if you are look -- if you are lucky enough to play at someone in a movie that resonates like that, it is a good thing. >> we are almost out of time. we have a couple of housekeeping items to take care of. that includes mentioning some of our upcoming luncheon speakers. tomorrow, we are in our pre fourth of july feeling of patriotism here. we will have charles bolden here and he will discuss arkin -- our continued commitment to human space flight. we still have tickets available for that occurred july 13, the owner of our hockey and basketball teams in washington will be here. he is quite accomplished and the high technology and rom. as you may know, you have been

here before. we typically like to present you with a token of our appreciation. it is the coffee mug. do not leave yet. [laughter] there is another coffee mug in case you might have broken an earlier one bread -- an earlier one. i noticed about -- [laughter] that is not what i planned. it can stay on the floor. you are out there with the sunlight being -- beating down on you. you need a national press club hiked. =

-- hat. how about a round of applause for our guest speaker today? [applause] >> harry reid canceled the senate july 4 recess next week. he said centers will stay to continue negotiations on increasing the debt ceiling. he made the announcement one day after president obama criticized lawmakers for their work schedule. today, senate republicans boycotted a committee meeting on free trade agreement with south korea. they disagreed with the inclusion of a program that would aid workers who have lost their jobs due to outsourcing. senate republicans held a news conference instead. outgoing defense secretary robert gates farewell ceremony. president obama o awarded tempt the presidential medal of

freedom. he is the first defense secretary to serve both a republican and democratic president. >> charles golden speaks at the national press club tomorrow. live coverage here on c-span at 1:00 eastern. the last space shuttle launch is scheduled for friday, july 8. >> he decided several days that he was going to kill him. he followed his whereabouts in the newspaper. he began tracking him. >> on september 6, 1901, self- proclaimed anarchist fired to fatal shots at president william mckinley.

>> senate majority leader harry reid announced that the senate will council its july 4 recess scheduled for next week to continue no sedations -- negotiations on raising the debt ceiling. they spoke with reporters for about 15 minutes. >> i announced this morning that we would be in session next week. it is too important not to be here and to resolve what needs to be done. >> we do not have any time to waste. the most important issue facing today is reaching an agreement about our deficit. we need to work out somebefore the market starts to suffer the consequences.

economic adviser. he was an economist at moody's and has worked with democrats country. he said, and we have to work something out soon. he talks about july. we cannot wait until august. july is here in just a few days. we have to hold a series of meetings, and we are going to do that. on tuesday, we'll have senator conrad, but they plan to move forward on a budget. on wednesday, we will have another caucus. we invited the president and vice president to come. we are confident that they will be able to be here.

we also, on thursday, we will team come. we need to stay on top of this. people meeting and discussing things. the idea that a number of senators quietly say to me, do we really have to be here? we have to be here. we do not want one to think that what we are doing here -- the involved. the main obstacle, and i want to be very clear, the

republicans' stubborn insistence on protecting giveaways that do not need the giveaways. how many of you heard on the radio today -- in new york, somebody went to an atm machine, they left the receipt. the receipt said they withdrew $400. he still had in his account $100 million. these are the kind of people that should be paying their fair share. we are asking people who are struggling on a day-to-day basis to make their mortgage payment, their car payment, to determine if they will be able to send their kids back to school next year. and we have people who are making huge amounts of money.

we democrats know we have to work toward a balanced budget. we know that. we need some help. it should not be a burden on middle-class americans. the most pressing issue facing us is forging a bipartisan deal to cut spending while creating jobs and that is what we're going to do, we will focus on that all next week. we will focus on the economy. >> one of our senate republican colleagues came to was a short time ago and was critical of the present cost press conference yesterday. he used some very harsh language. he questioned what he had to say. what the president had to say is very important to all of us. this august 2 deadline on the deficit is serious.

it is very serious. we are talking about the possibility that the united states would default for the first time in history at a time when countries around the world are in default and crisis as a result of it. we are in the midst of a recovery in the recession. playing games with this deadline in dangers this recovery. if it looks like we may not meet our responsibility, and just rates will go up. the worst thing that we could ask for in times of recovery. when the president expresses a sense of urgency that will parsley's and get to work and get this done, i think he is delivering a message to everybody ought to hear. the president said yesterday, revenue should be part of this conversation. he did not want to talk about revenue.

he threw that hot potato over to john boehner. if we cannot bring revenue to the table, we will not have a serious conversation. what we have identified in the last few days on the floor and off are ample opportunities for us to save money in our tax code. subsidies that are going to american businesses to ship jobs overseas should end immediately. the savings will encourage companies to state in america, employee american. the litany of subsidies that we have gone through, all of these things are special favors. protecting them is not protecting america. we have to step toward and break this deadline on the issue of revenue.

i have been involved in this for a long time. this is a moment of truth. we have to get this done, and done quickly. otherwise, the economy will suffer. >> thank you. it looks like we will be here in the capital for the fourth of july break, but it is time for serious negotiations. we do not need any extra fireworks going off here on capitol hill. a lot of us plan to be with our families back home next week. that is a small sacrifice compared to what is at stake if we do not reach an agreement to avoid a default. the clock is ticking on a deal, it is crunch time. we all know that raising the debt ceiling is not popular. no one side wants to own it by themselves. we will have to will dance and do this together. mitch mcconnell knows the president's door has always been open. his availability has never been

in question. we do not need any more stunts. we need a willingness for both sides to give a little. we have given a lot. the vice president has said more than a billion dollars in cuts have already been identified. that would put as far down a road towards an agreement. the question is how to make up the rest. it seems like leader mcconnell is willing to take the economy for the sake of protecting tax breaks for oil companies, yacht, corporate jets. "i think the president's fiscal commission pointed out there is a lot of money being used in tax expenditures. i think we need to get them out on the table."

senator alexander, "it is a good time to take a hard look at unwarranted tax breaks." again, not one of us. another member of the republican leadership. it seems as senator mcconnell has ventured out on a limb and many and his own caucus are sawing it off. the senator needs to joins the rest of his party, and abandon his rigid position on revenues, the sooner we can have a deal. >> i have been on the budget committee the entire time i have been in the senate. in all those years, i have to say i have never seen anything like what the republicans are willing to risk today in these negotiations and to they are willing to risk it all for.

earlier this week, the bipartisan policy center put out a report that was authored by a former bush treasury official about what would happen if republicans continue to play chicken. those scenarios were extremely grim. at risk are the benefits in health care that we owe our veterans, that have served our nation honorably. social security checks for our seniors. unemployment benefits. paid for are active-duty military. the question is, do they are willing to risk that for? it is for people who are making the most in this country. companies like exxon mobil, it is the owners of corporate jets, large corporations who are

shipping our jobs overseas, and it is the very wealthiest americans who are enjoying the most generous tax rates in over 60 years. they are not being asked to sacrifice. what we are asking for is that everybody participates. we do not want this budget balanced on the backs of our seniors, are working families, our veterans, and the hard- working americans who know that should be go to default because of their insistence on not shared sacrifice, it will hurt them the most. everybody be at the table, that is all we are asking. >> questions? >> why do you need to keep the senate here?

is this just for show? >> we have to have the entire caucus involved. even though some of the negotiation takes place with some of us, the four of us had a meeting with the president yesterday, we came back and each of us reported to the caucus. that caucus took more than two hours. they need to feel that they are in engaged in the debate around here. >> can you say with certainty that the votes are not there? what will be on the floor next week? >> we are not going to be [inaudible] on some piece of legislation that we do not have to vote on.

it takes both sides to get something done. neither one of us can do it alone. we are working on a number of different proposals. we struck four of them with the president yesterday. i do not know how many others have been discussed with other groups of people. we will spend some time next week on a very strong bipartisan measure. i talked to john mccain and john kerry both today. >> a lot of your colleagues [inaudible] are you forcing republicans to vote on those?

