before his remarks, he. the robotics center, the world's largest robotics development organization. this is about 30 minutes. ♪ >> ladies and gentlemen, the president of the united states. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] [applause] >> hello, hello, hello.

thank you very much. thank you. thank you very much. everybody, please grab a seat. thank you. hello, pittsburgh. it is good to be back. thank you, senator casey, and mayor, and the county executive. state auditor, jack wagner, who all of you, thank you for having me back here, at carnegie- mellon. it is good to be here. it seems like every time i'm here i learned something. so, for those of you that are thinking about carnegie-mellon, it is a terrific place. you guys are doing just great work. i just met with folks from some cutting edge companies, and saw some of their inventions, and here, in your national robotics engineering center. but, that is not the only reason i'm here.

you might not know this, but one of my responsibilities is to keep an eye on robots. [laughter] >> i am pleased to report that their robards you manufacture here seemed peaceful -- that the robots you manufacture here seem peaceful. [laughter] >> at least for now. this is a city that knows something about manufacturing. for generations of americans, it was the ticket to a middle-class life. hear, and across america's industrial heartland, millions clocked in each day at boundaries and on assembly lines to make things, and the stuff we made -- steel, cars, airplanes, that was the stuff that made america what it is. the jobs were good.

they paid enough to own a home, raise kids, send them to college, to retire. they were jobs that told us something more important than just how much money we made -- what was in our paycheck. these jobs also told us that we were meeting our responsibilities to our families, our neighborhoods, and building our communities and our country. for better and worse, our generation has been pounded by wave after wave of profound economic change. revolutions in technology have transformed the way we live and the way we work. businesses and industries can relocate anywhere in the world, any where there are skilled workers, anywhere there is an internet connection. companies have learned to become more efficient with fewer

employees. in pittsburgh, you know this as well as anybody. steel mills that once needed 1000 workers now do the same work with 100. while these changes have resulted in great wealth for some americans, and have drastically increased productivity, they have also caused major disruptions for many others. today, a high-school diploma no longer guarantees you a job. over the past 13 years, about one-third of our manufacturing jobs have vanished. meanwhile, the typical worker's wages have barely kept up with the rising costs of everything else. all of this was even before a financial crisis and recession that pounded the middle class even more. now, if we have made some tough decisions that have turned our economy in a positive direction over the past two years. we created more than two million

new jobs in the private sector in the last 15 months alone, including almost to wonder 2000 in manufacturing. we still have to confront the underlying problems. they were not caused overnight, and we will not solve them over night, but we will solve them. we are starting to resolve them right here, in pittsburgh, and right here, at carnegie mellon. [applause] >> and, by the way, that is why i ran for president -- not just to get us back where it -- to where we were, but i ran for president to get us where we need to be. i have a larger vision for america, when we're working families feel secure, feel like they're moving forward, and they know their dreams are within reach. an america where our businesses lead the world in new

technologies like clean energy, where we work together, democrats and republicans, to live within our means to cut our deficit and debt, but also to invest in what our economy needs to grow -- world-class education, cutting edge research, building the best communications and transportation infrastructure in the world. that is what it will take for us to win the future, and win the future begins with us getting our economy moving right now. that is why we are here. carnegie-mellon is a great example of what it means to move forward. at its founding, nobody would have managed that a trade school for the sons and daughters of steelworkers would one day become one of the region's largest employers, and a global research university. yet, innovation, led by your professors and your students, have created more than 300

companies, and 9000 jobs, over the past 15 years. companies like carnegie robotics. more important than the ideas you have incubated, are what those ideas have become. they have become products, made right here, in america, and, in many cases, sold all over the world. that is in our blood. that is who we are. we are inventors. we are makers. we are doers. if we want a robust, growing economy, we need a robust, a growing manufacturing sector. that is why we told the auto industry two years ago that if they were willing to adapt, we would stand by them. today, they are profitable. they are we paying job -- creating jobs, and retain taxpayers ahead of schedule. that is why -- [applause] >> that is why we have launched

a partnership to retrain workers with new skills. that is why we have invested in clean energy manufacturing and new jobs building wind turbines, solar panels, and advanced batteries. we have not run out of stuff to make. we just have to reinvigorate our manufacturing sector so that it leads the world the way it always has, from paper, to steal, to new cars, two items we have not even dreamed of yet. that is how we are going to create jobs throughout the middle class and secure our economic leadership. this is why i asked my council of advisers on science and to lookgy -a while back at the state of american manufacturing and the promise of -- promise of advanced manufacturing. the concept is not complicated. it means how do we do things better, faster, cheaper to

design and manufacture superior products and allow us to compete all over the world. so, these very smart folks, many of whom are represented here, wrote up a report that is now up on the white house website. we did not just want to issue a report. we want to get something done, so we have launched an all hands on deck effort between our brightest academic minds, some of our boldest business leaders, and our most dedicated public servants from science and technology agency's, all with one big goal -- a renaissance of american manufacturing. we are calling at -- it amp -- the advanced manufacturing partnership, which is made up of universities like georgia tech, carnegie-mellon, mich. some of our most innovative

manufacturers from johnson and johnson, to honeywell, to allegany technologies. i have asked the president of mit, susan, who is here -- there is susan. [applause] >> and, andrew, the ceo of dow chemical -- [applause] >>. this partnership and to work with my own advisers, -- to lead this partnership and to work with my own advisers on science, technology, and manufacturing. throughout history, our breeze breakthroughs have come through partnerships like this one. american innovation has been sparked by individual scientists and contra to endorse, often at universities like carnegie-mellon, georgia tech, berkeley, or stanford. but, a lot of companies in not investing early ideas because it

will not pay off right away. that is where government can step in. that is how we ended up with some of the world-changing his innovations that fueled growth and prosperity, and created, as jobs -- the mobile phone, the internet, gps, more than 150 drugs and vaccines over the last 40 years was all because we were able to bring people together in a strategic way and the critical investments. one example -- the national science foundation helped fund stanford to digital library project in the 1990's. the idea was to develop a universal digital library that anybody could access. two enterprising ph.d. students got excited about the research that was being done at stanford. so, these two phd students most from campus to a friend's

garage, and they launched this company called google. when the private sector runs with the ball, it then leads to jobs, building, and selling, that a successful all over the world. this new partnership that we have created will make sure that tomorrow's breakthroughs are american breakthroughs. we are teaming up to foster -- [applause] >> we are teaming up to foster the kind of a collaborative r and d that resulted in those discoveries, and to create the innovation infrastructure necessary to get ideas from the drawing board to the manufacturing for, to the market more rapidly. all of which will make businesses more competitive and create new, high-quality manufacturing jobs.

to help businesses operate at less cost, the energy department will develop new energy at -- manufacturing processes and materials that use half as much energy, which will free up money for companies to hire new workers or buying new equipment, help businesses discover, develop, and deploy new materials. we are launching the genome initiative. the enhancement of batteries made computers and ipods faster. it took years to take that to the market, but we can do it faster. nasa and other agencies will support research into next generation of robotics. i just met with folks from a local company, red zone robotics, that make robots that explore sewer pipes.

it is fascinating. the robot can go through any sewer system. it is operated remotely by the municipal worker. it has a camera attached so that it can sell everything is seen. he then transmits the data, it goes into a city wide data base, and enhance the productivity of the workers by 3 or four-sold. it helps the city make even better decisions potential, it could save cities millions in infrastructure costs. the company is also training new workers to operate the robots, and analysts to look through the data that is being collected. to help smaller manufacturers compete, federal agencies are working with private companies to make powerful, often on affordable modeling and simulation software easier to

access. i just saw an example. a few years ago, procter and gamble teamed up with researchers at los almost national labs to develop software developed for war to to go are -- to figure out what was happening with nuclear particles, and they're using these simulators to dramatically improve the performance of diapers. yes, diapers. folks chuckle, but those who have been parents are always on the lookout for indestructible, military-grade diapers. [laughter] [applause] >> but here is what is remarkable. using this simulation software that was developed in los alamos, procter and gamble have saved almost half of $1 billion as a consequence.

now, through the new partnership that we are setting up, procter and gamble is offering its powerful fluid dynamic simulator to smaller manufacturers, and it is doing it for free. this is not just because procter and gamble wants to do good. it is also -- they have thousands of suppliers. they are thinking to themselves, if we can apply this simulation technology to our smaller suppliers, they are going to be able to make their products cheaper and better, and that, in turn, will save us even more money. it has a ripple effect through the economy. starting this summer, federal agencies will partner with industries to boost manufacturing in areas critical to our national security. i just saw an example backstage. defense department scientists -- we call it darpa -- the folks

that bus stealth technology, and by the way, the internet, wanted to see if it was possible to design defense systems cheaper and faster, so they found a small company in arizona called local mortars, and they gave them a test. you have one month to design a new combat support vehicle, and you have three months to build it. there ceo is here today. as an ex-marine, who lost a couple of buddies in combat, he understood the importance of increasing the speed, adaptability, and flexibility of our manufacturing process for the vehicles that are used. local motors solicited design ideas on their website, chose the best out of 162 that they received, build and brought this new vehicle here, ahead of schedule, we just took a look at

it. not only could this change the way the government uses your tax dollars because instead of having a 10-year yield -- lead time to develop a piece of equipment, with all kinds of changing spectrums and moving targets, if we were able to collapse the pace at which that manufacturing takes place, that could save taxpayers billions of dollars, but it also could get products out faster, which could save lives more quickly, and could then be used to transfer into the private sector more rapidly, which means we could get better products and services that we could sell and export around the world. so, it is good for american companies, american jobs, taxpayers, and it may save some lives in places like afghanistan for our soldiers. so, that is what this is all about. it is a futuristic, and let's

face it, as cool as some of this stuff is, as much as we are planning for america's future, this partnership is about new, cutting edge ideas to create new jobs, sparked new breakthroughs, reinvigorate american manufacturing today, right now, not somewhere off in the future. right now. it is about making sure our workers and businesses have the skills and tools they need to compete better, faster, and smarter than anybody else. that is what we are about. we are america, and we do not just keep up with changing times, we set the pace for changing times. [applause] >> we adapt, we innovate, we lead the way forward. [applause] >> is worth remembering there was no time when steele was about as advanced as manufacturing got, but when the

name sick of this university, and to carnegie, -- and namesake of this energy university, andrew carnegie, tdiscovered ways to mass produce steel cheaper, everything changed. just 20 years after founding the company, not only was the old -- was the largest, most profitable in the world, america had become the no. 1 steelmaker in the world. imagine if america was the first to develop and mass produce a new treatment that kills cancer sells and leaves healthy ones on touched, or solar sells you can brush onto the house for the same cost of paint, or flexible displays soldiers can wear on their arms, or a car that drives itself? a imagine how many workers would prosper from those breakthroughs. those things are not a science fiction. they are real.

they are being developed and deployed in laboratories, and factories, and on test tracks right now. they sprang from the imagination of students, and scientists, like all of you. the part -- purpose of this partnership was to prove that the united states of america has your back, which will be supportive, because that is the kind of adventurists, pioneer institute that we need right now. -- adventuress, pioneering. to do that we need right now -- spirit that we need right now. [applause] >> if we remember that spirit, combining our creativity, innovation, and our optimism, which come together in common cause, as we have done so many times before, then we will thrive again. we will get to where we need to be. will make this century the

american century, just like the last one. thank you very much, everybody. god bless you. god bless the united states of america. [applause] ♪ ♪

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♪ ♪ >> c-span has launched a new easy-to-navigate web site for politics and the 2012 presidential race with the latest news from the campaign trail, biographical information on the candidates, and links to c-span media partners in the early primary caucus states. visit us.

u.s. house rejected two measures today to limit president obama's authority over u.s. military operations in libya. members voted down limited authority for one year and the bill to cut off funds. the house has gone home until after the july 4 holiday. the house recently debated and voted on two measures related to u.s. military involvement in libya. look for continual debate at c- span from the congressional chronicle can find video of every house and senate session, daily schedules, information, and hearings. blackberry users, you can access our programming any time, with core -- four audio streams of our programming all commercial-free.