>> that is something that we are considering. as you know, the senate rules -- it is not so easy to get things on the floor. one of the considerations, we might pick our favorite and go after that. that all takes time. everyone should accept this, why have we done this? why have we pointed out these individual tax breaks, standing alone, to have been together, they are worth tens of billions of dollars. i also appreciate my colleagues going down to the floor and laying out to the american

public that we are talking about. somebody you has an atm account with $100 million should be paying their fair share. >> how much it needs to be in revenues? >> there are all kinds of [inaudible] senator durban has feelings differently than others. it would be very unfair for the people who are struggling to bear the burden when the fat cats [inaudible] thank you, everybody. >> now available, the congressional directory, a complete guide to the first session of the congress.

new and returning house and senate members. with contact information. information on the white house, supreme court justices, and governors. order out -- at c-span.org. >> the debate on free trade agreements was canceled to date in the senate finance committee when republicans boycotted the hearing. a deal was reached earlier this week. senate republicans objected to parts of the agreement. democratic members of the committee met for about half an hour.

>> committee rules require a quorum. no republicans will attend today.

republicans objected to the committee meeting today. i am very disappointed that my colleagues have chosen not to join us to consider this legislation. this choice is district departure from years of bipartisan work in this committee. synods and committee rules require 48 hours' notice -- senate and committee rules require 48 hours. given all members sufficient notice of our meeting today. as always, we take our rules very seriously. instead of participating in a fair and open a quorum, members of this committee chose to block the scheduled mark up. the bigger disappointment is that this boycott means the opportunity to pass important job creation legislation is now delayed. today's action move us farther away from finalizing these trade

agreements. these bills are so critical to our efforts to open new markets , help displaced workers, and improve our economy. not meeting our commitment today mean someone is without a job and struggling to pay their mortgage, car payment, or their child's tuition will have to wait. it means workers to have been laid off have to wait to get the training they need to get a new job. the pride that comes from going to work every day. these agreements, together with the trade adjustment assistance, will boost our economy by billions of dollars. it represents the opportunities. they are the jobs that the unemployed americans need. in fact, these agreements will create a remarkable 250,000 u.s.

jobs and increase exports by $13 billion. that is just the job creation that we need in these tough economic times. so many americans struggling with these our economy need this package. they need these jobs. every day we delay, we lose ground to our competitors. tomorrow, -- in august, agreement-- colombia's with candidates -- with canada. in these tough economic times, now is not the time to walk away. it is a time for members of both

parties to come together to deliver real results to the american people. american workers cannot afford to wait any longer. i am disappointed in today's boycott, i resolve to continue to work to create the jobs that americans need. we will continue in the weeks and months to come. that is it. we are waiting. >> i wish you all the best bread we know you were getting married on saturday. we are happy for you. [applause]

mr. chairman, i am dumbfounded and saddened by what is happening here today. i look at my colleagues sitting up and down this road right now , thoughtful, committed, intelligent people who came here to give the nation's business. at a time when more than ever before people are pleading with us to do the nation's business like adults and come together crossing party lines and finding common ground for our country. i look over there and i see these empty chairs on the very same day that the july 4 recess has been cancelled because four or five members of that side

refused to allow the senate to recess, supposedly because we have so much business. you know, what is happening in this committee today tells the story of the broken politics of our country and the broken united states senate. it is frustrating. i came here today prepared to votes for a package that puts americans to work. it creates jobs in our country. it is in our national security interest as well as our economic interest rate it would have paved the way for us to open up the pathway for american products and help american workers to be able to adjust to the impact of trade differences that occur. we all know they occur. ironically, our colleagues who are not here are the same ones

who have been attacking the administration for imaginary delays about getting these very trade package is passed. i guess it was important to them until it's stopped being important to them. politics took over. there is something at risk here. this is not a funny moment. every day that goes by -- this is not a phony moment. how is america going to stay number one? we have an opportunity to open up new products that can be sold abroad, and yet, they have taken this extraordinary step of walking away from their responsibilities, walking away from the american people, walking away from a meeting of the senate at this extraordinary moment. one reason is possibly they do

not like the trade adjustment assistance because the chairmen have the temerity to strike a compromise with the house of representatives. or because they do not want anything to pass here because they want to do everything possible to work the president, keep the economy where it is, the election strategy 2012. we used to have members of this committee. they believed, and they came from states that were impacted by trade. they believed that you needed to help workers be able to transition. president bush in his last state of the union address, "trade brings better jobs and better prices. for some americans, a trade can

mean losing a job. the federal government has a responsibility to help." that was president bush saying this. gov. christie of new jersey, gov. barbara of mississippi, joined in that. -- barbara -- barbour of mississippi. as such, the program is a critical program to move in with free trade agreement in order to help american workers adapt to changes in the global marketplace. these governors have got to be scratching their heads, and these republican governors who want these jobs in their states. they have to look at these in d.c. it's and wonder what is happening to the united states

congress and the united states senate. mr. chairman, i do not know how you justify this. it saddens me bread i have been here 27 years and it makes you stop and wonder, how are we going to get our business done if we cannot compromise? i am deeply frustrated by it. i think the american people have got to be beyond themselves wondering what is going on down here in washington looking at this kind of the spectacle. we give up our fourth of july recess to be your to do business. they have been screaming about getting these agreements done. and we cannot do it. enough said. >> last monday, i held a full

committee hearing, bipartisan, in charleston, west virginia, about manufacturing and exporting. the message was basically best -- this -- we have lost the third of our manufacturing jobs in the last number of years, but exports from west virginia to other parts of the world have gone up by 50% in a couple of years. the audience was riveted. and galvanized. and subcommittees were formed. business people out there, labor toople, public citizen's, start working on these problems. how can we increase exports from

west virginia, which is not a rich state? we talked about the fact that if you have -- if you do not have a trade agreements, they maintain 50% tariff on any product that you decide to sell in europe -- and their country. if you do have a trade agreement with them, those tariffs disappear. not all of them immediately, but shortly. that makes our products more competitive. those folks in west for daniel to attended that hearing were galvanized by that, they were enthused by that, they expect us to be doing that. i am not disturbed that we are

being held here for a week. what disturbs me as that we could be making progress on export promotion, which is what the people of west virginia expect us to be doing. that is a ray of hope for west region and we do not have a lot of hope. >> a first of all, thank you for the extraordinary diligence that you have shown and bringing these agreements before us. that is a real accomplishment and it is absolutely in the national interest and you should be commended for it. i know that you put extraordinary effort into it and to forge the compromise that you did with our colleagues on both sides. it represents a real achievement. i believe the actions of our colleagues on this committee are inexplicable and indefensible.

when unemployment is too high and economic growth is too low, and we had an opportunity today to strengthen our economy, and our republican colleagues refuse to show up for work. all across america, hundreds of millions of people showed up to work today and they were expecting that we would do our job. they were expecting that we would show up to work. to solve our country's problems. the only explanation that i can see is i remember very well that republican leaders mitch mcconnell saying early in this session that his number one priority was to defeat president obama. i thought our number-one priority was to solve the country's problems. i think we are beginning to see a pattern that some of our colleagues on the other side,

their priority is political victory. regardless of the consequences to the country. that is a very, very sad day. >> thank you, mr. chairman. congratulations on saturday. this is something of a public announcement. abu dhabi honor to chair our trade subcommittee here -- i have had the honor to chair our trade subcommittee and the of always try to work in a bipartisan way. it is important that people understand what the bottom line here is today. blonder you delay legislation that expands -- the longer you delay legislation that expands our exports, at a slower or economic recovery will be. what we have seen under your

leadership, we have explored this expanded trade and is about more jobs. it is about the very jobs that we need most. high skill, high-wage jobs, the jobs for weekend gross things here in america, we can make things here in america, we can add value and then we can ship them around the world. i want to make it clear that i think your remarks are very much on point. this is going to be a tremendous bipartisan opportunity for our country. look at the enforcement agenda that has been bipartisan. the fact is, chinese companies are wondering merchandise through korea and other countries to avoid the trade laws. we could have made progress today to combat this.

on each of these issues, trade adjustment assistance, said that has been historically bipartisan as well. as we expand trade, and there will be changes in our economy. that is why we have the trade adjustment program as a trampoline, to make sure that our workers can get health care and job training and assistance. i look forward to the day when we can get back to what has always been bipartisan business here on this committee. our congratulations on saturday. >> thank you very much. >> mr. chairman, congratulations on your wedding. it is too bad that you will have to cancel your honeymoon. >> we will make it up. >> did you ever think that you would have us on your honeymoon with do you -- would you?