you can listen to our signature interview programs each week around the clock, wherever you are. download it free. >> next month, sheila bair steps down from her position as chairman of the federal deposit insurance corporation. in her last major speech before an audience today at a national press club, she criticized government and leaders for what she called short-term policy for preventing a crisis. she also warned congress and the administration on the need to get serious for -- about entitlement reform. her comments along with a question and answer period, are about 50 minutes. >> i started to take a question. the first question was who was number one? [laughter] >> they are tough to impress these days. it was angela merkel, if you all

were wondering, and i did drop to 15 this year, behind lady gaga. i think the banks are healing, but not as much i would like. before i would like to begin the speech, i would like to thank some of the staff there with me. rich, our chief economist, who was also been drafted as chief speech writer, he has done some wonderful work and had a big hand in this speech today. i want to thank him for this and all of the work you have done over the last five years. and, andrew gray is out here somewhere. he has been with me for five years. his deputy, thank you as well. and, and jesse, my chief of staff, who i drafted -- he worked for me during my treasury days, and has been at my side to what has been an incredible

experience. finally, my husband, scott cooper, who was in support of of everything, including cover in a lot of home obligations when i was there -- not there as much as i wanted to be. is a wonderful speech editor as well. i am deeply honored. thank you for inviting me to deliver my last speech as fdic chairman. as i prepare to close out my term, i cannot help but reflect on the challenges we a paste of the five years, and some of the lessons we have learned to read our nation has suffered its most serious financial crisis and economic downturn since the great depression. the ft effect will be felt for many years to come. there are many -- the after effect will be felt for many years to come. there are many causes, but in my opinion, the overarching lesson is the pervasive short-term thinking that helped to bring about. short-termism is a serious and

growing problem. i would devote my remarks to what i mean by this, and how it plays into the policy challenges. why does it a rise? short-termism refers to the long-term tennessee to unduly not consider outcome said. in the future. it is a familiar concept the emerging be hit -- concept. investors, systematically overvalue short-term payoffs, and pass up investment opportunities that could leave them much better off in the longer term. to let short-term thinking can be very costly -- to let short- term thinking can be very costly. -- to much short-term thinking can be very costly.

while the mathematical side of our brain makes careful calculations, the more primal, emotional parts of our brain focus on the here and now. which part to you think becomes active one research subjects are presented with real life -- decisions involving risk and reward? it is the more primitive -- primitive system that is less focused on long-term consequences. short-termism also grows out of institutional rules that govern our behavior. when a sedative compensation. according to stock prices, it creates incentives to maximize short-term results, even at the extent of long-term considerations. they tend to feel on each other. a volume varies, as it always does, the path of least resistance is to concentrate on

managers based on current results. hit this investment fund as part of your 401ks, would you not prefer that your fund manager be compensated at least in part on long-term performance? short-termism also holds sway in the realm of politics. the virtue of our electoral process is that incumbents face marked the supple -- discipline at intervals, but those facing reelection have little incentive to take a longer view of the issues than their constituents do. his the boating public does not regard the runaway federal debt as their largest concern, leaders will not either. we need to find leaders that will commit to problems that will pay off long after they have left office. americans are naturally cautious when it comes the the ability of government to direct capital to a long-term developments with uncertain outcomes. if we can easily think of farsighted investments that have

yielded returns for generations to come. think about no--- the national parks. government investments have left our country through the interstate highway system and the internet. as a nation, we have made investments that allow us to defend the peace, explore the moon, eradicate disease, and explore the human genome. there are many areas of our a national -- and natural life where short-termism seems to be on the rise. the text -- the average holding period of an equity share on the new york stock exchange fell to just seven months in. -- 2007. the average tenure of departing ceo's declined. not surprisingly, ceo turnover was found to be highest among companies whose stock price

performance led the industry. one powerful force behind the rise is technology. he might have more latitude to express short-term preferences that we might -- once did. for example, there are more options for households to act on their inclination to bar from the future to meet short-term needs. credit cards can be extremely useful, or highly destructive tools depending on how they're used. why-developed markets have expanded the opportunity for financial companies to earn returns from financial fees and trading activities, as opposed to the patient work of trading and the long-term investing. it seems quaint in the area of hedge funds and high-frequency trading. unless you have been too busy upgrading your facebook status, you can also see that it has been driven from informational

factors. given the bill and pressures faced -- built-in pressures, the constant flow of information on the high 10's there obsession with short-term performance. at this point, you might be asking what this has to do with the financial crisis, and the answer is plenty. as has been the case with most previous crises, a central cause of this crisis was expensive debt and leverage across the financial system. in the decade leading up to 2006, when home prices reached their peak, totaled mortgage debt increase by 183%, and average home prices rose by almost 190%. rising home prices prompted mortgage lenders to focus on temporarily-inflated collateral values, and relaxed standards that traditionally insure that mayor bower could pay over time. most of the sub-prime loans to impose a up for the adjustment in the interest rate or monthly

payment after two or three years, frequently making the loan, and affordable. as long as home prices kept rising, the borrowers could usually refinanced. after prices leveled off, sub prime borrowers defaulted in record numbers. the reason they were willing to make these risky loans, and issuers were willing to fund them, is because they knew they would be paid up front. mortgage investors and the homeowners would end up bearing the long-term consequences. are arrangements like this gave rise to the acronym that means i will be gone, you will be gone -- a watch term for short- termism. homeowners responded, too. they raided their home equity, cash and out to the tune of more than half of 1 trillion dollars at the peak of the blue. financial institutions frequently sought to maximize their financial leverage,

sometimes moving assets to shadowy offshore places. it worked brilliantly and so market liquidity forced the assets back onto the balance sheet, where there was not enough capital on hand to support them. leading financial companies proved adept at creating innovative and new loan structures and funding in the years leading up to the crisis, but all too often they left participants with badly- misaligned incentives. loan officers, portfolio managers and bank ceo's was basically based on stock price with little regard to the risks that were building up. most damaging of all, some of the most large and complex companies were made exempt because of their size, complexity, and into a tight -- interconnectedness. they were deemed too big to fail. the expectation that the largest

financial companies enjoyed the implicit backing as the federal government allow the managers of those companies to book short- term profits, while ignoring the risks inherent in the mortgage instruments they held. in a test that followed the 2008 bankruptcy of lehman brothers, the expectation of government support for systemically- important financial and institutions became a reality. government assistance -- took on a variety of forms, manning a total commitment of almost $14 trillion by the spring of 2009. direct assistance to the largest financial institutions east the short-term crisis of confidence in the interbank market, and our financial system began to function again. the policy makers failed to effectively attack the root cause of the problem, which was the enormous backlog of unaffordable and under-water mortgage loans that continues to slow the recovery of our housing market and the economy.

bailout's result in a host of adverse consequences of the long term. they undermine market discipline, and perform -- perform root -- promote risk- taking. they keep they are inherently unfair to well-run banks. the bailout of 2008 tainted the entire banking industry. in the first quarter of this year, the cost of earning assets is only about half as high for banks with about $100 billion in assets as it was for community banks with assets under $1 billion. in the end, bailouts violate the principles of limited government on which our free enterprise system is founded. that's why the fdic was so determined to perez for a more robust and effective resolution framework as a centerpiece of the dodd-frank resolution that

was enacted last summer. titles one and two authorize the resolution that can make it resolvable in a future crisis. this starts with the short to designate large banking organizations and certain non-bank companies as sippies and subject them to heightened oversight and higher requirements. these companies will also be maintained to show how they could be resolved in a crisis without a bailout and without blowing up if financial system. these provisions are designed to restore the discipline of the marketplace to the megabanks, to end their ability to take risks at the expense of the public and eliminate the competitive advantage they enjoy. some of the rhetoric has been either short-sighted or simply inaccurate. as part of the reforms, we

advocated for sippies, like the authority we have used for years to resolve fdic-insured institutions. this is specifically designed without a bailout, which is espressly prohibited by the new law. bailouts as far as the eye can see. we need to spread the word as to what the sippy resolution framework is all about. the resolutions will be critically important to carry out an orderly resolution that places losses on shareholders and debt holders, which is where they belong. the fdic and federal reserve are going to need to stick to their guns and insist these companies simplify their structure if necessary to ensure they can be resolved without a bailout in some future crisis.

once again, people are going to ask why now? why are we putting such onerous demands on private sector financial institutions? it will need to be explained that the alternative is to risk another financial crisis that could someday throw millions of people out of work and wreck our public finances. short-termism is also alive and well in the ongoing debate over bank capital requirements. some banking industry representatives are claiming that higher capital requirements will raise the cost of credit and could derail the economic expansion. this is a terrific example of the sort of static short-term thinking that got us into this mess in the first place. there's a lot of recent research that shows higher -- and it will have a very modest effect on the cost of credit. it will create a large net improvement and long-term economic growth by having more capital, lessens the frequency

and severity of financial crises. if your time horizon is anything longer than six months or so, i think that's a pretty good tradeoff. the fact is that capital requirements u.s. banks now face are mostly the same as those that were in existence before the crisis. the reason banks are not lending more now is a combination of risk aversion on their part and reduced borrower demand. they have plenty of capacity to lend. large banks have been raising capital since the crisis started and most either already meet the new standards or are well-positioned to do so solely through retained earnings. banks that need more time will benefit from the extended phase designed to ensure seamless transition to the new standards including a sippy surcharge. another dodd-frank mandate is requiring to attain 5% of the credit risk. risk retention is necessary to give issuers a long-term interest in the performance of the underlying mortgages. given the controversy that has

surrounded this rule, i have to say i regret that congress also carved out an exemption for ultra safe mortgages as designed by the regulatory agencies. everyone, it seems, believes that their mortgage should receive this qualifying residential mortgage. and thus be exempt from the small premium on their mortgage rate. the connection they're not making is that the small extra cost is the price we must pay in the short-term to put a little equity behind these mortgages to ensure that incentives are properly aligned and to avoid a costly repeat of the mortgage crisis in the future. we also need solid long-term thinking on other important national policy issues. too often the response has been another tax credit or a cut in interest rates that feels good for a while but does nothing to enhance the long-term performance of our economy. deep political divisions appear to have sapped our will to make the type of long-term investments in education and public infrastructure that will

pay dividends over many years. problems like the civilian conservation corps once pro provided skills for people that is they work to reserve our natural resources. we still see the handy work in national parks and forests throughout the country. the sense of pride and purpose is certainly greater than costly stimulus programs designed to put a few extra dollars in similar pockets, much of which is used to produce foreign-made goods. we need to get serious about making health care sustainable over the long-run. as longevity rises and the baby boomers retire. the previous generation is wonderful and much-underappreciated historical development. with this blessing comes the need to make some choices that involve short-term sackry faces. we have to work longer, pay more into the system and perhaps impose means tests on benefits.

similarly our loophole-ridden tax system which favors whole building over other long-term investments is badly in need of an overhaul. closing the loopholes will result in a more efficient allocation of capital and allow us to reduce marginal tax rates that can be used to help pay down our national debt. but system of us are going to have to give something up in the short-term in order to secure those long-term advantages. where will the focus be when this question is debated in congress? reported in the newspapers and reported about in the blogs. we are in dire need of leadership. both public and private. that will champion patients and sacrifice now in return for a brighter and more stable future for us and our progeny. the media plays a critical roll in all of this. you report the facts so others

can make informed decisions and you know better than anyone that getting a story factually correct requires going beyond the sound bytes to verify the accuracy of claims. there is no shortage of rhetoric for you to investigate. your effort to dig down to the truth of the story will help the public get beyond the sound byte of the day and think about the long-term consequences of the policy choices and the personal choices that all of us must make. there are signs that the mood of the public is already changing direction, at least in terms of their personal decision make. total household debt is down by almost 5% from pre-crisis levels while the personal savings rate has risen to its highest level in 15 years. i am reminded of some advice i received when i took the job as fdic chairman five years ago. it came from one of my predecessors, the late bill seedman, who i'm sure many of you knew well. the fdic's foremost

responsibility is to maintain public confidence in the banking system. today we ensure some 6.4 trillion on deposits in thousands of banks across america. while literally thousands of fdic insured institutions have failed over the years, nobody has ever lost a penny and insured deposits. bill emphasized to me that one of the keys to public confidence is transparency. as you would expect, much of what the fdic does is confidential as it pertains obviously to individual institutions. the fdic chairman needs to be visible to the public, accessible to journalists, and fully engaged in the policy debates of our time. so i took this advice to heart. and as many of you know, i have tried my best to reach out to the media, to talk with reporters, and to be a reliable source for the information that you need to tell stories with accuracy and perspective.

i think it has been a constructive relationship that has served the public interest. even at the height of the crisis, you didn't see massive runs on banks. working together, we averted a panic. people left their money and their insured deposits. it was a good example of how americans can still be counted on to make wise choices to benefit themselves and their country when they are armed with the facts and encouraged to consider the long view. thank you very much. [applause] >> thank you very much. so now we will engage in that give-and-take that you just mentioned about with the news media. we have a lot of questions from our audience. some of them were specifically stemming from the speech. some of them were handed to me before we came in. we have an interesting mix here this afternoon. we have a lot of very focused financial journalists who can really get in on the nuance and

the micro aspect of things. we have members, i'm sure, of the general public. we have some international visitors here. i think one of the great things about your ability is to speak directly in a way that's understandable that's not always shared by regulators or politicians. let's start with the big picture. here we are several years out of the financial crisis and you talked about some of the lingering effects. mr. bernanke talked about the risk this week, some of the problems that are particularly persistent, seem to be continuing and may raise the risk of the slowdown that we seem to be experiencing at the moment. what anxiety level do you think is appropriate for the public and our policymakers right now as we look out to the risk that we see that seems to be percolating over the horizon on any number of different fronts? >> well, i think these are risks, but they're subject to our control and influence.