-- with you? [laughter] >> my fiancee certainly did not. >> next day, some of us are going to take the floor and we will talk about a comprehensive settlement with real money about bringing down the deficit over the next decade. we will talk about real money, it is not going to be smoke and mirrors, the budgetary sleight of hand, and it is going to bite. $4 trillion at the deficit over 10 years. this senator from a state whose

people want solutions -- if this is a sign of things to come, we're going to have a tough time as it gets closer and closer to august 2. there is not going to be any cooperation if this is the son to come. -- sign to come. if you do something real about the budget, you have to have bipartisan cooperation here head that is what the people sent us here to do and that is what is the tradition of this country, particularly when the country's back is against the wall in crisis. this is an awfully bad sign.

>> i will be very brief. mike and -- my congratulations, and much happiness and joy in your marriage. the apparent contradictions on the other side are enormous. yesterday, seven to 10 of a republican colleagues got up and said, we must stay here next week. today, they did not show up totally inconsistent within a span of 24 hours. it leads you to only one conclusion. they want the country to be in as bad a shape as possible because that might help them collect wrote -- that might help them during the election. they're always for tax breaks for employers, but not now. they have always been for getting taa attached to trade agreements, but not now.

the list goes on and on and on. all of a sudden, a new theater has taken on the other side. the best way to win is to work the country as much as you can and that will create political benefit. that is sad. all of us are of such by it, but it is just confounding. i have never experienced anything like it and the 37 years i've been in politics. >> thank you very much, mr. chairman. i want to add one thing. parts of what we are doing here is the filling a commitment on trade adjustment assistance for workers, small businesses, farmers, who are waiting for us. they have a sense of urgency in their lives. since february, with the blocking of the extension of taa

assistants, people are losing their jobs and they do not have the opportunity to get training, to be able to get to a loan to start a new business to compete in a global economy. yesterday, workers in michigan were denied help because they were service workers. we included them two years ago. these are folks that lost their jobs when fewer goods were stored in warehouses because of the global economy. with what you are proposing, mr. chairman, they would be able to get help. i want to thank you for that. i could go on and on. every month in michigan, there are those to own a small business, workers, farmers, who have been impacted adversely by trade.

we will help them be able to retool, to go back to school. i just want to say for the record, there are a whole lot of folks were counting on us to be able to do something that will be able to help them be able to put their lives back together and get back to work and care for their families. that is an important part of this discussion as well. thank you for all of your work. >> thank you it very much. i am very proud of each of you. we have worked very well together. each of us represents a different state, a different point of view. we are all together. it is like our national model. -- motto. this is a moment of truth, frankly, for our country. it may sound dramatic, but i think it is true.

it is a moment of truth for competitiveness. how competitive town this country before our kids and grandkids? we have to look for work? we need trade agreements that make sense. it is a moment of truth for this country fiscally. senator conrad has spent an unlimited amount of hours to figure out a solution. it is a moment of truth whether we can get our budget together. it is also a moment of truth politically. can this country function? at least a few more than half of us want to show up for work. that is why we are here. to move forward.

i very much hope -- we are all for -- we are all optimists. that we will be able to find solutions that will keep moving forward, looking for the day when the other side does show up, so we can do our nation's business. my apologies to the witnesses and other people who worked so hard to help us craft a solution here. we will prevail. because we have to. thank you to everybody for your hard work and for showing up. next time, we will get the other side to show up. [applause] thank you very much.

>> senate republican spoke with reporters about why they declined to join the democrats. this is a little less than half an hour. >> let me just make one

statement. it is a conversation worth having. we wished the president would be willing to have this conversation rather than listening to press agents. the finance committee is set to begin a mock marked up a free- trade agreements. this is not going to be happening. we will not be attending, thereby denying the necessary quorum to conduct the business. i want to be clear. we do not take this action might be. we have a great deal of respect for this committee.

the progress leading up to this markup, we can not attend this and pretend as though everything is fine and dandy. we would be doing a disservice to our constituents if we were to collaborate in this kind of process. these trade agreements were signed four and five years ago. the president urged the congress in january to pass the korea agreement. all three have been ready for months. yet this week, right before the fourth of july weekend, it is planned at 3:00 in the afternoon after many senators have gone home. hundreds of thousands of hours have been spent getting this ready for congress to consider the free trade agreement. and then there is this rush job to jam them through the

committee. the administration, to appease its political allies, is desperate to attach an extension of taa to the korean agreement. they would create thousands of new jobs and they are holding them up over taa. they're prepared to throw years of work on the free-trade agreements down the drain for this. this is beyond irresponsible. if the president wants to pass taa, pass it. let it stand on its own accord like we had in the past. but do not attach it to these agreements. we gave the administration fair warning on this.

the president knew where we stood, and he decided to ignore those who do not agree with them. it is unfortunate that it has come to this. but he will have to live with this choice. just so you understand the procedure. when i heard they were going to hold this marked up today, i said to the chairman, why don't you put it off until after the recess? it will go through and you will have a lot of cooperation. he said, no. first, he said, i will consider it. then he talked to the white house, and then he said, nope. yesterday, i said, we are willing to waive the committee rules if you will begin a markup at 10:00 today. he said, i will do it if you

stop anybody on your side from evoking the 24-hour rule. we went to to the bother of getting a consent request last night that would waive the two- hour rule. this is our way of being able to show what we would like to see in this treaty. all of a sudden, i did here today, [inaudible] that is just not fair, and it is not right. frankly, it is clear they just want to ram this through. there are 97 amendments.

we were willing to cooperate and do everything we could. we are against the taa. but this is where we are. there are rights in the minority, to. these are the only ways that we can exercise our rights. hopefully, the white house will wise up. you can now imagine what it would mean to colombia and panama for us to do this. we all want these agreements. >> thank you. let me give a little bit of detail on two items to support

what senator hatch said. in the past, the trade-off has been the trade promotion of 48 and the same legislation as the trade adjustment assistance. why is that important? republicans have generally supported free trade agreements and the process by which they are brought to congress. and that is why the accelerated provisions of the trade promotion of 40 have been very helpful for us to get these agreements through. democrats have wanted to add to these various agreements, the taa provisions which provide generally support for communities and workers who have

lost their jobs as a result of free trade. republicans have never given much credence to that argument. our belief is that as a general proposition, free trade agreements create jobs, they do not kill jobs. it is true, however, that some people will lose a certain kind of job and will have to be retrained to do another kind of job. we provide something like 47 different kinds of job training programs in this country. one of the midst -- them is the taa. do not add your expenses to that. the stimulus bill added about $600 million in additional expenses. those have expired.

the underlying taa still exists for 18 months. we believe that it is too expensive and it does not work. we are willing to talk about how it should be reformed. do not add the additional expense. consider its in the context of gpa, as we have always done in the past. do not hold these very important agreement hostage in order to get the taa through. that is really what is at stake here. if the administration will appreciate that the house republicans and senate republicans are resolved unanimously to broach the issue in this way, we can accomplish everybody's objectives.

get these free trade agreement passed. take another look at taa. that is why it is so important to the republicans on the finance committee and why we want to have this done in the right way. >> in kansas, our farmers and ranchers depend on exports. we like to think of ourselves as the beef state. these agreements mean a lot. the trade agreement have been held up for 10 years. this has become an embarrassment. this is an issue of national

security as well. it is with dupont -- deep disappointment that we are at this point today. in the past, this has been a bipartisan effort. this is a dramatic change from that. i do not support the majority's move to gm -- jam the taa into the bill, despite all the calls that i am getting. it is not only controversial, but it is out of step. we have not done this before. in this economic environment, we have a duty, that is why we are here and that is why we will be your this next week. we will be here, and not working on a deal because they deal does not exist.

i remember when he talked to republicans before and all we got was a lecturer. maybe if he would calm down, it might be helpful. it is a situation robbing peter to pay paul. now they propose to take an additional $400 million to pay for it. they are working out. there are the cut out a whole bunch. t want a hip or knee replacement? you may not get in imaging kind

of situation. he will pay more for it. for what? when will they stop the draconian cuts? the special in these and not reduced to raise the burdens. this has the trade assessments. it is one thing to provide assistance in response to job loss. they are involved. this is brought the case. it is under the banner of globalization. they had been dislocated. if he had been suffering any harm, it is due to globalization. i defy anybody to define its. there are lots of important questions to answer. they are beyond the reach of

congress. this is different from the committee process that has been standard before. it denies their ability to fully represent the views of their constituents. this all not happen. why we are hoping of health care is beyond me. i hope we can move ahead in the future. >> as you heard, one of the big difficulties is having them blessing the treaty. the caribbean treaty is extremely critical as are the others. other countries are insuring. they will get an advantage over us. we wait around so long. when the third into the package, most of the amendments either

eliminate that are changing its in ways that fit with the bill. it presents a fast-track process. to that is only using get the big compromise. they thought they could jam it through in this treaty. is it important? >> absolutely. they have agricultural benefits. we finish them a lot. the curia in a tree would provide for it. they have always had some reasons that they have for not using this. it has always been tied to the same excuses that the koreans

have used. not only would it open it, it is to help in china as well. it is a huge market. they need to have adequate time. they need to bring out what the difficulties are. desire opportunity to say something on the bill. he does not think it is worth the time to come up. we were meeting at the blair house where i used to spent eight hours. every time they shared an idea come midday rebutted it. i did take notes of what people say. when it is over, i mention the ones i thought were valid. we are not doing this. they are having things dressed as.

>> it is unfortunate that these agreements are all trade agreements. they are being held hostage to have additional spending. i look at it from the perspective that it is an agricultural state. they lost a billion dollars and cultural exports in colombia. canadians are finalizing a deal. first it was with columbia. they evaporate to. when it comes to career, you have the european union. there is a senate agreement effective july 1. it'll give them a leg up.

there is a disadvantage if it comes to export opportunities. they have a precedent that has existed for a long time. they moved with trade adjustment. you have free trade agreements. for a president and the administration, they are concerned about economic group. it put people back to work and it would open up export opportunities. it did help us grow the economy. it is inexcusable. this is another tactic being used where they are being hijacked an order to get spending that they want. they ought to be looking at how

to reduce this. they will have the trade adjustment assistance. >> we were talking about 14 million bucks in trade. thousands of jobs being created. we wanted to sit down and get it done. this is not anything they could have feared. they can bring up whatever good amendments that have. this is an important issue. >> what can republicans aptly

do -- actually do? >> they can do this. why gum up the free trade agreements. he has been saying this since he was president. it started with his january speech. this is the another way of trying to pacify a special interest group that does not belong in the location. this is all we are saying. we should not be pushed like this. the bill we want to consider this seriously. this is important stuff. you cannot just do it.

is it your expectation that there will be eight separate votes? >> they will have various votes. we are unified as republicans. they should not be attached to the free-trade agreement. >> their plan with our country's jobs and abilities to deal share for wednesday. frankly, we are willing to do this. i've done everything i have done to do in the right direction.

they are falling be marked up. they could move forward. hopefully, this has the mark up. it is the only telling the president. any questions? >> you were prepared to move

forward with this? >> yes. the chairman knew that. i do not think he had any choice? we are not going to put up with this. it to be disappointing if he did put up with us. we have rights, too. we have been in both. i does there is a there would have brought these up. i did not know if they will will may do we have a big mark up. we are not going to be jammed like this because the white house does not want to give up on these things. >> can you envision a deal for the senate to deal with this within 90 days? >> let me put it to you this way. i do not run the senate.

the fact is they may be in a lot better position to get there. hopefully, none of us want ca to do it. keep in mind, they put this year. three months ago he said we will get those agreement up before august. there is no mention of taa. ok. if they want to have that, bring it up. the question whether it will. they may get to the free-trade agreement. it is very offensive in every way. it is a bad precedent to start.

there are other parts that do not belong. we do not want these to be but they love them off every domestic issue that we have. let's do it the right way. nobody would put up with this. >> thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] tune into c-span this independent state. they discuss it the united states can remain united. >> of the political level, we are more divided.

they have the form policy this july for the beginning at 10:00 a.m. eastern on c-span. for the complete schedule, go to c-span.org. in a few moments, in an hour, a hearing on how money is being spent on in afghanistan reconstruction contract. after that, harry reid announces that they said it will cancel the july 4 recess to continue budget negotiations. charles speaks of the national press club tomorrow. live coverage is here at 1:00 a.m. eastern. the last space shuttle launch is scheduled for friday july 8. >> i have huge trust in the united states of america. i have read this over and over.

i have huge faith in democracy and the democratic process. >> learn more about christine lagarde. she is one of the 15,000 people you can search and watch. watch what you want when you want it. gates was presented the presidential medal of freedom today. the first defense secretary to serve as republican and democrat said at a ceremony.

>> ladies and gentlemen, the vice-president of the united states.

[airplane overhead]

>> ladies and gentlemen, please stand for the official party and remain standing as honors are rendered. ladies and gentlemen, the and

the host for today's tribute, barack obama.

>> please be seated. ♪

ladies and gentlemen, sec. gates was awarded the honor for civilian service. and the united states air force decoration for exceptional service. becky gates has the distinguished public service award, given by the chairman of the joint chiefs of staff.

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>> sound off. >> ladies and gentlemen, please stand for the national anthem. ♪

>> please be seated.

ladies and gentlemen, admiral mullen. >> mr. president, sec. gates, becky, distinguished guests, good morning. on behalf of our men and women in unufirm, -- uniform, let me thank you for being here as we honor robert yates. he has led the military in the

time of world with impeccable integrity and a staunch commitment, no matter how difficult that things may be, no matter how high or how low in the chain of command is needed to travel. in that regard, he showed the pragmatism and the grit of our soldiers. i think that this is why so many of them are drawn to him. there were no fancy words. now that he doesn't have a vocabulary or even a colorful vocabulary, he can throw a barber with the best of them, like the time he called washington the only place in the world where someone can walk down lover's lane holding their own hand. it is not just his wits.

he is very honest. as one soldier put it, he couldn't play dead in a cowboy movie. it is this honesty with which he has -- that has served him so well. in his four decades of public service, no fewer than eight american presidents have benefited from his advice. and i could add hundreds of generals and admirals, thousands of college students and millions of american soldiers around the world. i will take a wild guess, but i bet that he would say that it was a lot harder to get generals to watch -- to get soldiers to watch generals and admirals. he got through in a big way,

making us think about things we had not considered, making us try a little bit harder and lead a little bit better. he drilled down for details, and never stop asking us the uncomfortable questions. when you compared to pulling teeth the act of compelling change in the military, you are a setback. but you saw the change that was needed before any of us. you lead the transition to a new mission in iraq, and the transition we now strive for in afghanistan. you testify new efficiencies and business practices with taxpayer dollars. you forced the acquisition system to purchase a greater number of armored vehicles to a

greater number of our soldiers could come home alive to their families. and you demanded that when they did come home, they were given all the respect and dignity and the care and support that they needed to get on with their lives. that is the other reason are soldiers respect you so much. you are a fighter and the always knew that you were fighting for them, and that they had no better friend. there is not a single one of them that would not say that when the chips fall -- they fought for their friends the hardest. i am proud to count myself as one of your friends. i will miss your leadership and your counsel. i will miss coming home on a saturday afternoon and sitting

on your front porch. i will not miss you blowing all of your dead leaves on to my lawn. we will miss you and the manner in which the quiet dignity with which you have served the military and our country as a whole. to say that we are grateful is to vastly understate our motions on the stay. if there is a more distinguished legacy of public service by any to american citizens i did not know of this. i thank you, sir. it is my great honor to introduce to you a man who has devoted an extraordinary amount of time to the task of keeping