if we take some action and make some decisions, i think with the housing market, we still have a loan level program. they need to be structured where it makes economic sense. it can make an economically viable payment. or if not, there needs to be relocation assistance or some other mechanism to clear the market. because clearly the foreclosure process is breaking down. our fiscal situation, it is a big risk for the financial system. that's what's in our control. they need to make some tough decisions. it's the same problem in europe. perhaps that debt needs to be restructured. people just need to understand they're holding it but they're going to have to take some losses. those are tough decisions people do not want to make. but it's not getting resolved. you know, you just need to bite the bullet sometime, realize there's a loss there, take it and move on. i think most of these problems

are now ones we're aware of. there are ways to solve them, but it takes political courage to do that. if i were citizens or voters, i would be worried more about the will to take action as opposed to -- there are solutions and people are going to overtake them. >> you went down a bit of a laundry riffing there because of the risks in the near-term. you mentioned about the modification process. i remember when we were in your office, it seems like early 2009, and we were sort of saying it would be great if we could get into that process and essentially try to resolve the housing crisis and the foreclosure crisis as soon as possible. is it fair to say as a whole that the government's reaction to that has been wholly inadequate? >> i wouldn't say wholly inadequate. i think it could have been better. i still think it can be better.

two things. we need to understand the housing market became too big a part of our economy. it remains a big part of our economy and it needs to clear in turn before we get on a more solid economic footh. i think this requires very senior level attention. we need to come to grips with that. we need to streamline the modification process. need to have more staff, better quality controls, tell the borrower where they stand. do they qualify for mod? fine. if not, then do it. i think the industry -- this is another problem, misaligned incentives, because the banks don't own a lot of these funds. they don't have the direct economic incentive to mitigate the loss, so that's a problem. that's why the government needs to step in more assertively, because this is a market breakdown. but i think it needs much more

senior level attention and focus and resources, and i'm not sure that's happening right now. >> back several years ago, where it seemed as if the hope was they could contain the crisis by focusing on the housing market, and yet here we are, and you talk to the foreclosure experts and they don't really -- they can cite a data point and say that is hopeful. but nobody is really willing to say i see the end anywhere in the near future. is it because there's a sense of intervention fatigue in the public and there's not a political will in the leadership to try to make the selling point that that's something that needs to be done? >> well, yes, to some extent. it's a short-termism theme. unless we can see a quick, easy fix, we don't do anything. so during the crisis, a lot of large institutions. that was easy to do, write a big

check. i was part of that decision making, i don't regret it. it stabilized the system. but it didn't fix the long-term problem, which were the mortgages. it's harder to go in there and fix these mortgages. i think that's why we lack the political will if it's not right in front of us and easy to do. we just don't seem to get it done. >> and you referenced the greek crisis. mr. bernanke was asked this week essentially, what is the risk to our banking system if indeed sort of a worst-case scenario there it plays out? and obviously, those political processes are yet to be resolved. so what do you think the risk is, first of all, to the banking system, and then to the broader economy with respect to the greek situation? >> well, again, i think that is a problem that's solvable. if europe can muster the political will to make the hard choices to stabilize a situation, i think if it gets out of control, it could be pretty ugly. there and here. there's not a lot of direct exposure, but certainly to great debt, but there's a lot of

direct exposure to european banks. this is another reason i might say why i'm so frustrated on the whole debate about capital right now. we have been argue for a long time against something called the advance approaches, which is implemented in europe in the early 2000's and led to really quite precipitous declines in capital levels there. basically allows banks to set their own risk weights on their assets for capital purposes using their internal models. so we have been pushing hard to try to get a leverage ratio, which we serve as a bond constraint on capital being too low to get the ratios higher, the quality of capital better, but also some objective parameters on the use of these advanced approaches to stop this decline and get the capital levels up in europe. but instead, i find myself and others defending trying to have a stable capital base here, where i wish the u.s. political will would be to engage in europe and say, you know, your

banks need to deleverage more. they need higher capital cushions. and this is complicating, i think, their ability to solve the greek debt situation because many of their banks are too highly lemplinged. >> so you're headed for discussions on this in the near term, right? >> that's right. >> is it fair to say you are among those trying to set the highest bar for the capital requirements? >> we are trying to set a high bar. i think we are trying to set a bar that we think is achieveable on an international basis because, again, we can always do what we think we need to do here in the u.s. the fed has the authority to set capital levels wherever they feel the need to be for a large banking organization. but i think, again, the bigger challenge is to make sure we can get the capital levels up in europe. we have publicly said, i think a 300 basis-point surcharge. it's something that we can and should do. i think it is achieveable. >> here's a direct follow-up to your speech. one person asked why do you use

the yufenism short-termism instead of greed? when financial institutions act solely for profit with complete disregard for the consequences of their action, it's historically been referred to as greed and not short-termism. good point? >> well, it is a good point. i think it goes beyond greed. i think our political process now is also suffering from short-termism. i don't think that's greed. i think that is perhaps more concerned about your immediate re-election prospects and the -- than the longer-term consequences for the country. i guess if you're worried about your job, you can somehow turn that into a greed analysis, but that may be a bit of a stress. i think greed is certainly a good example of short-term thinking, but there are other factors at play. and so that's why -- i did not choose to use that euphemism. >> first quarter data from your agency showed a rare year over

year decline in revenue, the first since 1983. zero interest rate policy hurting banks' profitability, and is that impeding the lending environment and by extension, should interest rates then be raised to help assist? >> well, that is an interesting debate, and i certainly hear that from a lot of bankers, that a gradual increase in interest rates, incremental increase in interest rates, could make lending more profitable. i think it's certainly an argument the federal reserve board is very aware of. they are countersuit arguments, but maybe it's time to think about it a little more. what we've been doing has not been giving us the impetus we were hoping for. >> a variation on that question, a couple weeks ago, jp morgan c.e.o. jamie dimon asked ben bernanke whether the regulators understood the full impact of the forthcoming regulatory environment.

and it is a common criticism from some quarters, that people say well, overregulation making us less able to compete. is there any validity to that concern, that criticism? >> well, i think going back to capital, i think we have done a lot of cost-benefit analysis on this already. and the overwhelming weight of the literature -- it's actually in a moderate range of what studies would justify based on a cost-benefit analysis concerning the payoffs, in terms of system stability and reducing the severity of the next crises with any incremental impact in lending costs. so i think they've done a very good job. you think some of this extends more from the interplay of the drivetous regulation. i think on that score, that is going to be more of a phased in approach and that perhaps with

the we could do some analysis we could do the analysis of some of these rules. i think understanding the relationships to make sure the rules working together will achieve the intended outcomes make some sense. so i think by itself, sure, analysis to understand relationships is good. but i wouldn't want that to be interpreted as a reason for not engaging in reforms that we know are needed and certainly on capital. >> someone has been asking about another downside. no one is asking about the upside. so as you look at the implementation of the efforts of dodd-frank, where do you see the greatest pitfalls and its potential derailment? >> boy, that's a really good question. i do think the derivatives oversight is very, very important. that's not an area where my agency has the lead. it's with the s.e.c. and the cfdic.

i hope very much that congress gives those agencies the money they need to implement some very important and needed reforms and derivatives transparency and oversight. the c.d.s. market in particular i think continues to be far too opaque for purposes of assuring systems stability. and it was a key driver during the crisis, and so i would hope that those funds would be available to implement those rules, because i think they're very important. i think just more generally, again, maintaining the political will, i've been quoted saying this boyfriend. this is a lot of amnesia right now and a lot of pushback on things that are so obviously needed like higher capital. and one of the things i hope to do when i leave is try to engage the public more generally on some of these issues and try to explain to them in terms everyone can understand, why it's important, why they need to be engaged, why they need to be paying attention to what their elected officials are doing this for. because this crisis hurt us aller the blism and i don't want to ever see it repeated.

>> one of the responses was to take some of the traditional brokerage houses and make them commercial banks. we all have situations where in the breadth of these enterprises, they're essentially taking depositors' money. does that mean there's increased financial risk there? >> well, i think that's a lot of what the voker rule is trying to address. we don't want insured process to be done for proprietary trading. the volcker rule -- it's important given the fact that a number of major investment banks have now become bank holding companies and larger at depository institutions. so i think again with the volcker rule, the tools are there to ensure deposits are not used for proprietary trading and another area where we need very

vigorous and robust implementation. some have suggested separating out the investment banks. i don't see that getting traction here in the u.s. though i have suggested it's part of these resolution plans that the regulators will be requiring a very large financial organizations that perhaps part of those can show greater legal and financial autonomy between the investment bank and the commercial banks to reinforce the volcker restrictions. >> so with regard to dodd-frank, someone saying now there does seem to be so much political pushback. i might ask you a question about that in just a moment. does the debate about the lack of job creation and the status of the recovery have the potential to overtake implementation? >> well, there again, i would implore the media to really drill down. when people are just starting to blame financial regulators for broader economic problems. i'm sorry, but most of these rules haven't even been finalized yet. they haven't had any impact. and it seems to me this is an

effort to blame the regulators for something that has nothing to do with what we're doing and it's completely outside of our control. and what the regulators are trying to do now is provide for a more stable system so when you get into the next inevitable downturn, we won't have this severe impact on the real economy that we had in this most recent crisis. these financial reforms promote a healthy long-term sustainable growing economy. they help redirect financial services towards supporting the real economy to the traditional function of credit intermediation. example. again, the capital rules. the higher capital charges are much more significant on the trading book assets than they are on the banking. so the capital incentives will be for lending, vis-a-vis trading and other market activities. so, again, what the financial regulators are doing is support

a healthy, vibrant, sustainable economy, not the other way around. i just hope people will scratch below the surface. >> with some banks too big to fail, financial schemes complex to unravel and cases involving wall street billionaires, sometimes seemingly difficult to prosecute, how will some of these larger banks ever regain the confidence of the american public? and if not, is that really a problem? >> well, i think it is. and this is why i would hope the more responsible members of the industry would work with the regulators as opposed to against us and rein in their trade groups and their paid lobbyists here. what kind of horrible reputation damage has been done by the industry from these bailouts? they have a more stable system. they have rules to constrain the excessive risk-taking that weed out the bad players in the industry. it's in their interest as much as ours. the intensity of cynicism and anger toward the banking sector

continues to be quite problematic. and so i wish the industry would see it as in their interest to work with regulators to get this fixed. >> there was some speculation after president obama was elected that you might be tapped as treasury secretary. you were critical of some of the policies of both the bush and obama administrations. do you think they've listened closely enough to your views and what advice would you offer your successor or any other independent regulators in terms of speaking up in such a way? >> well, i'm not a part of the administration. i'm the head of an independent agency. i was appointed in the previous administration. so i don't think it's their obligation to -- i'm not an advisor to the president and it's not his obligation to listen to me or give any credence to my crews. i speak out when i see risk to the banking system and i see continuing risk to the banking system.

and hopeful they'll have some input on broader decision make. but the president has the right to choose who advises him and i'm sure he has confidence in those who are advising him. and there are frustrations we've had on the intensity of effort on the housing problem. but i wish him well and i wish this administration well. >> that was a very cordial statement in keeping with the spirit of the national press club. [laughter] i asked someone else here recently on another subject who was in a comparable position, what kind of grade they would give the current administration with regard to, let's say, management of the financial crisis and now in the current situation. let's just say for the administration as a whole, what kind of letter grade would you get? as one who's been in the academic sector. >> do you really think i'm going to answer that? [laughter] >> you want us to drill down, right? >> it's a good question. and i'm not going to answer it because i don't want to -- i'm

trying to speak in on policy and i don't want anything that i say or positions i may articulate to look like they're pro any particular party. i'm afraid if i start grading the president or any other elected official, i'm going to get into that. so i'm going to take a pass. >> i've got a couple weeks where you might consider taking another approach. the s.e.c. has passed rules to invest in assets with high credit ratings, but because interest rates are so low in the u.s., the money market fund managers have sought investments in european banks debt, which have exposure to greece. are you worried the money market funds will obviously be hit if this situation continues to unravel? >> well, i worry that the people understand where their money is put, and if they have money in money market funds, they should do some checking. and the s.e.c.'s improved disclosure rules. i think first and foremost,

people should check and understand where their money is. and if that's consistent with their comfort level. i think longer-term, i think unfortunately folks do think of this money as somehow guaranteed and that was reinforced by the crisis when the government stepped in after the reserve fund broke the bucks. so i think making a float as other mutual funds do will help provide better clarity and understanding among the money market funds about the safety or relative risk of their investment. i do think it underscores that this is a problem. we meaning the ep sock and the s.e.c. with the s.e.c.'s leadership. >> one of the most dramatic events was the failman of lehman brothers. do you think more should have been done to save it to the extent that the government bailed out a.i.g.? >> no, i don't think more should have been done to save it.