america safe. he is a man who, along with his spouse, has made the well-being of our soldiers and their families the highest of priorities that he will pursue. ladies and gentlemen, barack obama. >> thank you very much. admiral mollen, thank you for your eloquent words, and also for your extraordinary service as you near your well-deserved

retirement. thank you for the decades of incredible service. members of congress, deputy secretary and members of the joint chiefs of staff. secretaries and distinguished guests, men and women of the finest military in the world. secretary gates, and i want to abolish a daughter. by took office, he had served under seven presidents, during an illustrious career spanning four decades. he would have been forgiven if he had opted for a private life of comfort. he had learned this. when asked by a reporter if he

would stay on to serve another president, he offered the answer, inconceivable. why did he say? there are days when he will ask this himself and i am certain his wife asks this also. but believe i know the answer because i have seen this man in those moments of debate and decision, one person's character is revealed. in the oval office and the situation room, and the theaters of war. if you look past all of his flashiest, bravado, and his sharp attire, what you see is a

man i know and respect. a man of common sense and decency, one of the nation's finest public servants. today, you are not only one of the longest serving secretaries of defense, but one of the best. why did bob gates serve? our nation is at war. to know bob is to know his profound sense of duty. our country and our security, and our men and women who get up every day and put on america's uniforms, and put theri lives on the line. when the outcome of the war in iraq was in doubt, he presided

over the extraordinary efforts. over the last few years, we have removed 100,000 soldiers from iraq and ended the combat mission. we are responsibly ending the war. the fight against al qaeda -- when we needed to focus, he was helping us to devise this strategy that put al qaeda on the path of the feet and made -- made it so afghanistan was never in the source of attacks on the nation.

bob gates launched a war on waste, challenging conventional wisdom with courage and conviction, speaking the hard truths and saving hundreds of billions of dollars that would be invested in the 21st century military. it was his mission to make certain that there were serving the troops in the field as well as us. and today we see the lifesaving difference that he has made. the shorter medevac times in afghanistan. and the determination to give the wounded warriors the world class care that they deserve. this may be your greatest legacy. the confidence that you gave our men and women in battle. there was a secretary of defense who fought for them, and did everything in his power to bring

them home safe. let me also thanked becky for her extraordinary work with our extraordinary military families. i know they consider our soldiers to be like their own sons and daughters. this is a responsibility that we have shared as leaders, every day in a time of war. we send them into harm's way. and we know that this is the reason that they are there. we stood in solemn respect at dover when our heroes made their final journey home, and we watched them grieved bill of

ones that they get to america. mesoamerica shares obligations with all the serve. but today, we not only paid tribute to remarkable public servant, we celebrate the principles for which we have served. i believe the life of bob gates is a lesson, especially to young americans, a lesson that public service is an honorable calling. and that we can pass the country to those who follow. the next secretary of defense has described the same life of service.

and he will lead this department with a clear vision and a steady hand. in his willingness to read this -- the first secretary of defense to serve under both parties, his integrity is also a reminder, especially for the people in washington. civility and respect for this course, citizenship over partisanship, these are not relics of a bygone era. we need them now more than ever. whatever the differences are of party and ideology, which only keep america strong if we remember what keeps america great, the ability to work together as americans. for common purpose. finally, as we face difficult

challenges across the world at the helm, but today be a reminder that the united states will meet the test of our times. fewer americans are in harm's way and we will bring the war. responsible land. we will make difficult choices and do this responsibly. i am certain that the armed forces will always remain the best equipped fighting force in history. in an uncertain world that demands our leadership, this will remain the greatest force for freedom the world has ever known. this is the america, to which she has devoted his life.

this is the america that we dedicate ourselves to. i can think of no better way to express my appreciation to someone i have come to admire, and i can think of no better way to express the gratitude of the nation than with very special recognition. i would ask for you to please stand. as the president, the highest honor i can give you is the medal of freedom. it speaks to the values we cherish as a people, and ideals that we strive for. it is my purpose to present the presidential medal of freedom to the 22nd secretary of defense, robert gates.

will you please read the citation? >> the presidential medal of freedom, to robert gates. he has selflessly dedicated his life to making certain of the security of the american people. he has served eight presidents of both parties with unwavering patriotism. he has led the department of defense with courage and confidence during the wars in iraq and afghanistan, making certain that our forces are better prepared for the conflicts of today and tomorrow. we thank him for a lifetime of service and devotion to the

nation. [applause] >> thank you, mr. president, for those kind words. for honoring me and this department with your presence here today. i am deeply honored and moved by your presentation of this award, and this is a big surprise, but we should have known a couple of months ago that you are good that covert operations.

mr. vice president, colleagues and friends, thank you for being here this morning. i would like to congratulate leon panetta. he suggested obama retained me as secretary of defense. when obama asked about my successor i returned the favor. this department and country are fortunate that he has agreed to serve once again. at such an important time. my parting advice is to get his office just the way he likes it, because he may be here longer than he thinks. i would like to thank the members of congress who are with us today, and i appreciate the supportive treatment by

citizens of both parties and even when there were disagreements, congress always came through for programs to take care of soldiers and their families. as you may have noticed over the last few weeks, i have had my say on many topics. if this is the last top, i would like to spend a few minutes talking about the men and women i have been fortunate enough to work with at this job. i would like to talk about the people i have served with, serving as the secretary of defense has been the greatest honor of my life. first, to president bush for giving me this opportunity. and for the support that he provided in the early months on the job.

and barack obama for his confidence in taking the historic step of asking someone he did not know to stay on, and for his continued trust, ever since. the transition from the bush to obama administration was from one political party to another in a time of war in 40 years. the professionalism of the transition was a great benefit to the country and was attributed to the character of both of the president's. i have been fortunate that we both had -- they both gave me a great series of appointees. the first thing i did was to

retain every single senior official i received from secretary donald rumsfeld. most of them have been with me through the state. and i have been fortunate enough to get another first-class roster from barack obama, providing with superb council on a range of issues and initiatives. these and other achievements and anything of consequence achieved in this department required successful collaboration between the military and civilian leadership. i have received forthright and loyal council from the leadership of the joint chiefs of staff and i will always be grateful to them for their cooperation and their friendship. i want to thank the chairman of the joint chiefs when i arrived. and my battle body of four years. mike mullen. without his effective leadership the record of the last several years would have been different.

he was never shy about disagreeing with me, but never failed to stay loyal to me and the president that he served. he is the epitome of a leader and an officer, a man of supreme integrity and a good friend. the practice in the spirit of collaboration is important for those dealing with intelligence and diplomacy. the blow against al qaeda exemplifies a remarkable transformation with military operations in the 21st century. my views have evolved over the years. i started out as a staffer with

president nixon and his national security council. the nixon white house was not exactly a hotbed of admiration for the foreign service. it was thought of as people with last names for first names who took time to implement the president's foreign policy. for much of my professional life, the secretary of defense and the president were barely speaking. i have not only been on speaking terms with these formidable women, but we have also become colleagues and good friends. giving a speech for more money for the state department did not hurt, but we should never forget the development experts who are taking risks and making sacrifices in the least hospitable places on the planet. and i appreciate the sacrifices they are making for afghanistan

and iraq and other places across the globe. as i were to support the soldiers on these missions i spent a great deal of time venting frustration with the bureaucracy. the people most often frustrated in this building are the career civilian professionals whose drive every day to overcome the obstacles to get things done. i understand and i appreciate the challenges of these public servants and the sacrifices that the endara, and what they accomplish has not received the thanks that it deserves. i leave this post grateful for everything they have done for the military and national security. during a time of war, the top priority of everyone in this building must be to get those at the front what they need to succeed on the battlefield, and to be properly taken care of when they get home. i have spent much of the past

few months with the soldiers, in number of forward operating bases in afghanistan. i was only help -- hopeful to lead a small sample of those downrange, to look them in the eye and let them know how much i appreciate what they and their families do for our country. looking forward i knew that it would be very difficult for me to express my feelings for these young men and women, in a way that would allow me to get through this speech. a personal message from me to all of the servicemen and women across the world was published and distributed in the military channel. i will just say that here -- i will think of these young warriors, the ones who fought and keep on fighting, and those who never made it back until the

end of my days. and as i was contemplating this moment i thought about something becky told me in january 2005 when i was as to the first director of national intelligence. i was wrestling with this decision and i told her she could make it easier if she said she did not want to go back to washington. she said, you have to do what you have to do. this is what military spouses have said a million times since 9/11. this is to those considering another tour of service. just under five years ago i was approached by the same president to serve. and her response was the same. as much as she loved texas a and m and could do without another stint in this washington, she made it easy to say yes. what answer the call to serve when so much was at stake in

america. we are really going home this time. your love and support at me grounded, since we first met on a blind date 45 years ago. i will lockout of my office for the last time, as the defense secretary. it is empty of all my personal items, but i will still have over my desk the portraits of two of my heroes and role models. generals eisenhower and marshall. i take a closing thought that was given in the opening years of the cold war. hicks told what was needed from that generation. the development of a sense of pop -- possibility for world

order, with the overwhelming importance of the country's actions and failures to act. and now, as he first uttered those words, the global responsibility and the importance of what we do or do not do remains an important part of this new century. it is important for those of us who serve, and i have every confidence that he will fulfil this. thank you and god bless the military and the country that they so nobly surf. -- serve. [applause] [applause]

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>> ladies and gentlemen, please stand for the departure of the official party. [applause]

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>> ladies and gentlemen, this concludes today's ceremony. thank you for attending. enjoy your day. >> in a few moments come at a hearing on how much money is being spent on advance -- on afghanistan reconstruction. senate majority a leader harry lead -- harry reid announces that the senate is canceling its july 4 recess. after that, debate on pending

free-trade agreements. a hearing of the senate finance committee with democratic members only, followed by republican senators on why they did not attend the hearing. on "washington journal," we will discuss the ongoing debt ceiling debate with david keating. "washington journal" is live on c-span every day at 7:00 eastern. >> he had decided several days before he arrived that he was going to kill him. he had gone out on he bought a pistol and a -- he followed his whereabouts in the newspaper. he began tracking him. >> on september 6, 1901, self-

proclaimed anarchist fired to fatal shots at president william mckinley. scott miller looks at the president and his assassin. >> a hearing examining how much money is being spent on reconstruction contracts in afghanistan. witnesses include contractors receive money from the army corps of engineers and the u.s. agency for international development. this part of the hearing is below less than an hour and a half. >> i will ask your indulgence to interrupt you long enough to give him a chance to make an opening statement. i have a formal opening statement, but i have decided

to not to give a formal opening statement. just express the reason for this hearing. this is not the first hearing that we have had on contacting. i began working on this problem almost the day i arrived in the senate. i traveled to iraq to do nothing but look at contacting oversight because i couldn't figure out how in the world things had gotten so out of control in terms of contract and in iraq. i went over to a rock and a realized why they had gotten over -- out of control -- iraq and i realized how they had gotten out of control. there was no training, not sufficient effort made on sustainability, decisions made that were made with a myopic look at the mission.

i always point out that the contract is probably -- if you read the initial log kept contract, if you look at poster child. people may not remember that the estimates for that contract for the first year were supposed to be under $1 billion. cost us $20 billion. that is just one example. i'm going to try to focus today on reconstruction contracts. the sad thing about this hearing is i have been hopeful, back in have done a lot to overcome some construction contract in.

this hearing does not make me feel good about the progress we have made. there has been some progress, afford this anymore. contracts in afghanistan. humming along. roads were not crumbling because them. that is a big number if we are not looking at cutting many nation. are facing the fiscal problems an enormous number. country of afghanistan to build roads, to build public structures, whether they are

schools or other public structures, and i think it has now become an urgent matter for this congress and to look seriously at whether or not that kind of reconstruction money is mission in afghanistan. i think if you look at the lessons that we have learned in the past in afghanistan and iraq that the government has been very slow to apply this lesson. and i'm not sure that the implementation of afghan first proud. i'm not sure that the government contractors have taken steps necessary to provide transparency and accountability that we have to demand in light of the incredible difficult in this country. this is the 10th year, and we

total already on reconstruction. spending has been todefense department and usaid are primarily responsible for this. no one is totally responsible. am responsible. in fact, i will be surprised if i do not hear testimony today really responsible. it is time that somebody is responsible for money that is spent on roads that will not ever be sustained and for buildings and electrical power facilities that are built that no one there even knows how to provide. it is time for someone to step forward and say i am planning

these projects. i'm the one certifying sustainability. even certifying sustainability, and we all know that the -- i talked about surp. here is what it was a posted a pair it was supposed to be walking-around money, used by iraq. ground in the community and and the window of his store is broken. we need to be the sergeant to say to the storeowner i have the money to fix your window. that is the kind of thing that provides stability, wins the hearts and minds of the community. we have gone from broken store

windows to hundreds of millions in construction projects. meanwhile, no one has taken ownership of what is the difference between the possibilities of aid in the department of defense responsibilities in large part responsible for the construction. sustainability will be the key issue we talked about today, and it will be something that i think is very important that we get our arms around. inadequate contrack and management practices -- once again, we will cover the ground. contractors overseeing contractors, obviously transparency and overseeing personnel. are the course getting better training now? yes, they are. i congratulate general caldwell

and others that have work and doing better, but we still are not where we need to be. i do not think anyone in this room will have an argument that it is not where it should be. we are getting a one-your turn over on aid right now. when we embrace a constant turnover like we have theater, we are going to have bad things happen. we will have problems that are going to occur because the beginning of the project will not have any idea what the end of the project looks like and vice versa. security challenges. that obviously remains a big problem. i think that we are going to have to try to dig through all of those problems today. i will tell you that if we do

not get some strong, substantive answers, that every dime spent in afghanistan on reconstruction is being spent wisely and being spent with the kind of oversight that we would expect if we were building a highway down the road in the united states of america. i think it is time we focus on a mission where we are training security forces and working to provide stability against taliban and the kind of structure that we need to support going after al qaeda on the border of pakistan and afghanistan. perhaps it is time to shut down $17 billion worth of money going for reconstruction projects when our track record really stings when it comes to reconstruction projects. i hope that you all will convince me that i have become cynical and angry and frustrated about the way we are spending money in theater. i am looking for good news, and i hope we hear some today.

but i think it is time for a guest check because i have too many people in missouri saying why can we fix this road? then i look at the practice we are building in afghanistan and it is hard to explain to them why we cannot fix that road. because we cannot afford it, but yet we can throw money away in afghanistan on projects that are not sustainable. if anybody had spent time thinking about it in the first place, they would have realized that. that kind of accountability has to be present. i am pleased that we have a number of witnesses today that are going to testify to contracting in theater. let me say this is -- good, the senator is here. i will give him time to get settled and we will continue to provide oversight in this arena. i think it is a place we need to draw the country's attention. we need to draw congress'' attention.

we can certainly bring the department of defense, the department of state to these problems, and we need to begin to do one of two things. do it right or stop doing it. i will turn it over to senator portman for his opening statement. >> thank you. i appreciate you holding the hearing today. it is an incredibly important topic given the resources we are devoting to afghanistan. i was there a month or so ago and visited with our soldiers and marines and also with some of the federal government agencies on site and some of the contractors. i know the subcommittee under your leadership has done some of the most diligent and searching oversight of reconstruction and development of the past several years. it is critical work, and i am pleased to join you as your ranking member.