i think we needed better tools. even looking back at that situation, i think the original problem probably was at bear stearns. i think that created expectations. a couple of uninsured banks that are operating within the bankruptcy. so we didn't have direct involvement in that. but i do think it surprised me when i saw the market reaction because the place was so sick for so long. i thought everybody just understood. and they didn't. and i wonder if part of that was because of the blowl expectation. bear stearns had had a government assisted deal done for it, and even though shareholders took some loss, they were still kept alive and everybody else is protected. so hindsight is always 20/20,

but going forward, this is why we just pushed so hard for resolution authority. one of the other problems of the lehmann bankruptcy is the way derivative contracts are treated. we can actually require derivatives to perform. in a bankruptcy they have a right to close out the positions and pull their collateral out. that led to a lot of the disruption with the layman bankruptcy. -- lehman bankruptcy. >> efforts by republicans to water down some of the reforms as one who is a member of the g.o.p. yourself, are you disappointed about that? >> i've been disappointed in some republicans and democrats, too.

we'll probably never be popular people. it's easy to beat up on us. it's not just coming from the republicans. there's a lot of democrats pushing back as well. so i am disappointed in a lot of people and we were so harshly criticized going up to the crisis. and some of that was justified. but now that weir trying to fix it, there is a lot of amnesia setting in. i just hope the congress will let us exercise the judgment and authorities that were given to us under dodd-frank. this is what they pay regulators to do, to make these kind of decisions and this is why they set agencies up as independent agencies so they can make these decisions, which sometimes will be politically unpopular. i just hope at the end of the day, members of both parties will let the agencies do their work. >> so you're at the national press club. earlier you mentioned not to pay too much attention to the need

for sound bytes, which was a particularly painful thing for our fellow broadcast journalists to hear. but in all seriousness, as one who has run for congress in the relatively gentle shadow of the kansas press as well as now having been subjected to international scrutiny, how do you feel like you've been treated by the news media? >> i think pretty fairly overall. there have been a couple times where i had some real issues. but for the most part, i think we've been treated fairly. and i think in situations where we've felt that a story didn't accurately or fairly present all the perspectives, including ours, we've found the press to be responsive to that. so i think overall we have had a good relationship. i hope you feel the same way. we have put a high emphasis on transparency. i think it's very important for the public to understand what it is the fdic does, because it hits them directly. it's their insured money in those banks.

i want them to understand what we do. i think that's the reason we fared pretty well in public opinion as well, because i think they understand and appreciate what we do. if i do say so myself, in tribute to all of our 8,000 staff, we've done it pretty well. >> so you referenced public opinion there. and that played into the fortunate or unfortunate aspect that you weren't successful on the congressional run in kansas, depending on how you view fate. bob dole has been sated as saying that maybe one thing that played into that was you were a single woman running for office. it just so happens your husband is very close to the podium today. so that is very visible that you are married now. so would that mean that the political landscape might have shifted over the years and you might be a more viable political candidate in the future? >> well, scott and i were dating during that campaign. and he's a democrat. [laughter] so he would come out and visit me. we would hide him actually. this shows how much love this man has for me and i have for

him. we had a big bear costume that we would use in parades. i'd say you put the bear costume on so nobody can tell who it is. the kids loved it. so thank you, dear. and i don't know. i don't think i really want to run for anything again. the reason is, i'll tell you i loved campaigning, i loved interacting with voters, i hated the fundraising. i spent about half my time on the phone asking for money. that was the singularly most degrading thing i had to do. i think it's a shame what we put members of congress through to do this. i don't know what the answer is, but the money has really overcome this process. and i think also other people who might otherwise want to serve from getting into it. >> we're almost out of time. before we ask the last question, we have a couple of housekeeping matters to take care of. first of all, i'd like to remind you about some of our upcoming

luncheon speakers. gary sinise will announce the formation of a special foundation to help causes around the military. on july 1, mr. charles bold, the administrator for nasa, will discuss the nation's future in space and plans to extend a human presence beyond low earth orbit. we also know that the retiring astronaut mark kelly will be at our table that day. ted leonza, who made interesting draft picks for the washington wizards and the majority owner as well of the washington capitals will be here on june 13. in terms of would-be depor -- formalities, i'd like to present you with our national press club coffee mug as a toke on the you. >> thanks very much. >> finally, a last question for our speaker. you're planning to write a book after you leave office. we're wondering whether it be take us behind the scenes of the decision making. will it be a tell-all?

or is there an angle to average people that you'd like to get across in the book? >> it will not be a tell-all. i think worked very hard in this crisis with the best of motives and there were certainly different perspectives and philosophies. i think it's important for those to be explained to the readership. that's really what i'm trying to accomplish. and also some of the things that have happened after the crisis and some of the problems we still need to work through and some of the reforms it's very important to enact. i hope very much with this book i'd engage the general population, some of these issues that have been just a domain of bank regular lay tors. it's really important for people to understand this is relevant to them, it's important to them and they need to be engaged. >> thank you. how about a round of applause for our guest speaker today? [applause] i'd like to thank our national press club staff, including our

library and broadcast center for helping to organize today's event. you can find out more about what goes on here at the national press club on our website. you can also get a copy of today's program from www.press.org. thank you, and we're adjourned. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

>> the u.s. house today debated two measures on libya. lots of discussion about the war powers act. both of those measures went down to defeat. one, which would have cut defense department funding for most libya operations until the president sought authority from congress, that fell by a vote of 180-238. an earlier resolution which would have authorized the president for limited military action in libya, but no ground troops, that fell as well. their vote there the 123-295. we're going to show you some of the debate today beginning tonight at about 8:30 eastern. the house is out until after the july 4 holiday. the house recently debated and voted on two measures related to u.s. military involvement in libya. look for continued debate in the house and senate at c-span's congressional chronicle, a comprehensive resource on congress. find video of every house and senate session, daily schedules, committee hearings, and information on your elected

officials at c-span.org/congress. here's a discussion on efforts to improve the economies of u.s. cities. it's a panel of u.s. conference of mayors looking at vacant housing, assisted leving, and implementation of new technologies from their annual conference in baltimore. it's just over an hour. >> these three presenters are here to talk about the issue of vacant abandoned housing. robert cline is the founder and chair of safeguard properties. jim is out of cleveland. an ohio guy. we're glad to have him here. jack connick based in washington, d.c.

gentlemen, welcome to the council. >> thank you, mr. mayor. i want to thank the council of american cities for giving us the opportunity to come over here and talk to you all. let me just briefly give you a little bit of background of me. i am not a banker. safeguard properties is a company that provides services to the banking industry. we are a company that when the lone goes into the fall, we go out to the property physically and take a look at the property, and report back to our clients. just to give you a little of the scope, we perform -- i'm sorry. to give you a little bit of an idea, we perform roughly 1, 300,000 inspections. these are all lones in the

default, some kind of default stage, and report back to our clients what's happening to it. what we also do is once the property becomes vacant, the people move out of the home, it's our responsibility to maintain that propperty on our client's behalf until final disposition of their property. the reason why i'm here. the reason we've talked about it, what i would like to do is basically report to you the mayors of the cities, we are what we call boots on the grounds. we see these properties on the ground, what is happening. again, from the time of delinquency, and what is happening to these properties. a statistic which i don't think people are aware of which i think needs to be brought to light, which is the reason why i have this gentleman here with me to help us out, is that out of the million-plus inspections that we perform on a monthly basis, 28% of them become vacant

where people will get up and move out of the home for one reason or another. i don't know why. but again, i want to emphasize these are properties that are not even gone into foreclosure or are in the beginning stages of the foreclosure process, but people are get up. will go to a property one month and it's occupied. the next month for some reason they're gone. here's what happens when a property becomes vacant. in the pre-foreclosure stage. in most states, it will take, the foreclosure process itself, will take anywhere from 18 months, sometimes as high as three years to go through the foreclosure process. now i think everybody agrees and you've heard secretary reporter that as long as the property is occupied, someone is living in the home, our clients' function is to keep them enjoying the home. we do not want to have a vacant home, regardless of whether

payments are being paid. these are -- there's a variety of programs that address that. i'm focusing on properties that have become vacant, people have moved out, nobody is there anymore. now, i will tell you again, being boots on the ground, seeing these properties on a month-to-month basis, because we're out there every single month. regardless of how well you try to maintain the vacant homes, the longer the property sits vacant, it's going to deteriorate, it's going to be a plight on the neighborhood, the community, on the next door neighbor. it is definitely not helping anybody. again, i want to repeat, this is not an issue that's widely known. but that's the reason why i'm here. i want to bring this to the forefront. we deal with communities all over the country. and we have been talk about it, trying to find ways of how a property that becomes vacant, nobody is there. instead of having the properties

sit there vacant for months on end, we need to find a way to circumvent the situation. again, there's no consumer in a house hold when it's vacant. the biggest complaint that we get from neighbors of vacant properties is -- we will put a sticker on the door. it will say we are maintaining this property. we get calls from the neighbors every single day, what's happening with this property? kids are in there. drugs are in there. depending on what area it is. but there's no way that a vacant property helps anybody. so it's not something that you're protecting. it's protecting the city, the neighborhood, now also keep in mind that while the property is in the foreclosure stage, which means it has not gone to foreclosure yet. some states it will take three years for that process to

complete. the servicer, the banker, the investor has limited legal rights of what action they can take on a property because they have not yet -- there might be a lien holder, might be a lender, but they have not yet taken possession. they can do certain items to protect their collateral interest, quote unquote. i'm not a lawyer, but being in this business for so many years, i know how the system works. there's very limited legal rights that a bank can take to take action to protect their property. i think it's my responsibility being in the industry -- and again, y not a servicer. to bring this to light and to bring this over and over again. there's no question about it. as long as the property sits vacant, the block is going to deteriorate. and i can tell you for a fact i have seen properties that when we go out to the property, it is

still a decent home. people are living there. it's a neighborhood. but by the time the foreclosure process completes, the property is worth $60,000 because it's been vandalized, deteriorating all along. we are out there on a monthly basis, but there's only so much we can do. i want to introduce mr. ricaucus. we actually are trying to find solutions. and there are solutions out there. i believe we have to get together at one table, sit down and everybody talk about it to find a solution. i've been doing this for 20 years. all i'm hearing is one side of the story. there is a combination that can be achieved, a resolution that can be achieved if they work together. and i'll let jim take it from there. >> thank you.

thank you, mayor coleman, it's great to be here. there's a wonderful article that talks about the incredible spirit of the japanese people as they rebuild from the horrific tragedy earlier this year. spirit is best embodied not by the response of the federal government, but the response of mayors throughout the affected prefecktures responsible for rebuilding. it speaks to the power of mayors in japan. i know having served as 19 years part of a city council, just how important mayors are. there's mayors from all over the country. virtually all of you are affected by the foreclosure crisis and the implications of the fallout. in weak market cities in particular, this fallout, and you probably know this, is best characterized by increased vacancies, stunning vacancies in detroit, toledo, buffalo, cincinnati, dayton.

increased incidents of homeowner walkways. robert just talked about one out of four closures happens to be a case where homeowners looked at the value of the mortgage and says we're never going to get the value and they tend to walk away from the property. we're also seeing plummetting property values. and destroyed real estate markets. for example, in the city of cleveland, the federal reserve bank just released the statement that the average home in cleveland takes 954 days to sell and is now selling at 8% to 10% of auditors' value. and along with this comes more abandonment, especially in central cities. the anger over this collapse has been understandable and justified. we turned our focus to northeast ohio where my organization is working. some of the organizations are poised to deal more quickly with this decline and take control of dead properties. we refer to them often is zombie properties.