this comes on the heels of a major announcement last week concerning the u.s. mission in afghanistan. the president announced his intention to withdraw the 30,000 so-called search troops with the first 10,000 coming out at the end of the year. i have noted some of my lack of clarity regarding strategic objectives in afghanistan. we are in a critical planning window with respect to the military and civilian mission in afghanistan. today we have 154,000 private contractors working for the defense and state department, a.i.d. in afghanistan. the efficiency assumes new urgency as we near the surge drawdown and the planned 2014 transition to afghan-led security. it is a timely discussion given

our fiscal problems and the fiscal crisis at our doorstep. over the past 9.5 years, our military servicemen and women have done everything they have been asked to do and more in afghanistan. they have performed remarkably well, and with bravery and extraordinary skill under tough conditions. given our reconstruction efforts, in afghanistan, which are incredibly important to the sustainability of this effort, we need to be sure that what we are doing is right, that we are consolidating some of the hard- earned gains that we have achieved. the counterinsurgency strategy that was outlined by president obama has been to clear, hold, build, and ultimately transfer. as we reach the transfer stage, we have to leave behind a more functioning society and economy, more resilient, constitutional, stable government that is capable of withstanding the radical taliban

and other elements. one of my questions, madam chair, is going to be questioning the sustainability of the efforts. congress has appropriated over $60 billion for relief and reconstruction in afghanistan. the great majority of which has been channeled through private contractors. we know from experience in bosnia in the 1990's and more recently in iraq that a reduction in troop levels as not mean a drop in contractor activity. in some cases, it is a matter of increase. there has been increase reliance on contractors to fulfill the logistical roles once performed by the military in those instances. eventually, the contractor presence will also decrease as we move support of large-scale off-budget spending to more direct to the afghan government directly.

this is why our reconstruction strategy must focus on insuring that afghans can sustain what we have helped build. how many additional schools and health, as we can construct, but also that there are teachers and health care officials to sustain those institutions. whether afghans have the resources and expertise to manage the long-term operation and maintenance of power plants. on a related note, as we encourage more contracting with local afghan firms under the afghan first policy, we must consider seriously revamping the process for vetting contractors to ensure they do not pose security risks. reconstruction is a critical component of our counter insurgency strategy, and dollars must never be diverted to support terrorists or in certain elements.

that is one of the concerns i have as we go through this afghan first policy. we should have no illusions that afghanistan will be immediately capable of standing alone. according to a world bank estimates, as much as 97% of afghan gdp is spent on military and military presence. that will not disappear with the drawdown of troops. reconstruction efforts must be focused on empowering afghans to regain control of their future. i look forward to the hearing today and specifically the discussion about reconstruction contracts, lessons we have learned, and ongoing problems. thank you. >> let me introduce, if we could

have both of our witnesses -- is it mr. hakki? would you mind taking a seat? did i pronounce it correctly? >> hakki. >> that will be easy for me to remember. let me introduce the two witnesses. larry walker is the president of louis berger group, an international consulting company that holds large contract with usaid in afghanistan. he is responsible for providing strategic direction for the firm for the successful completion of its programs. he oversees the development of strategic operating plans for each business unit and oversees the implementation of company- wide initiatives. thank you for being here, mr. walker. mr. hakki is currently the chief executive officer of contract international inc., which holds millions of dollars of contracts in afghanistan.

he has been responsible for overseeing operations of the u.s. headquarters office. his responsibilities include oversight of u.s. material procurement, engineering and quality control, shipping logistics' and monitoring of administrative personnel. he has been in the construction business for nearly 30 years. i look forward to both of you coming to that. i'm glad you're both here today and i look forward to your testimony. it is the custom of the committee to swear in all witnesses that come before us. please stand and raise your right hand. do you swear the testimony will be the truth, the whole truth, and nothing but the truth, so help you god? thank you both. mr. walker? >> chairman mccaskill, members of the subcommittee, i am larry walker, president of the louis berger group.

i appreciate the opportunity to provide perspectives on the highway project and our observations concerning reconstruction projects in afghanistan. it is an international consulting firm of approximately 3000 employees around the world. we provide expertise including engineering, program and construction management, and economic development services. many projects are carried out in some of the most challenging regions of the world. obg first began working in afghanistan in the 1970's and was one of the first to enter afghanistan after the september 11 attacks. i worked mainly with restructuring of the afghanistan infrastructure. we have provided nearly 40 house jobs to afghanistan people and trained thousands more. we have constructed more than 90 schools.

the improved road network has dramatically decreased transit times, which has spread economic development along the road corridors and provided access to education and health care. i have traveled them myself and i can say that the work has improved the quality of life in afghanistan. the coast highway is a critical commercial link. the road provides reliable transportation throughout the border province to kabul. i want to say a few words about the circumstances surrounding the reconstruction of the roads. as the picture shows, the topographical in geological features of this area where the work has occurred are some of the most challenging we have faced in afghanistan. the degraded security environment has made this the most dangerous project the company has attempted. we suffered 21 killed, 51 wounded, and four missing. security as a percentage of the overall project cost is around

30%. to compare other parts of afghanistan, the security costs averaged 8% to 10%. the project has experienced one of the 47 direct attacks, 108 direct ied's, and 40 other mine explosions. the lack of existing infrastructure and technical capacity, the need for capacity building, and the defacto war zone all work against measuring success, scopes schedule, and budget. for the afghan people, to protect the significant investment made by the tax pair in america and other donors -- before the contract existed, the louis berger group provided training for subcontractors and employees and we continue to do so.

this has been at the heart of our work for more than 40 years. the ultimate sustainability of many projects in afghanistan will generate enough revenue to provide the workers and materials that will be needed in order to maintain and sustain projects we and other companies have completed. the security environment increases the importance of communication between the contractor and the government. we have worked hard to communicate with the contract in officers, technical staff, as well as u.s. military to address security related issues as they arise. the group has helped to improve the physical, social infrastructure of afghanistan. most recently to discuss the recommendations found with the recent report. we support several of the commission recommendations including integrating contracts to expand and improve the

qualifications and experience level of acquisition personnel, expanding competition requirements, and requiring oversight of contingency contract. lbg applauds the efforts of the commission and the subcommittee to improve the manner in which the united states towards an overseas contracts in complex environments. and the focus on sustainability of our reconstruction programs. we strive to deliver quality construction in a timely fashion. the company and our employees do this work because we have seen the tangible improvements in the lives of the afghan people that result from our work. thank you. >> thank you, mr. walker. mr. hakki?

>> i'm sorry? ok. chairman mccaskill, ranking member portman, distinguished members of the subcommittee -- on behalf of contrack international, i applaud the reconstruction efforts in afghanistan over the past nine years. we share your interest in examining how the government can bring greater efficiency, transparency, and accountability to the construction contracting process. we believe these goals can help everyone deliver projects on schedule within budget and that are sustainable. contrack has operated since 1985 as a privately owned corporation headquartered in mclean, virginia. i joined the company in 1994 as executive vice president and was appointed ceo in december of 2010. contrack operates out of egypt and afghanistan.

would provide engineering procurement and construction services as well as facilities operations and maintenance. our focus primarily is on military, institutional, and infrastructure projects throughout africa, the middle east, and central asia. over the past nine years, contrack has completed $1.5 billion worth of fast track design built projects in afghanistan for the u.s. army corps of engineers and the air force. and working as a prime contractor, we have constructed brigades and usa coalition forces brigades, air fields, ammunition supply points, fuel storage and supply systems, forward-operating bases and other facilities. we are also awarded a contract to the permanent operation and maintenance services required to perform work on numerous ana

rights and afghanistan. it is somewhat different than most contractors in that we self perform the majority of our work rather than acting purely as a construction manager. contrack has been a vital partner with the corps of engineers in accomplishing the mission statement to provide sustainable development projects for the afghan people that employ the populace and promote the future stability of afghanistan. in order to utilize the local labor force, the majority of afghans must be trained in a skill. to accomplish this task order, contrack set up a training center to train and educate the afghans on a variety of construction trades.

to date, we have graduated more than 3000 students, most of whom are still employed by contrack. as a prime contractor, we foster relationships with local firms so they can succeed. this requires ongoing training and guidance concerning u.s. technical and contractual requirements and obligations. under the challenges that we are still facing over there, we have contracting with foreign contractors. afghan and international contractors often received contracts which are more than they can handle. many of them are not familiar with u.s. contract requirements. unfortunately, we share the perception and -- in the international community that there is an uneven playing field and that foreign contractors are not subject typically to the same standards as u.s. contractors.