part of a regionally funded land bank. a land bank in cleveland opened in 2009 and has taken over a thousand properties since late 2009 when they came into business. they are now take over 200 properties per month. there's some innovations there that i think can apply to your communities as well. fanny mae is transfering all low-value properties in the city of cleveland directly to the county land bank. freddie mack, h.u.d. is transfering all low-value properties from the cubanty land bank. -- county land bank. wells fargo with a check for $70,000. i can tell you this is based on talking to people in the business. these practices have killed the flipping market in cleveland, ohio. because they've choked off the dumping of low-value properties. the bank is actively engaged in

demolition through its own revenue and revenue generated by the sale of properties that do have value. the lack of demolition values is killing many of these older cities in the midwest. as i see your new american city logo here, i can tell you, you can't envision new american cities in many of these communities until you take down the old dilapidated american cities. unfortunately, the money is simply not there. we have plenty that show the value of occupied homes plummet. if you live next to a vacant property, very well-documented. yet our inability to convince federal officials of this pressing need has continued to be a problem. demolition dollars continue to be problematic, but mayors in weak market cities already know that. in ohio, we passed a couple -- one other innovation that we'll talk about briefly. the first one was called house

bill 294. it expedites the foreclosure of tax delinquent properties that are vacant. because of the flood of foreclosures in many of these cities, even tax delinquent properties that have been abandoned. vacant lots, vacant structures. taking in some cases up to two years to bring the foreclosure process. i have copies of summaries of these bills for mayors who are interested. house bill now takes the tax lincoln property and foreclosures on it in about 90 days. the second bill now in the ohio senate was actually introduced this week is going to allow the fast track of foreclosures where the homeowner has for whatever reason decided to walk away from the property. this bill will take the foreclosure process again that can take up to two years on these walkway prop -- wakeaway properties and reduce the time to maybe even four months. this reduces the exposure of

vacant property and the decay that can render the property worthless over a period of time. returns it to the market more quickly for resale and gives neighborhoods a fighting chance by occupying the property more quickly. or possibly going the demolition route. we have on the last bill worked very closely with consumer groups in ohio and nationally in the hopes that we can become a national model. and we hope that by taking control of these properties more quickly, we can help alleviate the problem again, especially in weak market cities. thank you. >> we've seen the actual end result of this type of proposal going in, getting a lot more traction from different areas in the country where it is absolutely taking hold. the sooner you can take the property and put it in some responsible hands as legal possession of the property, the

more you can hole them accountable, the more you can make sure that it is being done correctly. i want to introduce jack connick. jack is on the board of the mortgage bankers association. he also chairs the state legislative committee for the mortgage bank association. and this has been an issue that has been talked about and focused on quite extensively because i know i'm on these calls almost every week. trying to focus on how does the industry get hold of these properties and make sure that it is an entity that can handle that. >> thank you, robert. as you point out, i do chair the state legislative regulatory committee at the national mortgage bankers association. i'm not here on their behappen. i'm actually here just to talk about my experiences and my observations. i've been in the mortgage banking industry in various roles for about 40 years. and have watched not just this

crisis, but crisises before this and seen things that do and don't work. one of the things that's absolutely true, and you've heard it, you've heard the statistics around it from jim and from bob, that it's important that properties move to resolution as quickly as possible. it's also vitally important that homeowners who want to retain their home find ways to retain their home. mr. mayor, you pointed out earlier, there are a lot of obstacles in that space that need to be worked out. there's no question about that. but robert said something very important. 28% of the properties he sees on a regular basis are already vacant and abandoned. for whatever reason the occupant of the property has given up on the real estate and it's emptying and empty is the playground of the devil. there are all sorts of shenanigans. as mayors, you all know that, that go on in vacant properties. as you've also heard, the ability of the servicer, the

lender, the investor, whoever has interest in the property, to do something of a resolution nature, is hampered by the fact that they don't have legal rights until the foreclosure process runs. to the extent that takes years, that allows all of the deterioration of the shenanigans and the blight that occurs from it to happen and to exacerbate the problem. so what we wanted to talk to you about was that 28%. we don't have an answer to the whole of the foreclosure crisis. we do believe we have a good answer to the 28% of the properties that are creating the largest drive on your cities. and that is that they need to be moved through the process as quickly as possible. so that whether it's the taxing authority or the case of the tax expedition bill that jim talked about. or it is a property that's empty because of whatever decision that got it there. that property needs to get in the hands of someone who can do things with it. land banks are a great thing that's come about to try and do

resolution, as are agreements with non-profits in a number of cities for rehabilitation and placing new homeowners in those properties. all of those options exist, only after the point at can there is title and absolute ability to convey that's granted to the person of interest today. whoever it is. so it's that period that's eating everyone's lunch on abandoned properties that we wanted to talk to you about. i do chair the state committee at m.b.a. we have a monthly call. a whole group of people that get on that call. we usually have seven hundred folks that get on the call. we talk about issues. one of the issues we talk about a lot are what to do about vacant and abandoned properties. it is as large an issue for servicers as it is for you and it is the one place where there's low-hang fruit that we

know what the clear solution is, because ohio has had the experience. they know that the quicker they get the property and get it in the hands of a lands bank or some other resolution or demolition, if that's the right answer, speeds the property and ends the decay. so we wanted to bring that model to you and tell you about it, answer your questions about it, and ask that you help us convince the legislatures that this is the right track forprope abandoned. >> and nobody is thinking about taking any kind of action for for closing a property that is occupied. that is not being considered. i was in detroit and we inspected 8000 properties. what we found is that 80% were

still occupied. they were not in the best neighborhoods, but 15 properties -- they were occupied. other houses were vacant, but were still and a condition where we could have that property. the rest of it was property that was to promote -- totally demolished. that is a problem. he cannot rehabilitate a property on a block unless you get to demolish them. nobody is gone to do that on a block that has us on a property that has no doors. it has to be demolished. it is my opinion been on the ground that all three of those

media dressed at the same time. he will not have a recap situation where properties need to go. you have to clean out the old stuff, get it out of the way, and create new american cities. >> we have to have questions here. >> thank you. i'm a banker of 25 years. one of the problems we run into is going through that changed until the property can either be sold or the title changed. we have a. after foreclosure of six to nine months. in many of those cases properties are being serviced by one bank mortgage company to

the other. the upkeep of that property is what is causing problems in our cities, they are becoming overgrown, abandoned, broken windows. we make agreements with great outfits that last just as long as it is in the hand of that one lender and transferred to the next. we need to have a system working through the banks and the mortgage organizations that allows the upkeep of those houses during the period where it is going through foreclosure, because we may see five different servicing outfit from the beginning of the foreclosure to be and as we go through their participation agreements. >> another former banker. you are right. those are challenges, and that is in the process up until the time a single entity takes possession. if that is three words -- three years worth of grief, that is

worse than an abandoned property than if it is three months. that is the issue we are talking about. to the extent we can shorten the time were the most vulnerable property sit in that situation, the better for everybody. i agree with you, the other issue needs work as well. in the case of a vacant and abandoned property, where there is no consumer to protect, the faster we move it to resolution the faster we solve that problem as well. yes, sir. could you press the microphone on. >> all these solutions, do they require state legislation and state by state -- pretty much been but they do, and it is -- one thing i learned is we are creatures of the state and we

have to cooperate with state governments. these statutes can be used in in the state in the country. -- and ibank statute will be willing to share content information dealing with land banking. we have modeled statutes. i would be more than willing to share with you. we have to engage legislators. with term limits, there is a turnover with legislatures and the most critical role local governments can play is to be the back office and educate state legislatures who are getting up to speed just to be told their term in government is expired. >> the reason we are here is we

have gone to groups around the country and the major lenders. in the political process, the most compelling message you can get a legislator is everyone agrees this is the right answer. hear from just us, that is nice, and if they hear from you that the city believes this is a right answer and from the advocacy groups for the community they believe is the right answer, it builds a crescendo and tells them it is the right answer because those groups do not sleep in the same hotel, and secondly, it is something they can do that is not controversial but will be seen as positive. to the extent you can become comfortable and become a voice advocating for the solution, and

helps to get this letter is -- it helps to get the state legislatures and gauge. >> dealing on a national basis, the one complaint we hear from officials here when they have a problem they do not know who the contact. who is the interested party in that property? that has been a problem. what we have done is we have created a database that is out there. this does not cost a nickel. we have created a database where any official comes across the property, if they have a problem -- not a violation -- if they did a complaint from a neighbor,

any official will be able to go into the database, put in the address, and the dbase well -- the database will track down who the lienholder and the servicer is an who was in the organization's who is responsible for the crime rate. we are working to understand -- i see the devastation firsthand, i see what is going on. we try to create tools that the city can partner with our and of the business and find solutions on how this thing works. we have never seen -- i heard a couple years ago we have world war iii on our shores. [unintelligible] it is not decreasing.

you're trying to find tools, we can sit down together and try to find solutions. your help is appreciated. >> any other questions? thank you very much. jim, it was so good to see you again. you are doing a great job up there in northern ohio. we appreciate you very much. thank you, and we appreciate it. [applause] >> if we could bring up elizabeth mendenhall, mary kay leonard, and norman jacknis, and we will start out with elizabeth. if you could line up along here. i will appreciate it. >> thank you very much. as a member of the national

association of realtors, we are pleased to be here with leaders today. the realtor organization and many communities can comprise as many as 1/2% of your communities, but we are leaders, and we encompass over a million community citizens throughout your towns and communities. one of the things we want to make sure is on your radar was employer assisted housing pro gram. the network has range from 31 to 46 times that of a renter. 31 to 46 times. every home purchased comes -- pumps $60,000 into the economy. every two homes that are sold creeds' one job. it is not just about home ownership, but about job creation.

for every purchaser who is able to come up a home makes a difference in their lives and in the community. as the national economy is struggling, america will be wise thing to support housing in their committees. there are a variety of tools that are available to increase opportunities. why is workforce housing important? if you were a policeman, teacher, or emergency worker, he or salary with the tight credit market is making it hard for you to find safe, affordable housing. each of you are working to create those jobs in your areas. it is important those numbers can live there and be active citizens. teachers, firefighters, restaurant workers, that keep our country running, they have to live further away from their

places of business. on the flip side, that challenge her employers' ability to retain good workers. one of the most important things is employers surveyed their workers and find if they want to move to that area. they do research online. a lot of buyers looking for a property search online and if they move to a community, it may not be the best place for an employer to consider them a living there. that is where employer assisted housing programs can come in and help. they are a solution for workforce housing issues, and realtors is committed to being your partner in making sure this is a viable program. a simple employee assisted housing program can help an employee become a first-time homeowner. home owners are known to vote

more. studies show children of home owners fare better in schools. as workforce housing advocates, we want to be part of the solution. last year which contributed over $5.2 million and our partners with cities across the country to provide different employee housing opportunities, and we have a book that those same price that -- those state- by-state. the national association of realtors offers a class that they used to teach realtors on how to work with their employers to set up programs so they can a benefit to the big players in the area. we are a part of work groups the the country which assist and look for ways we can partner with the government on that level. this year we host a new round of

programs, and they are regional policy forums that focus on the nature of regional work force housing challenges and best practices. we invite employers to come be a part of this workshop, talk about how each of us can benefit from the employer assisted housing. i want to highlight two associations in particular. in wisconsin, the wisconsin association of realtors partner with the wisconsin housing finance agency in creating a website called wisconsin housing works. it served as a resource for local governments, lenders, and from the employers and counseling agencies in the agency on how to create employer assisted programs for it i point this out because we heard a lot of information from secretary donovan about counseling and the importance of how that works and also education of the general home buying process and partners

since that can work because it is a resource you can use and have them in different cities and states. there is real terms in the home state of maryland who have ban incredible work force housing champions. the top to realtors about employer assisted housing programs and there's a program in baltimore called live there your work program, and dominant talked about the plight in our areas and as we bring in employers to bring in a vacant commercial venues, we need to do this in florida residential properties in the area where people can live where they board and they can be in communities where they work to help revitalize those areas and integrate that with our own dollars.

the maryland association recognizes that if realtors cannot know about these programs, they cannot tell their clients about them. you have success stories all across the country, alabama, mississippi, also in philadelphia had a program called home buy now, and aflac has a wonderful employer assisted housing opportunity. they identified the gap between the median house is available and the income needed to afford a home. they had a great program and that is an example of that in your housing programs. right now we are working to make sure we can increase the economy and increased housing

affordability. any person, family who can afford it and who is the responsible buyer should have the right to home ownership. millions of realtors across the country are available to help. they are a great resources, and we want to encourage you to makes contact with your local association of realtors because we want to be there as a financial partner, a partner for growth, and a partner to make this country better. we appreciate the opportunity to be here today and present our programs, and i thank you. [applause] [inaudible] >> that you very much, and now i will take questions anybody hands regarding that presentation -- anybody has

regarding the presentation. yours is not working either pro? [inaudible] [unintelligible] >> in the city that looks likely a city participated in that. the importance with the employer assistance programs, there is lots of different banks, lenders, and when we partner together we can find resources to make that work. >> thank you. any other questions? yes.

[inaudible] >> we see a lot of foreclosures, but i noticed in the news recently, it has been negative about home ownership by talking about it ought to be a five-year wait before you purchase a home. is the national association of realtors doing anything to offset that negative press about investing in a home? >> i think that is a good question. one of our platform programs is one call home ownership matters. we have a campaign where we go across the country in different communities, and some of those are communities that have been hit hardest. we try to partner when we go to those communities with city government, state government, so we can focus on the different statistics, because all real estate is local. 70% of all foreclosures in the country were and only 42

counties. it is important and one of the things we are trying to do is make sure the local statistics are publicized in the local area, and we provide more and more local statistics. if you are in a community, contact your realtor organization to get those numbers because we are doing everything we can to try to provide the local statistics because many committees are having success in growth, job growth, or their community is not as distraught as others and it is important to publicize that. >> ok, thank you. all right. we are going to move on to mary kay leonard. mary kay is involved with the initiative for a competitive inner city. this council and the initiative for a competitive inner city are

going to be engaged in a joint research partnership, and the idea there is to have city's a nchor institutions for small business developed. i have had a chance to get to know mary kay. she is a wonderful person, and the initiative is a wonderful opportunity for us the partnership with. mary kay, i will give you this microphone because this one is not working. >> faq, and it was a pleasure to have you at our summit last fall in san francisco. we at the initiative are excited about this partners of trade -- about this partnership.

we believe that these urban corridors are not just in need, but also have a real assets. we believe a key asset is our anchor institutions, universities and hospitals. that is why these institutions are forming the first part of the council partnerships. i will tell you about some of the research we have done. there is a paper in your packet, and let me get you one fact. 66 of the largest in nurseries, the anchor institution is the largest employer. it could be -- they could be

doing a lot more. we work with anchor solutions. the ground our work with two things, and we think these are fundamental to our approach. the first one is the concept of shared value. it is a simple concept. it is on page 2 of the paper. it says the fortune of the anchor institution is inextricably tied to the fortune of that committee. the anchor needs its surrounding communities to attract students, faculty, it needs to be able to buy its goods and services from that community. it needs its community to be viable to do that. the community needs the an chor institutions to support the

health or the social need, educational needs of the community. secondly, in addition to this idea of the linkage, there is and you will see it on page 2 of this paper, there are multiple ways that an anchor work with its committee. these ways are not because it is just nice for a to do it. these are a principal business that if pulled in a certain way, thinking about what is good for the business, the anchor, and where there can be a complementary beneficial impact, then the business decision will be better, for the community, and will be creating long-term share value. a simple example. hiring.

anchors hire every single day, and they do not often ask themselves and he did not ask them, what percentage of those hires people coming from the surrounding neighborhoods? they might say, i am a university. actually another fact, two- thirds of the jobs in hospitals, one-third of the jobs in universities can be helped by folks with an associate's degree or less. it is much easier to think about how you can begin to leverage those hiring patterns. set an example, purchasing. how often does the anchor ask, what percentage of the spending on construction jobs goes to local residents and local companies? usually, if an anchor is

tracking it, it is thought to be significantly less than 10%. we have three anchors in detroit who have come together and pledged to increase their collective local spending to 30%, and they are going through a step-by-step set of actions in order to make that a reality. last, for example. we recently have called it -- many of you are working to try to leverage the power of your research institution in order to grow clusters of into related businesses. you are seeing it in technology, biotech, medical devices. that is a much longer term plan, but let me give you an example of san diego. 25 years ago, when pete wilson

pulled together at the universities, businesses, actually, and universities and said, how are we going to stimulate the commercialization of research the city gave land, created a nonprofit incubator and today 6000 technology companies employ 140,000 people in san diego coming out of that action. 25 years, 140,000 new jobs as a result of that. as i wrapup, icic is working with bankers across the country. understand what the overlap is in the needs of the neighborhoods around you. use the shared the you as you're making business decisions, purchasing, spinoffs, how am i going to do that, how

do i do real-estate development on the go forward basis. walt around at the wheel that you have in that paper. how do i begin to work with other stakeholders in the community to use those roles much more comprehensive way, because that is how you are granted at the highest economic and social thought you for a community, as well as competitiveness for the anchor. we hope that we can have a conversation with you about what roles, and each of you is working with one of your anchors in a way, it might be using your anchors and education reform project, it might be helping your workforce training systems, that if you think about these kinds of examples, there is probably much more that you could be doing to encourage those anchors to leverage their power. i will give you one example. we are working with new york

city small businesses services. they have hired us to talk with their key universities, suny, colombia, to understand how they are engaging in the committee, what they want to do, what they think they could do, and what they need from the city in order to encourage them to do that. yes, you could hear lots of examples coming -- we hear a lot about we need tax advantages, land -- those are not the kinds of examples the coming out of the conversations we're having today. some of them are much simpler, like we would like a list of all the businesses around our neighborhood that we could begin to do business with, or maybe you could do some capacity assessment of improvement of them so they can do that. there are multiple things that aren't to come out of these

interviews and we will convene those anchors with the cities so they can learn and we hope to bring that to you and treat more of them with you. thank you. i appreciate the partnership very much. [applause] >> thank you, mary kay. we've got to move ford, and i will take questions, if there are any. i want to talk briefly about what we are doing in columbus. we have two great prescience, institutions, children's hospital, and the other is the ohio state university. it is similar to what you have spoken of, and we look forward to a partial with you in columbus. we have an advisory council set up. our objective is a comprehensive economic development community changing anchors here theseanchro

institutions will engage that. hopefully will come together on ideas and we would like to see you're doing this and other places, and we would not have your engagement in the city of columbus as well. >> they. i would like to bring forward chattanooga, mayor little field, and norman jacknis, how great the city of chattanooga is, and the information technology infrastructure you are using to promote development in your community. is that working? >> thank you. chattanooga is an old industrial city down south. it is something of an anomaly

because most southern cities were based on agriculture or something related to that. chattanooga was based on heavy industry like a lot of the cities that you find out of the midwest. as result we were a polluted city. most cities can share a lot of history with us, but most cities were not characterized as the dirtiest city of america by walter cronkite. he announced four years ago that the dirtiest city in america west chattanooga, tennessee. we went to a lot cleaning and polishing and thinking about the future, and we were inspired by other cities like baltimore, and one of their favorite sons, james ross, and if you come to chattanooga, you will see a restored riverfront and encouragement -- restored

riverfront and an aquarium that looks like the one in baltimore. we have rebuilt our riverfront and downtown, and we have restored our environment, and just in recent years we have rebuilt our industrial base with the addition of over $300 million in investment by a company, the recently opened billion dollar new tools like an assembly plant in the indicted states, in chattanooga, and amazon.com, opening a new fulfillment center across the street from books right before christmas, employing a lot people. there is a lot of infrastructure that has made the proper course possible. we look for what is the next level. chattanooga has a partner which we own, the electric power board, which is in the business of destroying power for the tennessee valley authority. when they looked at smart grids,

something we have heard a lot about, they said we can do it in the old technology way or we can do it in the new technology we, the best way that he thinks is to thinksfiber to every home and business within our 600 square mile service area, over 170,000 users. we did just that. we were able to build a business plan around it, to issue bonds, and when that call came for those projects a few months ago, we were shoveling. we qualified and received a $111 million grant to extend that benefit to communities within our service area quickly and make sure everyone was covered, inner-city and suburbs. chattanooga and now has the fastest internet service in the

country. we announced that a few months ago. i was on a number of national news programs, and introducing us, one new york commentator talking to his audience, and i was in a studio where in washington attending a u.s. conference of mayors, and introducing me, they said if you need the fastest internet you would go to california or you would go to the boston area, somewhere like that, but, no, you need to go to a little town down south. he set it up for me that way. what a wonderful way to be introduced to the world. we have the fastest internet service and the country. when we announced that, people said no one needs that. gigabit service? medical professionals stood up and said we can use it. the scientific people at the

universities said we can use it. advertising and film people said we can use it. we found it is an extremely useful tool for economic development. it is a little bit like discovering fire, frankly. people said it has all these good uses. what can you do with it? we are not quite sure. one of our local on for no real groups -- curves is sponsoring a competition to determine what you can do with this new tool. it has all these medical applications, but it is in fact the new infrastructure of business. the new technology is digital technology. i think we all, even those in this room that are my age, about that, have acknowledged that. the new business of art, science, and business is the

information business, and the new american city is the wired city and the wireless city. where overlaying our fiber optic system with a mesh system that will enable our public employees, fire, police, to have access to a tremendous technology resource so they're not walking to -- into any danger situation without being able to see exactly what that situation is, video, building plans, that will be available to them on their screens on their laptops in their vehicles. that is the story in a nutshell, and with that, let me hand microphone to norman jacknis, which has been following along with us in helping us find new ways to use this new tool. >> fake you very much, and thank you very much for inviting me back. think tank.isco's

it is non-profit, and i had a working with this council and developing a strategy for future oriented economic growth. it is based on the transition we are beginning to see in our economy, a shift to most people for this and knowledge of and intangible services along with this he beat to this to indications of which chattanooga it is one of the early signs. neither one of those trends is in place yet, but it is happening, so if you're looking 20 years, you have to look at it and part of what we are trying to do is to figure out what the implications are and the demonstration projects that will help you figure out what kinds of things you need to start worrying about for the future. chattanooga comes along. we have been looking at a couple

of cities we could work on to do this project, and it came along. mary did not mention, but there is an annual award for the most intelligent communities in the world. they were in this year plus top seven. most of the actual cities that were in the top seven were not american. which is typical. we're back word about this compared to the rest of the world. in addition to the deed of light -- gigabyte network, hundreds of times more than the home, thehave now comeat city has a tremendous quality of life. it is a real human scale that is hard to appreciate unless you go. there is a visionary mayor, a

civic culture that works, functioning, and an active entrepreneurial committee unity. there's a local foundation that is helping the city revitalized itself. the chamber of commerce, and we have been talking about a variety of things we can start to do to demonstrate feature oriented economic approaches. one account -- one aspect of this is connecting the community with video and other ways with the global economy. it is not just we are used to thinking about globalization in the sense of manufacturing can happen in china or anywhere. even for intangible services, it will be a global economy, and starting now, so these on for

can reachntrepreneurs out and talk to investors, and they do not need to rebuild their own furniture -- their own version of m.i.t. in their backyard, because they can access all the courses m.i.t. has online and the research that has been put out. local on the brewers -- local entrepreneur can work in places like silicon valley and york and boston and they decided it was time to figure out where they wanted to live, and a went to chattanooga. this new white -- this new network in place allows them to do that and maintain relationships they have silicon valley and other places they needed, which was the best of both worlds.

we are talking -- part of this is to help figure out the can all entrepreneur access to this. the second part of this, and this knowledge economy, lifelong learning is critical. it is no longer just nice the head. so much effort in education has gone to the k-12 institutions. we have started to talk with libraries and mayor as his personal liaison to the library board. we're talking to them about having them take on the role of organizing all the education and training that exists on the internet, and most of it in the form of video, that can be delivered. organizing it for people in the city so they can build a library and say i can learn this

and they can have a package they can get to from their homes. that is two examples. the other thing i want to say, chattanooga, because of the network, is a test bed for all kinds of things. the mayor has encouraged people in other ways to think about all kinds of new experiments. for those of you have heard about the smart grid, most of what we have heard about is not smart. it is a connection between the home and utility that could go over the internet. what they have done in chattanooga is build the smart grids. recently had some bad weather. that smart grid as the intelligence to reorient itself so he can find an alternative path for electricity.