these include safety, ethics, bonding, requirements to establish workers protection in the interest of the u.s. government. we believe the corps of engineers has begun recognizing the risks in awarding projects to foreign firms based on low price only. for example, the government recently awarded a contract to 14 firms, all of which are american firms. future task holders will be competing among the 14 firms only. we appreciate the difficulties faced by the government and commend the professional manner in which so many contrack personnel perform their work in a hostile region. however, the for interpretation of core field staff have treated challenges to the contractor and the government.

for example, delays in resolving contract modifications due to government contracting officers and related personnel causes delays in payment to the contractors. similarly, high turnover of personnel in the field cause delays in the submission of the evaluations. quality at the job site is overseen by the qa representatives. they are experienced in other trades, but they lack sufficient training to understand and enforce technical requirements of the contract they are assigned to. lack of partnering between the contractor and the court is another unfortunate result of the personnel turnover. contrack has participated in numerous partnering sessions with the corps. we believe these sessions have contributed the success of the projects in those regions. however, in nine years in afghanistan and after completing over 50 projects, we have had only one partnering session with

the corps. the high turnover indicates the difficulty. this often causes delays to the project and cost overruns. sometimes the end users requirements are not always understood. for example, early part in projects -- the contractor and the facility and user would really help parties to achieve the end user design goals. transportation and logistics. the high volume of cargo creates delays at the base entry patrol points. meanwhile, border politics can block or delay shipments of material at the project sites make matters even worse. working with the afghan

ministries is a challenge. the afghans change procedure on a regular basis. require for tax exemption documentation, lack of stability, is further compounded by a staff that lacks cross training. new and constantly changing presidential decrees increase the risk environment. they can cause disruptions, delays, and safety problems. it will coordinated design must meet the general guidelines by the corps and address the end- user needs. we were tasked to design and build main entry control points. we had designers on site to agree on a design that satisfies everyone's requirements.

this required a lengthy review process. all these efforts resulted in a successful project completed on time and on budget. i appreciate this opportunity to share our experience in afghanistan and would gladly answer any of your questions. >> thank you both very much. mr. walker, i want to talk a little bit about the road. i understand where the road is located and i understand the strategic planning that went into this particular road. but i am trying to figure out whether or not someone along the way should have pulled the plug. let's talk about the initial price tag of the road. we are talking about now the highway, the highway that goes through rough territory, significant elevations, covered

in snow in the winter, and frankly a very challenging highway project under the best of circumstances. clearly, very difficult under the circumstances, especially considering you are going through significant taliban real-estate. the initial price was $69 million. we are now up to $176 million for 64 miles of highway. what went wrong in terms of the initial price tag for this highway? why are we barrelling towards three times as expensive as it originally was intended, and of that price tag, $43.5 million of that is security?

what we are saying is, a third of the cost of building of this are in fact security. it no one had an idea that this was the case before it began? >> when we started with the pr violence were not as high as they were as we got into the project. the original estimate of security cost as a percent of the contract was around 12% as i recall. the challenge was, as we got into it, probably a year into it, the attacks began to increase and the security began to deteriorate. at the time the project was initiated, there was no reason to assume that the security conditions would deteriorate the way they did, recognizing

that the possibility always existed, in working over there -- and it is a very fluid, the volatile situation -- no one anticipated the level of attacks the project was going to sustain. >> who made the decision what the level of attacks would be? was that the military? it would not be hard to guess that this would be significantly different just by the fact of where it is located. everyone knows -- frankly, the reason they wanted the road in the word -- the reason they want the roads in the first place was to clear out the hornet's nest of the taliban in the area. how was it misjudged by so much? questiont sure it is a of misjudgment.

it might appear that way. the security in the country in general began to deteriorate. at the same time, when looking at security in afghanistan, it is not one single footprint. clearly the north and the west is a different security profile than the east and the south. when we began work on one road in the south, for example, working in the same types of conditions as other roads in that area -- as a matter of fact, another extension of the road, we did not have nearly the security situation that developed later into the program. our historic experience was at certainly a serious level of security but not to the extent of what we are experiencing now. >> is a typical to have as many subcontractors as you have on the project?

you would typically have 24first-tier subs, and more second-tier subs? >> of the 24 first-tier subs, they would typically be very small. >> give me an example. for 64 miles, you have 167 different subcontractors for 64 miles per what in the world are they for? >> you could have a small afghan subcontractor whose job would be clearing ditches of debris, and other afghan subcontractor who would build masonry walls on an approach to the bridge. you would have another subcontractor who would work on the -- work with the primary first-tier construction firm. there are many small aspects of the construction project. one thing we wanted to encourage was the use of afghans as much as possible. >> how many of them are afghan

companies? >> without looking at the list, i cannot say. i would guess it is the majority of them. >> we would love to get the exact number. >> we can get you that for the record. >> that would be very helpful. the money that was paid in security to folks, there is every indication that they are the bad guys. is this the reality, that america has to accept that in order for us to do things for the afghanistan people, that we have to pay the people that are killing us? >> i do not believe that is the case, certainly on this road. with the security firm that we have, providing security on the firm, all of the local afghan security providers are placed into the military's biometric data system to check against the bad guy list.

if someone were to turn up, the military would get back to us and say they have to be removed. >> mr. arafat? >> his information was put into the biometric database and there is no indication that he was a person of interest. as a matter of fact, a task force 2010 specifically told us that he was not on their list. >> he was fired? >> we were in consent to use him when the contract was withdrawn, so his employment was terminated. >> he was given $1 million a year? >> no, he did not provide security as i understand it. his responsibility was to provide drivers and vehicles, which he did. the cost of those vehicles and drivers and fuel was $40 a day per vehicle. we compared that against similar charges for vehicles and that

was consistent. the charge of those vehicles was, i believe, a little over $1 million. >> i have additional questions that i will ask in the next round, but i want to turn it over to senator portman. >> thank you, madam chair. i thank the witnesses for being here today. mr. walker, we should be forward looking, but there should be questions that should be asked. not so much with regard to the road, i have some questions about the falling on the chair's questions, but with regard to some of the over billing practices and what kind of internal audits or other controls that had been put in place -- in november of last year, my understanding is that your firm receive the largest

fine ever imposed on the contractor working in a war zone $18.7 million in criminal penalties and $15.6 million in civil penalties for overbilling. as part of that deferred prosecution agreement, your company admitted former executives submitted false, fictitious, and fraudulent overhead rates and correspondingly result in overpayment by the government in excess of $10 million. federal prosecutors charge that is in addition to that that -- what i want to ask today and give you a chance to respond to is, what assurances can you give the committee that these kinds of abuses will not occur in the future with taxpayer dollars? have you improved in its internal audit controls? how often will you have reviews from outside accounting firms?

>> in 2006 we noticed a problem in our overhead, and we initiated an internal review. in june of 2007 we initiated a refund to the u.s. government of $4.3 million. in august of 2007, the justice department let us know we were under investigation and intervened with us at that point. let me take a half step back. we brought in an outside accounting firm to do a forensic analysis of what was going on in the overhead structure and we share that completely with the department of justice. what was determined was cost that was associated with one overhead pool was in a properly moved to another overhead pool.

that was u.s. government overseas work. that was wrong. that was absolutely wrong. in looking at that situation, recognizing that we had that problem, we worked with the department of justice to identify what the damages were to the united states government, and certainly welcome corp.. the individuals associated with that improper practice are no longer with the firm. we initiated a complete restructuring. i took over the presidency of the firm to 0.5 years ago and initiated a complete restructuring of the controls, policies, and procedures of the company. i created a more robust compliance of ethics departments in the company.

we put the entire company through training, the accounting department through many types of training. we put in place scores of new controls. we brought in yet another outside accounting firm to test those controls. it is one thing to have policies and procedures. it is another to make sure that they work. i brought in another independent accounting firm to test us to see how we're doing because we need to make sure that not only does the policy control on paper but it exists in the policy of the company. we have been in the process. we are under a monitor, and we share everything of course with that monitor, all the training programs, all the testing to provide assurance that controls that are put in place protect the u.s. taxpayer. we have shared this from day one with justice department, with u.s. aid, many presentations, and we laid everything open and fair to make sure that everything was as transparent as we could possibly be in the situation. situation.