entertainment -- it is a big area now, and the mere mention the arts, but you can combine all kinds of virtual stuff on the internet along with the physical aspects they had in the city for all kinds of new entertainment things. another area you are beginning to hear about is the importance of games. there is a school in new york city called quest to learn in which the whole structure has been changed to an environment where kids learn from playing games. people in chattanooga say we can take that to the next that because we have a much better network than the people in york do. government -- you did not bring --the government's examples some of this is like science fiction. little remote helicopters that can send ability -- a video from any place you want, and ultimately a three-dimensional view of what the city looks

like. all kinds of possibilities they are exploring. where trying to educate the citizens how they can take advantage of this. you have heard a fair amount of bad news today, but this is very optimistic going on in chattanooga. while we all worry about transitions, transitions we're talking about now, if you respond to it properly, gives you the potential to redefined and we invent your cities, and you can look the chattanooga for examples and hopefully we can find others, too. thank you. [applause] >> thank you very much. i cannot wait to go to chattanooga. looking forward to it. any questions? yes. i want to ask about financing. >> financing of fiber optic

broadband network. >> that our board has an advisory board made up of some of those conservative individuals in the city, business leaders, and the required before entering into this project that an extensive study be undertaken and a better -- very allow for a business plan be constructed, and they had to make sure that the system could support itself on savings alone, just in savings of electricity, down time, and such. it actually does that. they showed the business plan to me and i am not exaggerating, it filled the shelf 12 feet long of all of the elements that they had studied. on the basis of that, bonds were issued, and the system was built. it provides an addition -- in addition to internet service, video service, and yes, there were quite a few questions and

losses and such from competitors about that issue. the system was built simply to support the electrical system, which is a lab rat. it is an industrial grade electrical system, and those businesses want to make sure that they are going to be on line. if they are not on to be knocked off. this investment was based on that. we did have the benefit of the $111 million grant, and that was because of the stimulus program that came down the pike, very unexpectedly, and what they did was unable us to build a system out faster and to get online quicker and start the revenue flowing faster. it was a confluence of first of all good business minds that put the whole system, the whole idea together, and then the hard economic story that was affecting the entire country, or

us because the money was put into a new infrastructure. people said that money needs to go into infrastructure, and that is what it did, and it is paying off. >> they did an analysis that showed this thing would payback for itself. he did not depend on stimulus funds. all the stimulus funds was allowed them to accelerate their role. >> thank you very much, and i appreciate everybody coming to this council, and we look forward to a tremendous conference here in baltimore and look forward to your online participation. thank you very much. [applause] [captioning performed by national captioning institute] [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2011] >> coming up tonight at 8:00 eastern, to the's house oversight committee hearing on venezuela. congress is looking at supporting high style actions against other nations. c-span2. here's a portion. >> it sounds to me we are in agreement that chavez is sponsoring terrorism, whether through narco trafficking, through his cooperation with iran, through his law -- through

his support of hezbollah, so it sounds to me there is agreement. where the problem lies is, what do we do about it? i first want to make this point. and i'll say it again. we're happy that there were sanctions placed onha rez. chavez. what we're not happy about is that the three sanctions that were placed on pate vase saw, the denial of import/export bank loans, credits, denial of licenses for the u.s. export of military and militarily useful technology and prohibits on u.s. government's procurement from entities, these are things that are already not happening. so wcan also agree that these are toothless, is that right? >> chairman mack, i would respectfully disagree with that.

final evaluation. i wouldn't say they're toothless because what we have done is warned the international business community that there is a danger of dealing with pate that vase saw. >> okay, just so i -- okay. so the designation of being sanctioned is important, but the actual sanctions that took place don't have any teeth? because these are things that we're currently n doing with nezuela. >> chairman, the fact is congress has given us a calibratedet of tools to use in instances like this. basically, implying that we have to make a very complicated calculation as to u.s. iterests in each one of these incidences. now, we had to judge whether the sanctions would induce the company to stop it behavior -- >> i understand that. i'm srry. i just -- but, so the fact that you made the sanctions is important here. what you sanctioned isn't important because these things are currently not being done with venezuela in the first

place. and that's my take, and i think that's most everybody else's take. we have other tools that are available -- >> we do. >> -- restriction of imports, um, also prohibiting the sanctioned entity from acquiring, holding and be trading any u.s.-based property, so there are other sanctions that we can use. but i want to get back, first of all, let me ask you this. o owns pay that vase saw? >> 100% owned b the venezuelan government, sir. >> so there's no mistake that this is, the actions of the company isn't by some company, it's by the government of venezuela? >> i think we can assume there's an intimate relationship there. >> i would assume that chavez has full control over the company. >> sir, we alsoake a calculation as to u.s. interests, and if 10% of u.s. oil imports are coming from venezuela with three u.s. refineries dependent on citgo, 6,000 gas stations, 3,000 other

employees, we have to weigh those factors as well. >> so i would suggest then -- sir, then i would suggest that the state department sign off on the keystone xl pipeline which will then be able to take over for any oil that we're getting from venezuela. it seems to me that if we're, if you or the state department or if you're going to continue to use, we have a strategic interest in their oil, and we have the ability to get oil from somewhere else, weught to get it somewhere else, wouldn't you agree? >> >> i would say generally that's a fair point of view. >> so we can expect the state department to sign off on the keystone xl pipeline? >> i can only promise to take your views back, sir. >> i think they know my views. [laughter] so, aga, the definition countries determined by the secretary of state to have repeatedly provided support for acts of international terrorism. that is the state department's definition of a state sponsor of terror, correct?

>> that is the basis for t designation, yes. >> but that is the definition, that's what's posted on the web site, that is what the state department -- so how is, how can you not designate chavez as a state sponsor of terror when we know the narco trafficking, the support of hezbollah, even if 's just fund raising? by the way, i thought that was kind of interesting. i don't remember who said it, only in be fund raising. but fund raising is the mechanism that allows hezbollah to work. so we know drugs, terrorist organizations, support of iran, all three of these things would be a determined by the secretary of state to repeatedly provide support for terrorist organizations. >> well, the statute, sir, allows the secretary discretion to decide when repeatedly is sufficient enough to merit the imposition of this, of this designation. and as i said in my oral statement, sir, our approach is

very much predicated on effectiveness and what it is that's going to get venezuela to stop behavior that we believe is unacceptable. that is why we have, that is why we have instituted a calibrate iterative process in which we are escalating pressure as appropriate. without having follow on or side effects that we believe harm our own national security and harm the terests of those who we cooperate with very closely including to contain venezuela's behavior. >> thank you. the gentleman's time has expired. given the number of members on this pal, i've asked members to keep within the five minutes, but we will allow our witnesses to answer past that moment. we'll now recognize the ranking member of the committee, mr. tierney. >> thank you. obviously, when you talk about the sanctions, congress passed a bill that allowed the secretary some discretion into how she applied those sanctions. am i right, ambassador? is.

>> absolutely correct. >> all right. so the task for the secretary at that point in time is to calibrate, as you say, or to make a determination as to which sanctioning to implement -- sanctions to implement at any given time and try to get the response she wants from that while at the same time taking other considerations of what might happen to impact our allies and our own interests, is that right? >> correct. >> so i don't want to get into negotiating here in public with venezuela or anything. can i ask you to give us a broad range of all of the competing interests that we have there. when the balancing is going on, give us a range of what types of things we're balancing, cooperation with colombia in terms of drugs and borders, you know, other things like that. just give us some idea of all the differt interests. >> okay. well, i will defer in a moment to my colleagues from the regional bureau, from western hemispheric affairs. but certainly thediplomacy with

colombia is important. colombia would be very, very sharply affected by such a designation. since colombia is at this time making significant progress in dealing with venezuela and in curtailing those activities that we find objectionable, it would seem to counterproductive to do that at this time. additionally, there are such second and third order effects as catching the business dealings of lots of closely-allied cups up in the state sponsorship net, if you will, that if other countries that were doing business with venezuela suddenly found themselves to be in danger of being sanctioned, that would be problematic. i believe mr. delare has spoken to the issue of our energy concerns in this regard, so there's a whole array of different interests that need to be taken into effect, and i think mr. whitaker may have more to add on that. >> if i could just add on with a coup of points here. u.s. policy in venezuela as a number of folks want u.s.

national security and counternarcotics and counterterrorism, all of those are very important to us. we would need to weigh, it seems to me, the effect of sanctions we take on issues like that. the ambassador mentioned the effect it would haveof a sanction against venezuela when venezuela views colombia as a close ally of the united states, how would venezuela then react with respect to its dip diplomac efforts in colombia? that's unknown to me, but it's out there. again, that might be an avenue or a place whe the venezuelan government would seek to identify that group and take some action in response to an action that we took. finally, we have many u.s. companies in venezuela, and it's our goal as the department of state to understand eir interests,efend their interests. and we would need to take into account as well any impact in

that regard withespect to those companies that continue to do business inveneel >> thank you. if secretary's just decided to throw the book at venezuela and just take the more extreme sanctions on that, what would the anticipated, current anticipated response of the venezuelan government be? >> it's hard to say. i've worked on venezuela since 2005, and hugo chavez can be unpredictable. but one of the threats of his policy since taking office in 1999 is consistently to try to turn whatever problem or issue that arises into one of him versus the united states. whether that's accurate or not. i think that he would do this, he would seek to turn this into a matter of a u.s. attack on his government and seek to use it for internal political purposes. how that would manifest itself whether in diplomatic policy or with respect to democratic opposition in venezuela or with respect to u.s. companies is

>> tomorrow morning, a discussion on the impact of the greek and european debt crisis on the u.s. financial markets and economy as a whole. our guest is telis demos. then i looked at the issue of smoking and cancer. congressional budget office director said thursday that the nation's fiscal outlook is daunting unless lawmakers make significant policy changes. he was on capitol hill to testify before the house budget committee on the long-term federal budget and debt outlook released on wednesday. we will hear more about the report in this two-hour hearing chaired by wisconsin republican paul ryan.

>> welcome all to this very important hearing. the purpose is to discuss what can be done to avoid a debt fueled economic collapse in this country. are witnessed today is doug elmendorf. want to thank you for her professionalism and hard work and does your associates have cbo and for appearing in our committee again today. history the cbo released its long-term budget outlook. distractors harsh light of the challenges we face in sound similar to many in washington have been ignored for far too long. the federal government will raise across the dangerous tipping point this year. according to cbo, total u.s. debt will reach 100% of gdp. example of eclipse the size of our entire economy. economists who study suffering that tell us that leading total to rise above 90% of gdp creates a drag on economic growth and intensifies the risk of a delafield economic crisis.

the cbo is candid about the increasing likelihood of crisis in the report states quote, such a crisis with them for policymakers is extremely difficult choices and probably have a significant negative impact on the country, unquote. this code demonstrates reveals clear for the understatement. a sudden fiscal crisis would be a complete catastrophe for this country. families and businesses with her the full brunt of the painful consequences. if the nation ultimately experienced a panic run on its debt, policymakers would be forster make immediate and painful fiscal adjustment like yesterday programs that is still the rates increase. this is the massive tax increases on working families and steep but that cuts our most vulnerable citizens to hurt us. cbo is a nonpartisan agency, so it does not take a position on what would be required to prevent this crisis.

but we can draw firm conclusions on the evidence in this report. for one thing, this report makes clear exploding government spending not insufficient revenue is driving us towards this crisis point. if we simply keep revenues that the historic revenue average as a share of gdp, than government spending driven by an aging population and rising health care costs will cause federal debt to grow to a stable levels. again, cbo makes clear programs are driving the debt in driving these programs themselves into bankruptcy. attacking solutions to save these programs, threatens both the health security and economic security of the american people. if we try to chase ever higher spending with ever higher taxes, the cbo is very clear about the consequences. it estimates the gnp will be 2% lower in 2035 than it would be otherwise. the number represents hundreds of billions in dollars of lost income for american families and

businesses on top of much higher taxes they would have to pay. house republicans had have passed a budget, to pass prosperity. perchance to cbo's warnings in the averts the crisis for us. the house budget tackles the explosive growth in spending, save critical programs like medicare and puts our budget on a path to balance without resorting to job tax hikes. meanwhile, the president has not put forward a credible plan, credible budget and its been 785 days. and they said it again. 785 days since the senate passed any budget at all. we have a leadership deficit in washington and our window for solutions is closing quickly. instead of turning that cbo and others are working to inform us of this danger, let's work together now before it's too late to put america's budget on a sustainable path, grow the economy and the next generation

with a better economy than the one we inherited. thank you good but that would like to go to device ranking member, ms. schwartz. >> thank you, mr. chairman. i look forward to this hearing, not because it will be easy or because it's new, but because it's the reality of what our nation is facing and demands our attention. i did want to say that ranking member ben holland is at the white house. he apologizes to dr. elmendorf for not being here. user can of course that the vice president and the white house and the senate on the republican on the issue of the debt ceiling, which i know we may talk some more about and see if we can't come to some agreement about a balanced approach of spending cut and revenue increases to be able to move forward. we'll see. but i appreciate the opportunity to make a few comments about where we stand at what we hear

today about how we move forward. for me to make it and if you know i've been on the budget committee for some time. the federal budget is a statement of as a nation. it's about three things. it's fiscally responsible and reducing debt, meeting obligations to our seniors and making target investments to grow our economy. we need a balanced approach and that spending cuts for every aspect of the budget that ensure economic competitiveness and will increase revenue. we do not need political rhetoric were strict ideology. everything must be on the table and compromise in finding the common ground is very important. they are committed to deficit reduction. i feel like i should repeat that. democrats are committed to deficit reduction. the cbo's fiscal outlook

reinforces the need for action. the question is not if we reduce the deficit because we must. it's how. the short-term deficit with his works are necessary response to it. as well as revenues in the bush tax cuts to unpaid for spending and medicare. in a long-term deficit is made

worse by dramatic changes in demographics in this country in the cbo will point this out. our population is aging. 50 million more americans will be over 65 in the next decade. the ratio of workers to retirees is one to two to one in the next 40 years, meaning fewer wage earners to support and cost of retirees. get its projected by cbo to rise 4% or as much as 187% of gdp by 2035. this is simply unsustainable. a long-term balance deficit reduction is absolutely necessary. the president's fiscal commission are symbols, alan simpson commission and the bipartisan policy matters, both strongly acknowledge the need to do both cutting spending and raising revenue. the democrats proposed budget for fiscal 2012 tackles the deficit responsibly by both

spending cuts and revenue increases. these include reductions from elimination of duplicate of spending, fraud, waste and abuse are streamlining government to make it more efficient and eliminating those that don't work well protect the nose in the nation. it includes the implementation of health care reform to save $1.2 trillion in health costs over 20 years. it increases revenue by ending tax cuts for wealthiest americans saving a hundred billion over the years and ending corporate tax rates that bring in billions more. the democratic should make smart, strategic investments in education, innovation and come infrastructure and research and development which will strength and economic competitiveness to promote private-sector job growth and expand our economy. this is balanced, fair and responsible approach that it is a clear contrast to the republican badge it.

the republican budget takes a sledgehammer to nondefense discretionary spending was careless cuts that don't acknowledge the impact on americans or a recovering economy. the republican budget jeopardized the safety, highway expansion undermines education research and reduces our best hopes for a future prosperity has had income of the republican budget ignores defense spending. it's imperative that we meet our commitment to our troops and military preparedness and security of the nation further growth in dod spending has to be taken into account. if admiral to 20% of her spending. in the years between fy 08 it will spend more this includes the cold weather cannot be a non-and wars. that's government agencies agencies to become more efficient. a third term republican budget undermines our promise to

america's seniors. the republican budget will answer seniors and will not reduce cost by turning medicare into a voucher program. it will simply shift that purgatory seniors. again, i believe we'll talk more about this as we go along. the fact is the republican plan will increase the cost of senior health care and increase will be increase borne by individual seniors, not by all of us. cbo estimates the republican budget will cost a 65 yield an additional $6000 sonata pocket cost and by 2030 will be as high as 12,000. if republicans continue assault on health reform, the cost burden to seniors will not only increase, but will also reduce coverage and benefits. going back on the promise for me to her seniors and disabled in america is wrong. it's not only morally represent, fiscally irresponsible. finally, fifth, republican

colleagues refuse to address the needs to raise revenue, which is essential to balancing our budget. just as we cuts unnecessary federal spending, we must also pay special tax division said a trade deficit. tax expenditures at over $1 trillion to a deficit annually. yet the republican budget continues to affect millions of dollars in tax rates every year. we should stop this and save taxpayers billions. we cannot afford another 10 years of deficit financed, bush tax cuts and our fiscal outlook to change. revenues must be a part of

solution, plain and simple. freelance real quick. indeed sensible, reasonable and strategic solutions to our nation budget challenges. it's clear the house republican budget takes a one-sided approach. we need a balanced approach that needs to meet our commitments as the nation and it's fiscally responsible and will strengthen our economy in the short and long-term. i look forward to our testimony. >> all say we see it a little differently. do not dr. elmendorf, the time is yours good >> thank you, mr. chairman. to you and all the members, the budget outlook of the united states is daunting during the next decade and over the longer term. as the economy recovers from a severe recession and policies adopted in response to recession phase out come the deficits will decline markedly in the next few

years. however, the retirement of the baby boom generation are significant and sustained increase in the share of the population eligible for social security, medicare and medicaid benefits. moreover, per capita spending for health care will probably continue rising faster than spending and other goods and services. in addition, the recession and a company policy of the pen a legacy of greatly increased government debt between the end of fiscal year 2008 in the end of the current fiscal year, debt held by the public will surge from roughly 40% of gdp close to his 40 year average to nearly 70% of gdp. the highest is shortly after world war ii. therefore, we face a budget pressures of an aging population and rising health care costs from a significant beware starting point than just a few years ago. cbo analyzed long-term budget outlook under two scenarios that

embody different assumptions about future policies. although there are great uncertainties about future economic conditions, demographic trends and other factors how we think about implications of our analysis would be the same under reasonable alternative assumptions. here are our findings. under one scenario, or extended the same scenario, debt held by the public would increase slowly from its already high level relative to gdp, reaching about 85% to 2035. that scenario adheres closely to current law and can be summarized in three broad categories. first, spending on the major health care programs as as social security is projected to grow substantially from 10% gdp today to 15% 25 years now. increase the spending will be on the major health care programs. medicare, medicaid and subsidy

to provide it for insurance to seniors, which would grow from less than 6% of gdp today to 9% in 2035. spending on social security is also projected to rise, but much less sharply. second to the scenario, given assumptions that underlie our baseline projections, government spending on everything other than interest payments on the debt and the programs they just mentioned include national defense in a way to read the mystic programs. that category of spending would decline to lower share of gdp since before the second world war. third in the scenario, expiration of the tax cuts enacted since 2001, the grain reaches the alternative minimum tax, tax provisions of last year's health care legislation and the way in which the tax system interacts with economic growth will result in steadily higher revenues. revenues reached between 23% of gdp by 2035, much higher than has been seen in the past.

the significant increase in revenues in decreasing the relative amount of spending would offset much, but not all the rise in spending on health care programs and social security. you revenues historically high levels it would continue to rise. however, the budget outlook is much bleaker rendered alternative fiscal mary up in which federal debt would go much more rapidly, 6100% of gdp by 2021 in approaching 190% by 2035. that scenario from which more closely approximates current policy is incorporate several changes to current law is or where they expected to occur or that would modify some provisions of law that might be difficult to sustain for long. most important are the assumptions on revenues. under this scenario, we've seen attacks cuts enacted since 2001 will be extended, the reach of the alternative minimum tax will be restrained and over the long

run, tax will evolve further so revenues remain near historical average of 18% gdp. this scenario also incorporates assumptions about medicare's physician that they remain current levels rather than declining by a third at the end of this year under current law and policies enacted by share for extreme growth by the federal government will not continue after 2021. in addition, the alternative scenario includes the assumption that spending in all other activities will not be quite as low as under the baseline scenario, although we'll still saw close to its lowest level in the entire postwar period. it is important to note further that these projections do not incorporate the harmful effects of rising debt would have an economic growth in interest rates, incorporating economic feedbacks of the report, debt under this scenario would be well over 200% to gdp in 2035 is

such a thing would come to pass. the implications of this analysis are clear. there is a substantial mismatch between what the government would have to spend to maintain existing programs in their current form and the revenues that taxpayers are accustomed to providing good to keep deficits and debts from climate to unsustainable levels how policymakers need to increase revenues for the percentage of gdp. decrease spending from projected bubbles will adapt sun combination of those two approaches. making such changes remain well below potential levels would probably slow the economic recovery. however, the sooner one team changes pass a spending policies are agreed upon the sooner they are carried out once the economy recovers, the smaller the damage to the economy from growing federal debt. thank you.

yesterday the trustees and the ways and means confirmed in a hearing medicare as we know and use in 2023 so i have three

basic questions on this part. if medicare trust funds are empty, and paying for medicare promises requires tens of trillions of dollars to be transferred from general revenue, where will these funds come from, number one, number two, how what medicare be financed in a fiscal crisis and is it plausible medicare could continue to provide current benefits indefinitely as analysis consumes comparing the two? >> on the first question mr. chairman, if the trust fund runs out of money than the only way the benefits will be continued at the level specified in the current law is if the general revenue were used for that purpose and that can only come from higher taxes or lower spending in other programs. >> or additional borrowing. >> if the government becomes unable to borrow at affordable rates as we have seen from other

countries end up in a position, there would probably need to be very stark changes in the whole range of government spending programs and start changes -- >> in the immediate term. >> when the situation arises the government cannot turn to capital markets to obtain the funds it needs and then balance the budget almost literally overnight then the disruption to the federal government policies and the economy and the society could be immense. >> so this is unsustainable. >> the path of the budget the current policy is most definitely. >> and the medicare baseline itself. >> it funded through the trust fund is on unsustainable path and our own projection it is in 2020 a few years earlier. >> so let's get down to the provider side of this. i've been on the ways and means for a long time and lots of

provider issues. historic lee medicare in both parties have been working on this, medicare control cost by paying less than private. it cut by $500 billion not to advance medicare solvency but fund another open-ended entitlement program. on top of that physicians are said to be cut by an additional 29.4% of this january i believe it is 29.4 to read to your -- in the medicare -- to your projections assume providers continue to accept patients with the same rate they do now under the traditional program because let's remember medicare pays providers eda present what they will receive in the private market. this will fall to about 40%. so, do your projections assume providers continue to accept medicare patients at the same rate now in the traditional program and as your analysis assumed despite the additional provider cuts coming this will

have no effect on the quality or access of care? >> we don't model the behavior of physicians. we don't more of the access to carroll quality-of-care. >> it stays as is. >> we noted in the letter analyzing your proposal that's a gap in the tool kit that we are trying to fulfill but under the current circumstances we don't model in the regular baseline projections or analysis of the proposal the affect it might happen under the current law or alternatives. >> your analysis effectively assumes no matter how much the government pays providers for health care services providers continue to deliver the same quality care and access. that's the gap to talk about one of you accept the premise and position of price control to actually reduce cost strikes me that your analysis does not appear to take into account the choice and competition despite in the economy and even within medicare where applied would put

downward pressure on the health inflation. there's a take away here that the only way to get a grip on skyrocketing health care cost is to restrict price control and heavy government rationing. is that what we are to conclude? >> i don't think that's a fair interpretation of the analysis. as you pointed out yourself medicare pays list providers to date and private insurers. so it is i think an open question to how much lower payments can go in medicare relative to private insurers without the access to care or quality-of-care of medicare beneficiaries in an important way >> but you don't feel like you have the tool kit to model that is that what you're saying? >> we also noted in the letter that we do include the effect of competition in the current private insurance market and assessing the gap today between the costs in medicare and the cost of the similar patient we estimate the downside of medicare, but we do not in the

analysis and corporate any effective competition that might arise over time from the additional place pressures that are built into your proposal and from additional flexibility that insurers have relative to the traditional medicare to adjust. >> to be clear on that point medicare part b which is something we looked at -- if you don't mind i would like to have on contact. helpful. medicare part b, it's come and 40% below cost projections. now while those savings can be attributed to the lower-than-expected in a moment to calculate nearly 85% of the program savings were, quote, direct result of competition and significantly lower plan bids. remember we had an amendment in the ways and means premiums rate that would be about 25% higher than they actually are today.

the reforms in the budget are modeled on these kind of reforms so choose from guaranteed medicare coverage option. when analyzing the costs under the house-passed budget, did you take into account choice and competition would have on the health care cost and do you assume people will continue to utilize the same rate they do now meaning what i got out of what you just said is that you're not really greening those lessons from the experience we had from the part d result petraeus too we are not applying any additional effect of competition on the growth rate over time and analysis of the proposal coming and we don't have, again, the analysis we would need for the quality of valuation on the importance of the factors. interpreting the evidence and interpreting other evidence in the world is complicated at the time of the estimate the we made which was above the ultimate

cost prescription drug spending we expect this to slope through of the health care system than we anticipated at the time. part d shared in that slowdown. that is say, again, health care system wide phenomenon. the extent to which the was passed through to medicare part ad is different than it would have been under an alternative structure for part de is a subtle and of the question and if one looks at other examples one tries to compare the public health care programs to systems where there are competition in the private insurers the comparisons are not straight forward as we shall there are periods of history where the cost and the public programs grow faster than private insurance and periods where there is the opposite can be seen. if one looks the federal employees health benefit program

premiums in that program have risen fairly rapidly along with premiums and the rest of the health care system roughly despite the competition. but interpreting this evidence is tricky. we have a public health care program that has evolved over time with a lot of policy changes. it's not a queen from a research and set of policies. we have private health care system that's been affected by developments in the health care system and affected by the tax treatment of employer sponsored health insurance so it isn't a clean run of a purely private system either. we are trying to do this is a long project is to glean the lessons from the different parts of the historical experience to try to address the policy issue which is the power of the public to find the benefit of chrysostom versus a system where the government makes the fine contribution the competing private insurers to try to give you some more analytics. >> you guys are doing -- at the shop you do such a great